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10 things you need to know before crowdfunding

In the world of business, creating a financial poll can be sometimes intense. In modern times there are now various ways to seek funds for your business (CROWDFUNDING). In the past 5 years , companies, big and small alike, started using this system to fund their ideas and product. But the process is not quite as easy as you think. Lets take a look at 10 questions usually asked about crowdfunding and what you need to know before you launch your first crowdfunding campaign.

#1 Why should people give money to you?

Why should someone give money to your business and not to another business? Times are tough, and people want to be sure the money is going into the right hands, and will produce the expected results.

    #2 What are the pro’s and con’s of crowd funding?

    Crowd funding can be risky because if the campaign does not raise the minimum amount that is needed, no money will be given or accepted. Do you want to take that much time and risk?

      #3 Is there plenty of potential support?

      Crowd funding is all about networking. How many people are in the company’s network, and is the product or goal something those people would support?

        #4 Does the company have the time and resources to run a good campaign?

        This type of campaign takes a lot of planning. It requires a strong pitch, regular communication with donors and it is always good to create video to introduce the campaign goals.

          #5 Who are the companies most common customers and would this campaign appeal to the customers?

          If a company is known for selling children’s toys, most of those customers will not be interested in investing so that the company can start making auto parts.

            #6 What do the companies current customers want, and what will the company give the customers in return?

            When a company has achieved its end goal, the people who donated to the project will want something in return, like the new product, coupons or free company swag.

              #7 What message does the company want to send?

              A company that is thinking about starting a crowd funding campaign should make sure the funding page can send the right message. Can the company use crowd funding, but still keep the best image?

                #8 How many people will help the campaign run smoothly?

                Crowd funding can be difficult, so keep in mind how many people will be involved.

                  #9 How much money is needed?

                  Crowd funding can be great if a company needs a sum of $200k to $300k.

                    #10 How much money will this campaign cost?

                    Crowd funding has a pretty low “up- front” cost, but the more money is asked, the more it will take to run a campaign. 

                    After all of these questions have been answered, it is time to decide whether to start a crowd funding campaign or do something different.

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