Posted: Thu 2nd May 2013
We've recently teamed up with Crowdfunder to offer a new crowdfunding channel for small businesses on the Enterprise Nation website. Crowdfunder's Emily Smith looks at how best to approach a crowdfunding campaign.
Launching a crowdfunding project is a great way to fund your new business idea but with this alternative method of funding comes a little hard work. As entrepreneur and investor James Caan has said: "One of the biggest mistakes an entrepreneur can make is getting caught up in the moment: running with your idea or opportunity and spending time and money on developing it rather than taking a step back and thinking to yourself 'Is my idea really a viable business?'"
Pre-promotion is a vital stage to any crowdfunding campaign. Not only is it a fantastic time to test your idea on the crowd before going live, but means you don't spend money on it without it being validated first. Taking a leaf out of Caan's book use pre-promotion to ask the crowd what they think of your idea. If no-one thinks too much of it, then it's time to rethink whether a crowdfunding campaign is your next step. Use this time before your project is made live to gather a crowd who will potentially back your project. Email everyone you know and use Facebook and Twitter to drum up some interest. Once you're live and only have 30 days to raise your money, it's a lot harder to work on building a network. This is the time you want to be pushing your project to the network you have already built. Caan goes on to say: "It's natural when you have an idea, or are presented with a business opportunity, to get excited. It is, however, absolutely vital for you to do your research. Know the market."
Create rewards for funders
Rewards are the make and break of a crowdfunding campaign and it would be great to have an idea of what rewards you could offer your backers when you submit your project to the site. A great way of thinking about rewards is to ask potential backers what they would like the rewards to be. If these are feasible, then bingo - you've got rewards! Having aspects of your project, such as rewards, clear before you submit your project will guarantee that your idea will be made live a lot quicker.
Prepare your application
You'll have between 30 and 45 days to run your campaign, which means preparing for launch is the most important step of your whole crowdfunding venture. It pays to prepare: you'll need to know what rewards you'll offer, have a video idea or a date to film a video, have a crowd already interested and Facebook and Twitter set up for your project when you submit to the site. It may take a few weeks between making your application and going live, but we'll use that time with you to make suggestions and tweaks that will help you make your pitch as good as it can be. Remember to email us before submitting your project. We're always here to help out - submitting a pitch that is almost ready to go live is better than spending weeks perfecting it. We look forward to seeing your submissions soon. Good luck!_
Photo credit: Martin Fisch via Compfight cc_