Reilly Newman | There is risk involved with all decisions. It’s just a fact. With risk comes reward. This is why being in business comes with risk.
Starting and running a business is innately “risky” because there is a possibility of failure. Statistically, 20% of new businesses fail during the first two years, 45% during the first five years, and 65% during the first 10 years. As you see, time doesn’t favor businesses. As time goes on, the death rate of businesses only increases.
You can view this as a risk and a negative. Or you can see the positive side. Those businesses that do survive in two, five, and ten years enjoy the spoils of staying alive and thriving. Their success compounds as the rest of their market dies off.
Besides the obvious of better business practices and responsible use of funds, there is also a common thread of these surviving businesses having better brands. It may seem ridiculous at first, but as you’ll see, brand reduces the risk of being in business.
Brand reduces risk in three major ways:
1) Brand Adjusts Business Mindset:
We’ve talked a lot about the mindset shift that brand brings to a business model. It expands the business beyond just the product/service. It stretches the business beyond just the functional attributes of the business into the emotional benefits it delivers to its audience.
2) Brand Creates Precision:
The emphasis of brand within a business will naturally create an increase in audience accuracy. Your brand helps create clarity and precision of your specific audience. This makes your marketing and business operation efforts more effective and creates a healthier business entirely. Through clarity in your brand, your business gains confidence in how it should target and serve your desired audience.
3) Brand Stacks Strengths:
Brand forces a business to focus on its strengths by making the business carve out its place in its market. A brand knows the business can’t be all things to all people. It empowers the business to niche down to a viable market within its sector. This creates a stronger audience who actually appreciates what the brand promises and is wanting to support what the business offers.
The leveraging of the business’ strengths in tandem with a longterm vision and more effective efforts, we see that brand naturally creates better business tactics that help your asset – the business – reach its full potential. If a business isn’t taking advantage of this, it becomes clear how over time the business falls into irrelevancy and soon joins the cemetery of the fallen businesses.
As with all investments, there is inherent risk. However, with this risk comes reward. Since you are an investor with your asset (your business), if you don’t view yourself this way you definitely should be. Any good investor knows that you must mitigate this risk. Any efforts to ensure the reward for your risk, is priority. Brand should be that priority for your business in order to protect your investment and mitigate your risk of losing your asset.
