Compass: Your Roadmap to Business Reinvention

Claudia didn’t have a “big plan” for reinventing her business. She knew she had outgrown her old business model of working with new mothers as her target audience, and had made the decision to stop actively marketing her business. Then things happened that she couldn’t have foretold.

Recognizing It’s Time to Change

Claudia confides, “I hit a place with my target audience and I never got beyond it. I found that I always had a certain number of clients, which was fine, but it never moved beyond that number of clients. I felt that I needed to go in a different direction.”

“I was kind of banging my head against a wall,” she says. “I started to realize that I wasn’t enjoying writing my ezine anymore, I wasn’t enjoying marketing to new moms. It was hard for me to recognize: I didn’t want it to be true because I had spent so many years doing it and stopping felt like I was failing. The truth was, I wanted to want to do it.  I think that if I had been honest with myself, I would have made a switch earlier.”

Claudia recommends that when small business owners feel that something is off, they take a few days and figure out what’s not right. Admitting to yourself that your old business model isn’t working for you anymore is an important first step.

Reinvention from an Unexpected Source

Claudia had tutored teenagers for over a decade, had always had a small number of tutoring clients, and had been teaching a summer class on SAT preparation for several years. Even though she had been tutoring children for quite a while, she didn’t consider this to be a major thrust of her business previously because she wanted to be home with her own child after school hours.

But now that her child is older, and Claudia knew she was unhappy in her old business, she began to close it down and revisit the idea that tutoring could be a viable business model.

“As soon as I closed down my old business,” she says, “In one week, five new tutoring students came to me!  It was so bizarre. I suddenly had more students than I knew what to do with.  My business just took off.”

Mourning Your Old Business

When you’ve been in business a number of years, you invest a lot of yourself in it. So when you close down your old business completely, you need to be aware of the feelings that can come up.

“I actually felt sad,” says Claudia. “I wish I could say that I was really joyous and happy, but I wasn’t.  It felt like a really big loss. I think because it was a business that I put so much into and cared so much about.”

But Claudia has a great philosophy about this business cycle: “People change and I changed. Once I got my mind around that, I realized that it was a really positive thing and once I realized that it was a positive thing, letting my business go was kind of a relief.”

Pausing to Plan

When I asked Claudia, “On a scale of 1 to 10 — one being you’re just starting your tutoring business and ten being that you have a complete new business model — where would you say you are in the arch of building this new business?” she replied, “Four.”

Because Claudia had run a successful business previously, she knows that she needs to design a business model for this new business – for next month and for 10 years from now. She says, “Not only the marketing, but the planning and the organizational skills that I learned in my last business, I know need to have. Knowing everything I know is going to help me tremendously. I’m actually much better off now than I was when I was starting my life coaching business for new moms!”

So what do you do when your new business comes out of the blue? You step back and take some time to plan the foundation, even as you are conducting the new business work.

How can you tell if you should just go after improvements, or if you should go after true innovation when transforming your business?

Susan M. Grotevant of the University of Minnesota says, “Old organizations, like old people can become set in their ways.” We tiptoe around innovation because it means getting rid of sacred cows, those projects, tasks, products and services we’ve been doing a long time but are no longer profitable, effective or efficient. Instead we settle for improvements, small tweaks that seem like we’re moving forward but really are a smokescreen to real transformation and business reinvention.

Improvement can be defined as small levels of change that have low risk, and typically start with an existing problem or process. There’s nothing wrong with gradual, consistent improvements, and the Kaizen philosophy of  change is being embraced all over the world.

But gradual improvements don’t allow for the type of creative thinking that starts with a clean slate, breakthrough thinking which helps innovate new ways of serving your customer and leapfrogging over your competitors.

Yes, innovation is riskier, but the rewards often outweigh those risks: greater revenue and profitability, thought leadership, and a bottom-up overhaul of how you serve your customers so you can serve them even better than ever.

Which strategy is better for your business reinvention? Both have their place in your strategic thinking, and your long-term goals will help you determine whether innovation or improvement is right for you. Don’t push away innovation because it feels to overwhelming or risky, though. You could be pushing away the future of your business.

Good news…the FREE audio recording of the guest radio interview I did with The Coaching Show radio program is now available (see both segment 1 and segment 2, for a total of 30 minutes)

Click here to visit The Coaching Show radio program website to listen to the recording of the interview.

Listen online or download the MP3!