The pandemic forced many businesses to look at new ways of selling their goods and services.
In fact, 41.3% of businesses said they pivoted in some way due to the pandemic, according to a recent survey from Signs.com, an online provider of custom signage.
To be sure, economic disruptions like the pandemic can force companies to pivot but, experts say, it’s not a bad idea to look at ways to pivot even during good times.
"While a crisis like the pandemic can necessitate a pivot, pivoting a business could be seen as a normal course of business for many owners to remain competitive and fresh," says Nelson James, president of Utah-based Signs.com which conducted the survey.
"A larger portion of business owners viewed their pivots as necessities [roughly 7 in 10]," James says. "So perhaps the pandemic acted as a catalyst to speed up business owners’ decisions to pivot with both short- and long-term goals in mind."
Short- and long-term goals
Even those forced to pivot during the pandemic see the changes they made as long-term (63%) rather than temporary, according to the survey.
Certain pandemic-related changes may be temporary — for example, it remains to be seen how many companies will remain fully remote, James says. However, "businesses have already committed time and money resources towards pivots that involve identifying new target customers, offering new products and services, or switching supply chains, so it makes sense for businesses to stick with these changes," James says.
That’s the case for Plainview-based Acupath Laboratories, a privately owned pathology laboratory specializing in cancer diagnostics since 1998. Acupath saw business drop 90% during the state-mandated lockdown last March after its traditional physician clients couldn’t see patients in person and do certain medical procedures like biopsies, says chief sales officer John Cucci.
That’s when the company pivoted to offering COVID testing.
While the lab had the technology to facilitate COVID testing, it needed to ramp up staff and equipment to get the FDA emergency use authorization necessary to start doing it, Cucci says.
So Acupath invested over $2 million in lab equipment and hired close to 20 new staff and quickly began filling demand for testing. It picked up new customers including nursing homes and television and film production crews. And, in April, the company added saliva testing to the services it offers, and now has surpassed 600,000 COVID-19 PCR tests, Cucci says.
Acupath had always planned to go into PCR testing for other areas like urinary tract infections and GI issues, but COVID accelerated the company's shift, Cucci says. While its pathology business has returned to pre-COVID levels, it sees PCR testing as a long-term growth strategy. The company also has expanded its business, including inking a partnership with several mobile specimen collection companies.
Cucci said while the pivot was necessary, it resulted in "Acupath becoming a much stronger company both from an employee and operational perspective."
Investment can be low-cost
While Acupath invested a significant amount in shifting gears, companies needn't invest a lot to pivot, says Erica Chase-Gregory, director of the Small Business Development Center at Farmingdale State College.
It could be low-cost, she says, such as offering a new service like curbside delivery.
In fact, Signs.com found the average cost for a company to pivot was $4,564.
Chase-Gregory says businesses should assess their performance and review the gaps they were trying to fill last year.
Companies considering a pivot should do an audit of their "non-balance sheet assets," says Steve Davies, president of The Alternative Board in Nassau County, a coaching and advisory group with 45 business owner members on Long Island. These are non-financial items like customers, their business model, distribution methods, and the talent and knowledge they have within the company, he says.
They should examine not only the natural outgrowths of what they do, but also new products and services that they can either sell to their existing customers or new lines that they can bring in, Davies says.
That’s what Angela Carillo, owner of Alegna Soap, a Bethpage-based soap maker, did when she pivoted to selling soap making kits and gift sets online last year.
Pre-COVID she mainly sold at fairs and festivals, but had to drastically boost her online presence once COVID hit.
While she used to get one to two online orders monthly, she now gets five times that amount, Carillo says.
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Top five common business pivots
• Targeting new customers
• Offering new products/services
• Offering new virtual service
• Aligning with a pandemic trend (e.g. going remote)
• New online delivery channel