Small company, big brand
“NEVER UNDERESTIMATE THE POWER OF A STORY. ALL BRANDS ARE A NARRATIVE; THE STORY IS WHAT DRAWS US IN.”
Just because a company is relatively small in size, does not mean that it cannot be a true leader in its space. It is what BGF looks for in the companies that it backs; it is celebrated in the following pages of this publication; and, it is what ultimately will enable these companies to become the great brands of tomorrow.
Companies such as Trunki, Morphuits, Barburrito, Arran Aromatics, Better Bathrooms and Peyton and Byrne, all illustrate that you don’t have to be a large organisation for your brand to be big.
By pursuing a distinctive vision, developing a highly original product or creating unassailable positioning, small and mid-sized companies can build a dedicated audience of customers that enables them to create formidable brand power and punch way above their weight, even without large marketing resources at their disposal.
So how do they do it?
It helps to think of “brand” as more than just the visual representation of a business. Brand represents everything that the company makes, says, does or provides – this is what constitutes brand equity. Its assets include company purpose, values and culture, people, products and services, customer experience, pricing and positioning, technology, IP and even the company’s valuation. Certainly it is so much more than a visual representation, pretty picture or snappy message.
A brand is in continual dialogue with its customers and other stakeholders. Whether face-to-face at events or on the shop floor, online via social media and the company website, or through the customer service department, it is vital to engage in two-way conversation.
That personal connection can make all the difference to the promotion of a brand. AFG Media, the creator of the world famous Morphsuit brand uses Facebook to showcase their product and create a highly engaging and ever-growing forum for their customers to connect with both the brand and a wider community of like-minded followers. Over a million ‘likes’ and an audience of advocates in the tens of thousands, all for little or no cost.
This dialogue can help in the development of new products and services, identifying pain points and barriers to purchase and will often uncover insights that allow for real innovation.
It also helps if the ‘voice’ of a brand is an authentic one. Arran Aromatics, a business with a turnover of less than £10m, headquartered on a remote island in the West of Scotland, has created a brand that is now recognised internationally. It sells its products in over 30 countries and is one of Scotland’s biggest exporters to Saudi Arabia. Its recent investment in a new e-commerce website for consumer and trade customers has given the brand new global outreach. This brand is built around its provenance, with each of its products made and hand-finished on the Isle of Arran, using the finest ingredients including the island’s mineral rich natural water.
Great brands are often created by a product or service that defines its category. In other words, the category and the brand become synonymous. For example, when Trunki went to market with its unique range of travel accessories for children, it carved out a niche that did not previously exist. Many families across the world now buy a “Trunki”, not just a ride-on children’s suitcase.
Obviously a great idea will never make it big without good management and skilled handling. It takes more than just a good idea to create success, and there are many good ideas that are poorly executed – particularly when businesses are expanding rapidly. Many of the best brands seek to define and distill their own particular DNA before they expand into new markets, sectors, or products so that they can maintain consistency, coherence and most importantly, the successful formula for creativity and commercial success.
Even if a company’s product or service isn’t groundbreaking in itself, a strong brand will find a means of differentiation or a way to create unfair advantage.
Never underestimate the power of a story, all brands are a narrative; the story is what draws us in.
This second issue of Portfolio celebrates the many great stories, voices and personalities behind companies that have been backed by BGF. It highlights the different types of valuable brand assets that these companies have developed. Yes, many of them are still young with further growth still ahead of them, but we know that among them are great national and international brands of the future.
The template for a model entrepreneur
BGF made its first investment in October 2011. As I write thirteen months on, we have put nearly £100 million of new capital into growing British businesses. We are on target to make 20-25 investments in 2012, and more significantly we have put in place the team and the infrastructure required to make 30–40 investments next year. And we expect that number to rise further as we begin year-on-year to make “follow-on” investments into our portfolio companies.
But this publication isn’t about BGF. It is about the companies that we are investing in, and the business heroes that run them. This “club” now numbers over twenty business leaders, including entrepreneurial teams as well as single owner-led businesses.
There is no such thing as a typical entrepreneur. As our investment portfolio has begun to expand, it has been striking how different the CEOs are, whilst at the same time sharing notable characteristics.
Let’s start with the differences.
The spread of investment shows that good ideas, good management and growth are not restricted to any particular cities or regions. And neither do one or two sectors dominate. In fact, with 20 portfolio companies we have invested in 15 different sectors – from healthcare to oil & gas services, and from leisure & hospitality to IT & telecoms.
BGF doesn’t invest in property or financial services and when those sectors are removed from UK national statistics, the BGF portfolio broadly follows the national pattern. For example, manufacturing companies represent almost a quarter of our portfolio, as they do in a rebased UK economy.
Across the UK we have invested in almost every region, and most large industrial centres. This is a direct result of having dedicated regional teams and regional approach to market.
Another major point of difference is how our investment is being used by each of the companies. BGF investments have to date funded overseas expansion, new sales and marketing campaigns, acquisitions (big and small), development of new facilities and the roll-out of retail and leisure chains. There is one thing they all have in common, however – the creation of many new jobs.
Lastly age, which presents no limit to entrepreneurial success. Today, our youngest entrepreneur is 32 while our oldest CEO is almost 33 years his senior. The average age is 45. Experience is not a requisite for success. What sets successful business entrepreneurs apart is the passion and drive to take your business further.
And so what are the characteristics that these entrepreneurs share, qualities that we look for when selecting which companies to back?
I see four that particularly stand out:
VISION:Entrepreneurs have an idea, probably even a dream. They know where they want to go. Innovation is critical, as James Hurley explores in his article (p 11). But the most successful entrepreneurs back up their ideas with a clear strategic plan. They really understand the dynamics of the market they are operating in, and that means they are sure of the product and company position they are seeking to achieve. They have vision and a route map to get there.
PASSION: Don’t ask any of the CEOs to tell you about their company if you are in hurry to get somewhere else. They love their businesses. They love their products, their sector, and they love the people that work for them. They are generally in constant sales mode and its infectious. Spend time with a successful entrepreneur and you will soon become their latest salesman!
OPEN TO IDEAS: Another characteristic is willingness to listen to advice. That doesn’t mean an entrepreneur will always take it, but they are innately curious and looking for new ideas or a new edge. They recognise that information, expertise, and new networks can all be keys to unlocking yet more growth. This is why we think it is so important to create forums where the CEOs can get together to share their experiences – and they agree.
OPTIMISM and DETERMINATION : We asked all our investee CEOs for their single biggest piece of advice to aspiring entrepreneurs. They all said the same thing: never say no, never give up. It takes a special kind of person to take the disappointments, knock-backs and downright failures that come with starting and growing a business. Not everything works first time, not everybody sees the genius of your idea – even for the most successful business owners. But the real heroes are the ones who put faith in their vision, take advice where they need to, possibly even change tactics, but ultimately carry on trying.
18 companies … 18 unique, compelling and inspiring stories. This publication tells some of them, and introduces the entrepreneurs that BGF has backed. If you want to know more, please visit the website www.bgf.co.uk , or better still just give us a call 0845 266 8860
[This article originally appeared in BGF Portfolio #1 published in November 2012]
Director of External Affairs, Communications & Marketing
Jon joined BGF in September 2011 from leading international corporate communications firm Brunswick where he was a Partner advising a wide range of international blue-chip companies and UK small and large businesses.
Jon is a member of BGF’s senior management team. He leads BGF’s in-house media and communications function, and is responsible for PR, marketing and key corporate sponsorships. He also works closely with BGF’s many public and private sector third-party partners.
Jon began his career with the Labour Party, where he worked as a policy adviser and speech writer for Shadow Cabinet members for four years up to the General Election of 1997. After the election, he joined PolyGram Filmed Entertainment where he worked on press and public affairs issues, and in particular was the chief ‘industry’ author of the Government’s 1998 White Paper on the future of the British film industry. He was a founder director of a London-based communications and reputation management agency which he helped build to £2 million plus revenues and a team of 10, before joining Brunswick to build an integrated financial PR and public affairs offer in 2004.
Jon holds a degree in Government and Economics from the London School of Economics, a masters degree in European Politics and Policy Making and an MBA from London Business School. He is trustee of Debate Mate, a charity dedicated to running school debating clubs in areas of high child poverty, and of the recently formed Scale-Up Institute.
Jon is married with two daughters and lives in Greenwich, London. A mildy obsessive amateur road cyclist, he spends much of his free time in lycra.
“Over the past few years there has been a growing appreciation of the role of the UK “Mittelstand” or ‘Scale-Ups’, as they are beginning to be known, as contributors to our economy: two thirds of all new jobs, for example, are generated by high-growth small companies. As the economy continues to strengthen, it feels like the right time to promote these businesses and explain how we are helping them succeed.”
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