You have a great business idea and you’re finally ready to make it a reality. However, the next obstacle you need to overcome is to find the funding you need to get your business off the ground.
In recent years, the advent of alternative finance has brought startups new funding options, and driven an explosion in the number of entrepreneurs raising money through crowdfunding. Specialist crowdfunding websites have made it possible for anybody with a business idea to reach out to potential investors. However, crowdfunding success isn’t guaranteed, no matter how good your business idea.
If you’re thinking of raising money to kick-start your business through a crowdfunding campaign, there are some key steps you need to take before you launch your campaign. With so much at stake, we asked Indiegogo to reveal the 6 things you need to do and know before you launch your crowdfunding campaign;
1. Planning is critical
Before you launch your crowdfunding campaign, do your research, and have a look at a range of campaigns that are similar to yours on a variety of different platforms. See what worked for them and what didn’t; read through their contributors’ comments and get a feel for how to position your own campaign.
Careful thought must go into choosing a realistic campaign length and funding goal, as well as the crowdfunding platform itself.
Your goal should be the lowest amount you need to bring your project to fruition. If your goal is £25,000 and you end up raising £50,000, your campaign will looks like a massive success. On the other hand, if your original goal was £100,000, raising £50,000 makes it look like you’ve fallen short.
When deciding on a date to launch your campaign, we would recommend avoiding bank holidays or weekends; campaigns should generally start at the beginning of the week.
2. Teamwork goes a long way
It’s tough (and even impossible sometimes) to manage things by yourself, and if your campaign is going to be successful, it’s important to have a strong team around you supporting your efforts and picking up any slack.
Campaigns that are run by a team raise over three times as much as campaigns run by an individual; you’ll need the support to split responsibilities such as collecting information for your databases, creating the pitch video, managing social media channels, and handling your perks, amongst others.
We would recommend leaving yourself around 60 days to plan the campaign and 30 days to manage the campaign after launch.
3. Being social counts
Even ahead of launching your campaign, social media is one of the most effective ways to spread the word about your upcoming campaign and reach out to potential contributors.
The social media platform that you choose to create accounts on for your campaign will depend on the target market of your product or service, as well as the relevancy of the platform. Twitter is a great place to start, but those with visually appealing products should consider setting up an Instagram account as well.
Remember, everyone who you interact with is a potential backer of your campaign so treat them like it!
Make a content calendar; it’ll keep you on track and organised so that you won’t be a mess once your campaign has launched. Increasing your followers can be difficult at first, but if you follow relevant pages and people, as well as interact with the community on trending topics, your page will be visible in no time.
This is also a good time to build out your database of potential contributors in any way you can – host events, partner with other brands, run contests, post quizzes, etc. The more people who you can reach the better chance of success you have.
4. Build a community
The importance of building a community around your cause or business cannot be over stated when planning your crowdfunding campaign. The earlier you start building your list of potential contributors and getting them excited about your campaign, the better.
Your immediate personal and professional networks are your potential first source of support and contributions, but you need to branch out and increase your database of contacts.
Whilst social media is a great stepping stone, you can build your potential database of contributors through a landing page, by posting on community boards and by hosting in-person at events.
As a minimum, you should start collecting contacts two months before your campaign launches. From there, use email marketing to reach out to your database and keep them informed.
Email marketing is great way to promote your campaign; we’ve found that the average conversion rate from email to contribution is 34% higher than other forms of outreach.
Email can be used to inform your followers when your campaign is live, update them about the status of your funding target, and provide news about your product and any additional perks being offered.
You might be tempted to mass mail your community, but avoid it as much as you can. You want your potential backers to feel special and a personalised email does just that!
Moreover, in every email, ensure that you integrate your social media pages as well as your campaign page, as people are more likely to access them through your email to find out more about your campaign rather than going out of their way to research it.
5. Create a great campaign page
Once your all-star team is in place, your database is built, and your social media platforms set up, it’s time to turn your attention to your creating your campaign page. This will act as your ‘shop window’, and will make or break the success of your campaign.
Make sure that your story is clear, direct and compelling. The most successful campaigns place invest in engaging pitch videos, clear infographics and professional images. Ensure your pitch text is strong, emotive and contains no spelling or grammatical mistakes.
We recommend breaking your text up into sections to make it easier to digest. Campaigns with well-made pitch videos raise four times more than those without them, so using a combination of infographics, videos and text is the best way to keep your audience engaged as they look through they campaign page.
Here are some examples of great campaign pages to help see how these elements can be combined successfully;
6. Your perks are important
Spend time creating a variety of perks to suit every budget and potential backer. After all, offering a single perk of £1 won’t get you the funds you need, whilst only having a single perk for £500 might have the same results. Be creative, but make sure you’re offering real value.
Ensure that regardless of how many people contribute to your campaign, the perks will remain deliverable and achievable for you and your team. When designing your perk structure, don’t forget to introduce special perks throughout your campaign to keep the momentum going.
Launching your campaign page is just one small step on your journey to successfully crowdfunding your idea. Taking time ahead of launching your campaign to build out your team, grow your database, set up your social media channels and produce a fantastic landing page, are all crucial to the overall success of your project. Don’t underestimate how much time and energy you’ll need to put in ahead of your launch.
About the author
This guide has been written exclusively for ByteStart by Joel Hughes, UK Design, Technology and Hardware Manager at Indiegogo. Joel joined Indiegogo to work closely with entrepreneurs and makers at Indiegogo to bring their products to market and seamlessly transition from crowdfunding to e-commerce.
More tips on starting and funding a business
ByteStart is packed with help and tips on all aspects of starting your own small business. Check out some of our most popular guides;
Funding your business
- What to do when the bank says “NO”!
- How peer-to-peer lending offers businesses a new funding option
- Finding finance for your new business – funding advice for start-ups
- The way to get paid – 12-Step Action Plan to stop customers from paying you late
- 8 signs that a small business may be approaching insolvency
- 10 late payment excuses used by customers – and how to deal with them