As a small business owner, you know adapting your business is key to survival. And the economic disruption of the COVID-19 pandemic means many businesses are under pressure to find new revenue streams. If you’re looking for ways to pivot and find new income, staying true to who you are as a business can help increase your chances of success.
Consider these four steps to developing new revenue.
Review and enhance your value proposition
Your value proposition is the benefit your company promises to deliver to customers if they buy your product or service. In order to reevaluate your value prop in the time of COVID-19, consider the following.
- Audience: Your business was designed to meet the wants and needs of your core clients and customers. Keep in mind your customers’ needs may be changing during the crisis.
- Relevance: If you are still meeting your audience’s wants and needs, think about how you can continue that. As your customers’ habits continue to change, can you find a way to be even more relevant to them?
- Culture: Your company has a unique identity. Is it coming through in the products and services you offer?
- Competition: This crisis may change the businesses you compete with. Keep an eye on what they’re doing and look for opportunities to differentiate.
Discovering a new way to bring value to your customers is the easiest way to develop a new product or service that generates revenue for your business.
Action: Make a list of ideas for how you can deliver new benefits to customers who may have changed during COVID-19.
Ask for ideas
Coming up with new ideas for your business can feel like a lot of pressure, but you’re not alone.
- Customers can tell you what they want, need and lack. Ask, “How can we better help you?” Your customers may have a specific need in mind, and the solution is as simple as asking. However, you don’t want to ask customers to innovate for you if they don’t have answers, so be ready with specific questions about how their circumstances have changed. By better understanding their situation, you may be able to design a solution.
- Competitors may have ideas that inspire you or provide a lesson in what to avoid.
- Employees are motivated to help you succeed, and they know your business well. They may have ideas about how to add value. Consider Women & Children First, a Chicago-based bookstore that began hosting a virtual book club after employees suggested that customers might like virtual events.
Action: Keep track of who you speak to, and their ideas, in one place. This can make it easier to spot a standout idea and identify who to work with to pursue it.
Think evolution, not reinvention
Don’t feel like you need to go back to square one. Instead, focus on smaller tangible ideas.
- Less might be more. New revenue streams don’t always mean upgrading your products or services. With people worried about money, simpler products or services might be more in demand and generate more revenue than a higher-priced option.
- Be persistent. It might take a few tries to turn an idea into a revenue generator — but don’t let that keep you from testing new things. If you’re enhancing your value proposition, you should be able to monetize the idea eventually.
Action: Strategize how you’ll let your customers know about any new offerings. Emphasize how customers will benefit.
While it’s important to brainstorm with your employees, customers and confidants, you also need to test your ideas. There are operations involved, and you may need to invest money and hours into the pivot.
It’s important to constantly evaluate what’s working and what isn’t. If a new revenue stream starts to cost more than you’re benefiting, don’t be afraid to reevaluate.
If your new initiatives stay true to who you are as a business, pursuing them won’t derail any long-term goals. In fact, you may even uncover new opportunities for potential growth. A virtual book club, for example, might evolve into potential new business.
Action: Evaluate the longevity of any new products or services as the economy recovers. Does it make sense to keep your new offerings permanently as other lines of business pick back up?
Just because you’ve discovered a new revenue stream today doesn’t mean it will keep working as the crisis progresses and changes. Staying flexible is key.