Do not underestimate the time you will need before you launch your rewards based crowdfunding campaign.
So, you think you have a great idea, but you think you will need some funds to get started.
You think rewards based crowdfunding could be the solution, right?
In this article 3 of the crowdfunding series ,I will share with you. Exactly what you will need to do, before you even start launching your rewards based crowdfunding campaign.
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So, let’s get started
I want to start by asking you a question! Why do you think so many rewards based campaigns fail! Yes you heard that right, 78% in fact do fail.
Which means for every 3 submitted only 1 is going to succeed….
If you are thinking about rewards based funding you will already have been searching on the internet.
You will no doubt have seen the websites which make it sound so easy…
You will have seen words like!
- Have a great idea
- Just write it up
- Post it on our website platform
- Add a video
Just sit back and watch the funds come in!! right
Well I hate to be the one to shatter your dreams
But if you are to have any chance of being successful with your rewards based funding campaign
We need to rewind………………..
You need to go right back to the beginning!
Let’s start by discussing the time required
You will need to be prepared
You will have to do lots of work if your business idea is going to be successful…….
Start thinking 4-6 months before. In some cases, depending on your business it could be longer.
So, you think you have a great idea? Right
My question to you, is how do you know you have a great idea?
Who have you spoken to ?
Have you checked if anyone would actually buy your great idea?
Every business opportunity is dynamic, and it will change and grow as the business evolves so it’s important that anyone with an idea supports it with a business plan.
Recently someone asked me why they needed a business plan for a rewards based crowdfunding campaign.
My response to them was, would you invest in a business that had:
- No plan
- Did not understand their target market
- No understanding of the market potential
- Little or no knowledge of the numbers
- No idea of the costs involved to deliver the proposed rewards.
If you are like this person I bet you are now thinking, well when you put it like that!
Hummmmm, I can now see why 78% of rewards based campaigns fail…..
You must remember that anyone who gives you money, is in fact an investor ( even if they are giving you the money )
They are investing their money in return for the promised reward.
One thing I think we can both agree on today, money is hard to earn.
No one, and I mean no one is going to give money to a business:
- They do not believe in
- Cannot see business potential
- The numbers are just pipe dreamed with no supporting facts
My question to you is ! Would you?
So now we have got that over with we can get into the nitty gritty of what you need to do if you really believe that you have a great idea …
Crowdfunding Campaign Step 1 – The Plan
Anyone that has already written a business plan will know the executive summary is one of the most important part of the business plan.
You will also know that most executive summaries include:
- The business
- Why it will succeed
- Funding required
- What will be the rewards?
One thing you may or may not be aware of is the content of the executive summary is that same as the content you need for your crowd based funding campaign ……..
Which we will come on to later in this article..
The business planning process will force you to review your business idea. Develop a value proposition and strengthen your target market opportunity.
It will help you to get under the bonnet and think about the operations, its financial requirements. What will be required to make everything happen and much more…
You will start to spot connections that you would otherwise have missed, for example, if your marketing plan projects 10,000 customers by year 2 and your staffing provides 2 salespeople. You will force yourself to ask the question, how can 2 salespeople generate 10,000 customers?
The answers might lead you to thinking about forming partnerships, targeting distributors etc
Once you have completed the business plan you will be able to formulate a powerful executive summary that will stimulate and engage your audience.
You will be able to tell them about the business:
- What do you do?
- What is your product? (and before you ask I am not asking you to give out your trade secrets here, but enough information to attract interest)
- Who are your target customers?
- What do you think the future holds for your business and your industry?
Who’s going to make this happen?
Sell yourself, make the reader believe you can make this happen.
Start with a clear statement of what you propose to do and outline your objectives.
Objectives should be SMART
Specific. The reader must know exactly what you propose to achieve.
Measurable. The objective must be clear and explained so that it is possible to know when it has been achieved. For example, we will make 1,000 units by month two. So that in month two if you make 1,500 units you know it’s been achieved.
Achievable. There is no point setting an objective that is unattainable. You need to set targets that are achievable.
Realistic. It is important to be realistic. For example, you will generate sales to that value of 3 million in the first 6 months of trading is unrealistic.
Time-bound. Define when the objective shall be achieved. For example, you propose a market share of 30%, but give no time frame the reader may not believe you.
You need to be able to convince the reader that you will succeed, Provide a clear statement why you and your team will succeed.
What is special about:
- Your team
The reader is looking for something unique, that will give you the edge over everyone else.
So, suppose you are not unique. Convey your vision of a different approach or just that there is room for your business idea in the marketplace.
Crowdfunding Campaign Step 2 – How much do you need?
You need to identify how much money you need to get your business idea started.
- Typically rewards based crowdfunding raises between $5000 – $50, 000 dollars
It’s worth noting at this point that as with other types of funding rewards based crowdfunding funding is not regulated which means anyone can invest. However, anyone investing in your business does so by entering into a contract with you. They invest money in return for a specified reward.
Crowdfunding Campaign Step 3 – Protect your idea
So, you have now proven you still have a great idea and the amount you need fits within the funding band.
You need to now focus on the idea
- How will you share your idea?
- Do you have a prototype?
- What visual images will you use?
One thing you need to know is that crowdfunding platforms which we will discuss in the final article of this crowdfunding series do not offer any form of protection for your idea.
Which means that any type of intellectual property you may have will not be protected. One thing you need to be made aware of is today as you read this article your idea is still YOUR idea!
However, once its shared live on any platform, anyone could steal your idea. Worst still they could take it to market before you have even had chance to raise the funds……
Make sure you check out this great article by Marc Rossen to find out his take on it…..
Crowdfunding Campaign Step 4 – The Campaign
You are now realising this is not something you can put together over night, In fact some of my readers may now be thinking this is going to be a lot of work..
If you are starting to question! Now is the time to rethink if you really believe in your idea..
Because you are only just getting started and there is still lots more to do..
Every campaign will need
- A marketing strategy
- High quality grabbing content
- At least 20 high quality visuals images
- A promotional video
Also, not forgetting just in case you missed it some type of prototype..
Furthermore, you will need to think about rewards. What can you give your investors in return for their funding contribution.
Finally, you will need to pull this together in the form of a marketing strategy.
Before you start any campaign you need to
- Complete a marketing plan
- Research your target audience for your crowdfunding campaign. This will help you to define how you should market your campaign.
- Define the expectations by way of rewards which could be expected from your investors.
Spend time researching both the market and the competition. So that you can create a bespoke marketing strategy for your target audience.
Pick the right crowdfunding campaign platform
In article 4 the last one in the crowdfunding series I will discuss the various platforms available. I will also identity why you need to be aware of any suggestions made by fans on your social media platforms.
Make sure you subscribe to the tribe, do not miss the next article in this crowdfunding campaign series.