Contributed by Liz Myslik
Entrepreneurs spend considerable time and effort raising money to fund the growth of their brands. Far too often, they spend those dollars in ways that harm, rather than help, their business. Considering that 97% of new businesses fail, the stakes are high to get it right. Because we’ve worked with so many successful natural food brands over the years, the Fresca team has had the opportunity to see what sets them apart from those who don’t make it. Here are some nuggets that we have learned along the way:
First, define why you are doing what you are doing and why it matters. This is what truly sets your brand apart and keeps consumers coming back for more. No, it’s not the features or benefits of your product. Simon Sinek offers great perspective on this topic in his book Start With the Why (for the time starved, check out his TED talk below).
Next, answer the basic questions: who/what/when/where. Define your target market. You can’t be everything to everyone, at least not until you have the marketing budget of Coke, so focus on those who are most likely to buy your product and make it part of their lives every day.
Once you define your “who,” the “where” and “how” should be easier. For the “where,” determine what geographic market(s) and sales channels (natural channel, grocery) and specific retailers (e.g., Whole Foods, Safeway) where your consumers are most likely to buy your product. For the “how,” determine your go to market approach. This includes deciding how you will connect with your retailers and consumers to entice them to try and buy your products…again and again. What are the marketing programs, promotions, and people you will need, and what do they cost? Talk with brokers, retailers, fellow entrepreneurs, trade resources such as New Hope 360, and industry advisers to learn what works and what things cost.
It’s surprising how many entrepreneurs create a plan to raise money, and then never refer to it again. This is a huge mistake. Use your plan to help you make decisions and stay focused. The hardest thing to do is not to say yes…it’s to say no. You will have infinite possibilities and options to grow your brand, but staying focused and true to your path will help you succeed.
One way to do this is to create quarterly milestones that are both financial (revenue, contribution margin, current ratio, cash on hand) and strategic (velocity, number of stores, social media buzz). Evaluate your achievements against these metrics each quarter. You will quickly see what’s working and what’s not. Force yourself to take action based on your results, even if it means making difficult decisions about your product, your team, or your plan.
Inevitably, plans will change, but having one will ensure clearer direction.
Want to know what investors really think about your business plan?
Watch this video from Entrepreneur Magazine.