Whether your business is brand new or firmly established, you need money to make money. Crowdfunding can help you reach your financial goals and enable you to grow your business. Here are a few ways crowdfunding helps your business make money in 2018.
What is Crowdfunding?
The term crowdfunding defines the collective act of individuals who donate money to finance a project. Numerous platforms provide crowdfunding services.
- Kickstarter – Raised over $3.4 billion and successfully funded 135,567 projects since 2009.
- GoFundMe – Fifty million donors have raised over $5 billion since 2010.
- Fundly – Supported more than 42,000 campaigns and raised $305 million since 2009.
- Indiegogo – 800,000 ideas funded by nine million backers since 2008.
After choosing a platform, you create a campaign, post it online and advertise it to your supporters. When you reach your goal, you receive your money minus a percentage the platform charges. Throughout the process, you retain ownership and license of your business idea or project.
Why Use Crowdfunding?
All businesses need capital to operate. What happens, though, if you would rather develop new products than raise money, experience a slow quarter, decide to upgrade your facilities or want to launch a unique product? Crowdfunding can provide the financial resources you need to fund projects that allow you to maintain or grow your business. This unique opportunity also gives your customers the opportunity to participate and partner in your business’s growth.
Tips to Use Crowdfunding Successfully
If you’re ready to use crowdfunding to make money for your business, follow these tips.
- Consider bite-size projects.
You may need to raise $10,000 for an expansion, but that lofty figure could intimidate donors. Instead, break down your project into smaller chunks, and fund them one piece at a time. Your donors are more likely to support a campaign if they feel like they’re making a difference and it looks like it can succeed.
- Offer compelling rewards.
Most crowdfunding projects include rewards for donors that relate to the campaign in some way and entice them to give. As an example, when graphic novelist Kris White funded “The 36, he rewarded $1 donors with a PDF of chapter 1, and $10,000 donors earned spots as supporting supporting characters.
- Hone your pitch.
You get one chance to make a good impression, so know your goal, target audience and message as you prepare the pitch you’ll publish on the crowdfunding site. In addition to a great description, choose an image that conveys your brand and product.
- Tell an exciting story.
Maybe you envision teaching local high school students in your new manufacturing facility or plan to donate some of your new product to in-need residents in your town. Share this story as you ask donors to open their checkbooks. Write a compelling script and record a video that shares your story and prompts people to donate to your cause.
- Share details about the donations.
Donors need to know that you plan to use their money wisely, so include information about why you want money and how you’ll use it. Be transparent as you build trust.
- Plan a marketing strategy for the entire campaign.
While the beginning and end of a project are typically the most exciting and bring in the most bucks, plan to share emails, social media posts and other content throughout the campaign. Remember to create press releases for local and national media, too. Regular updates and reminders keep your campaign in your donor’s minds and elevate excitement from its beginning to end.
- Share on social media.
Leverage your social media influence and build awareness for your campaign among your followers. Vary content to include images, videos, even images which you can design using visme. Be sure to answer questions and respond to comments, too, as you keep your audience engaged with your campaign.
- Ask for donations.
You may create an amazing pitch and engaging marketing strategy, but remember to include a request for donations. Consider featuring key team members and potential recipients of your campaign dollars as you improve the humanity of your business and need.
Crowdfunding can give your business important capital for a variety of projects. Use this resource wisely as you improve your company’s growth and future in 2018.