Crowdfunding for beginners – a guide for the uninitiated
It may seem daunting, but anybody can launch a crowdfunding campaign. Sara Guiel takes you through the basics to help you take the leap.
Crowdfunding has been around for years and no doubt you know vaguely that it’s about investing in business. But did you know that crowdfunding can be a great big injection of cash for the small business or new project? And that anyone can launch a crowdfunding campaign? It takes a bit of planning and time, but it could be the funding your vision needs. Let’s cover the basics and see what you think.
What is crowdfunding?
Good question! It’s an alternative way to raise money for your business from those around you and people who have an interest in what you’re doing or want to achieve. Entrepreneurs are turning away from traditional funding routes as they get harder to secure. Instead they are looking to their audiences, the people around them, and their communities to support their ventures. It’s not new but it’s now more widespread and social media makes reaching a bigger crowd much more possible.
Is it for me?
More than likely! Crowdfunding campaigns are all shapes and sizes. From a one-off project, to a whole business launch. You might want to fund a specific initiative in your business or raise money to start something much larger. There are many different crowdfunding platforms you can use so do your research and find one that aligns to your values. The platform Crowdfunder UK has helped over 80,000 individuals, businesses, charities and community projects demonstrating a huge variety of people choosing it as an option for raising funds.
How does it work?
Once you have your idea, you need to plan a campaign. The usual way is to offer ‘rewards’ for ‘pledges’. Pledges have a monetary value. Your Crowd make pledges and you reward them for doing so. If you have a product to sell, then the reward is a simple exchange of money and tangible product. If you offer services then think about when you could deliver that once someone has pledged for it. You decide the value of your rewards and you can have a wide variety of prices so anyone can afford to get involved and support you.
Do I have to need to have a specific target?
Yes. Think about what you need to raise to accomplished your project. Then work out the value of the pledges needed to achieve it.
What’s a campaign?
A campaign is the time that you spend crowdfunding. It’s when you promote and contact people to encourage them to pledge towards your target. It’s usually 4-6 weeks of intense marketing.
Do I have to be a tech wizard?
No. All crowdfunding platforms have resources to equip you with the knowledge you need. They have easy templates to follow and plans for projects to get ready. They all have advisors and usually forums to exchange ideas.
So I like the idea – what happens next?
Research the platforms. Find the one that suits you. Decide on your target. And then clear your diary for a month. Good luck!
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