A Beginner’s Guide To Crowdfunding Your Business
Often setting out the initial steps for any business activity is sturdy. Whether it is the commencement of your business or promoting an idea or a feature. The initial stage of any novel innovation can make you repulsive.
Crowdfunding could be an explicit way to fund a project or idea. Through crowdfunding, it’s easy to get recognition for a product or idea. Managing to Pre-sell your product and also generating substantial revenue out of it is an unfinished goal of many entrepreneurs. Hence, crowdfunding could be an explicit method to fund your business idea or project. Crowdfunding is a source that offers both funding and exposure. It is a method of raising funds from the crowd, be it your family, friends, customers, investors, complete strangers or individuals who believe in your idea. All of these can be done through a crowdfunding platform.
Who is this Guide for?
This guide is for anyone who is novel to the crowdfunding business or someone who is deciding if this is the right source to raise funds for their business. Crowdfunding could be useful to a startup at any stage of its development. For example, the business might be established, or still at the initial stage or a small-business expecting for capital growth, or a startup needing to purchase equipment. Crowdfunding would be the ideal way for startups to tell their story and connect with the substantial backers for their idea or project.
Crowdfunding for Business
Many crowdfunding campaigns prepare to fail due to enormous reasons. Hence, it is essential to understand what you are getting yourself into so you overpower the challenges or risks that come with crowdfunding.
Below is the guide for crowdfunding your business
Step -1 How do you know if your idea is right for crowdfunding?
For a prosperous crowdfunding campaign, it requires many investors or backers who are substantially interested in what you are offering. A backer is a person who would fund you. It is important for startups to think from the backer’s perspective. It is also essential to get a maximum desire for your idea or product from the backer.
Knowing the answers to all these questions below helps in availing a successful crowdfunding campaign:
- If there is the existence of a similar product/idea in the market
- Unique features of your product/idea
- Is there substantial individuals to fund your idea/project
Therefore, understanding the target audience is the only way to answer these questions. It is vital that startups understand their supporter’s potential as the entire campaign would be around them.
Step-2 Choose the right crowdfunding platform
There is an existence of a large number of crowdfunding websites that aid you in launching your campaign. But only a handful of websites turn out to be best for this purpose. Each platform has varied features, different size audiences, demographics and campaign options. Some platforms come with reward-based crowdfunding, some undertake selectively equity-based crowdfunding or Debt -Based crowdfunding. Startups are entitled to choose the platform that would enable them huge traffic for their idea/product. Where they could get a substantial number of backers.
Step-3 Planning your crowdfunding campaign page
Once the startup has decided that the funds are to be raised via crowdfunding and have chosen the platform to launch the campaign, the next step would be to plan their crowdfunding campaign page. And the first thing that goes into formulating a good crowdfunding campaign page is well-done research. The research should include:
- To find a relatively similar project from the chosen platform
- To scrutinize what works well in a highly funded idea.
- To analyze the reasons from other failed campaigns.
Apart from good research, a triumphant crowdfunding page also needs:
- Title: The title needs to be clear and clever. Wherein the approach of the title to the supporters need not be related to a blog post, the title has to depict the main feature or the uniqueness of the project/idea.
- Video: Supporters are interested in the campaign if the story is appealed via a video. Since it is the first thing that people watch on the platform, that video to be showcased needs to be clear and transparent.
Step -4 Create a promotional plan
Promoting a crowdfunding campaign is important, without which the campaign might fail. The chances of getting featured on the crowdfunding websites is by showing relevant interest in your offer to the individual via these platforms.
Ways to promote your campaign
- Build an email list- Generating an email list of people who are interested in your idea is the perfect way to bring in early supporters. The best way to create an email list is by content marketing. In short, generate valuable blog posts on related topics and gather email addresses of the readers.
- Getting the traction of press- The other way of getting traction for your campaign in front of an audience is via bloggers and journalists. To have a successful campaign it is vital that the campaign has some uniqueness in its offering to the people. It is necessary to let the media know about your company so it becomes easier for them to promote your campaign.
Step- 5 What to do during the campaign
Once the startup has set its campaign page ready, and by having the email list up to date and substantial press contacts, the campaign is ready for the launch. The maximum amount of funding is witnessed in the initial days and the last few days. Startups have to start promoting the campaign via email lists a day prior to the launch to build some expectations which often works well. The launch of the campaign is to be done after sufficient planning. Better planning of campaign results in a successful crowdfunding campaign. The startup’s campaign has to stand out when compared to its competitors and the same can be done by presenting their business or project in a unique way.
Step -6 Delivering the promises made
If the crowdfunding campaign has been successfully backed, this is an indication that the actual work has begun. It is essential that the startups stick on to their promises made to the backers at the time of fundraising. Entrepreneurs can update their backers regarding the status of their product by emailing them until the product/idea is at the development stage. They need to be sure that the backers do not worry regarding the delivery of their product they have invested in.
This is essential for future funding requirements. If the startups fail to deliver the promises made, not only they would be starting the new crowdfunding campaign from scratch, but they would also lose the trust of their initial supporters. However, if the startups deliver to the backers as promised, the same backers will be eager to fund their next project/idea.
Generally, it takes sufficient planning and work to launch a successful crowdfunding campaign. Irrespective of the method of crowdfunding chosen by the business, it is necessary that the startups do research before kicking off the crowdfunding campaign. The platform they choose, the goals set by them and the rewards they give in return for the potential backers do impact on their business for years. However, with deliberate planning and having rational expectations, crowdfunding could be the best source for startups to raise finances.