Are you building a business or a brand? The terms business and brand are often used interchangeably. So much that you may be prone to believe they mean the same thing. However, while the terms are closely related, there are some major differences between the two. In fact, it is possible to have one and not the other. Meaning, not every business is a brand.
Here I’ll discuss the individual characteristics of both a business and a brand. I’ll also explain what happens when you have one without the other and the magic that can be created when you have both.
What is a business?
Simply put, a business is defined as an organization or entity that offers goods and/or services with the purpose of making a profit. A business either manufactures goods and services or procures them from other suppliers. These goods and services are then made available to customers in exchange for payment. These customers could be other businesses (known as business-to-business sales or B2B) or direct end users (known as business-to-consumer sales or B2C).
Activities that are not performed with the primary purpose of making money are not considered business activities. And these profit-generating activities must be performed regularly for an entity to be considered a business. This means occasional transactions do not count. Lastly, the goods and services provided must also be legal to be considered as business.
What is a brand?
A brand is the perception of an organization or entity in the minds of consumers. It’s how you feel when you think about or encounter a business. A brand is intangible but is thought to be the most valuable asset any organization or entity can have, even more valuable than its tangible assets.
In today’s markets, consumers are inundated with infinite options and choices. It can almost be overwhelming. To be successful, companies must search for ways to connect and build meaningful relationships with an audience. They need to stand out in crowded marketplaces and be first and foremost in the minds of customers. This is achieved through building a brand.
More than logos and color palettes, brands have a voice, personality, and purpose. They build trust through consistent experiences, quality, and messaging. A brand has three primary functions.
Building a Business
Building a business involves strengthening the physical operations of an organization with the overall goal of maximizing profits. To be profitable, a business needs to simultaneously increase revenue while decreasing expenses. Increased revenue is achieved by, obviously, selling more products and services. Businesses may run various marketing campaigns, offer sales and discounts, develop new products and services, or expand and enter new markets. Decreasing expenses may mean adjusting operating hours, investing in technology, cutting staff, discontinuing unprofitable product lines, switching suppliers, or facility changes. The success of the business is dependent on its ability to manage and maintain efficient operations.
Building a Brand
Building a brand on the other hand is concerned with none of the business-building practices mentioned earlier. Business building is focused on generating income, while brand building is concerned with building awareness, community, and loyalty.
Branding is everything a company does to shape its perception in the minds of consumers. It is an iterative and ongoing process. Building a brand involves three main steps.
You Need Both
The world’s most successful brands have mastered building their business and brand simultaneously. It is possible to build one in the absence of the other, but this success may be diminished or short lived. Focusing on the business and not the brand can lead to failure once market competition increases. Low barriers to entry inevitably produce new competition, better products, and cheaper prices. On the other hand, putting all your focus on brand building and negating to make smart business decisions will leave you out of business.
When built together, your brand helps to shape and guide your business goals and decisions. This may mean passing on some opportunities because they make business sense but not brand sense. However, this also means your business operates with strategy and intent, making it more efficient and effective. Your brand gives your business vision and a greater purpose beyond just selling products and services. It makes your business impactful and enduring. When customers are emotionally connected to your brand, they will remain loyal through changes in your business, market shifts, economic turns, and the waves of consumer preference. Why? Because they trust you. In the end, you meet the needs and desires of your audience, and your business is profitable because of it.
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