So you struck gold right next to the braai over the weekend with your new business idea…but you have no startup capital? Check out this quick read on how to crowfund your business idea!
Trying to raise enough of a profit to complete the amount needed to get your idea running can be hard work and seem nearly impossible. It is not that unachievable though, you can crowdfund to reach your goal. You probably want to know what crowdfunding is and how to crowdfund your business idea though.
Crowdfunding is about using persuasion on individuals to get them to make small to large monetary donations to your idea, and once several people donate, you end up with a huge cash sum. Now, how can YOU make crowdfunding work for you?
Well, when you first start learning how to crowdfund your business idea, you’ll come across sites like Kickstarter and Indiegogo which are sites that allow you to seek donations in return for rewards to donors. Rewards meaning free product all the way to a chance in a raffle, the options are endless. You could also crowdfund through assembling loans and royalty financing. Sites like LendingClub let members invest directly and borrow from other users. These methods are rarer than other types but the theory behind it is that by removing the middleman, both sides will profit from the transaction.
By crowdfunding, you are presenting yourself with a great opportunity to profit and create a good strategy during a startup or during the early stages of a company’s life. By raising funding, the company will hopefully have enough leftover funding that it can make it out of its startup stages and come out on top. Plus, all of the people who donated will feel like they have helped you to accomplish something and will become loyal customers to your business because they feel that they are a part of it in some way. It is best to have a story that engages your potential donors to feel emotionally involved with your company’s goals. Definitely follow through with whatever your promised your donors. A company can be sued if they do not follow through with what they promised to do, so you want to avoid that and stay honest. Honesty is the best policy in all cases.
Here are a few extra tips to help your crowdfunding campaign come out successful:
- You’ll want a small group or network of people who are willing to give and urge others to give by sharing your fundraising campaign.
- If you are indeed giving out prizes, make sure that they are prizes that normal people would want.
Be prepared to spend a lot of your time online. You will need to promote your project a lot and it can really take a chunk of your time.