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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
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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.

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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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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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