2 minute read
Entrepreneurial brands93
by iKnow
93
ENTREPRENEURIAL BRANDS
In times of economic growth, conditions are perfect for the entrepreneurial brand. There is a classic business school method of brand building, which aims to make a lot of money in a very short time for its owner and developer by selling to a large, established company. There are benefi ts to both sides. The big company doesn’t have to take the risk of developing its own brand; the initial investors make their fortunes. Sometimes.
The idea You study for your MBA and you learn the rules of how to create a cool brand in a short space of time. You develop your business plan, take it to venture capital companies (VCs) for funding, put the plan into action, attract the attention of corporations in your market, then sell out.
The VC gets its investment back with a big fi nancial return, the corporation gets a new brand without having to do all the investment in creativity and the brand owner tuckers his or her millions safely away in the bank ready to start again, or retire for ever, or become a venture capitalist.
VCs expect a very high return on their investment, because they often lose their money when brands crash and burn before they are bought. If they don’t get a big corporate buyer, these brands rarely break even because their debts are too high.
Many entrepreneurs set up from scratch with a view to running their business for the rest of their lives. If they become very successful, brand owners will often take the very tempting piles of cash waved in their direction; sometimes they choose to stay in the business and work together with their new shared owners to preserve the brand’s integrity but take advantage of the infrastructure, like distribution networks, IT systems and legal departments.
In practice • When economic times are tough, this route is harder, but not impossible. • If your dream is to be bought out and retire with your millions, you’ve got to offer something new and potentially profi table. • Look into the ownership of new, cool brands. You might be surprised to fi nd that they’ve a parent company or a major shareholder much larger than themselves. Read their brand history and fi nd out how they got there. • Attract attention. Use all channels possible to get talked about.
