When we started Main Street Gourmet more than 30 years ago, I don’t remember hearing or learning about the business concept of “pivoting.”
I just know we did whatever it took to keep the dream alive and survive.
Pivoting is now a relatively common term in business, generally involving a dramatic shift in strategy. It has many different shapes and sizes. It can involve the entire company or a certain aspect of it, or even the reimagining of product offerings.
One of the biggest dilemmas facing an entrepreneur is deciding on the right method and timing of a potential pivot. Have sales hit a wall? Does the competition consistently beat you? Are you too slow in implementing strategy? Have you found a better strategy that has fewer impediments with higher rewards?
Main Street Gourmet started in 1987 as a retail outlet in downtown Akron. Our business plan called for the company to add retail outlets and possibly a franchise component. Our retail outlet was doing well enough during the first several months when a local restaurateur came to us and wanted to buy our muffin batter and use it to make and sell muffins in his restaurant. Naively, we looked at this as more of a threat than an opportunity, but we reluctantly sold him the batter.
After several orders, we started to see the light. This wholesale side of the business involved less labor, higher sales per order, better overall margins and an entirely new and larger customer base to pursue. Our first pivot in our evolution was to exit the retail business and focus on the wholesale bakery muffin batter business. It was a major turning point that resulted in rapid growth and gave us the ability to add a lot of infrastructure.
Our second pivot happened about eight years later when we started to face stiff competition from a national company that had better distribution, a powerful sales team and the wherewithal to go after business with a cutthroat mentality. In order to compete with this national business, we decided to develop a customer approach that would be difficult for it to compete against. Our strategy was to customize the products we sold to national and regional chains so that they could have a unique product and something to call their own.
Under this new model, we were able to obtain major restaurant chains and outfit them with distinct bakery products. The competition found it difficult to sell its off-the-shelf product to these chains, and its stodgy organization made it impractical to set up new production lines to try to duplicate what we were doing. Our relatively small size and ability to be nimble and adaptive became an advantage. Today, this concept is the cornerstone of our business.
Starting and maintaining a business is filled with many dynamic elements of risks and rewards. Being aware of a potential pivot and implementing it successfully can turn your company in a powerful new direction.
Steven L. Marks is co-founder and co-CEO of Main Street Gourmet, a manufacturer of frozen bakery products with distribution throughout the U.S.