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Grow your business with Crowdfunding

By 11th August 2017April 1st, 2022No Comments

man stacking up coins into piles

Tips for crowdfunding to grow your business

Although this may come as a surprise, crowdfunding is a great way to finance business growth. Many companies crowdfund to raise funds to develop new products and ideas. UK’s largest crowdfunding website Crowdfunder, has raised £42,485,223 to date for its users. People raise money for all sorts of things. For businesses, community groups, charities, political movements, sports clubs, and more.

Post your business idea as a campaign so people can donate money towards your goal. You need a good project description to encourage people to part with their hard-earned cash. Financial targets range from a few hundred dollars to test new products to thousands to fund business properties. You will set a target amount with a time deadline to achieve it on most websites.

Encourage people to support you. Offer a reward based incentive system based on how much people donate. This can be merchandise, discounts and even acknowledgement as a donor. For example, a donation of $10 can earn a donor’s name on your website. Or, for $20, offer a 5% discount voucher for a donor’s next purchase.

Here are some tips to think about when considering crowdfunding to raise funds.

Prepare a business and marketing plan

Treat raising funds through crowdfunding the same way you would other potential investors. Prepare a thorough business and marketing plan for your online project. Write a clear, engaging investors’ pitch to engage people. Be clear about your goals. Be transparent about your business and offer incentives for peoples support. Show passion for what you believe in and add testimonials from those who already back you.

Consider using a video to pitch to your audience. Invest some funds in a professional production. You can get your points across better in a video than on paper. You can also use this video as a marketing tool to promote your crowdfunding campaign on other websites.

Getting noticed

It is important to get those first few donations quickly to show others that people support you. Getting these is key to getting noticed by others. This should not be difficult if you send out a promotional email to your current customers and supporters. Even friends and family may donate to get you started. Once you have those first donations it will help you reach out to people you do not know.

Crowdfunding advantages and disadvantages

As with any financial options, crowdfunding has advantages and disadvantages:

  • advantages include:
  • access to an already established customer base
  • turning customers into investors’
  • opportunities to interact with your customers
  • feedback from customers during product development and testing phase
  • instead of selling shares to investors offer reward incentives (a discount on their next purchase, for example)
  • a great marketing tool for free
  • lower risks – if you do not reach your funding goal you do not need to commit.
  • disadvantages include:
    • the need to build a promotion campaign for your idea or product to get peoples interest
    • you cannot guarantee to reach your funding goal by the deadline
    • competing with other businesses for crowdfunding
    • the time required spent with investors providing updates which takes you away from the end goal
    • providing incentive and rewards to those who support your campaign.

Promote your campaign. This takes effort. You cannot just start a page, write a description and expect the funds to magically roll in. You need to put the groundwork in. Let people see your commitment. This encourages belief in you and your ideas. Crowdfunding not only raises much needed cash, it allows businesses to market themselves in a way they never could before.

 

Marc O'Dwyer

Marc O'Dwyer

After completing a Graduate program in Marketing, Marc’s impressive sales career began at Allied Irish Banks, Pitney Bowes and Panasonic where he received numerous Irish and European sales performance awards and consistently exceeded targets and expectations. In 1992, Marc’s entrepreneurial spirit led him to set up his own business, Irish International Sales (IIS). Initially, this company was a reseller for Take 5 Accounts and Payroll software. Within four years, IIS became the largest reseller of Take 5 in Ireland, acquiring four other Take 5 resellers. He also found time to set up two mobile phone shops under the Cellular World brand and a web design company offering website design services for small businesses. In 2001, he bought the majority share in a small Irish software business, Big Red Book. At that time, the company was losing money. The company became profitable within two months, and Marc then acquired a payroll company to compliment Big Red Books Accounting products. In 2003, IIS were appointed as Channel Partners with SAP for their new SME product, SAP Business One. Marc sold his Take 5 business and concentrated on developing this new market for SAP As a result, by 2007, IIS was recognised as the largest Channel Partner for SAP in EMEA (Europe Middle East and Africa). In 2008, the IIS Sales Manager bought the Company from Marc in an MBO. He launched Big red cloud in June 2012, the online version of big red book, to date the company successfully converts 59% of trials into sales and the number of customers is growing rapidly. Marc continues to run both Big Red Book and Big Red Cloud which now support 75,000 businesses. He is a very keen sportsman, having played rugby for 20 years, represented Leinster at under 16 and under 20 levels, and league squash with Fitzwilliam Lawn Tennis Club for 10 years. Marc has competed in 11 Marathons, including the London and Boston Marathons, and has completed several Triathlons and Half Ironman races. He has also completed six Ironman Races in Austria(x2), Frankfurt (Germany), Nice (France) , Mallorca (Spain) and Copenhagen (Denmark)