New Year, new store? If you’re like most independent retail store owners, a new year can feel like the perfect time to make a fresh start by reworking your product lines, introducing a new category, revamping your staffing…or even changing business models.
But before making such a drastic change, there are a few key things to consider. Changing business models is not a decision to make lightly, so today, I’m sharing some valid reasons to change (and some NOT change!) your business model.
Read on to learn when you should change your business model, when you shouldn’t, and what can help you make this decision with confidence before the new year arrives.
Before we dive in, changing business models is NOT a decision I take lightly. I want you to have the data, research, and any information necessary to help you feel CONFIDENT about this decision.
With the new year approaching, I know many of us take the end of the year to ponder and reflect on what’s been working and what hasn’t. We tend to start thinking about what we can change to make our businesses and lives better.
For some, our changes will be minor (but hopefully have a significant impact, of course). For others, you might be considering BIG changes—such as completely changing business models.
What Does Changing Business Models Mean for an Indie Retailer?
For independent retail store owners, changing business models is a major shift. It usually means shifting from one niche to another.
For example, if your store is an apparel shop but you want to become a home decor store, you are changing business models. Another example could be from home decor to a full gift shop.
This isn’t just increasing your offerings in one category—this is completely changing the focus of your store. It might also mean rebranding with a new name, logo, and mission.
Before Changing Business Models, Ask Yourself These Two Questions
While changing your store’s business model can feel exciting—especially with the “New Year, New Me” energy building in Q4—I want you to have a conversation with yourself before making this decision.
There are two things you need to ask yourself if you’re considering changing business models:
1) Why do you want to make this change?
2) Does this change make sense?
Over the years, I’ve seen store owners disregard what their customers told them. Instead, they chased after an ideal store they wanted for themselves, or worse, a version of their store they thought would bring them more success.
The problem isn’t always the product lines, the niche, or the category lineup. Far more often, it’s the store owner’s thinking that’s the problem.
For instance, maybe one of your categories or services is doing incredibly well, to the point that you’re drowning in it, and it’s bottlenecking the rest of your business. Your customers are telling you they want this with their hard-earned dollars!
But if you’re afraid to raise your prices, set clear boundaries, and create efficient systems, you’ll never be able to get your head above water. And if you change your business model to avoid going all in on the category or service, you’ll be ignoring your customers completely.
When Changing Business Models Makes Sense for Independent Retail Stores
So when should you change your business model? Let’s look at a few reasons that make sense (and don’t come from a place of fear, worry, or ignoring what your customers want in favor of what you want).
Customers Are Asking For You to Change
If your customers are asking, either directly or indirectly, for something other than what you carry, that’s a great time to consider changing your business model.
You Have the Foot Traffic But Not the Sales to Match
If your store is full and you have good or excellent foot traffic, but it’s not converting to sales…then it’s time to consider changing business models.
When NOT to Change Your Shop’s Business Model
On the flip side, there are a few reasons NOT to change business models.
Your Mindset is Getting in the Way
Feeling FOMO, envy, or competition with another store? That’s NOT a good reason to pivot.
Whether you’re in a group like Master Shopkeepers or not, we all follow other store owners on social media. It can be easy to see another store on Instagram that makes you want to drool and causes envy.
But like I’ve said before, another store’s business is NONE of your business.
When you start to make decisions from someone else’s lens, you lose YOUR vision of what will work for YOUR business.
There’s Too Much Demand
If your customers are asking for MORE of something you already do, you need to ask yourself, “Can I accommodate MORE of this?”
It will sometimes make sense—especially if you’re ready to raise your prices, set boundaries, create systems, or hire more hands, as I mentioned earlier.
It won’t make sense in other cases, and that’s ok!
Your Revenue is Low
Do customers love what you have? Does almost everyone who comes in make a purchase, but you still need higher revenue?
It might be because you haven’t done the marketing work to get the right people in. Changing business models won’t work if you continue avoiding your marketing.
Times You Might Consider Changing Business Models at Your Indie Retail Store
And then there’s the middle ground, where you might consider changing your business model.
You’re Experiencing Burnout
Truthfully, burnout can often be fixed with mindset work. But sometimes, it’s simply time for a change! If this change will make all the difference for you and your customers, it might be the right choice for your indie shop.
Are You Considering Changing Business Models in 2024?
Again, I do NOT take making this decision lightly. I want you to have the data, research, and any information necessary to help you feel CONFIDENT about a decision of this magnitude!
If it’s time for you to have a conversation with yourself about changing business models, take it seriously. Look carefully at your data when you are rested, and your mind feels healthy.
Otherwise, you’re risking a good thing that you can work to improve.
- Free resource: 100+ Quick & Easy Social Media Ideas for Retailers
- [05:22] What Does Changing Business Models Mean for an Indie Retailer?
- [05:53] Before Changing Business Models, Ask Yourself These Two Questions
- [07:45] When Changing Business Models Makes Sense for Independent Retail Stores
- [10:19] When NOT to Change Your Shop’s Business Model
- [14:18] Times You Might Consider Changing Business Models at Your Indie Retail Store
- [15:19] Are You Considering Changing Business Models in 2024?
Connect With Kathy
Kathy Cruz is a brick and mortar store owner and retail coach. She helps shopkeepers work less, profit more, and grow their brick and mortar businesses through her podcast, quiz, and retail coaching mastermind.
Website: www.savvyshopkeeper.com | Instagram: @savvyshopkeeper