Seeking investment? 5 reasons to get your brand right first

Investors are looking for strong brands that will yield strong returns.

This article originally appeared at Talk Business, you can read it there too.

It’s incredibly common for start-ups and scale-ups to undervalue their brand, focusing instead solely on the product they’re selling. This is all well and good, but it will only get you so far. Every business reaches a point where the strategies and activities they deployed to build traction and drive repeatable business stop working as effectively. This is where brand really comes into play and if you don’t address this before going out for investment, you’re missing a serious trick.

Investors are looking for strong brands that will yield strong returns. And a strong brand is about a lot more than just your logo and name. It’s about defining a clear, distinctive and confident positioning and having a plan for what’s needed to take that to market in a way that will cut through with a new cohort of customers that are critical to maintaining momentum behind the growth trajectory an investor will be buying into. If honing your brand is sitting on the backburner, here are five reasons to get it sorted now:

Brand increases the value of your business

Not only are customers more likely to pay a premium for your product or service if they connect emotionally with your brand, but Investors also recognise the potential this gives your business to scale revenue more quickly, making you a more attractive investment proposition in any upcoming funding rounds. Brand equity can also be a factor for consideration in any future business evaluation and sale price should you eventually want to sell the business.

It’s important to remember that people don’t invest in products, they invest in brands and the people behind them. Investors are looking for solid brands driven by a strong sense of meaning and purpose. They understand these are the businesses that will be rewarded by the market.

Brand helps you communicate clearly

When you are ready to speak to investors either for an injection of funding or a sale, having a strong brand will help you communicate clearly with potential funders through your business plan and presentations.

As mentioned, branding isn’t just about the visuals, it’s about establishing who you are as a business and bringing confidence and credibility to your vision and ambition for its future direction. When you have a clear brand narrative, your communication is clear and consistent. How you communicate both internally and externally is driven by your brand.

Brand determines who you attract

How your brand reflects your business will not only determine what type of customers and employees your business attracts but also what type of investor your business attracts.  Your brand is the outward projection of your business and will speak volumes to all your potential stakeholders. Establishing a strong brand will ensure you attract the right investors for your business, with purpose and drive that aligns with what you’re trying to do.

Brand differentiates you from the competition

First impressions of a brand are formed within the first 10 seconds. But to build awareness and memorability you need to repeat that impression several times over. That’s one reason why it’s vital to think of your brand as your real competitive advantage. It’s what’s going to help you cut through the clutter of the competition and make a lasting impression with customers and prospective investors alike.

As market dynamics and customer needs change, a strong brand will give your business resilience and make it easier for you to flex and adapt. Investors are looking for brands with this element of resilience and future potential – it reduces investment risk

Brand is an investment not a cost

Shift your mindset from spending on your brand being a ‘cost’ to your business to it being an ‘investment’ in your business that will produce returns in the future. Various research – but in particular the seminal work from Les Binet and Peter Field in ‘The Long and the Short of it’ – has shown businesses with a strong brand are more successful over the long-term. Assessing the value of that investment lies not just in evaluating the effectiveness of your marketing activity – though it undoubtedly enables you to derive greater impact from any marketing spend – but in understanding how it can power every aspect of the business forward, whether that’s supporting access to new markets, shaping product innovation or improving employee productivity.

Of course it follows from this that agreeing what investment your brand requires now and in the near future is an important part of any conversation with prospective investors. Building a successful brand takes funds as well as hard work, and for the benefit of both parties in the interests of a mutually fruitful relationship it’s vital to set out expectations around this ahead of making a commitment to each other.

Ensuring your brand has strong foundations before seeking investment will massively increase your chances of success. This is because brand massively increases the odds of business growth and survival – and of course investors want that.

New products and businesses are being launched at an unprecedented pace. It’s those businesses from a well-established brand, or those building a name for themselves fast, that can capture customer attention fast enough that succeed.

Photo by Sunder Muthukumaran on Unsplash