09 Jan 4 Critical Questions to Ask Yourself Before Using Crowdfunding
Crowdfunding is the ideal way to take your idea from concept to reality.
Unfortunately, it does not work for everyone.
According to PC Magazine, nearly 40,000 campaigns failed to reach even 20% of their funding goal on Kickstarter, and only 44% achieved their goal.
Their theory is that crowdfunding will tell an entrepreneur if their concept is viable or not. Because if you do not reach your goal, the idea was not something fund worthy.
While this is true, a vast majority of campaigns fail to reach their goal because they are not setup properly; not because they are a weak concept.
So, to make sure your idea is viable and something that will succeed, you must first ask yourself these critical questions.
It’s time for some self-analysis.
4 Questions to Ask Yourself Before You Start Your Campaign
- Do You Have a Solid Business Plan?
Per Jayson Demers at Entrepreneur, you should not even think about crowdfunding until you have a business plan.
We could not agree more.
After all, you cannot expect someone to back your idea if you have no solid plans for how you will use the funds.
To prove to investors that you have a solid idea, you must create a business plan. Then, you will discuss some details of that plan in your campaign’s description and information sections. Certain things you will address in that plan can include if you have made a prototype of the product or if you have photos that you can show, and anything that legitimizes your idea.
- Do You Have a Clear Calculation of How Much Money You Need?
Asking for too much may guarantee you never meet your goal. Some platforms require that you meet your goal by 100% to collect your earnings.
However, asking for too little means your project may not have enough to start or succeed.
So, the goal is to ask for the bare minimum you need to get started, without over-exaggerating the request. You do this by setting up a great business plan. A business plan projects how much money you will need during the first few years of operation, how it will be spent, and when you would see profits from your concept.
- What is Your Offer for Backing Your Idea?
Most crowdfunding campaigns are based on rewards. This is how you encourage people to give to your campaign and drive your idea toward reality.
NerdWallet recommends rewards because it eliminates the need to give equity to investors, and helps you fund an idea that may not fund through traditional investing.
While it does open the door to funding, you still must offer something worthwhile to your pledges. Offer rewards for entry-level pledges, such as something small for $25. Then, move your way up in rewards, scaling the supply to the amount pledged to your campaign.
- Do You Have the Time to Invest in Your Crowdfunding Campaign?
Your campaign requires constant monitoring and work.
Not only will you set up the primary campaign on your platform of choice, but you will also promote through social media, respond to questions, engage with pledges, and implement an SEO strategy to attract people to your website.
It requires a significant time investment, and most do not realize that when they start their campaigns. If you do not have the time, that does not mean you cannot start campaigning for your idea. Instead, it just means you need to bring in some assistance.
Contact Campaigning Gurus to Lighten the Load
Don’t overwhelm yourself with every to-do associated with crowdfunding.
Instead, contact LC Media to get assistance with starting and maintaining your successful campaign.
Our in-house team offers boutique style services that are tailored to the needs of your campaign. You can add on services a la carte until you receive the right amount of support you need to succeed.
Need social media help? We got you covered.
Need help creating a website for your campaign? No problem.
Get in touch with us today and let LC Media take your crowdfunding campaign from idea to reality.