Let’s face it. No matter how well thought out an entrepreneur’s business plan is, in the first 12-24 months of a new business, things will happen that are different from what was expected.
Startup owners need to be able to pivot or change their business in order to survive changes in the market or their customer base. Most importantly, entrepreneurs of small and medium start-ups need to be strategic when changing their plans, so they can use their limited resources to their best advantage.
Regarding the services a company provides to its customers, Kimberly A. Eddleston, Schulze Professor Emeritus of Entrepreneurship at Northeastern University’s D’Amore-McKim School of Business in Boston, says, “If something doesn’t doesn’t make you money, but you what makes you money, so you keep it.
Eddleston, who is also the editor of EIX, the Entrepreneur and Innovation Exchange, which is a backer of Next Avenue, says, “Entrepreneurs don’t want to spend time on something that doesn’t make money. business. They have to make strategic decisions about what will get people in.
Adapt to different demographics
These strategic decisions cover not only what services a company can offer, but also who it considers to be its primary customer base. When Patricia Wynn, owner of Patricia Services, LLC, in Hillsborough, North Carolina, launched her lifestyle assistant business in April 2021, she thought her customer base would be primarily clients aged 65 and older. .
Over the past year, she’s seen her clientele grow to include Gen Xers and even a busy mom and PhD candidate with young children who needed help cooking for her family while she was working on his thesis.
“Originally, on my website, it seemed like I was targeting older people more,” Wynn says. “Now I want to reach everyone who needs help with their daily activities”, regardless of age.
Expanding its target market has been successful, but not without challenges. One difficulty has been to add one or two staff members, even part-time. “The recruiting part was harder than expected,” says Wynn. “There is a labor shortage across the country. People do their own thing and don’t want to work for others, even part-time.
“I also have to make sure I have enough hours with clients to ask someone to work with me,” she adds.
Being flexible also means growing a startup incrementally, notes David Deeds, Schulze Professor of Entrepreneurship at the University of St. Thomas Opus College of Business in Minneapolis and editor of EIX.
Tips for growing slowly
“When you start a business, buy only what you need,” he advises. “If possible, when it comes to gear and other items, buy something that’s used or second-hand and cheaper. Don’t buy a desk until you need it. It’s the difference between slowly building a business and being able to succeed and having a big ego and doing too much too soon and failing.
Strategic decision-making has been critical for Wynn as it maneuvers its start-up business around the pandemic, inflation and rising gas prices over the past year.
“I take it one day at a time,” she says. “You have to do what you have to do to feed yourself and pay your bills. If you see that something isn’t working, you need to give up. You may need to go about it in a different way.
Respond to new circumstances
As things change, entrepreneurs shouldn’t be afraid to update their business plans. Rather than updating once a year, many updates can occur on a monthly, weekly, or even daily basis. Startups don’t operate in a vacuum, they operate in the real world where constant change is happening.
According to a recent article on Entrepreneur.com, leaders of successful businesses must spend time developing effective strategic plans to determine where they want the business to go and how best to allocate their resources to get there.
While many factors go into crafting a differentiated strategy for a new business, one of the most important, according to the article, is deciding on a target market and finding the best way to reach it. achieve effectively.
To that end, now that she’s been in business for over a year, Wynn is reconsidering how she advertises her business, estimating pricing and considering expanding so she can add a staff member or two. .
Changes underway at Patricia Services
“This month I’ve come to the conclusion that I’m going to make some changes to what I do,” says Wynn. “In terms of reaching new customers, since the Care.com website only generates a few referrals, I will be printing flyers by the end of August or early September and distributing them in parts of Hillsborough and Chapel Hill where I haven’t advertised before because some people still don’t buy services online.
Going forward, Wynn says it will change its pricing structure. For new clients, rather than setting hourly prices for cleaning, cooking or errands, she “will assess the tasks I’m being asked to do and the size of the house, and take into account the gasoline I need to drive there, before I give a price estimate for each specific house.
She’s found that local cleaning companies charge more than she does for the same work, and for some clients there’s also an element of caregiving, whether she’s supervising young people or helping an older client.
“I’m changing the prices to make them fairer for the time and energy I spend,” says Wynn, who will keep an hourly rate for existing customers.
Think two steps ahead
She also wants to add commercial customers such as banks, office buildings, and car dealerships to her customer list. This would increase his cash flow and allow him to hire people in addition to his brother, who periodically cleans a client’s properties with Airbnb rentals.
The challenge, Wynn says, has been blocking out time to sit down to figure out the next steps for her business while maintaining a 40- to 45-hour work week, which alternates between five and six days.
“It’s hard when you’re alone,” she says. “A client of mine . . . moved to Boston, so I now have Monday and Wednesday nights free to watch on the computer and research what I need to do to move forward, make more profit, and add customers and staff. One way to attract more staff is to fill out job listings through the local labor department. I used to post jobs there when I was responsible for McDonald’s and Wendy’s.
Carefully check job seekers
Wynn says she can also post a job posting for her company on Facebook, making it clear that background checks will be done on anyone who applies.
When she replaces the client who moved to Massachusetts, Wynn will hire someone to work with her. The application process will include a practical component.
“Part of the interview will be following me around for a few hours, so they can see what I’m doing for a client,” Wynn explains. “If they can handle the job and if the existing client likes them, then the next week I’ll send them on their own, while I serve another client.”
Wynn says adding just one staff member requires her to ensure that her existing clients can develop a good relationship with someone other than her. “I’ve worked hard to develop good relationships with my clients over the past year, and I need to maintain them,” she says.
Leslie Hunter-Gadsden is a journalist and educator with over 25 years of experience writing for print and online publications. She has covered business and a variety of topics for several consumer and trade and media publications, including Next Avenue, Black Enterprise magazine, and the Sisters from AARP newsletter.