Why do businesses turn to crowdfunding? For many, it’s the last resort option when the doors are about to close and the money simply isn’t there to pay the bills and employees. But crowdfunding has evolved into much more than that, and it can actually become a critical part of your business strategy rather than just a last resort solution.
The More Revenue Streams The Better
There are several different ways to raise money for your small business, including loans from banks and conventional investors. But often, these methods come with restrictions or high-interest rates that can hinder a small business’s growth potential. With crowdfunding campaigns, companies can access easy-to-access capital without giving up equity or limiting future fundraising potential. And because backers are often just as invested in a company’s success as its founders, they may be more willing to spread positive word-of-mouth advertising. This helps offset some of the costs associated with traditional marketing efforts.
Where Should You Go To Crowdfund
The three most common crowdfunding sites are Kickstarter, Indiegogo, and GoFundMe. As with any funding source, pros and cons exist. The biggest pros are that you have little to no financial risk as a project owner because you receive contributions only if your project reaches its funding goal. If it doesn’t reach its goal, you don’t get charged anything. Also, crowdfunding campaigns tend to attract more attention than other fundraising efforts. This is especially true on social media platforms like Facebook and Twitter. Finally, you can use your campaign to build a community around your business idea or product offering. You may find supporters who want to help spread awareness about what you’re doing or even join in on your mission once it gets off the ground.
Use CrowdFunding As A Marketing Tool
Crowdfunding is an excellent marketing tool for small businesses just starting. If you’re looking to get noticed in a crowded industry, crowdfunding can help you tap into new audiences and drive more traffic to your business. The best part? You don’t have to spend a dime on advertising or marketing campaigns. Instead, you give people something they want in exchange for their money: products, services, perks—the possibilities are endless. And it doesn’t matter if you’re selling t-shirts or tech gadgets; crowdfunding has helped companies raise millions of dollars from everyday consumers worldwide.
It Makes You Network
If you’re in business, there’s no avoiding it: You need to network. It doesn’t matter if you prefer to work by yourself. After all, your business is going to need customers and investors. With enough dedication and hard work, you might be able to grow a massive company from scratch—but most small businesses will depend on funding from banks or private investors at some point or another. Crowdfunding naturally involves networking because you’re actively trying to draw people to your business. When you’re out mingling and trying to get people to support your business, you’ll network with people with similar interests.
