Web's Largest listing of crowdsourcing and crowdfunding events

Events

Advertise

Web's Largest Directory of Sites

2,339 crowdsourcing and crowdfunding sites

Crowd funding: A guide for SMEs

document Crowdfunding

Crowd funding: A guide for SMEs
Daniel on Aug 20, 2012

It's the latest buzzword in the world of business. Firms of all sizes are rushing to take advantage of this enormous social movement, which has been sweeping the internet in a big way over the last year. Traditionally, small and medium-sized enterprises have always been reliant on big banks when they have needed loans, but crowd funding changes all of that. The concept takes the 'Dragon's Den' method of finance and applies it to the internet. So instead of pitching your business idea to four fire-breathing mythical entities, you're encouraging everyone in the world to invest in your project. Crowd funding platforms such as Kickstarter and Indiegogo have seen immensely successful projects raise thousands, and in some cases millions of pounds. Using these sites, you can set a financial goal and invite people to invest, tempting them with a variety of incentives. If you meet your goal, the project is funded and you get the money. But don't get dollar-signs in your eyes just yet – only 44 per cent of all Kickstarter projects succeed in raising the amount required. And with the exponential increase in interest, you have many more projects to compete against when it comes to attracting attention.

So how to make sure you end up in the 44 per cent of projects that actually succeed? Here is XLN's guide for small businesses who may be looking to take advantage of crowd financing. Who would want to invest?

Before you even think about setting up your page, you need to think about who will want to pledge money to your business. Comic writer Rich Burlew spent ten years building up a dedicated fanbase before asking them to invest in his publishing company, and received £800,000 in response. Think about your existing customer base if you have one. Would they want to invest in your business? What kind of incentives would get them interested? They can be anything from a bumper sticker to a pre-order of whatever you want to develop with the extra money from the crowd fundraiser. How to promote your crowd fundraiser?

If you have a loyal customer base, some of this will be achieved through word-of-mouth. But even so, make sure you make an effort to get people talking. Traditional low-cost advertising works wonders. Social media, telling the local press, leafleting; these are all excellent methods of raising awareness. With a dedicated fundraising platform such as Indiegogo, you'll also receive a page with which you can promote your project. Use it wisely and keep everyone updated with comments on your progress.

What can you afford?

Even if you succeed in collecting for your goal, crowd funding projects can still fail if you underestimate how much your rewards cost. For example, it isn't going to be viable to offer people an iPad for donating £20. Similarly, make sure you take elements such as postage and packaging into account – many a project has failed because the leader hasn't taken into account the cost of sending 200 magnets with overseas postage. Prepare for this eventuality. Follow this advice, and you'll be getting money from the masses in no time.

Summary
Traditionally, small and medium-sized enterprises have always been reliant on big banks when they have needed loans, but crowd funding changes all of that. The concept takes the 'Dragon's Den' method of finance and applies it to the internet. So instead of pitching your business idea to four fire-breathing mythical entities, you're encouraging everyone in the world to invest in your project.

Description
Here are some guide for small businesses who may be looking to take advantage of crowd financing:

-Who would want to invest?Before you even think about setting up your page,you need to think about who will want to pledge money to your business.

-How to promote your crowd fundraiser?If you have a loyal customer base,some of this will be achieved through word-of-mouth.But even so, make sure you make an effort to get people talking.

-What can you afford?Even if you succeed in collecting for your goal, crowd funding projects can still fail if you underestimate how much your rewards cost.

Tags: Crowdfunding, Crowdsource, Crowdsourcing, small business

Posted by Benjamin Fossel

Aug 20, 2012 12:41 pm GMT Viewed 634 times

Author: Daniel Source

Contact us if you are owner of this content and want to make changes.

Download Flag This

Events

Crowd funding: A guide for SMEs

Comments

Crowdsourcing.org

Categories

Content

Crowdsourcing.org, an initiative by massolution®

Events

Related Content

Crowd funding: A guide for SMEs

Comments

Crowdsourcing.org

Categories

Content

Crowdsourcing.org, an initiative by massolution®