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Brand Startup Costs

As a brand identity firm, Indicia helps companies of all sizes develop and enhance their brand image. Many times we work with startup companies who have a great product or concept they need designed so it can “go to market.” Other times we work with more established companies trying to launch a new product or service. Regardless of the creative challenge, one of the most important considerations (and questions that we are often asked) is: how much is this going to cost?   For startups trying to bring a new product or concept to market, knowing the cost to design, develop and manufacture the brand is critical (the “brand” could be the product itself, or the packaging, logo, etc.). Budgets are often tight (if not non-existent), so factoring in startup costs (plus desired profit margins) into the expected retail price is important to determining whether or not the initiative is feasible. Typically, a 4X factor is desirable, meaning that startup costs multiplied by 4 will determine the final retail price; if a product cannot be sold for that amount, then the entrepreneur should consider a larger initial production run (read: greater investment), eliminate any “middleman” distribution, or try to reduce some of their marketing costs.   By reducing marketing costs, we do not suggest “do it yourself” or going to an online or low-cost provider for the design of logos, packaging, or web sites: the old adage “you get what you pay for” is often proved true in these cases, and you might end up paying twice for something that could have been done right in the first place. We suggest you speak with at least two or three marketing and design firms prior to making a decision; even though you will pay more than an online “solution” or freelance designer, the results should far exceed the cost in terms of increased brand perception and sales.   For companies trying to launch a product or service, consider how the brand will be marketed. A “starter” brand kit usually consists of a logo, paper system (business cards, letterhead, etc.), a simple brochure and/or a website. If relationship-based selling with face-to-face interaction is key to the success of the brand, then perhaps a leave-behind sales kit is appropriate—consisting of a custom designed presentation folder, a small informational brochure, as well as product or service-specific insert sheets. If simple brand awareness is desired, then a revamped web site or interactive animation or video will help generate excitement and generate traffic to your web site. Depending upon the industry, product or service, and the brand components required, initial start-up or launch costs can range from $10,000 to $15,000 (based on industry averages—actual costs may vary depending on scope and complexity of projects).   Even though the initial costs of branding can exceed $10,000 or more, it is important to remember that these are typically one-time fees spread over the development of all designed components (which could last several months). They can be amortized over the brand’s production and life cycle costs, or considered customer acquisition. Brand startup costs are “profit and revenue generators,” not “costs,” because a well-designed brand has been proven to sell more units, be more profitable, and add value to the company’s bottom line.   By: Ryan Hembree