As an existing (or soon-to-be) entrepreneur, you probably have some strong opinions about crowdfunding.
Some see it as an integral part of starting a new business or launching a new product idea in the twenty-first century.
While some have referred to it as a fad, or even a crutch for entrepreneurs – many don’t even think of crowdfunding as an option for their business at all.
But I’m here to tell you that crowdfunding can be a powerful tool in your small business arsenal – especially if you know how to use it right. The benefits of crowdfunding for a new business go way beyond funding.
Sites like Kickstarter have raised billions in capital to start hundreds of thousands of projects, and they’re only growing.
But crowdfunding isn’t just about raising capital…
How Crowdfunding Can Work For You
Here’s four ways using a crowdfunding platform can help your business beyond just getting you money:
1. Product Validation:
The topic most near-and-dear to our hearts… Before you launch your business, you need to know whether your idea is a good one, right?
Crowdfunding gives you a concrete measure of how the public feels about your new product.
People often vote with their wallets, and if they’re willing to contribute to your business, you know for sure they like your idea. However, if your campaign isn’t getting any traction, maybe your product isn’t solving a big enough or wide-spread problem. Or perhaps it just isn’t what people need right now.
With crowdfunding, you’re not just getting money and gauging demand for your product, but you’re also getting invaluable feedback.
You can communicate directly with your potential customers and find out what they love about your idea, but also what their concerns are. With this powerful information, you can fine-tune your launch plan and your offering to get the best traction.
Perhaps the best spin-off of crowdfunding is that you’re creating a core customer base right off the bat.
Your backers will have literally [and figuratively] invested in your business, so they’ll be very excited to buy when you finally launch. Not only will they be the first to buy, but they’ll tell everybody they know about it.
These first customers will also become your fan base and spread the word far and wide before, during, and after your launch.
If you’ve gained enough raving fans, these people become an organic marketing tool – sharing and discussing your campaign on your behalf. Nonetheless, you’ll still have to do some marketing for the crowdfunding project itself.
Getting that marketing engine running is hard work – and it will be done by the time you launch, if you’re using it to promote your campaign.
Consider this when you set-up your crowdfunding venture so that you can keep all the same social media handles and such to use for marketing after your launch.
Though it may seem focused solely on capital, crowdfunding is much more than a trendy way to raise money for a new venture.
Not only is crowdfunding an ideal tool for gauging demand for your product idea, but it can help you develop a marketing strategy and create some major buzz.
You also gain valuable customers in the process, creating a base of super fans who will carry you and your new-found business, from startup to success.
The Crowdfunding Formula
While it’s clear that crowdfunding is a powerful tool for entrepreneurs, why is it that some campaigns race to the top, while others fall flat?
Is it just luck?
There’s a formula to finding success with your campaign – a step-by-step process that all the successful Crowdfunders have used (some without even knowing it!)
When relying on luck, an inexperienced Crowdfunder might:
- Create a simple campaign that just sits there on the platform site.
- Hope that the crowdfunding site brings in contributors.
- Spam their followers in desperate attempt to gain more backers.
- Lose out on the money to launch your dreams.
But don’t worry! You don’t have to rely on luck to get your crowdfunding backers.
As many of you know, Testing the Muse recently released a free downloadable “Complete Crowdfunding Kit” to help you avoid having to simply rely on luck; to make sure you’re covered for all the aspects of preparing and launching a successful campaign (available here).
But there were still some of you who are really serious about making an impact with your campaigns, and asked for additional hand-holding…
For you, we’re pleased to offer an exclusive discount to our affiliate The Crowdfunding Formula – Winners’ Program, which offers to transform your campaign with mentorship from successful Crowdfunders and more. If interested, you can find out more about the Winners’ Program and how to receive your exclusive discount (25% off) here.