After four combat tours and a stint as spokesman for General David Petraeus, retired Army officer Frederick Wellman, 47, was excited to go into business for himself advising communications firms on military issues. But once he launched the Washington, D.C.-area firm in November 2010, he discovered that the business offered less growth potential than he expected.
With four kids at home and bills to pay, Wellman made a big shift in May 2012: He turned his business into a public relations firm specializing in aerospace and defense issues. Offering the new mix of services allowed the business to thrive. “We hit a sweet spot,” says Wellman. Today, his firm, ScoutComms, employs three full-time workers and four contractors, serving big clients such as the Home Depot Foundation.
As Wellman realized “pivoting” isn't just a buzzword. It's an important survival skill for any business owner. Making ongoing shifts in response to customers’ feedback is hard wired into the culture of Silicon Valley software startups, but whether you run a bed and breakfast or an accounting firm, pivoting can help you improve your business and make a better living. “Things are moving so quickly you can’t have a static business model,” says Patricia Wetzel, 55, who has a bachelor's degree in international finance from The Wharton School of the University of Pennsylvania and previously worked in finance. She launched her socially-minded company, The Anti-Cancer Club, in Reno, Nevada, in 2011, after getting diagnosed with cancer in 2009. Constantly experimenting with her offerings, she provides a varied mix of educational programs and products from more than 80 business partners, aimed at people with cancer and their families. Wetzel's site makes money by getting a cut on merchants' sales.
See also: Business Survival Skills Everyone Should Know
Unfortunately, say experts, many business owners resist making big changes that could help their businesses thrive. Often, it’s because of fear – fear of change, of making a costly mistake, or of pouring more money into a business that’s already required a big investment. “Those who are best able to pivot have no sense of financial urgency,” says New York City executive coach and career counselor Roy Cohen.
It's been decades since you had the option of crashing on your parents' couch if your business failed, so you don’t have the same freedom to go wild experimenting as your twentysomething counterparts. Here are some tips on how to find the freedom you need to make your business stronger, without going broke.
Write it into your business plan. If you’re starting a business, plan for a ramp-up period where you can fine-tune your business model, advises Cohen. This usually means building a cash cushion by saving several months of living expenses, or arranging to depend on a working spouse’s income, or tapping retirement funds. Wellman, for instance, has a military pension and family health benefits that give him financial stability. With money in the bank, you’ll feel freer to do what needs to be done to create version 2.0 of your business if you need to. “When you have a fear of `What happens if it doesn’t work out?’ it will prevent you from thinking clearly and carefully about your options,” Cohen says.
See also: A Company of One: Survival Skills for Solopreneurs
Build on what you’re already doing. Taking small steps in a new direction is often the most practical approach for midlife entrepreneurs with bills to pay. After working as a senior manager at Microsoft, Whitney Keyes, 45, went into business for herself in 2004, doing consulting for her old employer and other firms. “That was an easy way to generate revenues,” she says. “I had the contacts.” But Keyes yearned to break out of the tech industry, so she gradually began taking on small-business clients in other industries—from a restaurant to a Pilates studio—work she found to be more fun.
She soon discovered a drawback to her plan: “In this economy I was not able to generate the revenue I need by working with smaller businesses at an hourly rate,” she says. She decided to pivot again, into doing more paid public speaking, a small part of her business that was more lucrative. To create a calling card, Keyes published a book called Propel: Five Ways to Amp Up Your Marketing and Accelerate Business last summer. Now, she says, she derives 75% of her revenue from speaking and 25% from consulting. “I’ve been able to get higher paying clients who value my expertise,” she explains.
Pivoting in a new direction doesn’t always mean abandoning the original one. The Anti-Cancer Club started out educating clients about healthy eating. But in Wetzel's own journey fighting cancer, she realized that stress management and exercise were just as critical. She gradually began teaming up with merchants who provided discounted services, from house cleaning to dance and martial arts classes—as well as private-chef services—to her customers. “We broadened our mission,” she says.
See also: Top Online Courses to Better Run Your Small Business
Get an outside perspective. Turning to knowledgeable advisers can reduce the risks of pivoting. One of Cohen’s clients, age 48, bought a sit-down restaurant in a college town that he didn’t know well. Customers were not flocking in, and he discovered that there was more local demand for healthy takeout fare. Lacking restaurant experience, and not sure how to fix the menu on his own, he hired an adviser familiar with the industry to help him get it right. “He needed to invest even more money to redefine the business,” says Cohen. Fortunately, the move paid off, helping him to avoid what could have turned into a bad investment.
Spin that pivot. There are times when the smartest way to pivot is out of a business. If you decide to move into a completely different venture or back into a traditional job, it’s important to think about how you’ll position the change to your professional network—so the change looks smart, not flighty. Nicole Williams, a career expert for LinkedIn, recalls one midlife entrepreneur who decided to leave her business and take a full-time job that was more compatible with her family responsibilities. The former entrepreneur sent an email to her network telling them about the change. “She positioned it as a celebration: This is a wonderful opportunity for me,” says Williams -- and let them know how she would be available to help them in her new gig. “She owned the story,” says Williams. If you make big changes in your business—or decide to leave it—so should you.
Elaine Pofeldt is co-editor of the $200KFreelancer, a website that aims to help self-employed professionals earn a good living.
Photo credit: Andy Baker/Getty Images