“The co$t of not branding your business is similar to not fixing bad credit and still applying for a mortgage but often times worse!”
DO you realize the adverse effects of NOT branding your business? It consistently drains your cashflow on a regular basis. It’s sort of like having a gas bill go up and cost you hundreds of dollars every month. By the end of the year you probably should have financed some new windows instead of trying to save that little money by not investing in windows. Instead you turn the heat up to keep warm while ignoring the root of the problem. You ultimately end up paying double to fix the problem.
It’s amazing how many times we adults let the ‘up front’ cost get out ahead of us. Many families will do things like neglect paying for insurance and when a loved one dies everyone has to scramble and ante-up just to make everything come together for a proper burial. It’s important to what you’re receiving as a gain rather than focusing on what it is you are paying out of your pocket as a loss.
Branding is that 1 thing that most entrepreneurs seem to neglect. Why? Because it seems entirely too hard and way too expensive. Most people have not been properly educated and they think they can skate by simply remaining at what I call the hustle-stages or just do some simple advertising and basic marketing to close friends and family thinking their business will blow up over night. Only to discover that most friends won’t support them and if they do support them, the welcome could run out very fast.
Unless your business actually accommodates your family, then they are just pity shopping. They do it out of love and support they have for you. They buy even if they don’t really need your product or service. That’s not what your business should be about. Business is about reaching your target market in a time of need and serving your customers.
Think of how you feel when a struggling family member is hustling their chips, dinners or desserts. If its not what you need, you can get tired of them asking you after the second or third time. Pretty soon you can find yourself avoiding them and not taking their multi-level, marketing type phonecalls. You can feel their daunting desperation sneak into your space and they have just about put themselves in the same category as the homeless man on the corner.
It’s no longer business, it’s now become begging. Then what happens? The solo-preneur gets upset with you for not supporting. They don’t understand you’re not their target market. You simply aren’t that every week buyer that needs their product or service that will pay the bills and keep their doors open.
Some people may not fully understand so let me hit this from another angle using credit analogies. Its very irresponsible to neglect your credit score in general because you may need it when buying a house or car, etc. The reason being is that when you have a 720 score or higher, You can get an auto loan interest rate of about 4.8%, taking your monthly payment to a minimal $375.00 monthly. A credit score of about 620 -680 is around 9.0% which makes your monthly payment go up to $415.00 which equates to an extra $2300 per year out of your pocket. When you have a 580 credit score or below, your interest rate soars to 15% causing a $630.00 payment which adds an extra $15,000 within 5 years.
With a home purchase you will be upset to know how much money you throw away. A $200,000 mortgage with excellent credit can give you a conservative payment of about $1100 monthly but a low credit score of about a 550 can cost you double. Your total will jump to over $450,000 including all the interest you will pay over 30 years. The cost of NOT branding is similar so let me explain.
Branding a business is extremely costly in numerous ways. The biggest being that most businesses never hit the 10 year anniversary mark. More than 80% never even make it to 5 years. In fact the US Census Bureau says that “400,000 new businesses open their doors every year and in that same year 480,000 businesses are dying”. That number is staggering but no one rarely talks about the root of why they fail. The solution boils down to one word… BRANDING.
When I hear people complain about the cost of branding, I first ask them how much is their marketing budget. When they say they don’t have one, it tells me at that very moment, they are naive toward the basic fundamentals of business & branding. I now have the choice to either run in the other direction or I can stay and offer to educate them if they are willing to learn. “Education costs… but the lack of education costs more”. When you have top of the line information then it may come at a premium cost and depending on how far they have let the problem evolve to, it often cost more to fix then if they did it correctly from the beginning.
To all the people reading this blog who are still unsure about the importance of branding, I will be clear of what my message is. It is imperative to the longevity of your business to brand. I’m saying that if you are thinking about starting a business, the main investment that you should consider first and foremost is in your branding. I’m sure that some will disagree but I assure you that investing in your brand covers every area imaginable that you will ever face. If you have $100,000 to start, don’t neglect to set aside 20% to invest in your branding and a total of 30% to include you marketing, at least. If you only have $5000 to start then spend it on your brand consulting first. Don’t rush. Anything less than focusing your energy on proper branding will breed problems you don’t need in the end. Your good idea could result in a very poor start.
By not looking at the overall picture, you are seeing things near-sighted to the point where you think you are starting off good but this misconception will catch up to you. Every test you cheat on will hurt you from a knowledgeable perspective in the long run once it’s time to rely on that information that you were supposed to learn but cheated on. Could you imagine a doctor who cheated his exams trying to do surgery on you? The very thing he may need to know to save you will be left in the classroom skipped over. This could cost him millions in a malpractice lawsuit. Costs are everywhere!
I’m using these analogies to help you see that NOT branding costs every business owner. Even when you don’t brand you take on a brand but you will be considered a no-name brand. Even that costs you to be looked at as less valuable, less desirable than your competitors. You will be discounting yourself right on out of business. I teach business owners the difference in tactical marketing verses strategic marketing. I show them how to find their market dominating position and make it affordable.
I run into a lot of businesses that are merely hustles. The good thing about a hustle comes when it is your passion that created the hustle in the first place. Oftentimes though, they are usually birthed out of necessity or in other words, as a business that is often times operating in survival mode. If its not in survival mode it’s established because a person desires to have more money than their current job will allow available to them so the “side-hustle” is a means to get ahead or to make ends meet. They all focus on one main thing which is to get extra cash fast.
Hustles are what some people call “Nigger-rigged” as I’ve heard people say in my neighborhood back in the day. It is a term that means to piece together. If your electric cord has a short in it (it’s old and worn but you wish to salvage it) and you duct tape it for it to work instead of buying a new one then you have successfully nigger-rigged it. Most hustles are illegal and will cut corners to get to the bottom line, (which is the dollar). If it’s not and the job is legal, you may call it a hustle but its technically considered a second or side job. Unfortunately a real hustle usually breaks laws that govern and regulate in one way or the other (mainly tax evasion).
It may not have even been intentional (people make mistakes and overlook things when, especially when its not their expertise), they may not have known they needed a business license or that certain codes and standards have to be in place to operate. That also brings me to shed light that the first cost that they cut was paying for the proper education. College may have charged them $50,000-$100,000, but that is less than a year’s worth of salary in the long run. The next part was having inspectors come out because it helps avoid fines for not being up to code.
Then if you have ever had a calamity or some unforeseen circumstance come up, then you may have learned the hard way about having liability insurance. A good accountant helps keep you abreast with money that may be seeping through the crack. Lastly, a good attorney is good to have on retainment not only to protect you from audits during tax time if need be, but also because unfortunately slip and fall schemes and other things may pop up to try and take your money away from you. My advice is to simply do it right the first time.
Most people who start business understand that the fundamentals of a small business include hard work. That is a huge cost to become the boss. Success does not happen overnight. You have to stick with it even during the times when it seems hard for you to stay focused. You may try a marketing strategy and it doesn’t work in 2 weeks and not be tempted to quit when it seems that its not working. You may just need to be open to tweak things. Listen to people who are experts in their fields of expertise.
No business owner wakes up to say I need a business coach or a financial strategist. But with over 480,000 businesses dying each year, there should be a lot more people looking to get outside help. There is nothing wrong with hiring a consultant, coach or strategist. One of the biggest obstacles is trying not to be everything to everybody. Find your niche and stick with it. The next thing I see is one person attempting to play all the roles of that business. Again, we call them Solo-Preneurs because they are the managing, marketing, advertising, sales and the billing department, etc. They wear all the hats of the business. If those aren’t your expertise, its no wonder your business is sinking. If its not sinking then you are definitely wearing yourself out and spending more time making it run then if you were working at a plant or factory. What fun is that?
Branding offers you piece of mind. What is that worth to you knowing that your business is operating smoothly with all pieces to the puzzle flowing together like a well-oiled machine? It is single-handedly the most important investment any small business owner can make. It is even more important than the business plan because of a few reasons listed below.
- The business plan is merely words on paper. Many business plans can simply sit on the shelf as great ideas. The branding of a business is the action plan for the business. The business plan actually sits inside of the brand. Branding is an action word. You can actually cultivate into a powerful brand without the business plan and still formulate a business plan from doing proper branding. Its best when they work together.
- The essence of true advertisement and marketing should always be built upon the brand itself. If you have no brand you don’t know what you stand for initially so it’s easy to send mixed messages to your audience. That’s a sure way to confuse buyers ands stop them dead in their tracks. Why would you ever sell something when you are unsure who you are selling to, why you are selling to them and for what reason they are buying? The be everything to everybody marketing strategy doesn’t work. You have to focus and narrow in on your niche to discover your tribe.
- You will attract better talent to your business. People are attracted to and gravitate to businesses they like and trust and can rely on. When you can emerge from your competitors it gives you a higher perceived value. This helps you charge more money and the less you will have to give discounts because you will know your market dominating position.
- You will start off powerfully. A proper foundation helps you to fire all cylinders at once and for a new business it is critical in the start up stages. This means initially you are trying to find what works. You are cultivating and developing your niche and tightening up loose ends. It is important to remember that you can influence a brand but ultimately, your brand is what the people who support your business say it is for them. Your business is likened to a fragile new born baby. You have to spend so much time nurturing it in the beginning stages. When it grows up after about 3 years old, you can begin to spend less time from it once it starts to walk on its own. That’s if you have set the proper systems in place to sustain it.
The bottom line is that a strong brand breeds strong marketing. You will have a far better chance of being around to service customers for a lifetime. A strong brand helps to establish your presence and gives you a solid name that rings quality and integrity and it helps to enrich the community it serves. It won’t be some charity that everyone is asking for freebies, that’s only supported by your family and friends doing you a favor as a noble cause. It will be respected for years to come and people will patronize you because you have great products, good customer service that stands alone to cater to your specified target market that I call your tribe.
As you can see, “The cost of not branding is similar to not fixing bad credit” and in a lot of cases it can be far worse. The initial investment, sacrifice of time and the preventing of closing your business doors is not worth the risk to not invest in proper branding. I’d definitely say that it’s an investment that is worth protecting. Do you agree?
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“Your Smile is your Logo, Your Personality is your Business card, How you leave others feeling after having an experience with you becomes your Trademark.”– Jay Danzie
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