This year marks the 30th anniversary of SRB Communications. In honor of this accomplishment, our blog series, Lessons Learned, will highlight the five most important lessons that Dr. Brooks learned in 30 years of business as the founder, president and CEO. Check in next week for Lesson #2.
Starting a business is a risky venture for anyone to take. Data from the U.S. Bureau of Labor Statistics shows that approximately 20% of new businesses fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. The world is a constantly changing place. Many hopeful entrepreneurs don’t prepare themselves or their businesses for the strain that can be placed on them. And no matter how long your company has been in business, you’ll need to know when it’s time to pivot.
Pivoting a business is not just adding new service offerings, it’s a systematic change in your business model. That being said, you shouldn’t wait until your business is under severe economic strain to think about how you can pivot your business. Always have your business prepared to shift business models, you never know when you’ll need to make a change.
Look at what’s happening in the world today. No one could have predicted a global health pandemic would hit and totally devastate the economy. Though the causes are different, we find the world heading towards an identical economic situation as the recession from 2007-2009. That recession hit small businesses very hard. SRB Communications lost 90% of our business, pretty much overnight. The media landscape changed dramatically. We went from producing 90-100 videos a year in our million- dollar production facility to competing with one-man teams with a small camera, iPhones, laptop and at-home editing software. Producing original television programming on a regular basis for network and cable TV was replaced by reality shows.
As the CEO, I looked at my business, our services, personnel and the media landscape. Though we were a production company, we still had one large advertising contract with Pepco Holdings. I had to make some tough decisions. I could shut down the company after 18 years of business and call it a victory or I could pivot the business from TV production to marketing and advertising, where production of radio and TV commercials are still dominant.
When I looked at the media landscape and did the market research, what I found was that there was more business to pursue in the energy and utilities industry. And that business was expanding to advertising and marketing work and executing campaigns, e.g. educating customers about utility programs and initiatives. And so that is when I decided that if we could win one (1) utility contract, we should go after every gas, water, and electric company in DC. And we did. And we won. And then we went to Maryland. We won again. Then we started winning utility contracts up the East Coast. After a few years of pursuing and winning contracts in the utilities vertical, we continued to expand our business verticals in advertising and marketing to higher education institutions, government and transportation agencies, political campaigns, convention centers and sports arenas.
So, for me and for SRB Communications, pivoting the business was about learning that we had to sell what our clients want and need. Too often a business fails because they provide services that their customers are no longer looking for. SRB Communications was a TV production company but the market shifted, so we had to do the same. In sports, there’s a saying, “Be where the ball is going, not where it is.” Look at your market, figure out what your customers need, and if you can have the capabilities, be that. Sell what clients need, not just what you have.
Business is unforgiving and to survive you have to stay on your toes. Pivoting leads to a business that is flexible enough to surpass those vulnerable years where many fail. Your business is in fact not yours; it belongs to the customers you serve. The customers decide if you succeed or fail, so it’s best that you listen intently to their needs.