The following excerpt is from Entrepreneur’s book Finance Your Business. Buy it now from Amazon | Barnes & Noble | iTunes
If you’re looking to get attention and funding for your business idea, crowdfunding might give you the initial push you need to make your dreams a reality. Launching a successful crowdfunding campaign can essentially be broken down into the following nine steps.
1. Share your story
Let your potential funders know how your product or business idea can benefit them. Share who you are, what you’re planning to do, where the project idea came from, what your budget is and why you’re passionate about it. This shows you’ve actually put some thought into the idea, which helps prove the legitimacy and credibility of your project.
A basic outline of this information is also available in Kickstarter’s Creator Handbook, which is an invaluable tool for anyone who wants to use crowdfunding to get money for their business. Communicating your story through visual imagery is of particular importance.
Make sure to create a great-looking project-header image as well as a compelling video. You have to have a stunning video pitch. Make sure the video quality is crystal clear, your story is compelling, and your product shines. Show you’re credible by speaking clearly, outlining the concept and the benefits, and demonstrating exactly how it works. Connect emotionally with a personal story in a way that a potential backer will be able to relate to. Finally, talk about why the product is unique. People need to know what problem you’re solving that will be appealing to consumers.
2. Offer great rewards
People will back your project if they think it’s worthwhile, but it’s always good to have great perks for your pledgers, too. You’ll likely want to refer to the aforementioned Creator Handbook to figure out what you can and cannot offer, as there are some restrictions you’ll need to be aware of.
You’ll also want to be fair with your rewards in terms of price points, and make sure you can actually fulfill them. It’s fine to promise your pledgers big rewards, but don’t forget that delivery can take considerable time and effort. Be realistic.
3. Set a funding goal
If you’re launching your campaign on Kickstarter, be aware that it has an all-or-nothing funding model. If you meet or exceed your funding goal, you get to keep the money. If not, you don’t get anything. Platforms such as Indiegogo work on a slightly different model, where you get to keep the funding regardless of whether you reach your goal.
At this point, it’s important to think about how much money you need to get your business up and running, and how many people you know…