Using Crowdfunding to Help Grow your Small Business

Why it helps

Starting a new home business can be tough. A popular way to minimize financial drama when starting a new business is to use a crowdfunding website. These websites allow people to make donations that you can use towards starting and growing your business.

Crowdfunding is becoming very popular among businesses, and there are many sites that allow for it. Choosing the right site will give you the best chance of success.

crowdfunding

Crowdfunding sites

There are many crowdfunding sites, each offering a different focus. A few examples are below.

GoFundMe

GoFundMe focuses on the struggles of individuals and businesses opposed to simply business opportunities. They charge 5% of the donations, and if no donation is made, there is no charge.

Kickstarter

Kickstarter allows you to advertise your project and receive funding for it. Kickstarter take a 5% pay from donations. Note that it is entirely up to you to follow through (otherwise you could be legally liable!).

Patreon

Patreon works by allowing a payment to be made on a reoccurring basis. This is beneficial as it can be on the lower end (even a dollar) a month. Patreon is centered on creative projects.

How to give yourself the best chance at success

Give people a reason

Transactions need to be mutual. People generally don’t just give money away (unless there is a genuine emotional appeal). Generally, ‘I need money’ wont work in this world! If this business is important to you, and you believe it is beneficial for society, then let people know that.

You should also let people know what social and environmental benefits your business could bring. This includes any ethical advantages brought about by your business. People will often support things that they believe benefits them.

Offer incentives

People love getting free gifts or incentives, and although they are paying, the trick is to allow people to believe they are getting more than you’re paying

Exclusive access to certain sites could helps you cause, and you could also offer workshops and other giveaways. You can also make people feel like a member of your business by providing loyalty cards and discounts. When people feel included, they may be more proactive in giving back.

Make realistic goals

People will often only help if they feel as though it is in their power to help, and although $100,000 would be nice, it is unlikely anyone will see this as a realistic goal.

By dividing goals into smaller portions, such as $500 at a time, people may feel it is in their power to help assist you. This achievable target can help with both set up and exposure, and have you on the way to starting a thriving home business. You should use your business plan to help do this.