As we previously mentioned in our post entitled 5 Secrets on How To Gain Large Business Customers, this decade’s pandemic has created many challenges for small business owners. The financial turbulence caused by the crisis has made businesses and consumers reluctant to spend. As a result, leads do not progress, while existing partners reduce the level of business they do with you, making revenue generation difficult.
If securing customers is difficult for established businesses, it might be even more of a challenge for those that are just starting out. Fortunately, the internet has created a way for businesses to secure funding and customers before fully committing to a project. This method, called crowdfunding, is the process in which upcoming businesses pitch ideas to the general public, usually on platforms like Kickstarter. Through crowdfunding platforms like Kickstarter, businesses can gauge interest in a product without investing too much capital, while also collecting investments from a potential customer base. In this article, we’ll go over the reasons upcoming passion businesses need to use Kickstarter.
How Does Crowdfunding Work?
To launch a crowdfunding campaign online, businesses first post their product or service pitch to a crowdfunding platform. Any individual interested in the pitch can back the project by contributing funds. Unlike traditional investment methods, backers are not expected to contribute a significant amount of capital. Sometimes, backers can even invest as little as $10. The low barriers to entry make crowdfunding more accessible to the average investor.
What Is Kickstarter?
Kickstarter is one of today’s most popular crowdfunding platforms. What sets Kickstarter apart is its rewards system: usually, businesses that launch crowdfunding campaigns are not required to pay their backers for investing. However, through Kickstarter, businesses can incentivise “pledging” money by providing rewards for bigger contributions.
Rewards tend to be early-access copies of the business’s pitched product, This model can be seen in the campaign of the upcoming card game Bonc. Pledging at least 20 GBP (38 AUD) to the project automatically earns the backer a single copy of the game.
Crowdfunding campaigns can also reward backers with exclusive products or merchandise. Backers of the popular horror film The Babadook were gifted an exclusive Babadook pop-up book, which was modelled after the very book shown in the film.
What To Know About Starting A Kickstarter Campaign
To run a successful Kickstarter campaign, you need a solid idea of your project scope, timeline, and costs. If you make overambitious promises to attract funding, your business’s reputation would be at stake. The popular crowdfunding campaign Coolest Cooler made the mistake of failing to take tariff costs into account and shut down after just five years of operating. Approximately 20,000 backers, who each pledged upwards of 185 USD (260 AUD), were denied their promised reward.
Give your project more traction by promoting it on social media. The Kickstarter website gives users the option to share projects via Facebook, Twitter, and email. However, don’t limit yourself to these platforms alone. You can also share project updates on YouTube, TikTok, Instagram, and other social media websites to raise more awareness about your project.
Never before has investment been so democratised. Through Kickstarter, you can share your passion projects with the world. And if you win the world over, they just might help turn your ideas into reality.
Article contributed by Ruthanne Jane