Ask these 10 Questions About Crowd Funding
In the past three to four years, companies, big and small, have started to use crowd funding to afford new products. But is this new marketing option best for your company? Try asking these questions to get an idea.
Question 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.
Question 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?
Question 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?
Question 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.
Question 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.
Question 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.
Question 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?
Question 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.
Question 9- How much money is needed?
Crowd funding is great if a company needs only $200,000-300,000, but not for more.
Question 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.