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Making a Pivot

by Michelle McDonald Pride

Before a strategic rebrand, our business was called Trading Hope. We were growing, but well aware of looming trends in the marketplace and patterns in our business that indicated a future decline in revenue. A mentor to me half joked and half warned that if we did not change something, we would soon be called Fading Hope. Our rebrand was an outward representation of a major strategic pivot.

Some of the most well known brands have successfully pivoted. Wrigley Gum used to give away pieces of gum on the soap they sold. Facebook and YouTube began as dating sites. Even Avon began as a book business that gave away free perfume with a purchase. While these examples are drastic, they are all incredible pivots that recognized the advantage of changing strategy.

Being able to pivot as a social enterprise is one of the most important, yet difficult concepts to approach. How do you pivot your social enterprise without sacrificing your impact? Most social entrepreneurs do not begin their business based on a market need and opportunity; they begin based on targeting a social problem or a particular community group in need. The entire business model is often upside down. For this reason alone, pivots are of critical importance for social enterprises.

What is a pivot

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How The Foundry is Helping Freedom Businesses Find a Market

The answer is always the same… “We need marketplace access.” We work with Freedom Businesses – companies that have a focus on combatting slavery and human-trafficking. This answer is often given in response to the question, “What do you need most as a Freedom Business?” Marketplace access is a consistent, ongoing need for all companies, Freedom Businesses and BAM companies are no different.

What this question does not take into account is whether that market access is for retail, wholesale, white labelling, production only, or any other creative way to enter the general market. What we have found is that marketplace access is really a coded way to say, “We need money and therefore we need sales.”

The reality is that Freedom Businesses do need a market: real markets that are based on quality products and not just the marketing of the brand’s story or relying on ‘sympathy purchases’. While it is important to relay that story with dignity and deep purpose, the story should not take the lead over the product. The product needs to be able to stand on its own merit, with a real market, if the business is to truly succeed.  Read more

6 Product and Market Bloopers: What to Do and Not to Do

Some things are learned the hard way. Mistakes are part of life. But we can also learn from others’ mistakes and hopefully avoid them. We asked BAM practitioners in very different sectors in different parts of Asia to share a lesson they had learned about developing their product or service. Here is their BAM blooper reel:

1. Don’t jump from your idea to… we’re going to do it!

Do your research. Don’t do, “I’m just believing God” and not do your homework. Take time to do some basic surveys and cost comparisons. We’ve always done market research and surveys, asking: is it out there, what’s the competition, how long have they been around, what they are charging? If there is nothing out there then look at a nearby country or look at a product that is close to the one you want to offer. We’ve seen businesses come in with a ‘good idea’ and just go ahead, with no research. One man I met came in with an idea for selling waffles, a business he’d done before. However, he was very badly advised by a local consultancy. He only had one product and here in this country if you don’t have at least 10 things on your menu no one will come in and buy. I walked into his shop and saw in five minutes that it wasn’t going to work as a business. He’d spent his retirement money and closed up after only 6 months. – Ron Read more

How to Create a Value Proposition

The value proposition is a clear statement of what value you offer, to whom, and in what way. It is different from a mission statement because it focuses on differentiation, or the compelling reason why customers should choose you and not your competitor.

Over the next few years the forces of competition will intensify – even for BAM businesses. Although there is growing evidence that some businesses can offer a premium product or service and simultaneously reduce unit cost, this ‘increasing returns’ phenomenon is a mainly a characteristic of the knowledge economy (e.g. for an internet based service where the variable cost is very small). Usually a business has only two positioning choices: increase margin by lowering costs and charging what the market will bear, or increase margin by premium pricing based on a distinctive value proposition, consistently delivered, which gives customers a compelling reason to purchase.

A value proposition must be written in clear language using simple words, so that all your employees can work out the things they must do to deliver it consistently. A clear proposition will make resource allocation choices easier for you. When money is tight, you will want to spend on the things which maintain or extend your value proposition. The value proposition will also act as an attractor for new customers – it will define your position in the market and give you a reputation and therefore a brand. It will unify the actions of your board and employees and it will act as a deterrent to competition; the key to becoming a “price setter” in the market because you can then control your margin. Read more

How Does Spiritual Impact Intersect with Your Product or Service?

It goes without saying that the product or service you develop will be tightly interwoven with your missional goals: social, economic, environmental and spiritual. We can learn a lot from mainstream business about how to most effectively develop products and market share that will turn a profit and create economic impact. We can also learn much from the social enterprise movement and other socially responsibility companies about how products and services integrate with both social and environmental impact. But business as mission integrates a fourth bottom line, that of spiritual impact. In what ways does the product you develop or the service you offer intersect with the spiritual impact of a BAM company?

We asked four BAM practitioners in very different sectors in different parts of Asia to share why they chose their business and how it connects with the spiritual goals for their business:

Extreme Sports Equipment – Wholesale and Distribution

For us it’s impossible to separate our products from the impact we want to have as a business. First of all we want to make sure that all our products have integrity. We use the finest quality materials to make our equipment. Factories here tend to use a lower grade of materials when mass producing this type of equipment. We asked our manufactures to use the highest grade of materials possible and have a good standard of quality control in place. We pay more, but we feel that supplying top-quality equipment is integral to our credibility and our message. We also include graphics and images on our equipment that have a gospel meaning behind them. Every graphic has a story and we include booklets with our products that explain what the images mean and essentially tell the gospel. We are actively engaged with the extreme sports community here, we sponsor competitors and hang out with the people who are into our sport. We’ve started a kind of church among this group, we go where they all gather together and we do a bible study there, we regularly meet with a core group of 20 to 30. We send representatives from our company out as they do product distribution to other cities and they are able to build relationships with community leaders and begin to disciple them. – Jon and Dave Read more

6 Essential Questions to Ask Yourself About Your Product and Market

Here are 6 fundamental questions, the answers to which will – if adopted – increase the likelihood of you successfully building a sustainable and fruitful BAM enterprise – one that impacts along the four bottom lines: financial, environmental, social and spiritual.

1. Is there a real market for my product or service?

The first critical question is, is there a real market for what I intend to offer? Who will buy it? Research is essential to understand fully what your customer needs or wants and how you will meet or even exceed that need. To do this you should develop a value proposition: what value you will your product/service bring to the customer that helps either move them away from a pain, or draws them towards a benefit?

Successful market entry usually does one of two things:

a. Provides a new and innovative way for a customer to use a product or service that will save money and increase efficiency and productivity, or

b. Provides existing products or services at a cheaper price. Read more

Business Planning: Developing Your Product, Identifying Your Market

We are starting a new series this month on Business Planning: Product and Market. Figuring out your product or service offering is obviously at the very heart of any new business. However, it is at this crucial, early stage that many would-be BAMers go wrong by failing to properly consider whether there is a real market need – and therefore customers – for the product or service they want to sell. There is no business without a customer.

A recent blog for The Institute for Faith Work and Economics on starting a social business puts it this way: [It] is imperative to have the customer in front of your mind when starting a social business… To start a social business, you have to know what will be marketable to your target customers.

The first thing you have to do is figure out what sells – don’t start with the cause. The cause is what moves us… but, you can’t start a business around a cause.Jimmy Quach, via TIFWE

Many BAMers get the ‘cart before the horse’ – they start with a cause, or they start with the potential employees they are hoping to empower, or they think of a ‘great’ idea for a product or service that feels doable to them. However, if that idea doesn’t have a market – if there are no customers – then there will be no sales, no cash, no empowered employees, no credible business and the cause will be lost. You need both the ‘cart’ and the ‘horse’ to move forward. There is nothing wrong with having a cause, or trying to empower a certain group of employees or pursue a particular product; however you better make sure that there are customers and sales to drive that business forward towards making the impact you hope to make. Read more