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10 Things You Should Know about Crowdfunding to Start Your Business

10 Things You Should Know about Crowdfunding to Start Your Business

After yelling expletive after expletive because you stubbed your toe on a chair you failed to push under your desk before going to bed (because who knew you were going to leap from the blankets with the best idea you’ve ever had at 2AM?), you settle into said evil chair to validate said best idea ever.

Site after site, email after email, your idea has claws. It will work! YOU can do this!

Only… you can’t… because you have no money.

Your brain feels like it’s playing ping pong in your skull. Idea after idea about how to fund this Best Idea Ever. Finally, it dawns on you.

CROWDFUNDING!

YES! That’s it!

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Except, it’s not that easy. It’s not until you know more about crowdfunding, and you’ve panhandled to every person you know and haven’t met yet.

1. Crowdfunding can fail very easily

According to Crowdlifted, over 71,000 Kickstarter campaigns have failed as of January, 2014. IndieGogo campaigns fare far worse with a 91% failure rate, according to Crowdfund Insider.

Those are abysmally horrible numbers. Especially considering that of those 71,000 fails, over 51,000 fail to make it through the friends and family round. Add that all up and it’s a whole lot of zeroes.

Even start-ups like Simplifit, and their co-founder Kevin Packer, know that you can’t just ask for money. You have to know when to crowdfund and when to approach other resources. As a weight loss brand, they couldn’t just take to the streets to ask for cash to get their software funded. He also says creating a crowdfunding campaign is a huge effort and distracts from the actual building out of ideas. Lastly, Packer says crowdfunding best serves products that are unique and stand out quickly.

It’s clear that not ALL businesses are suited for crowdfunding. Let’s take a look at what you need to do before hitting the streets.

2. Make sure you know who you are serving

Businesses that are aiming to serve the greater good by producing a product or service that fills deep needs, fare the best when asking for money from strangers. Unless you’re a video game developer. Then you leave everyone in the dust. By in the dust, I mean you walk away with 65 million dollars. The next highest earner stands in shame with 18 million dollars (as reported by Wikipedia).

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Don’t post some self-serving campaign just because you need a website. Understand?

3. Presentation is everything

You’ve heard the phrase, “You eat with your eyes”, right? Well, it’s the same with your presentation. Throw up any old whatever-you-can and your earnings will suffer. Trust me.

Carefully consider your presentation because you  don’t want your prospective funders to be on the fence about how serious you are. They’ll not give you a dime if they don’t feel like they can trust you.

Invest in a quality video. If all you have access to is your iPhone, watch this vid. Follow their tips to create vivid images that pull people in (along with their donations).

4. The language you use matter a lot

No matter what you do, don’t say the wrong words. If you do, people who are considering donating, will cross your name off their list of charities. You have to know the people you want to appeal to, intimately. You have to say the things that make their hearts sit up and take notice. Because if you don’t? You’re lost… just like Gilligan.

Do the legwork to understand how your potential think. Use the language they use. Use the words that open their hearts.

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Saying “Invest in US” will never earn you anything. But saying, “You want to own the world, and we want to help you do it,” just might.

5. Create early interest

When you present your crowdfunding campaign, it creates credibility and speaks to that, “Oh, Sally’s backing this, so it must be valid” mentality. It’s also known as social proof. If you already have some backing from outside sources, let your prospective funders know. If people who have already invested in the public round are excited about your project, they’ll also be good candidates to share their good intentions with their inner circle and extended contacts; thereby extending your public reach even sooner.

6. Be prepared to present your business plan

Some platforms, like IndieGogo and MicroVentures, want to see some semblance of your business plan. You don’t need to have every detail mapped out for them, they just want the highlights. That said, it’s always great to have your actual business plan on hand so you can present it if asked. You can even elude to it in your video for your campaign, adding a little more “oomph” to your “street cred.”

7. Know which platform will serve you best

Crowdfunding has been an ever-evolving industry since its inception back in 1997 and it’s come a long way. GoFundMe.com has raised over 580 million dollars for personal fundraisers, making it a leader in the field. But, as a business, you might want to look to campaign backers through sites like Kickstarter or Crowdrise for your creative ventures.

Or maybe you just want to launch a t-shirt line? If so, check into TeeSpring.

Be aware, each has fees attached. Some as low as 5% and some as high as 10% (like TeeSpring).

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8. Layout a strategy for marketing

You’ve got a Facebook account, but your BFFs are only going to share your campaign once or twice before they move on to the latest cat video. You need a marketing plan that will allow you to reach far beyond your circles.

This is where intimately knowing the people whose hearts will be touched by your pleas for help comes into play. If you know them well, you know where to find them online and off.

  1. Create flyers to post in those real world spots.
  2. Create ads for Google and Facebook. You can even buy Twitter ads, too.
  3. Create eye-catching and heart-grabbing images to post on Pinterest using Canva and Pixabay.
  4. Don’t rely solely on Facebook ads. Use your blog to talk about what your campaign. This will generate interest in a more heartfelt fashion. More than once.
  5. Reach out to people via email, but be careful not to spam. Engage them in conversation first, then ask if they’d like to contribute. Even better, add something catchy (not sales-y) to your email signature on your phone and your desktop. This way, no matter where you’re sending from, you’re covered.

9. Influencers can be your friends

Reaching out to influencers during your campaign is a good idea. Let them know you’re raising money for this cause that their audience will truly benefit from. However, do NOT wait until said campaign starts to start conversations with said influencers. Bad, bad idea. Do it early.

Start warming those fires. Try and be seen by them long before you need help. Create genuine relationships and don’t be a beggar. No one wants to feel like they’ve been used.

10. Remember it’s hearts that power wallets

No matter what you do, don’t forget the cardinal rule of crowdfunding: It’s hearts that power wallets.

There’s a trifecta that you cannot ignore if you want people to tear open their wallets for you: Story, authenticity, and credibility. Bake these things into your campaign and you’ll pull people into it. Let them see the passion that powers the idea. This will power the business. Let them feel how much you’ll put into creating “Awesome” for them. Let them experience just how important this campaign really  is. There’s a good chance they will reciprocate with genuine excitement and willingness to give and share.

That’s how you create a successful crowdfunding campaign. And that’s how you’ll get your idea from notion to motion.

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Published on January 8, 2021

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

How To Pay Off Credit Card Debt Fast: 7 Powerful Tips

Ever wondered whether your credit card debt is the reason you’re in a bad financial situation? You can’t enjoy any fun activities because a good chunk of your money goes toward debt payment. Heck, you’re even behind on some of your monthly bills.

The effects of clumsy debt management are too many to list here. This guide is going to help you discover how to pay off credit card debt fast and start chasing your financial goals.

Debt problems are the last thing anyone wants to encounter. But things can get out of hand when all the “little debts” you take accumulate in interests.

What if you knew some simple and proven ways to be debt-free quickly? Implementing them would mean better financial health for you. It becomes possible to free up cash for your “wants.” These include taking a trip or buying something you’ve always desired. All that while paying your bills on time!

Let’s not wait any longer. Here are 7 powerful tips for paying off credit card debt fast:

1. Pay More Than the Minimum Credit Card Payments

Many people only pay the monthly minimum on their credit cards. Truly, that’s the right amount for staying on good terms with your credit card company. But you need a different approach if you’re looking to achieve financial independence within a short time.[1]

Most of your payments go toward interest costs when you only pay the minimum amount. A substantial sum of your balance remains standing. As a result, it becomes more expensive to eliminate your debts.

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You don’t want to wait more than 10 years to get rid of debt while it’s possible to do it sooner. All you have to do is double that $100 minimum payment to $200 or go higher.

The good thing is that minimum credit card payments are affordable in most cases. By paying a higher amount, you reduce your interest costs, lessen your borrowing period, and boost your credit score.

2. Start With High-Interest Credit Card Debt

If you have more than one credit card debt, prioritize putting the extra money toward the ones with the highest interests. This debt pay-off strategy, known as the debt avalanche method, is essential for being debt-free quickly.[2]

First, you need to list down all the credit card debts you have in the order of their interest rates. Next, you choose the one with the highest interest and pay a significant amount toward it each month. It can be an amount twice or even thrice larger than the minimum payment.

At the same time, you make monthly minimum payments on the other debts. Their interest charges won’t be as costly as that of the first debt on your list. You only move on to the next high-interest debt after the first one is gone. Remember that your focus is on the interest rates and not the balances.

3. Revisit Your Budget

Budgeting is useful for tracking your financial moves. Once you create a budget, some tweaks along the way can make it work for you better. One situation that requires you to revisit your budget is when you’re struggling with debts. It might hurt a bit to slash some expenses. But you also don’t want to miss out on achieving financial freedom in the long run.

You can reduce some variable expenses to free up more cash for credit card debt payments. They’re the ones that change from time to time. Some examples are groceries, fuel, and clothing.

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Other opportunities for cutting down your spending lie in non-essential expenses. Instead of dining out all the time, you can cook at home more to save money. You can also share some subscriptions with friends and pay a fraction of the cost.

If you’re determined enough, you can eliminate all your unnecessary expenses and focus on paying off your credit card debt first.

4. Avoid Using Your Credit Cards

Do you want to know how to pay off credit card debt with a low income? One simple way is to stop using them. Having your credit cards everywhere you go means that you’ll be more tempted to buy unnecessary stuff. In this case, you spend money that you don’t really own and get deeper into debt.

The quickest fix to stop the debt build-up is spending with cash. You’ll be more aware of everything you can afford at any particular time. If you decide to keep one or two cards to ease the transition, always make wise choices. For instance, only use them when experiencing financial difficulties.

It’s best to categorize your fun activities under “discretionary spending” in your budget. This way, you won’t need more debt to kill your boredom. By halting your credit debt from accumulating, it’s easy to pay down what you already owe and be happy with the progress.

5. Start a Side Hustle to Boost Your Income

You’re probably turning away a lot of money by not monetizing your skills. Everyone has something that they’re good at doing. And you can use that to generate extra income for attacking your credit card debt.

If you look around your neighborhood, you can find several side hustle opportunities. It can be pet sitting, tutoring, or lawn mowing. You can start an online business by offering services such as digital marketing, content creation, and web development. Such skills go in high demand on freelance sites and job boards.

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Finding clients on social media is also a good strategy to utilize your skills and make more money. Facebook groups, Quora Spaces, and subreddits are some places to look for side jobs. You only have to join a niche-specific platform, share your services, and respond to any opportunities.

It’s possible to learn a skill, practice it, and earn from it. Use the free resources online or purchase some e-courses to get started.

6. Sell Your Used Items for Extra Cash

Starting a side hustle isn’t the only way to generate extra money. You can turn unwanted items into cash for paying off credit card debt. Whether it’s an old TV, book, or furniture, there is always someone itching to buy your used stuff.

A garage sale, as much as it’s old-fashioned, is perfect for getting your neighbors and passers-by to buy from you. You keep all the money because there are no business permits or taxes involved. While you may not make much cash, it’s better than leaving your stuff to go defunct in your storage.

Other than that, you can sell your used stuff on online marketplaces. Facebook groups are great places to start if you want quick approvals and hence sales. You only have to ensure that your listing follows Facebook’s commerce policies.

When selling any pre-owned items online, ensure they’re in good shape to avoid problems with your buyers.

7. Know When to Seek Help With Your Debt

Asking for help with your credit card debt can be challenging to do. But letting it drown you is a road you don’t want to take. While you may feel embarrassed at first, it’s the best way to get back on track when you run out of options.

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There are tons of non-profit credit counseling organizations that can offer you free guidance on how to escape the debt trap. An example is The National Foundation for Credit Counseling. They simply review your finances and help you determine the source of your financial problems. After that, they match you with an actionable debt management solution.[3]

In extreme cases, the debt solution can be:

  • Debt relief – where your debt is partially or wholly forgiven
  • Debt consolidation – taking out one loan to repay others
  • Debt settlement – the creditor forgives a significant portion of your debt
  • Bankruptcy – legal process for seeking relief from some or all your debts

It’s necessary to carefully weigh your options before deciding on the way to go. Find out how it might affect your credit score and any other risks.

Wrapping It Up

Debt is a major setback when you’re trying to prosper in life. Paying off credit card debt is essential if you want to reach your financial goals. That means having more free income, a good credit card score, and even a chance to retire early. You become more productive each day because of the peace in your mind.

So, you now have some tips on how to pay off credit fast. Go ahead and get rid of that good life progress killer!

More Tips on How to Pay Off Debt

Featured photo credit: rupixen.com via unsplash.com

Reference

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