Summary: How to raise funds for your business through crowdfunding. Common mistakes to avoid and steps to follow to ensure a successful campaign.
Crowdfunding is gaining in popularity as a way for small to medium business owners to raise funds for their business, or elements of their business.
However many Crowdfunding campaigns flop because of the following reasons:
- Use of the wrong Crowdfunding platforms.
- Underestimation of the amount of work involved before you launch a campaign, during a campaign and after a campaign.
- Not getting enough campaign reach to meet funding goals.
- An ineffective crowdfunding pitch.
- Ineffective images or videos.
- Not having initial funders to get the ball rolling.
- Not spending an initial capital outlay to create a solid campaign in the first place.
- Not having the right rewards for contributors.
Here are some steps to follow to avoid a flop and create a successful Crowdfunding campaign that enables you to raise lots of funds for your business:
Step 1: Choose a Crowdfunding platform with a flexible funding option.
Non flexible crowdfunding platforms only allow you to withdraw funds once your funding goal is reached.
Flexible crowdfunding platforms allow you to withdraw funds irrespective of whether you have reached your funding goal or not.
So go with a crowdfunding platform with a flexible option, as many crowdfunding campaigns do not reach their target.
Also make sure you choose a crowdfunding platform that supports your country and your currency.
A good option is Indiegogo, with flexible funding, as well as the ability to pay out funds to many different countries and currencies.
Step 2: Budget some initial capital towards the success of the campaign.
Unfortunately you do need to invest a bit of money into a crowdfunding campaign in order for it to work.
So budget some capital for graphics, images, a professional looking video, for social media coverage and to deliver exceptional rewards to those that contribute.
Step 3: Come up with a catchy funding pitch and a good strategy
Spend some time developing your crowdfunding strategy.
What are you crowdfunding for?
Why are you crowdfunding?
What is your memorable story behind your reasons for crowdfunding?
What is your plan going to be spread the word online and through social media?
How long will your campaign run for?
Make sure your pitch comes with a catchy statement and a compelling story with both the “what”and the “why” behind your campaign.
Step 4: Determine what rewards you will offer contributors
Successful crowdfunding campaigns offer people rewards or perks in exchange for their contributions.
Study successful campaigns to see what rewards they offered to get some good ideas.
Have different levels of rewards for different contributions.
For example, a reward for a $10 contribution, a higher reward for a $25 dollar contribution, a great reward for a $100 contribution and an amazing reward for a very high contributions.
Studies show that the most popular contributions are for $25, so make sure you have a reward for that amount.
Step 5: Create a catchy video and good images
It has been proven that crowdfunding campaigns with a good video will double their results.
Make sure you create at least one professional, catchy video explaining your pitch and the rewards contributors get in return.
If you do not have the expertise to create your own video, get help with this, as this is very important.
Make sure your images are high res, that they represent your campaign well and that they can be shared on social media.
Step 6: Create a media page
Set up a helpful media page to encourage the press to write about your campaign.
Include hi res pictures and make you highlight the elements of your campaign that make it newsworthy.
Go onto HelpaReporter.com to tell the press about the campaign.
HelpaReporter.com has lots of journalists scanning this site for news.
If you have some budget, hire a PR company to help you promote your campaign in the media.
Step 7: Put your campaign onto the Crowdfunding platform
Register on your chosen crowdfunding platform and follow the instructions to post your campaign with its pitch, images and videos.
Step 8: Get friends and family to get the ball rolling
Make sure you get everyone you know to donate immediately to get the ball rolling and for others to see that funds for your campaign are being raised.
It has been proven that crowdfunding campaigns that have funds coming in early have a better chance at succeeding.
People also tend to donate only once they see others have donated.
Step 9: Get a notable funder onboard
Having a notable funder (someone who has influence in your industry) contribute to your campaign has been proven to encourage others to contribute.
So do your best to get a notable funder on board and make sure you update your campaign and campaign promotions with the fact that this well-known person has made a donation to your campaign.
Step 10: Get help from Crowdfunding promoters to create back links and get traffic
Within minutes of setting up your campaign on a crowdfunding platform such as Indiegogo, you will get a few emails from companies who specialise in promoting crowdfunding campaigns asking if you would like to make use of their services.
These companies create the back links you need on social media to get more traffic to your campaign.
Prices for these services range from twenty dollars to a few hundred dollars.
It definitely helps to use these services.
Step 11: Stay active online during the Campaign
You need to work hard during the campaign to attract contributors, to keep traffic coming to your campaign and to prevent your campaign from being buried amongst the tens of thousands of other campaigns vying for attention.
You need to keep pushing on social media.
You need to go onto crowdfunding social media groups and promote your campaign.
You need to keep creating back links to as many social media pages as possible.
You need to keep posting updates on your actual campaign page, preferably with images or pictures.
Failure to do this will result in an unsuccessful campaign.
Step 12: Make sure all contributors get their rewards and are thanked
The work is not over once your campaign end date has passed.
You need to make sure every single contributor gets their rewards and a personal thank you for making a contribution to your campaign.