Mentoring: 3 fundamental business mistakes emerging brands make
These days almost anyone can start a business. The time has changed significantly since I founded my first business almost 16 years ago. The barriers to entry were much higher than they are now. All you need is an idea and a laptop. But not everyone can run a business. During my mentoring sessions, I keep seeing a reoccurring pattern that most of my mentees have in common. So I thought it would be a great idea to document the 3 fundamental business mistakes emerging brands make, so you can take action yourself, fix them or avoid them altogether.
1. NOT HAVING A SPECIFIC GOAL
One of the first questions I ask is what do you want your brand to become. Who is it in the market that is doing it right now? What is your goal? Without the ultimate goal, it’s hard to define strategies and milestones you need to reach in order to achieve it. You need to think mid- to long- term, not short-term. If you think that you can build a brand within a year, it’s an illusion. It may have happened before, with a big financial injection and possibly smaller ROI, but that’s very rare. Building a brand takes time. Why? It takes time for your customers to get to know you and to accept your brand’s values. It takes time to build an authority and reputation. It took me around 7 years to establish my brand in the market.
First, think about the brand or a business model that you admire. Who do you want to be? Who can you become? Then, think about what needs to be done to achieve your goal. Once you clarify that, you should brainstorm on how you’re going to grow your brand in the market.
Here are your options:
- Through retail / business network (B2B)
- Through direct sales (D2C)
- Through brick and mortar store or seasonal pop up (B2C)
- A combination of the above
Whatever you decide, it’s definitely NOT given. You can always adjust as you learn more about the conditions of the market. The only way you find out how your market works is by speaking to people and your customers. For example, my aim from the start was to establish our brand nationwide. In those days online shopping wasn’t common and therefore customers insisted in seeing products before making a commitment to purchase. The only way we could do that was through a network of retail shops (B2B). However, you can easily start with B2C and D2C in the first couple of years and add B2B, once you feel your brand is ready. It really depends on what products you sell, the market environment and your customer. There is no right or wrong formula.
Remember: TEST – LEARN – ADJUST
2. NOT HAVING A CLEAR PRICING STRATEGY
Yes, I made that mistake as well. Your pricing strategy and the way you place yourself in the market will depend on your strategy as above. If you want to grow your brand through retailers, you need to include market margins into your RRP calculation.
However, if you find that your RRP would be too high for you to compete, meaning you price yourself out of the market, you need to adjust your strategy, as I mentioned in my previous point.
Another option would be to create a 3-tier pricing structure. For example, you can introduce a low-, a mid- and high-range product offerings. Decide which one would be your:
- Influencer product – a product, which is used mainly for attracting attention to your brand.
- Signature product – a product, which is your cash cow.
- Entry level product – a product, which introduces your customer to your brand.
3. NOT HAVING A MARKETING BUDGET
The next problem I see is not having a marketing budget. I strongly believe that there is no such thing as free marketing. When social media was in its infancy and social platforms weren’t so saturated, as they are now, you could have generated leads and possibly some sales through organic social media exposure. However, those days are over. Get it into your head. You need to be able to evaluate how much you can generate from organic and paid exposure, and create a plan that considers both.
When I had my business I used to allocate my budget across many channels to maximise our brand’s exposure. Having a budget or a figure in your head, which you’re willing to invest in your business is nice but it needs to be more refined. In terms of paid exposure, you should consider the following channels:
- Your website and its ongoing costs
- Advertising in media – online and offline
- Social media exposure including bloggers and influencers
- Trade shows and short term retail exposure (such as pop ups)
- Development of marketing campaigns (through videos & strong visual imagery production, website, mailing list providers, social media and press – back to advertising)
- Look books, catalogues, leaflets, business cards, packaging and other promotional materials to provide maximum impact
Think about the best ways of bringing attention to your brand through each channel and when you get the leads – how can you communicate with them online and offline? Work on a strategy that will help you with building word of mouth. Treat each customer as your brand’s ambassador. What can you do for them to become one? Answers to these questions will help you with defining your marketing efforts and therefore you should get a better idea of how much investment you’d need to make.
Remember: PLAN – EXECUTE – LEARN – ADJUST
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