Most people don’t see the sleepless nights, long hours, and frustration small business owners experience when they launch and attempt to grow their businesses.
If that wasn’t hard enough, founders of color and minority founders face additional challenges and must overcome established stereotypes.
For example, Black founders receive less than 1% of venture capital, only 8% of venture capital-funded startups founders are women, and fewer than 0.4% of startup founders are Latina.
Studies show that during periods of economic turmoil, minority-owned businesses fail at a much higher rate than other businesses. This happens, in part, because of systemic racism at financial institutions that make it difficult for minority-owned businesses to obtain debt financing.
Despite those challenges, the opportunities for minority-owned businesses are enormous. By 2044, more than half of all Americans are projected to belong to a minority group.
So, while racism, stereotypes, and economic uncertainty make it tougher for founders of color and minorities to start a business, minority business owners and founders of color do bring a unique perspective that over the next several decades, can help them create a strong brand identity and build successful and sustainable businesses.
What is Brand identity?
Brand identity is everything visual about a brand. It’s what you, customers, and prospects can see. Every decision your company makes and every action that it takes affects the brand.
The goal of brand identity design is to tell your company’s story in a way that creates loyalty, awareness, and excitement. And, you can do this by implementing an effective brand strategy.
How do you build an effective brand strategy?
There are three core phases to an effective brand strategy.
Phase 1: Discovery
Start by evaluating your existing core identity
Your core identity is often defined by your company’s vision (why your company exists), mission (what your company does) and, values (the beliefs that guide your company’s actions).
New companies don’t have an existing core identity and can skip to Phase 2.
Existing companies should evaluate whether their original vision, mission, and values are still relevant. Here are some helpful questions you can ask:
- Are there elements that have emerged in the company’s culture that aren’t reflected in that vision, mission, and values?
- Are some of the existing elements poorly defined or no longer valid?
- What’s most important to your company?
- Does your existing brand identity and marketing properly communicate your core identity to your target audience?
Conduct market research and perform a competitor analysis
Here are some useful questions to ask when you conduct market research:
- How big is the overall market? How big is the market segment you’re targeting?
- How has your market changed since the time you started your company?
- As a founder of color or minority founder, do you have a unique understanding of your market segment and target audience? If you don’t, have you hired someone who understands that target market?
- Are you pursuing a bigger market but compromising your products, marketing, and messaging by focusing monolithically on different target audiences without segmenting them?
Develop personas for your target customers
Personas help you figure out:
- Who your customers are
- What their goals and frustrations are
- Where they spend their time
- When they’re the most active or available
- Why they make certain decisions
- How they interact with your products or buy your services.
- Evaluate how people perceive your brand
Evaluate both internal (your employees) and external (everyone else) perceptions of your brand.
Phase 2: Identity
Define your core identity
If you’re starting a new company, start with a blank sheet of paper and fully define your company’s vision, mission, and values.
If you have an existing company, you evaluated your core identity in the discovery phase and now have a chance to evolve that identity.
Articulate your brand positioning
Your brand positioning explains how your company differentiates in the marketplace and how you differ from your competitors.
Brand positioning will be especially important when you write a business plan. Lenders and investors will want to understand how you add diversity to the marketplace and why those differences will help you succeed.
As a founder of color or a minority founder, you have a unique perspective. Minority business owners commonly see different problems and often offer different solutions than business owners from other groups.
That allows you to bring innovative products and services designed for everyone, or to pick a segment of your target market and create products or services for them. For example, Bevel founder Tristan Walker launched products to help Black men who faced unique problems while grooming.
Often, your positioning can be summarized in one or two sentences to explain what you do better than everyone else. And, rather than target a huge market in which you’ll face huge competition, consider, like Tristan Walker, finding a market that large competitors simply don’t understand because their marketing and leadership teams don’t look like or think like the target customers.
Articulate your unique selling proposition
Ultimately, a company’s unique selling proposition (“USP”) is what your business stands for. For example, you could say that Apple’s USP is found in “user experience”: everything they do is meant to have the user at its core.
For minority founders and founders of color, the USP can focus on the specific needs of a smaller group within a larger market, or on the unique innovations, your products bring to the broader market. As noted above, Tristan Walker focused on products for Black men because he understood them well and nobody else was offering good products for that market.
But you can also innovate and target your products and services to the broader market. Apple, for example, creates innovative products that are appreciated, loved, and valued by many people across different cultures, languages, races, and demographics.
Develop your brand identity assets
When you understand your brand and the components that define brand identity (colors, typography, shapes, etc.) it’s time for you to work with your designer to develop the creative elements that will give life to your brand identity. These include your company logo, business website, product packaging, brochures, and more.
Phase 3: Execution
Once you’ve completed discovery and developed your core identity, you must find the right way to communicate about your brand through marketing. Execution is crucial to putting your business on a path to success.
Here too, founders of color and minority entrepreneurs face numerous obstacles and a scaling gap. For example, only 19 percent of Black-owned businesses and 20 percent of Hispanic-owned businesses grow to 10 or more employees, compared to 25 percent of companies owned by founders from other groups.
To get a competitive advantage, read Chapter 7 of the Complete Brand Identity Guide for examples of how brands translate their brand identity into actual marketing. A strong brand identity can help put your new business on a path to success.