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Branding's Impact on Raising Capital

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Editor’s Note: Regular contributor Steve Nielsen, sent us his 9 tips for how to use your brand effectively. Steve is also the founder of PartnerUp, an online community that matches founders to cofounders. Please read Steve’s post in its original format at The StartUp Blog.

We all know that creating your company’s brand is one of the most important things you’ll do as a business owner. Having a strong brand that represents what you do, conveys a professional and stable image, and builds a relationship with your target audience is essential to the success of your company. So when most people think of branding, they think of customers, but fail to see the impact that a strong brand has on all of the other functions of their business.

Something really interesting struck me the other day when I was looking through a few business plans/pitches from entrepreneurs: having a good brand for your startup idea is hugely beneficial in making a great first impression with potential investors, and even banks.

Consider this: You’re a banker or investor, and you get approached by two companies. The first sends you a pitch on plain paper, stuffed in a plain envelope and includes a business card that they printed on their home printer. The second sends you a pitch on company letterhead, has a unique logo, includes a business card that is well-designed and professionally printed, provides some professionally printed brochures and backgrounders on the company, and puts it all into a professionally designed and printed folder and envelope. Which company would you feel is more professional, stable, likely to engage successfully with consumers, and ultimately more likely to generate revenue?

It doesn’t just stop with investors and banks, either. Potential employees are more likely to want to work for a company that connects with them through a strong brand. Even vendors, who are selling you something, are more likely to be willing to negotiate extended terms or special agreements with a company that appears professional, established, and stable.

Here are some tips for creating a killer brand for your small business or startup:

1) Find the right name for your company. A short name that conveys what you do is always the best. Try to find a name that allows you to secure its .com domain name. Also, always make sure to do a little bit of research to ensure that the name you want to use isn’t already trademarked or in use by another person or company. Megan from PartnerUp wrote an excellent article on our blog about how to name a company.

2) Have a logo professionally designed. Your logo is the centerpiece of your brand and will appear on everything from business cards and stationery, to apparel, to your building and signage, so it’s not worth skimping here. An exciting trend in logo design is online logo design companies. In the past, it would cost thousands or tens of thousands of dollars to have an ad agency design a logo for you. Today, through the internet you can find several companies who offer logo design for less than $800. Before choosing a logo design company, look through their portfolio and make sure that you like their work, then contact a few previous customers to make sure that they were satisfied with the results.

3) Create brand guidelines. Most people have never heard of brand guidelines, but they are so important to a strong brand. For a small business, brand guidelines can be as simple as a 2-3 page document that describes what colors your logo should appear in, what fonts your company uses on documents, signs, and brochures, what size your logo should be with respect to its page, what tagline should appear with your logo and where, what format brochures should use, what signage should look like, how employees’ e-mail signatures should appear, and other basic brand guidelines. The goal here is to create consistency across all of the different types of media your brand will be seen on.

4) Have stationery and brochures professionally designed. Many business owners are tempted to create their own stationery and brochures to save a few dollars. Most of the companies that do online logo design also do stationery and brochure design. This investment is well worth it and will really help to convey a unified and professional image for your business. I recommend creating your brand guidelines first because you can then send these guidelines to the designer working on your stationery and brochures so that they’ll conform to your newly-created brand standards.

5) Get everything professionally printed. On a per-page basis, it is usually no more expensive for you to hire a professional printer than it is to print things yourself. However, the results are much different — collateral printed by a professional printer looks, well, professional! This is very important to building a strong brand.

6) Get a web site and domain name. Have a web site professionally designed and hosted on your own domain name. Business has shifted from being done using phone books to being done online. Accordingly, your web site will in many cases be your first contact with potential customers. Invest in your web site accordingly.

7) Buy a phone system and get a phone line for your business. It used to be expensive to buy a phone system, often costing tens of thousands of dollars. Now, you can buy simple pre-configured phone systems with an auto-attendant for less than $1,000. Use the auto-attendant and have someone that you know (not yourself), with a professional-sounding voice, record the greeting and prompts for your phone system. This is another easy way to maintain a level of professionalism that your customers and investors will expect to see in a stable business.

8) Invest in public relations. One of the most important things that you can do to gain credibility for your business is to get third-party validation of your business or concept. The best way to accomplish this is through public relations. Once you get your company featured in a few articles, you can show these to potential clients, investors, and vendors, helping to further solidify your company’s brand and po sition in the marketplace. Hiring a PR firm for a small business or startup can cost as little as $3,000 per month, and is well worth the investment.

9) Remember, it’s never too late. If your existing small business doesn’t have a stellar brand, remember that it is never too late for you to rebrand your business using the above advice. If you decide to rebrand, make sure that you try to roll out your new brand all at the same time instead of peice by peice. This will help to generate excitement surrounding your new brand and will avoid creating a disparetely branded company image, consisting of stuff with your old logo and stuff with your new logo.

If you follow the above tips, you should be able to effectively create a killer brand for your startup or small business without spending tens of thousands of dollars.

5 Responses to “Branding's Impact on Raising Capital”

  1. The idea is right but the implementation strategy is not correct. The topic “Branding’s Impact on Raising Capital” is very important. The 9 tips are not the right list. Hopefully, I’ll find some time to write the right list in my blog.

  2. I Often get the feeling that hi-tech entrepreneurs talk about impressing. I personally subscribe to a more straightforward approach – do what st best as you see it. The rest will follow!

    In branding this can be the difference between:

    1. creating a brand that you think will work for what you perceive to be your market, investors… what not (if all goes well.., your understanding of these external forces will change and evolve many times over the tenure of your startup!)

    2. creating a brand that reflects the product/service/business you really believe in. A good brand, I feel, is one that really reflects the vision/values/motivations behind your business – and these are the things it should focus on. It’s so great not having to explain yourself – this is where a brand can really come in handy – people “just know” exactly what you are… effortlessly!

    who cares how much space your letterhead will take? It will take up as much as it needs to… for this you need to truly trust both your vision for the startup and the branding process.

    It is only natural that when you have a good brand – it will reflect on everything – anyone who comes in contact with it is will immediately experience your vision – those that will connect are relevant to your business, so that don’t – maybe are less relevant.

    Ironically – if you have a good brand – the response you get for it from a potential investor can tell you something about how well suited he is for you!

    If you fake it – then it is fake! If you make the effort to really do it then it is inspiring! The people you want to reach know the difference in a split second!

  3. Christopher

    I can see both sides here. However, I tend to think though that it would be wise to have some professionalism to your company before pitching a VC.

    First impressions are everything and if you are able to put together a whiz-bang brand/logo for not a lot of money, I think that it will be helpful in making a good first impression, and probably worth every penny. It also will help to convey to VCs that you are able to get a lot of results for not a lot of money.

  4. I have to agree with Alan. Many of these are not only the wrong place to spend money but they are the wrong place to spend valuable focus. Many of the points seem more appropriate to general small business as opposed to a tech startup. To hit just two:

    Phone – you don’t need anything more than a direct line (can be your mobile) until you launch and need to talk to clients/customers. Then use a virtual pbx system for $50 a month or less (OneBox, etc.)

    Professional printing – When is the last time you actually mailed anything anyway? And especially in early days your messaging changes so frequently that professional printing is a waste of money. Save it to PDF, compress it and send away!

    Pre-launch you’ll need branding nailed down, but the VC is going to fund the quality idea not the quality look. Post-launch they are funding your traction.

  5. These are the exact inverse of the many articles on lean startups by others that say:

    Dont spend money on letterhead, logos, phone systems, etc. The VC’s will respect you for saving cake and putting towards code and rollout.