Could crowdfunding help me achieve my small business goals?

What is crowdfunding?

Crowdfunding is a way of financing a project or venture by raising money from a large number of people, typically through the internet. Crowdfunding usually involves crowdfunding platforms such as Kickstarter, Indiegogo, Crowdcube and Fundable (we'll cover those in a bit).

Crowdfunding has become popular in recent years as a way for small business owners to finance their projects and products. It can be an effective way to raise money quickly, and often with little hassle. However, crowdfunding is not without its risks, so it's important to do your research before embarking on a crowdfunding campaign.

What are the benefits of crowdfunding?

Crowdfunding can be a great way to finance your small business goals for a number of reasons:

• You can test the market for your product or service before fully committing to it. By gauging people’s interest in what you’re offering, you can get a better sense of whether or not it’s worth pursuing
• It allows you to tap into a larger pool of potential investors than you could through traditional methods like bank loans or angel investors
• It can help generate buzz and publicity for your business. If your crowdfunding campaign is successful, it can generate a lot of good press and word-of-mouth marketing

How could it help me achieve my goals?

Firstly, crowdfunding could provide you with the funds you need to launch your product or project. Secondly, crowdfunding could help you to raise awareness of your product or project. And thirdly, crowdfunding could help you to build a community around your product or project. 

1. Crowdfunding can provide you with the funds you need to launch your product or project

One of the most obvious benefits of crowdfunding is that it can provide you with the funds you need to launch your product or project. If you have a great idea for a product or project but don't have the money to finance it, crowdfunding could be a great option. 

2. Crowdfunding can help you to raise awareness of your product or project

Crowdfunding could help you to raise awareness of your product or project. When you launch a crowdfunding campaign, you'll typically create a page on the crowdfunding platform where people can learn about your product or project. This page will include information about your product or project, as well as photos, videos, and updates from you. 

3. Crowdfunding can help you to build a community around your product or project

Finally, crowdfunding could help you to build a community around your product or project. When you launch a crowdfunding campaign, you'll typically start to connect with other people who are interested in your product or project

Can any small business use it?

Yes, any small business can use crowdfunding campaigns to finance their projects. There are a number of crowdfunding platforms such as Kickstarter, Indiegogo, Crowdcube and Fundable that allow businesses to post their campaign and solicit donations from the public.

Typically, businesses will offer rewards or perks to donors who contribute a certain amount of money. For example, a business might offer a t-shirt to anyone who donates £50 or more.

Where do I start?

There are a number of different crowdfunding platforms out there for you to select from, depending on the type of project you're looking to fund:

Kickstarter focuses on creative projects like art, music, film, and technology and is one of the most popular crowdfunding platforms out there — it's probably so well known that even people outside of the crowdfunding community will have heard of it, adding trust to your project.

Indiegogo is a crowdfunding platform that offers flexible funding, meaning that you can keep the money you raise even if you don’t reach your goal. This can be helpful if your project has a lower financial goal or isn’t as time-sensitive.

Crowdcube is a crowdfunding platform specifically for businesses looking to raise equity funding. This means that in exchange for their investment, donors will receive a stake in your company.

Fundable is a crowdfunding platform that offers both rewards-based crowdfunding and equity crowdfunding. It doesn't charge any platform fees, but there is a $179 per month subscription fee. It's a great choice for small businesses that are looking to crowdfunding as a way to raise both debt and equity financing.

Once you’ve selected a platform, the next step is to create your campaign page. This is where you’ll need to clearly articulate your goals and what you’re offering in return for donations. You’ll also need to set a fundraising goal and deadline.

It’s important to be realistic in both of these areas – setting a goal that’s too high will likely discourage potential donors, while setting a deadline that’s too soon could result in a rushed and less-than-stellar campaign.

Once your campaign is live, it’s time to start promoting it. Utilise social media, email lists, and any other channels you have at your disposal to get the word out. The more people who know about your campaign, the better your chances of reaching (and exceeding) your fundraising goals.

Crowdfunding can be a great way to finance your small business goals. It allows you to tap into a larger pool of potential investors than you could through traditional methods and can help generate buzz and publicity for your business.

What are the risks?

Of course, there are also some risks to crowdfunding that you should be aware of before launching your campaign:

• You might not reach your funding goal. If this happens, you won’t receive any of the money that was pledged to you and you’ll have to find another way to finance your project.
• It can be time-consuming. Managing a crowdfunding campaign takes a lot of work and can be very time-consuming. You’ll need to invest a significant amount of time into promotion and marketing if you want to be successful.
• You might not make any money. Even if you reach your funding goal, you might not actually end up making any profit if the costs of rewards and perks eat into your profits. You might not make any money. Even if you reach your funding goal, you might not actually end up making any profit if the costs of rewards and perks eat into your profits.

Some success stories

Some businesses that have found crowdfunding success include:

• Pebble, a company that makes smartwatches, raised over $10 million on Kickstarter from over 68,000 backers
• The Veronica Mars Movie Project, which was seeking to finance a movie sequel, raised over $5.7 million from 91,585 backers
• The LIX 3D Printing Pen feeds plastic into its tip, before melting it, allowing users to 'draw' innovative and creative freestanding structures once the plastic cools and hardens. The project raised £731,690 from 8030 backers
• The sci-fi miniatures board game Deadzone was realised thanks to a raise of $1,216,482 by 4,306 backers. The game lets players battle in a fully 3D environment, using highly detailed models and beautiful stats cards
• LiveCode, a campaign launched by RunRev Ltd, is an open-source software tool that helps teach people how to code and has been adopted by traditional education establishments in Scotland, as well as industries such as gaming. The project had an initial goal of £350,000 but managed to raise £493,795 from 3,342 generous sponsors

Crowdfunding could be an option to finance your small business goals. It allows you to tap into a larger pool of potential investors than you could through traditional methods and can help generate buzz and publicity for your business.

However, there are also some risks to crowdfunding that you should be aware of before launching your campaign, such as the possibility of not reaching your funding goal or not making any money even if you do reach your goal.

But if you’re willing to put in the work, crowdfunding could be a great way to finance your small business ambitions. And, of course, when you're ready to launch or push your small business onwards, takepayments have lots of flexible point of sale, card terminal machines and online payment options to help you meet your goals.

John Ford

Copywriter