How does a marketing agency support a start-up?
The success of start-ups depends on many factors. How can agencies help young companies to be more successful?
November 13, 2020
The phenomenon of start-ups is currently omnipresent, companies are founding start-ups, agencies are founding start-ups, craftsmen are founding start-ups, on TV there are special shows for start-ups. Who doesn't sometimes wonder "In der Höhle der Löwen" about some curious founding idea of an ambitious start-up team?
Start-ups - How does a marketing agency support a start-up? (Illustration by Thierry Fousse from Icons8)
Start-ups are young, not yet established companies that pursue two goals. On the one hand, they are founded on a novel business idea, and on the other hand, they want to grow quickly. Startups often go new ways and found in the fields of communication technology, electronic bussiness and life sciences and work with innovative marketing or consulting concepts. They often have the right nose for new trends, simply try something out and thus often pick up new developments and innovative products faster than long-established competitors.
These innovative start-ups set themselves apart from the established business world through product ideas, new services and technologies used, and also differ in their structures and growth plans. Thus, creative start-ups can influence and turn entire industries upside down with their dynamism or even create new markets as a result.
After successfully establishing themselves on the market, start-ups are no longer start-ups in the true sense of the word. However, it often turns out that these companies then continue to rely on their original start-up strengths such as creative freedom, flat hierarchies and high dynamics.
Former startups can also develop into large corporate groups such as Amazon, Google, Zalando, Xing, Facebook, etc.
Start-ups usually finance themselves initially with seed capital and then expand with additional debt capital such as venture capital or fundraising.
Although startups represent only a small part of the overall economic startup cosmos, they have become an important driver of economic development and social progress. They create jobs and help new ideas and innovative technology to break through. Many an industry heavyweight has been challenged by dynamic startups.
Entrepreneurs and start-ups need a bright idea, a strong brand and an effective marketing strategy. Especially in the start-up phase, it is important to have a creative marketing agency at your side that shares your passion for your product.
Often start-ups are already working in a certain industry, from which they develop their own business idea. Or they need a solution to a problem in their personal everyday life and create their business model from it. Or someone who is passionate about traveling, for example, might develop a business idea in the tourism sector. One example here is the Königsbrunn-based start-up OCEAN VAN. The founders are enthusiastic Bulli vacationers. They turned their passion into a profession in 2019 with a campervan rental service.
Once you have found your target project, you have to check whether there is already something similar on the market and how your idea could be implemented in a new and convincing way. Developing a business idea is therefore often a lengthy process that requires your creativity.
What do you want your company to look like? What product or service do you want to offer? Who and where are my potential customers? What does my ideal customer look like? Are there competing products or providers that offer your idea at a lower or higher price? In what area are my innovations? How can I position myself in the market? What should my team look like?
Important in this planning is the financial budget and the possibility of risk-free growth.
The best business model is of no use if it is not tested to see whether it really works. Start-up experts call this measure proof of concept. In line with your product, a marketing campaign should be launched to test whether your business idea will be of interest to your customers. In this way, you can avoid putting a lot of money and heart and soul into your idea, which may become a slow seller.
Your marketing agency will help you develop suitable "test advertising measures". Examples of such test runs are simple websites, ads or marketing surveys in the wider personal environment.
The next step to a successful start-up is the creation of your business plan.
In your business plan, you describe your business idea and its implementation measures in detail. This also includes the preparation of a financial plan with planned income, expenses and your capital requirements. Your business plan is a guide for you and serves as a decision-making aid for your investors.
In many cases, the involvement of a financial advisor is also recommended. In the meantime, there are also professional start-up consultants. Neutral feedback is certainly helpful in the start-up phase.
Start-ups usually live off their investors. And you can only win them over with a convincing presentation. In a pitch, you describe your business idea, your vision, the need for your product, the customer benefits and your capital requirements in a short and concise presentation.
In order to be noticed on the highly competitive market, you need the professional support of a dedicated marketing agency. This way you can concentrate on the core business of your company and leave the advertising in the hands of professionals who know how to establish you on the market. The external appearance of your brand stands for your competence and the quality of your product. Thus, the brand appearance is of utmost importance for the image and success of a young company.
The marketing area includes:
Company logo, corporate design (uniform, coherent overall concept of advertising tools), website, social media presence, online marketing, advertising slogans, flyers, brochures, business cards and much more.
Start-up companies are younger than ten years and are considered innovative in their business model, product/service or technology used. They typically have strong revenue growth and usually a higher number of employees. Start-ups are predominantly team start-ups.
Thus the difference to the classical business start-ups becomes immediately clear. Of the total number of start-ups alone, 80 % are sole proprietor start-ups. Start-ups, on the other hand, already offer an average of 10 jobs when they are founded, compared to solo founders with 0.4 jobs.
In start-ups, the founder and the employees are usually younger. Other differences to traditional companies are the flat hierarchy and rather casual atmosphere, as well as a high level of dynamism. There are hardly any standardized work and business processes and a hardly regulated work environment.
Classic start-ups appear as retailers, craftsmen, freelancers and adopt a frequently used business concept. They are usually not innovative or high-growth.
In addition, they all involve a certain amount of risk, as you are venturing into unfamiliar territory.
A start-up goes through individual development phases, each of which involves special tasks and risks. The financing channels also change in the respective phases.
In the following, we show the typical course of development of a start-up.
In the seed phase, the planning and preparation of the start-up is done. The seed for your start-up is planted.
This phase includes the business idea, the business model, the business plan as well as the product development and the test run.
Startups finance expenses from the seed phase from their own funds. In this early phase, a bank loan is hardly feasible anyway. If outside capital is already needed in this phase, you can either look for business angels or start a crowdfunding campaign.
With the actual founding/business registration of your company, the start-up phase begins. You now have your market-ready product, can build your distribution network and start your marketing.
In this phase, not only the initial investments for product development are incurred, but also the running costs (rent, personnel, ancillary costs). However, your sales increase only slowly in this phase. Therefore you have to keep an eye on your solvency.
In this phase, start-ups often make use of public funding programs (Landesbanken, KfW Bank) or secure equity capital from investors.
In the start-up phase, your company is already up and running. Often, the first employees are hired, the processes run more routinely.
In this phase, a startup gradually gets into the profit zone, the startup has its break-even.
But even if the break-even point has not yet been reached, investors and banks will be more willing to provide financing because your company has already been able to prove itself.
In the growth phase, your company has already established itself in the market. You can attract new target groups, further develop your product and expand your distribution system.
Now the capital requirement will increase significantly. At the same time, the risk decreases because your product has already established itself with a fixed customer base. For the further development of your company, it is important in this phase to be able to raise the increased capital requirements through equity capital, loans or subsidy programs. Unfortunately, little happens without working capital.
If you are then in the 5th phase of your startup story, you have achieved a lot. You are now an established company and are not really a startup anymore. Your profits are stabilizing, growth is settling at a normal level. Planned investments can be financed from the generated revenues.
Startups, however, do well to preserve the basic idea of a startup despite its success.
What does a typical start-up company look like? The foosball table and the coffee bar alone cannot define the common image of a start-up. The core of a start-up is the team of creative, innovative minds, in which there are no strict hierarchical divisions. Short decision-making processes, trust in each team member and a relaxed working atmosphere enable good results.
But is a productive team in a pleasant working environment alone enough to write the success story so familiar to many startups? What is the secret of successful startups that seemingly out of nowhere reshape entire industries?
There is certainly no such thing as "the" recipe for certain success. But some patterns for the successful development of a start-up can already be identified.
If my start-up responds to a particular annoyance that many customers are equally familiar with in their everyday lives, the chances of success are certainly not bad. I don't have to reinvent the wheel; it's often the little things that make everyday life easier.
If an idea doesn't work, it ends up in the trash and an alternative solution is developed.
Then the solutions should be innovative. However, innovative does not mean that innovative technology has to be developed at the same time. One example of this is Robin-Zug from Augsburg. Here, rail passengers can claim compensation for train delays online.
Top start-ups don't work quietly, but are in lively dialog with their target group. What does my customer need? What should the solution to his problem look like? If I don't know the problems, I can't offer a solution.
Successful startups work with a successful team. Investors would rather put their money into a great team with a mediocre idea than into a great idea to be worked out by a mediocre team.
And successful start-ups minimize the financial risk. They stay within their financial budget with their proposed solutions. If that doesn't work, they look for another solution. New ideas, yes, but always within the given budget plan.
One example of a very successful start-up is the Little Lunch Team from Augsburg. In 2015, the two brothers Denis and Daniel presented their idea of a quick, healthy soup for the midday break at the office on Höhle der Löwen. To date, Little Lunch is the most successful start-up on the show.
The basic idea of a start-up is to break new ground with an idea. This offers both an opportunity and a risk. I can open up a new market with my product and thwart the competition. At the same time, however, there is a risk that my product will not be accepted.
That's why it's so important for me to test my business idea for its potential success or failure from the very beginning, and to be able to quickly touch up and correct any problems if necessary.
Start-ups are an indispensable source of impetus for economic development. With their innovations, they pave the way for new technologies and also increase competitiveness. That is why the government supports the start-up scene with many measures and programs. For example, low-interest loans are available from KfW Bank.
But the individual federal states also offer a wide variety of funding programs.
Founders can obtain information and advice on the individual measures via founders' platforms.
Founding a start-up is a chance to bring your creativity to life in a project. With a cool idea, careful planning and a motivated team, your start-up can also become successful.
Should I or shouldn't I? Young entrepreneurs cannot be relieved of this question. It is not easy to weigh up the opportunities and risks.
Currently, more than half of all start-ups give up again within the first 5 years after founding a new company. This is often due to poor customer acquisition and retention.
However, this risk can be minimized - through good marketing. Get advice and support from a dedicated marketing agency. Above all, the advertising measures must not slacken after the first successes. Those who do not advertise die, as has unfortunately been proven many times.
Many agencies offer interesting price packages, especially for start-ups. This investment always pays off.
A start-up must fit you and your life situation. Look for a business model that suits you. You can work with a team or you can outsource the fields of work that you are not comfortable with. You don't have to be young or hip to make your business idea work. You need to have the desire to develop and implement your ideas.
In any case, we as a dedicated advertising agency are happy to start with you!
Sebastian Lochbronner
86830 Schwabmünchen
Germany