Photo by Nick Fewings via Unsplash
As I check in with clients and friends throughout the industry, I’ve been asked over and over again, “Should I pivot my business?”
Event rental pros are wondering if they should break into home staging, create elopement packages, start offering flowers or all-inclusive services, expand their offerings or pursue new markets. My answer is always based on the individual situation but I wanted to share my framework for how I evaluate potential business pivots (whether you’re in a pandemic or not).
Before we address the question of pivoting, I recommend first assessing whether or not you’ve reached your potential in your current market. For instance, if you currently rent cross-back chairs, are you renting them as frequently as you’d like? Are they going out every weekend? Twice per weekend? Midweek? If not, why not?
Do you have 5% of the addressable market? 10%? 50%? Are there people interested in renting cross-back chairs that aren’t currently renting from you? If so, why not? Is there potential for you to be renting more of what you already have to your current target audience?
Would you rent more if you had higher brand awareness? More relationships with potential referral sources (planners, venues, caterers, florists)? If people know about you and just aren’t renting from you, I recommend that you find out why before venturing into another business line.
If, however, you’ve been really successful with your cross-back chairs and feel like you’ve sufficiently saturated your existing market, it may be time to talk about some pivots.
I hate to see entrepreneurs add additional business lines in order to get “more revenue streams” when they haven’t yet turned up the volume of the one they’ve already got. More irons in the fire doesn’t necessarily mean more revenue or more profit… sometimes it just means more chaos and headaches.
In light of the COVID-19 pandemic, the answer to this first question may be really different than it was three months ago. Maybe you were growing your business at the rate you wanted. You had a healthy share of the market you are in. You are known by and referred by the referral sources that already have your target market in hand. But since coronavirus has brought things to a standstill, you’ve got to look for other revenue sources because this one truly has dried up (at least for the foreseeable future).
Product, Audience, & Process
When I talk about a business pivot, I’m not talking about starting a whole new business; I’m not suggesting that you turn from event rentals to pizza delivery. In fact, the wisest way to pivot your business (whether in a time of crisis like this or even in a healthy growth cycle) is to focus on three aspects of what is currently working: your product, your audience, and your process.
Let’s assume for a minute that before COVID-19, things were going like gangbusters for your event rental business. Your collection was dialed in. Your target audience loved you. You had your process & systems down to a science. Essentially, you had a recipe for success; Product + Audience + Process.
Don’t get me wrong. It wasn’t and easy recipe and it certainly wasn’t without its bumps in the road. But you weren’t reinventing the wheel with every order or guessing about how to make things work anymore. You had a strong sense of what your target audience wanted and you knew what pieces would be successful (and how much risk you were willing to take to find out).
If that describes your pre-COVID stage, you’ve set yourself up for a successful pivot.
But in order to make that pivot work, you’ll want to keep two out of the three ingredients of your previous success the same and only change one.
Sell a NEW Product to your same Audience with the same Process.
Sell the same Product to a NEW Audience with the same Process.
Sell the same Product to your same Audience with a NEW Process.
To continue our example from above, if you’ve been successful at renting your cross-back chair collection to your target audience using the delivery process & procedures you’ve developed, this might be the time to start offering that same audience more products. Do they also want tables? Can you add cushions to your collection? Is there another need they already have that you can fill?
With event rentals, this can be a tricky pivot because new Product requires capital investment. It is risky. You have to take the leap before you know if your audience will bite.
But, you can mitigate some of those risks by
- leveraging your relationships and asking your existing and past customers about their needs
- proposing your new product idea to existing clients and referral sources and gauge their interest
- purchase samples and pre-rent knowing you’ll have the item in stock at a future date
In post-pandemic events, consider that your clients may not be able to splurge on design details or upgrades because they have smaller budgets. However, another subset of the market will have more money to spend on “extras” because they’ve reduced their guest counts. Everyone’s target audience will be impacted differently. You’ll have to determine what your audience’s response to COVID will be.
Post-COVID weddings and events will have higher demand for food service items with hygiene-cautious options (think sneeze guards on food stations and bars, innovative trays for passed food, displays for individually-portioned courses, etc.). Creative seating ideas that are aesthetically pleasing and inviting yet still encourage physical distancing will be in greater demand. More events will occur outdoors. Keeping all of these things in mind will be essential when planning a product pivot.
Additionally, consider that while some elements of life may be forever changed (we’re still taking our shoes off at airports after 9/11), other aspects of events will return to the way they once were bye later 2021 or 2022. If you’re making a product pivot, consider if an existing product you already own can be temporarily modified in order to reduce costs and allow for more flexibility in the future.
MORE EXAMPLES OF PRODUCT PIVOTS FOR EVENT RENTAL BUSINESSES:
- Add Dishware and or Flatware to your offerings
- Group your collection in pre-set packages rather than individual pieces
- Offer plexiglass shields as an optional add-on for your bars
- Create attractive hand sanitizer stations
- Promote “King Tables” (with two of your farm tables pushed together to make a square) that would still seat 8 people but couples or families could be seated physically distant from one another
- Do an in-house “styled shoot” with lounge groupings that separate people six feet or more but include plants, side tables, and other decor to “fill in the gaps” and feel intentional rather than awkward
For a Process pivot, you’ll offer your same Product (rental collection) to your existing client base and target Audience but in a new format or process.
If you’re trying this type of pivot it may look like reaching out to your followers and past clients with an offer to change things up in their home without long-term commitment. Perhaps you offer an “upgrade your dining room” rental package that includes one table, eight cross-back chairs, and a rug for a three month period at a set price.
Another way to make a Process pivot would be to start offering will-call pick-up services (if you haven’t done that before). Process pivots are all about making your same Product accessible in a new way to your existing Audience.
You may incur costs of training new staff, and paying for mistakes and problems you didn’t anticipate along the way. A new Process may also result in more damage or wear and tear to your collection. The risks and costs of a Process pivot have to be outweighed by the increased sales potential. If you remove barriers or make it easier for people to rent your pieces, will they rent more or more frequently?
MORE EXAMPLES OF PROCESS PIVOTS FOR EVENT RENTAL BUSINESSES:
- Lowering or Eliminating Delivery Fees (don’t do this if you can’t make up for the costs within the rental fees themselves)
- Allowing longer term rentals (instead of day rates, charge one set rate for a Thursday through Tuesday rental)
- Eliminating in-house Delivery Services and recommending outside delivery provider instead
- Offering Delivery Services by your team to other vendor partners (florist, designer, planner, etc.)
Larger Business Changes
If you choose to change more than one of these three factors, the pivot becomes a lot more like starting a new business than building on the momentum you already have. Offering a new Product with a new Process to your same Audience is a little easier than starting from scratch but there are pros and cons.
For instance, if you decide to capitalize on the great relationships you already have with your Audience by selling them furniture or flatware in this season, you may peek their interest because they already trust your style and taste. However, in order for you to fulfill those orders, you’ll have to take the risk of buying the inventory and figuring out how to fulfill those orders in a time of corona… either the cash outlay or the shipping / delivery process could drive you to the edge of bankruptcy. You risk sullying the good relationship you already have with your Audience if you can’t execute what they expect of you with this new Product and new Process.
Similarly, if you consider that your Product could find a temporary home if you shift to home staging, you’ll be pivoting to a new Audience and a new Process. While there are similarities, if you aren’t already an expert in real estate and home staging, there is a lot of room for error. Figuring out pricing for longer-term rentals, knowing how to protect yourself against damages, sorting out whether or not you’ll sell the pieces to the home buyer at the end of the term…. there are a lot of question marks. These risks combined with the fact that you may have to make significant capital outlays to acquire items you don’t already have for home staging (mattresses, linens, wall decor, kitchen items, more residential accessories, etc.), could make the endeavor more of a pivot in all three areas rather than a safe shift within your realm of expertise. In the end, you may spend more than you can make with this experiment.
While I in no way want to discourage my friends and colleagues who are going down these roads, I am noticing lots of business owners make assumptions in this season. Think about how many lessons you’ve had to “learn the hard way” in your event rental business. I think many of you have grown, are thriving, and have overcome incredible obstacles. My fear is that this season will cause some of you to turn to a new bright shiny object (that pivot idea) because it seems so hopeful and like the answer to your prayers. But that bright shiny object has a lot of risk lurking under the surface. There are costs you MUST count. There are holes you don’t want to fall into over there.
Once you’ve counted those costs, assessed those risks, and decided what you’re willing to tolerate, I will be the first one to say, “Be brave. You can do this. I am for you!”
But I would be irresponsible if I didn’t remind you that the path you are on has been hard-fought. You have been walking this direction for quite some time. You have worked really hard to get where you are. I know the way is dark right now. I know there is a lot of uncertainty. I know it can feel good to turn to something else… even a project that we don’t know much about because it means we’re actually DOING something. But hold on. Stay the course. We’re going to have to ride through this storm for a little while. I don’t want you to get so far off the path that you can’t find your way back when the clouds lift.
As you evaluate your pivot options, consider how each idea falls in this framework of Product, Audience, and Process. Is your pivot holding on to the good things you’ve built in two areas and trying something new in one? The more you change about what you’ve already worked so hard to develop, the higher the risk you’re taking.
The Way Forward
You need a two part plan right now. The first part is about surviving this season (however long it lasts). The second part is about what growth will look like on the other side of it.
Survival for your business in this season will entail many things. Attending to cash flow in your event rental business will be essential. Reconsidering your payment structure will be a wise move. Fine-tuning your event rental contract to avoid future postponement or cancellation problems will be key. Being ruthless in cutting expenses now will prolong your ability to survive; the more cash you have, the longer you’ll be able to last.
Pivoting your business may be part of your survival strategy (something temporary to get more cash in the door) or it may be part of your overall long-term growth strategy. Either way, taking time to consider the hard costs of any potential pivot is key. You don’t want to part with that cash now on a gamble only to jeopardize the future of your successful event rental business.
Whether you’re offering something new or continuing on the same path, you must be marketing now. Even if your Audience isn’t making purchasing decisions today, they are paying attention right now. They are online more than ever. They may not be interested in the backyard wedding package you put together but it is still an excuse to get in front of them. Even if your new will-call service flops and no one goes for it, remember that how you promoted it will be part of your Audience’s impression of your brand. Whatever pivots you make right now should be consistent with your business, your brand, and your values.
If they aren’t, you’re better off hunkering down. In this season, even when it is scary, don’t throw out the baby with the bathwater.
We’d love to hear about your pivots. Shoot us an email to let us know what you’ve done in the time of COVID-19 to position your event rental business for surviving, thriving, hunkering down, or growing. We’d love to hear what you’ve tried, what’s working, and where you’re headed next on your rental adventures.
You might also like:
- COVID-19 Resources for Event Rental Professionals
- Handling Postponements & Cancellations in light of COVID-19