When a business first begins trading, there is no track record of the new enterprise. Consequently, prospective customers have little to base their buying decision on other than marketing material. Financial institutions have no accounts to back up lending decisions. And vendors may be hesitant to offer credit to a company with no credit history.
So, how do you go from a company with zero reputation to a trusted business? The truth is you can't; generating trust takes time. However, you can adopt these simple strategies to establish business credibility and overcome the initial trust barriers.
The first thing that will concern people about a new business is the many start-up failures. Because many companies fail due to a lack of funding, lenders and vendors will be looking for reassurance in the opening balance sheet. Customers buying a relatively low-value product will not be concerned with financial stability. However, if the sale involves a long-term contract of any kind, financial stability may be a concern.
The strength of the opening balance sheet required for credibility will depend on the type of business. However, having sufficient funds for start-up costs and short-term working capital requirements will answer many questions about financial stability. It will further strengthen the balance sheet if the initial funding is equity rather than short-term loans.
A professionally presented business plan, including financial projections, will reassure lenders, vendors, and investors. In some sectors, an abridged business plan may also be helpful to prospective customers. A roadmap for the development of tech products, for example, might provide comfort for early adopters. In all cases, a well-thought-out and presented business plan will provide a valuable tool for generating credibility in the early days of a business.
Hiring professional advisors and service providers will add a few credibility points, and this point applies to any sector and size of business. Having an accountant on board from day one, for example, will provide comfort that the company will be well managed and financial forecasts are realistic. Hiring a business lawyer will help to alleviate any fears about contracts or legal issues. The firms you choose to hire will also make a difference. A local firm of accountants would suffice for a small local business. However, it would be best for a significant start-up to hire one of the top firms of accountants.
Having a professional business address is crucial for the credibility of almost any business. Even a sole trader working from home will benefit from having a proper postal address and a phone answering service. Online ventures will also have far more credibility when a business address is displayed on the website. It may not be necessary to have a physical office in the early stages of a small business. Still, a virtual or serviced office will undoubtedly boost the credibility of a start-up.
Branding plays a crucial role in establishing and growing a new business. The branding of a business is part of what sets it apart from its competitors. Branding also conveys to customers and other interested parties what they can expect from the company. Branding includes everything from the company name, through a color scheme and logo, to the brand identity. And it is critical that branding be applied consistently across all platforms. Consequently, branding is one of the many aspects of setting up a new business that is best not rushed.
One of the first things people will look at when assessing a business is the company website. Consequently, creating a professional site with a custom domain is advisable. Set up proper business email addresses, too, because nothing looks more amateur than XYZ@gmail.com. If you don't have the technical know-how to develop a business website, it would be best to hire a web developer. The cost of creating a relatively straightforward business site is not prohibitive, and a slick presence on the web will make an excellent first impression.
Your new business may lack history, but you and your team do not. So, don't be afraid to push the personal credentials of the business founder and employees of a start-up. The entrepreneur behind the venture might have an enviable record of business success, for example, or be an authoritative figure in the sector. Appropriate qualifications, accreditations, and trade body memberships of team members are also relevant for establishing credibility. These personal credibility indicators can be used on the website, the business plan, and marketing materials.
Credibility is as much about impressions as it is about quantifiable factors like a balance sheet. Generally, it is best to purchase quality products for anything the outside world will see to make the best impression. And that includes printed stationery and forms and a professional-looking email template. Even something as simple as the business card you hand a person will help form an individual's perception of your business.
It's never too soon to begin marketing a start-up on social media. You can create a pre-launch buzz about a new venture on social media and start reaching out to potential customers and other contacts in your niche. An early presence on social media also provides further validation of the professionalism and potential longevity of a start-up. If people talk about your brand before making your first sale, you will have already made your brand more credible.
As mentioned in the introduction, generating trust and credibility takes time. Nevertheless, much can be done in the first months and years of trading to speed up the process. Making customer service a priority, for example, will generate customer goodwill and, hopefully, reviews and testimonials that can be used in marketing the growing business. Joining and attending business forums will raise the profile of the company. And publishing valuable content on the company website and third-party sites will establish brand authority.
The best approach to establishing credibility is to ask yourself questions other people will ask. For example, why should a vendor trust your company to pay their account on time? Why should a customer risk signing a twelve-month support contract with your business? How can you alleviate fears that your company might not be around six months from now? Then, for each of these possibly tricky questions, counter the objection in marketing materials and or have the answers prepared with backup proof wherever possible.