What has it taken to keep your small business thriving—or even just surviving—for the past four years since the U.S. economy crashed? For my business, it’s been an ongoing process of reinvention.
Turns out we’re not alone: A recent survey out from Citibank found the majority (53 percent) of small business owners have stayed afloat or competitive by reinventing their businesses.
Here’s what Citibank found small business owners are doing to reinvent their businesses:
- 47 percent overhauled their product or service offerings
- 24 percent revamped their infrastructure, such as technology or staffing
- 18 percent revamped their sales and marketing
- 7 percent cut prices or took less profit
- 3 percent relocated their businesses
These figures don’t surprise me, because reinvention is what entrepreneurs do. (After all, if we weren’t such naturals at innovation, we’d be employees, right?)
I’ve learned a lot about reinvention as a small business owner. When my partners and I started our company in early 2008, just before the economy crashed, we had a well-thought-out business plan targeting one type of market. A few months later, though, our big clients lost their budgets and couldn’t commit to contracts. Time to reinvent ourselves. We turned on a dime and have kept our business thriving as a custom content provider for more than four years. There have been lots of large and small reinventions along the way–and we’re not done yet.
Even when I was an employee, I’ve always liked shaking things up, but one thing that’s surprised me about being in business for myself is that the pace of reinvention truly never lets up. In fact, with 38 percent of small business owners in the Citibank survey describing competition in today’s business environment as “extremely intense,” entrepreneurs were taking other steps to stay competitive:
- 88 percent stayed up-to-date and current about their industry
- 70 percent increased time spent working with customers
- 67 percent updated or upgraded computer systems
- 52 percent used the internet and social media more
- 51 percent built a network of suppliers and partner companies
To make these changes happen, 38 percent are increasing capital investments into inventory, facilities and computer equipment, with 75 percent using profits and 62 percent using personal savings to do so. Small business owners’ reinvention process isn’t over, either. In the next 12 months, 50 percent of small business owners say they plan to introduce new products or services.
Now, what these figures make me think is: Who is that 12 percent that aren’t keeping up-to-date on their industry? The 50 percent who aren’t introducing new products or services? The 33 percent who aren’t upgrading their computers? If you ask me, these entrepreneurs are making a big mistake.
In the old days, maybe you could rest on your laurels and feel confident in your hard-won knowledge. Today, you’ve got to keep earning that knowledge over and over again. If you’re not reinventing yourself, not only are you not keeping up—you’re falling behind.
How are you reinventing your business?
Reinvention Photo via Shutterstock
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Thank you for this post, Rieva,
You’re right; the speed…the pace at which reinvention happens, and for us must happen, is astounding.
As much as I truly want to focus on one area in my business, I can’t.
I need to have several “Planks,” to my business–as author Phil Simon calls them.
Being an entrepreneur is a great thing. Because we can reinvent our businesses as needed.
The Franchise King®
Agree with Joel, this is a great post. Small business owners who think they can weather downturns or spark explosive growth by offering the same products and services year after year must read this.
I love the term ‘reinvention’ as it has a more positive note, where one learns from mistakes and still continue to persist. I think that listening to your customers is the best way that can help when you’re reinventing your brand, so you don’t only keep your products/services up to date, but you also have something that matters to your target market; something viable.
This is absolutely one of the most insightful posts I’ve ever come across today. Well, it’s either you come up something new with your business or risk sinking. (Insert Ben Franklin quote about death and taxes here.)
What did we do to reinvent? Cut expenses, relocated the business to home, expanded into a new major sales channel (Amazon), reinvested all our profits and put the kibosh on expensive vacations. It’s really starting to pay off, but it did take time.
This is an excellent and much-needed post. Current success in no way guarantees future success, and the only way to keep growing and expanding is to constantly learn and try new things!
Hmm. Good thought provoker, Rieva. I hear the word reinvent and think — tear down, start from scratch, major shift. I don’t know if you can reinvent yourself by incremental changes. It is possible, i guess. Invent = new or dramatically changed from something old. I’m all for reinvention of a business especially if it keeps more small business owners alive and profitable and successful. Reinvent. Invent. Change yourself first, then change the world.
thanks all for your responses. I think this is something entrepreneurs need to do regularly
Fascinating statistics! It’s a real eye opener to those looking to reinvent their business and who want to get a better idea of what other businesses are doing. The figures are really enlightening, and they even support the different tips listed on the article at http://www.sbtelegram.com/2012/09/28/branding-and-rebranding-reinventing-your-business/
Evolution of Facebook from Orkut,explains reinvention.