The questions you need to ask yourself
If you relate to those characteristics, or think they’re something you could easily work on (like the active social media presence), the following questions will ensure that you’re absolutely making the right decision.
Do you have a solid plan?
Take a hard and critical look at your business plan, and ask yourself, “Would you invest in this?”. If your idea and plan are quite wishy-washy, then the answer will more than likely be “No”.
On the other hand, if you’ve got a great plan, research backing, and statistics, you have great potential. Contributors want to know that they’re giving money to something solid.
Also, once you hit all your financial goals, you don’t want to be left with the embarrassing dilemma of what to do next. This is something that you can absolutely improve if necessary, just keep working on your business plan until it’s perfect. In the meantime, you can also start building up your social media following and working towards ensuring you have all the crowdfunding characteristics.
Will your target market be interested?
Have you researched your target demographic? Are you confident that they can be persuaded to fund your campaign? This could mean ensuring that your rewards are suitable, or that you’ve marketed your platform correctly.
Why would they contribute to you? And do they have a strong incentive to do so? This could also be the best time to consider whether or not your offers are genuinely valuable, and what you can do to make them more appealing or valuable.
Are you willing to invest the time and effort into this?
Here’s the hard truth: crowdfunding takes up a lot of time and effort. Your business won’t be magically transformed into a wildly popular overnight sensation (as much as we wish it could). It doesn’t matter how great or strong your idea is, you’ll still need to put in the work to sell it.
You should be continually interacting with your users, donors, and followers, sharing new content, updates and working with marketing and search engine optimisation to make sure your campaign reaches the relevant people. Crowdfunding takes a lot of time and effort but the benefits can definitely outweigh the negatives.
Do you know about the drawbacks?
There is no rose without thorns. Crowdfunding isn’t as easy as it may appear on the surface, even with help from programmes that make it seem simple. Some platforms don’t release your money until you hit 100% of your target, and so checking this in advance is an absolute must.
Also, some crowdfunding runs on an equity-based approach, which obviously will impact your company going forward. You need to be very aware of these drawbacks and limits, and research everything in advance - including reading all the small print.
Crowdfunding can be a brilliant way to quickly raise both your company’s profile and necessary funds. However, knowing exactly what you’re getting yourself into before you dive in head first is crucial. Make sure that you’ve researched everything from the platforms that you use, to your target market to your own business plan and pitch.