Over the past few years, crowdfunding has grown in popularity, mainly due to the Internet. Crowdfunding campaigns are available all over the web and these campaigns are set up by entrepreneurs who need funding to start their business. It’s common to use crowdfunding for ecommerce, especially when it comes to manufacturing your product. However, to have a successful campaign you need to have specifics for contributors — such as a monetary goal, purpose, and deadline. So before you set up your campaign, sit down and consider these tips.
Find Your Manufacturer or Price Manufacturing First
You need to research manufacturer pricing before you start asking for contributions. If you can, find a manufacturer for your products and get an accurate price estimate for your goods before you set up a crowdfunding campaign. Also, it might help to get an estimate in writing, that way if prices change, you can still hold the manufacturer to your quoted price.
Have a Business Plan Written Up
A business plan is important, especially if you’re asking contributors to find your entire ecommerce startup. You need to identify your short and long-term goals in your business plan and you can use those in your campaign for a more accurate picture in your campaign text. Regardless, all startups should have a business plan. It works like a road map, which tells you where to go, how well you should be doing at certain points and how you’ll fund everything over a five to seven year span.
Identify the Goals of Your Campaign
You don’t have to use crowdfunding to fund your entire project, but you do need to set a goal for your campaign. For larger projects or an entire startup, it might be better to run separate campaigns for each goal. For example, if you have multiple prototypes that need manufacturing, you might want a campaign for each type of product rather than all of your products — which also gives you a more attainable campaign goal.
You’ll need to sit down and decide what the exact goal is for your crowdfunding campaign. For example, if you’re using the crowd funds for manufacturing, how many products will you be able to manufacture with that funding? How else will you use that money? Identify specifically what you need the funds for and how those funds will be used, because you will need to put that in your crowdfunding campaign text.
Be accurate in your calculations. You shouldn’t just guess on how much money you need to bring your product to market. Instead, get the numbers straight by talking to manufacturers, figuring out shipping costs, finding out how much it will cost to advertise, etc.
You’ll also need to figure out how many donors you need for your goal amount. According to IndieGogo, you should divide your goal by 100 to give you an estimate of how many people and smallest donations you’ll need to reach your total goal amount.
Picking Your Deadline
When you set up a campaign you also set a deadline. This is the final date you can receive funds for your project. The deadline goes active the moment your campaign does. Therefore, if you need more time to create your campaign, you should add more time to your deadline. Most campaign platforms have a maximum number of days they’ll allow one campaign to run — such as 30, 60, or 90 days. Using the maximum time doesn’t always mean you’ll get more funds. In fact, it should be your goal to raise funds steadily throughout the course of your campaign.