Crowdfunding for Small Business is So Awesome!
Have you caught up to the latest trend for financing your small, or huge, project? Crowdfunding has been around for, well forever, probably. It’s an obvious solution for small businesses to consider when seeking funds.
How to Choose from Over 500 Crowdfunding Platforms
Since the latest growth in secure, simple Internet platforms, making it accessible for the average person, crowdfunding platforms are growing rapidly. Funding typically comes from loans, investors or donations. The latest trend in crowdfunding is on a barter system. Some platforms let you trade investments. At the time of writing this, there are an estimated 500 crowdfunding organizations. What this means is, there is a platform for everyone and the benefits of each crowdfunding program are not the same.
If you are researching a Crowdfunding platform for your project or idea, do your homework based on the following:
- do they focus on your niche (investments, arts, sciences, small business, etcetera)
- do they have a history (they aren’t going to go belly up through your campaign)
- do they offer clear support that indicates they want to help you succeed
- is their platform easy for you AND your potential backers to navigate and invest
- do they use social media (so you can use keywords, hashtags and their fans to leverage your success)
Go Big or Go Local (or both) with Kickstarter, IndieGoGo, AlbertaBoostr
I recently started working with a client, Janet Pliszka of Calgary’s Visual Hues Photography, who investigated IndieGoGo and Kickstarter as platforms for a campaign to pre-fund professionally created, child and tween-focused video lessons at Kids Photography Academy.
Janet was most keen on using Kickstarter at first, because the “rewards” based platform is friendly and suits her brand, and personality, significantly. It is also straightforward and projects similar to hers have seen successfully funding. However, she says,
“limitations with bank accounts with the United States-based organization were a problem I didn’t want to work around, at first. So I investigated Canadian-friendly IndieGoGo, suited more to artists, but easier for Canadians. Before fully committing, Kickstarter actually launched its Canadian version, so the timing was perfect! We chose Kickstarter in the end. But I caution those interested in crowdfunding to explore their options and make sure every single part of the process is a fit and is easy. There are so many details. Getting caught up on one piece that isn’t perfect can ruin your efforts.”
One of the greatest benefits of Kickstarter, that I can see, is the quality of content a business is required to provide in order to be “approved.” For example, they strongly encourage the use of a video. Janet’s professional quality video (created by Dana at ChicFlicks) explaining what Kids Photography Academy is, is shown here:
Dana explains the project, from the video point of view, on her blog here.
Consider Local Options
One of the biggest challenges in receiving funds is getting the backers! My golden rule in marketing is to “start with those who love you best”. The same is true for crowdfunding. Those who already believe in you and your project will end up funding the most towards your campaign. Or at the very least, for larger projects requiring greater funds, they will be the ones who fund first and get the momentum rolling.
You certainly want to navigate some stealth marketing and publicity angles to get the word out. But you must have a community of fans, customers, champions of significant size before you roll or you will be one of the campaigns not funded. Even the best ideas will get lost in cyber-space — Internet based news and ideas must have traffic to the site. It’s that’s simple. Real word of mouth or online word of mouth momentum must start the ball rolling.
So if community is critical, consider local options. Geo-local crowdfund platforms are popping up, like AlbertaBoostr in my back yard (I’m excited)! Sean Ballard, Director of Innovation (doesn’t that title make you excited?), shared this insight into what a local platform is all about:
“Alberta BoostR is a crowdfunding platform for small businesses in Alberta. Our niche is being a place for local people to support local companies, like retailers or service businesses that might not get the attention they deserve on global platforms like Kickstarter and Indiegogo. This gives local businesses a platform to boost their business with funding, continue to build their community, and market their business in an authentic way.”
Should you CrowdFund?
Crowdfunded projects are tricky to see through to completion (and cashflow). But the great news is, you can use it to test out an idea, experience feedback and possibly… get funded. The ideas that will do best are those that are specific, easy to explain and easy to get behind. Your enthusiasm and excitement (like Janet’s) are what will get your fans on board.