Compiled by Erica Schofield, Crowdfund Coach
Crowdfunding provides an opportunity for small to medium businesses to raise funds from a large pool of individuals who are interested in supporting innovative ideas and entrepreneurial ventures. It offers an alternative to traditional funding sources, such as bank loans or venture capital, which may be difficult for smaller businesses to secure.
Particularily useful for creative businesses, and any business who interact with a wide range of clients – theatre, hairdressers, sports, and eventing businesses.
Crowdfunding campaigns can serve as a valuable market validation tool. By presenting your business idea or product to the public and gauging the level of interest and financial support it receives, you can gain insights into the demand for your offering. Positive response and a successful crowdfunding campaign can help attract further investment and build credibility.
The Labia Theatre conceptualised their 10 Movie loyalty card in their successful 2016 crowdfunding campaign, 7 years later it’s still available! And was used as the basis for a second campaign in 2022 – A special offer used as a way to say thank you to their patrons for all the support during tough Covid pandemic times,
Running a crowdfunding campaign requires creating a compelling pitch and spreading the word about your business or product. This process can serve as a valuable marketing exercise, raising awareness about your brand and generating buzz among potential customers. Crowdfunding platforms often have a built-in community of backers and supporters, which can further amplify your marketing efforts.
Reshika from the successful campaign “Saving the planet, one plant at a time, one bee at a time” who raised R94,000 with her Thundafund Campaign in 2022, found that her best take away from running a crowdfunding campaign was that:
“Having a campaign gave me a reason to go talk to schools and potential clients about what I do. I could go present to them about my live campaign and through it I had a reason to get out there and talk about the wonderful work my business does!”
Crowdfunding allows you to engage directly with your target audience and potential customers. Through comments, messages, and updates, you can interact with backers, gain feedback, and incorporate suggestions into your product development or business strategy. This direct engagement can help foster a loyal customer base and build lasting relationships with early adopters.
Crowdfunding campaigns can serve as a platform for pre-selling your product or offering exclusive perks to early backers. This allows you to generate revenue and secure customers before your product even hits the market. Additionally, the feedback and testimonials from early adopters can help build trust and attract additional customers once your business or product launches.
Crowdfunding campaigns often attract attention from the media, industry influencers, and potential partners or collaborators. The exposure gained through a successful crowdfunding campaign can open doors to new opportunities, partnerships, and collaborations that can fuel the growth of your business. It provides a chance to showcase your brand and story to a wide audience.
For small to medium businesses, Crowdfunding can be an attractive way to secure start up capital without giving up a large portion of ownership to investors, venture capitalists or other traditional funding sources.
Remember, while crowdfunding offers several benefits, it also requires careful planning, effective marketing, and ongoing engagement with your backers to ensure a successful campaign.