Two months after launching Brand Thunder, Patrick Murphy sensed that sales were sluggish because he was charging too high a fee for his sole product, a customized Web browser.
So he temporarily slashed the price by more than 75% and gave the product new, income-generating features, including ads and a search tool, by forming partnerships with other businesses.
The original fee "was a leap for something that wasn't proven," says Mr. Murphy, who started the Dublin, Ohio, company in 2007 in anticipation of a pink slip from a large Internet company. "We had to be nimble enough to make that change or this business would not be here today. It was live or die."
Start-ups don't always evolve according to plan. Some end up targeting the wrong market, while others get sidelined by unforeseen competitors. To avoid failure, experts say it's critical for owners to quickly identify what's obstructing them and come up with a solution that sticks.
"Change is absolutely critical to success," says Lou Davenport, an adviser in Lancaster, Pa., for SCORE, a nonprofit small-business mentoring and training organization. "There are things in the business plan that are simply not going to work."
Kate Byars originally launched a photography business in Atlanta last year that offered to take family portraits and provide digital copies of those shots. But within six months, it became clear that the business wasn't generating enough income to survive for much longer.
"I had an avalanche of customers, but after I crunched the numbers, I realized I was working at less than minimum wage," Ms. Byars says. "I needed to find a niche that would allow me to become profitable."
Ms. Byars also needed to act fast. "It was sink or swim," she says. She started her company, Kate Byars Photography, following a layoff from a nonprofit organization. And just a few years earlier, she had to flee New Orleans empty-handed when Hurricane Katrina struck.
Ms. Byars resolved to turn her business into an upscale photography service -- a change she made by increasing her picture-taking fees fourfold and offering framed, printed copies of her shots to account for the price inflation. Today, her business has four employees and is in the black. "I can actually make a living at this," she says.
For other entrepreneurs, turning a struggling start-up around may require adopting a new way of finding customers.
Barry Randall says he initially relied on networking to build a client base for Crabtree Asset Management, a money-management business he started in 2008 after getting laid off from a large firm in the same industry. But six months passed and he had nothing to show for his efforts.
Mr. Randall, who works out of his home in St. Paul, Minn., says things changed when he happened upon Wealthfront, a company that promotes the services of firms like his online. In return for a percentage of the fees it charges, Crabtree Asset Management is now being promoted on Wealthfront.com. It currently has 11 clients.
"It's the equivalent of getting shelf space at a supermarket," Mr. Randall says of the exposure, adding that being listed on the website also helps to strengthen his company's image. "There's an implied level of substance that goes with appearing alongside other businesses, particularly ones that are larger than your business."
Leslie Sell says her first approach to generating buzz for her custom children's book business, Little Wonder Company, failed to attract many buyers. It entailed giving free samples of her product to bloggers and journalists who write about parenting, in hopes of getting positive press. Not only was the strategy costly, but it was also "very labor-intensive," she says.
Ms. Sell, who started her business after getting laid off from an advertising agency in 2007, says she fared better 10 months later when she hired an independent public-relations professional, who would get paid only if she produced results. She did, getting Ms. Sell a mention in a gift guide for this holiday season on a parenting website.
Soon after, Ms. Sell scored an interview with a local TV news show on her own by tapping her personal network.
As a result, says Ms. Sell, this past month her average customer orders per week were 40 times greater.
Of course, it can be difficult for entrepreneurs to concede that their businesses are heading in the wrong direction, says Isaac Barchas, director of the Austin Technology Incubator at the University of Texas at Austin. "Sometimes, it's obvious to everyone except you," he says.
For this reason, Mr. Barchas urges entrepreneurs to consult with mentors or advisers throughout those first few volatile years. "Getting that friendly but honest third-party perspective is really important," he says. "It's a good way to make sure you haven't fallen so deeply in love with your original business idea that you're blind to making necessary changes."