Reinvention Revisited: Restaurants, Retail And More.

Reinvention is one of the four pillars for successfully navigating the downturn, the others being downsizing, debt workout, and Internet marketing.

I continue to field questions as to what reinventing your business means, so I will attempt to outline a few examples.

Reinvention requires examination of your business and coming to terms with a few facts. Revenues are down (meaning profits are also down), consumer tastes and habits are changing, credit is unavailable and people are saving more, reducing their debt, buying less and changing their purchasing habits. With overhead creeping—or perhaps galloping—upwards, something drastic must be done to your business model, i.e. reinvention.

Reinvention is all about evaluating your business and making adjustments in the process, maybe you subcontract instead of manufacture to reduce overhead and fixed cost per piece, or maybe you import instead of make. Maybe you become a sales organization instead of a manufacturer.

Reinvention is about what you sell. Maybe you expand a niche to be the best in it or maybe you focus on one small aspect of your previous product mix to be the best in this smaller range.

Reinvention requires that you examine your customer mix as maybe you can no longer be everything for everyone. Maybe you must be something special to a smaller customer mix. Maybe you drop wholesale and sell direct to the specific consumer you are most successful and profitable with via Internet sales. Maybe you add retail from your factory and target your preferred customer. Know your best customer and market to this sector. It is about taking your greatest success, most profitable service or item and figuring out how to deliver it to the market less expensively, better and most profitably.

Reinvention sometimes means rolling years of development and evolution back to what the basic formula for success is for you and emphasizing it. Or, maybe it is abandoning everything you have done to date and launching a new approach to market your product or service.

Businesses that once offered home delivery and then phased it out for a mall location and are now are reconsidering cheaper rent and home delivery again… that’s reinvention. Adding additional services, like tailoring (or whatever is appropriate to your product) is an example of reinventing your business model. Offering do-it-yourself seminars for people and selling the book or video is reinvention of your process. Another trend of reinvention that is creative and makes sense is utilizing one’s assets more productively by building revenues and profits were there were none before in response to the consumers’ new habits, attitudes and buying preferences. This may mean staying open 24 hours a day, or having a Saturday night sale, offering at-home events or only opening the business on weekends.

For example, a smart restaurant owner, noting a decrease in lunch business, realized that business executives are now on tighter budgets and smaller expense accounts, so he began to emphasize “power breakfasts”, breakfast typically being a less expensive meal. Smart executives, accustomed to the “power lunch” (or dinner) realized these were very expensive and time-consuming and began to cut down and even cut out such meetings. Thus, this local eatery commonly patronized for lunch or dinner business meetings began opening for “power breakfasts” with phenomenal success. Now it’s a trend. This is reinvention. He reports he has more than made up the loss he had experienced in lunch and dinner business by promoting his power breakfasts. He now opens early and serves until lunch time.

Take a hard at your business and make the necessary changes. Reinvention, one of the four pillars for successfully navigating the downturn.