Raising the necessary capital to get a small business off the ground or to keep it afloat before it becomes profitable is what 80 percent of start up ventures struggle with the most. High overhead costs paired with low sales can grip business owners with very little room for marketing, production, and research and development. The 3 necessary business elements to making a business profitable.
Which is why crowdfunding has been a recent 'go to' platform for startup businesses to generate the necessary capital to finish off prototypes, start manufacturing and production, create marketing campaigns and to do business expansion. And although crowdfunding has been a great vehicle for many startup businesses to raise capital and validate the market, not all crowdfunding campaigns are successful. It takes a specific kind of knowledge, strategy and execution to do crowdfunding right.
Our track record for online marketing success has transitioned over to the crowdfunding platform, where we’ve achieved a lot of crowdfunding success for our clients, and I’m going to share with you 3 crucial elements to create a profitable and successful crowdfunding campaign.
But before I dive into that, I want to go through:
What Exactly Is A Crowdfunding Campaign?
The concept of crowdfunding is relatively simple. It’s the process of recruiting as many people as possible to contribute money — whether it’s for an idea, a product, a cause, a political movement, or a business venture.
And what crowdfunding does is that it allows you to achieve five crucial business goals:
- Raising Capital: Having enough capital to start and maintain a business is crucial for any business survival long term. And with the difficulties of borrowing money from banks and venture capitalists, crowdfunding has been a great way for small businesses to raise capital without any collateral, credit checks and sales. In fact many crowdfunding campaigns are simply concepts asking the public to support their ideas.
- Market Validation: Testing the market and knowing that there’s a demand for your product or service is an advantage that crowdfunding can give you. Creating a crowdfunding campaign allows you to see whether or not people like your idea and is willing to support it. This allows you to validate the demand before spending money to start your business. Knowing that your business will be a success before you begin is a big advantage, and crowdfunding allows you to see this.
- Market Research: Not only is it important to validate the market to see how warm it is, crowdfunding also allows you to see who that market is, the gender skew if any, age range, occupation, income level, schooling, marital status and so forth. This is crucial when setting up your brand and marketing message, you want to know exactly who’s consuming your product or service and why. Knowing this allows you create the correct marketing plan moving forward.
- Business Valuation: Now if your crowdfunding campaign is successful in raising capital, this automatically gives your business a positive valuation (what your business is worth). If you are able to raise $100,000, your business is now valued at $100,000, and have this kind of business valuation goes a long way to establishing credit with banks and getting even more funding from lending institutions and venture capitalists.
- Customer Feedback: This one is extremely important because customer feedback provides you with insight that can be used to improve your business, the products or service and overall customer experience. Knowing what you can do better with your idea or what extensions or complimentary items to include with your product or service allows you to expand and create things that people want and are willing to pay for right on the spot.
Now, as easy as crowdfunding sounds, it’s not as easy as it looks, if it were, everyone would get rich via crowdfunding, but they don’t. It takes a specific approach to be able to get the word out and generate a lot of buzz to bring in the backers and money; one that we’ve successfully implemented and repeated for many clients.
3 Steps To Crowdfunding Success:
A truly successful crowdfunding service needs to incorporate 3 elements.
- #1 – Extensive Market Research. You need to find out where your market lies, who would like your product / service, what your audience looks like and where they reside online. Knowing this information on an intimate level allows you to create marketing material that talk directly to your backers and gives them a reason to support you.
- #2 – Creating A Pre-Launch Campaign. A truly successful crowdfunding campaign begins well before the actual campaign begins. One of the things a lot of crowdfunding campaigns miss out on doing is a pre-launch campaign to generate the necessary buzz prior to the actual launch of the campaign. The timeframe for a crowdfunding campaign is usually between 30 – 45 days, so you need as much buzz and backers to come in and support you in a very limited time space. Therefore creating buzz and excitement beforehand is crucial to having a successful and profitable campaign.
- #3 – A Full-Out Campaign Blitz Within The First 7 Days. Momentum is key to having a successful crowdfunding campaign, especially the first 7 days. Reaching your campaign goals within the first 7 days puts you on the radar of the crowdfunding platform you are working with like Kickstarter and Indiegogo, and more times than not, these platforms start to promote you through their newsletter and their feature page. And this will push your crowdfunding campaign to the next level and raise even more capital.
Want To Raise Over $100,000 Through Crowdfunding
I offer a free crowdfunding strategy session where we’ll create:
- A crystal clear vision of how crowdfunding works and what it can do for your business.
- We’ll map out a blueprint that gives you a step by step plan on how to structure and layout a successful crowdfunding campaign.
- And you’ll leave the session energized and inspired to understanding how to raise over $100,000 for your product and business in a very short period of time.
Click Here To Schedule Your Free Crowdfunding Strategy Session.
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