As an entrepreneur, there may well come a time when you need to raise money for your business. And quite often, you won’t want to take out a loan or give away precious equity.
One solution is to start an online fundraiser that meets suits the type of business you have, the amount of money you need and the level of generosity within your existing network of contacts.
Let’s go through the steps you need to take in order to raise the required funds.
Select a fundraising website
There are a number of fundraising (aka crowdfunding) websites that help you raise money for business endeavors. The main difference between these sites is the funding method that is employed, the niche that they serve and the fees levied.
Fundraising sites are either keep-it-all or all-or-nothing. The former is where you keep all of the money you raise irrelevant of if you meet your financial goal. For the latter, this model returns money to donors unless you reach your full financial target.
It’s best to use keep-it-all if you can go ahead with the planned project or task even if you don’t reach your goal. For example, lets say Jane runs a flower shop and she wants to raise $10k to expand her collection. She decides to use the keep-it-all method because even if she only raises $5k, that will still allow her to expand, albeit on a more modest scale.
All-or-nothing should be used if you can’t progress without meeting your target. Lets say Jack wants to launch a new iPhone app and needs $3k. There’s no point in him raising just $500 as this wont cover the basic costs – he either needs the whole lot or nothing.
Once you know what funding method is right for you, the fundraising website you select will also be based on the niche that the website serves.
There are fundraising sites that cover all sorts of things – from creative projects to mobile apps and everything in between. There are also sites that have a separate category for every type of project.
Check out the fees, the look and feel of the site, its community and make a call as to what you think will work for you.
Entice donors
Some, or even all of the money needed, may come from your existing network of friends, family and contacts. Many of these may donate to you simply because they think you’re awesome.
However, other people, including strangers that stumble across your project, will often need a little more prompting. That’s where rewards come into play.
You can reward donors in many different ways. For example, lets say you’re creating a DVD documentary on Olympic athletes. You could send them a copy of the DVD before anyone else. You can get them involved in the actual production of the documentary – being a runner in a key scene would be pretty cool. Or how about adding their name to the credits?
Other than rewards, the content of your project needs to be designed around one thing – driving donations.
Make sure your description explains what you’re doing, why you need the money and how the donor can make a difference. Furthermore, if you really want to reach or exceed your target – make a video of you or your team talking through the project. Every fundraising website has shown that video helps to raise exponentially more money than pictures alone.
Share, network and share some more
Once you’ve created a project that you’d be happy to fund yourself, it’s time to share via email, social networks and any other medium that you can use to reach an audience.
Remember, that it’s not just about posting a link on Facebook. You need to create personal updates, get people involved and tell a story that others will want to be a part of.
And don’t be afraid to take your campaign offline and host fundraising parties and events to drive further interest to your fundraiser.
The more effort you put in, the greater the rewards.
Bio: Sandip Singh is the founder of crowdfunding website Go Get Funding which has helped people from all over the world raise money for what matters to them. Learn more about how to fundraise and get great fundraising ideas.
