Why Branding is so Important for Startups
Starting your own business and becoming your own boss is a dream that can easily be turned into a reality in today's digital world. The modern era has made it increasingly easier to launch your own business and run it successfully online.
The pandemic has proven that working from home is possible and has given people more time to think about what they want to do with their lives. Maybe the time in solitary confinement has spawned new ideas, or people have had the time to really think and plan that idea they used to talk about in the pub with their mates. It seems that, for many, it is now time to turn that dream into a reality.
There is no better time to start your own business; in 2021 there are more entrepreneurs than ever before. People are resigning from highly paid jobs and starting out on their own. With advancements in technology, the cost of setting up a small business and running it online is relatively low. However, the competition is probably at an all time high, with new businesses popping up left, right and centre.
Out of every 100 startups 90% fail in their first year, leaving only a small proportion to go on and bask in success. Why is this, I hear you ask?
It could be to do with a lot of factors: a bad idea; lack of product testing; poor money management; lack of customers; or just getting lost in the sea of competition. There are many reasons a startup will fail and also there is no easy route to success. It takes time to build a legacy — Rome wasn't built in a day and all that.
Is branding important for startups?
One major factor is the competition that you face in your chosen field. How are you going to stand out from other companies? How are people going to remember your business? Branding is often overlooked by owners as they feel it is not an important allocation of resources. But building your brand from the outset is so important for a new company in attracting customers and gaining their trust. If branding is done properly then a business can build a brand that targets a certain clientele and market themselves directly at those customers. You want to talk to them on their wavelength and resonate with their personalities, talking to them in a voice they understand.
Branding will enable you to give your business a unique personality where you can express who you are as a company, what you stand for, and create something that your potential customers and investors can really relate to and support.
How much of your startup fund should you allocate to branding?
When you first start your path as a founder of a company, having a budget that you rigorously stick to is so important. You, of course, need to be careful of what you spend your money on and how you allocate your resources. The question of what the most important factors you need to invest in is, of course, at the forefront of your mind.
For the most frugal of founders, having a good idea and a prototype alone is not going to attract investors. This is where branding can help a business from going broke, and investors are more likely to be interested in a brand that is scalable.
The majority of startups fail due to lack of branding or clear brand strategy. Founders can spend years developing an idea and then, when they come to market it, they realise that they have not tested it properly and are not able to reach the desired customer. Subsequently the product or service fails.
How are you going to stand out from your competition?
“The art of marketing is the art of brand building. If you are not a brand, you are a commodity”.
Branding plays a huge role in developing and growing businesses. With startups it is maybe the most important factor in success and allows you to differentiate yourself from the crowded marketplace.
The digital age of the internet has given a free platform for businesses to engage potential customers with interesting content. Having a solid strategy of how you are going to achieve this is of paramount importance for startups. You need to invest in a strategy that builds a brand that promotes your ideas and core values to the public. You need to keep your audience engaged and target them at the right time through the right media.
Having a strong visual identity is a part of the process, but before that you need to create a brand that people can resonate with and associate themselves with. Your brand is not just your visible identity and logo, but what people remember about you and how they feel when they think of you.
“Your brand is not what you think it is, it’s what they think it is”
With a solid brand identity a business can create a loyal following of fans which gives you a competitive advantage in the marketplace. It gives your company its own unique brand persona that can grow and develop as your business evolves.
People connect much easier with brands that have a persona that they can resonate with. You want them to join your “Tribe”, to spend their money on your products and tell their friends and family about your business. This type of loyal following is essential for the growth of startups.
Investors are drawn to startups with great branding
As a fan of ‘Dragons Den’ I can’t help but notice the amount of times the Dragons invest in companies that have a strong brand over those who have ignored it. I have seen some awesome ideas for businesses (well I thought they were) get torn to shreds as the branding and messaging is all over the place.
Investors understand the importance of brand value and the thought and process that has gone into the development of the brand. They want to understand your positioning in the market and the value that you bring to potential customers.
Investors are looking for clarity on what it is that you offer. They do not want to hear mumbling and obscure words, but a clear definition of what it is that you offer. You need to keep your positioning statement short and to the point.
In this age of startups, investors are looking for businesses that make a positive change in the lives of their customers. How are you benefiting the end user? Maybe your business is there to save your customer money, or you are trying to make their lives easier or safer. It is important that you include these elements in your message that you are sending out to customers and investors.
For a majority of startups securing investments is as important as creating a customer base.
Branding will help you create a customer base
The world is full of brands; whether people spot them in the shops or are scrolling on their phones. People generally gravitate to brands that they know and trust. Your visual branding needs to be impressive to stand out from the competition.
Having a strong brand identity is vital in creating a customer base; it can make you look like you are there to compete with the established brands and therefore gain the trust of your desired customers.
In the long run, without a solid brand strategy you will struggle to market a product or service successfully. However, startups who invest in branding will be able to transmit their purpose, values, mission, and connect with customers on a deeper level. They will have carved out a niche in the market and will differentiate themselves from their competition and be able to compete with larger companies as customers feel more of a connection with your brand.
“If people believe they share values with a company, they will stay loyal to the brand.”
Thanks for reading.