25 Mar Is Crowdfunding Right For Your Business?
For many entrepreneurs, creating a business plan and product development is easy; however, finding funding sources for your startup is not so easy.
When it comes to launching your business, understanding the financial aspects of running a business can be difficult. There’s a lot of area that a business needs to cover. But before you head to the bank for a traditional lending source, first consider crowdfunding and determine whether or not it will work for your business.
What is Crowdfunding?
There are many forms of crowdfunding such as equity crowdfunding, real estate crowdfunding, crowd lending, and many more.
Crowdfunding involves the matching up entrepreneurs and startups with interested investors in a particular niche market. When managed properly, crowdfunding can be a win-win situation for both entrepreneurs and investors. Crowdfunding involves attracting investors interested in supporting a business, with the opportunity to see a higher return down the road.
While there are many crowdfunding sites available on the Internet that many businesses have been successful with, partnering with an experienced crowdfunding firm can open the doors for many more opportunities for success.
Regardless of which crowdfunding path you choose, an entrepreneur must first determine:
- Launching an Idea. Obviously you can’t launch a business or project without an idea. Once you have an idea, then it’s time to put that into motion. Create a sample product for your audience or potential investors, or have them sample your professional service. Investors want to see a tangible product or even an asset, such as real estate crowdfunding and investing, before committing to any one project or idea.
- Target Audience. This should be any entrepreneur’s first step before launching a business or even a crowdfunding campaign. Pinpointing your target audience is extremely important because it allows a business to focus on who their customers are, how to market to them, and their demand. Then, by turning this information into data, an entrepreneur can then analyze and determine how to develop their product or service and then prepare for a crowdfunding campaign from there.
- What’s Your Strategy? Once you’ve determined who your target market is, and your product and/or service, what’s your marketing and business strategy? Documenting this strategy, or even drafting a business plan is a good idea for attracting investors. It gives them something to review and it shows that you are professional and take your business, and their time and resources seriously. Remember, these are investors, who should be treated similarly to customers.
- What are Your Goals? Your business goals can be anything. Even as a startup, you may not be sure about goals, but it’s important to start somewhere. Your business is likely to fail without some sort of goals set in stone. The best advice is to start with a list of top five goals: two that are small, yet reasonably attainable; two that are “reach” goals, meaning they will likely require some effort; and one large goal.
If you’re considering crowdfunding as a funding source and would like to learn more about available options and services, and how they are right for your business, contact a crowdfunding consultant. We see ourselves as partners to both entrepreneurs and investors and we believe the right relationships will equal the right results.