How Crowdfunding Can Turbocharge your Business for Serious Growth

Recently at Next Chapter, we’ve been talking about a subtle but incredible benefit of crowdfunding that entrepreneurs are not necessarily aware of: that crowdfunding turbocharges your business.

So what do we mean by that?

Well, we discussed recently with Serena Pau, Founder of Ozmo the smart water bottle, the (good!) pressure that a campaign creates by setting a launch date.

The beauty of crowdfunding is that you are drawing a line in the sand to commit to delivering your product to a community that has engaged with you and pre-ordered your items.

So what you need to have in place are the key components that make your campaign successful but would also help make your business successful.  For example, industry standards show that up to 40% of your funding may come from your current network, however, how will you get that remaining 60%?  Well, this involves putting in place the type of marketing and sales mechanisms that you would continue to use after you campaign finishes.

The interesting challenge here is that you are doing two key things to reach this 60%

1. A lot of pre-launch planning around your ideal customer, tailoring a message to them and giving a lot of thought to where they “live on-line”.  I.e. defining and engaging with your target audience.
2. Secondly, you are achieving these 50-60% sales targets in 30-60 days. That is a huge effort!  Done well, this can effectively be the basis point for future sales especially the marketing aspects you have spent time working on.

We meet many startups who are thinking of crowdfunding, but may not have in place all the aspects necessary to deliver on their product or business.  So as part of our crowdfunding manual (shared with our campaign owners) we cover some of the following items to help address the remaining 60%. Here’s a sneak peek:

• Researching and refining your target market. E.g. use focus groups to get feedback on what your potential customer will pay, where they like to shop online, and what bloggers or news they connect with.
• Setting up social media - ensuring you have a website landing page in place, and your two preferred social media channels set up. E.g. Facebook and Instagram. These help build legitimacy for the campaign as potential supporters can check them, but this is also the start to your building and engaging with your community.
• Laying the groundwork of forming your community for newsletter communications or special announcements as you start and grow.
• Developing a detailed marketing plan for your campaign.  Crowdfunding industry statistics show that if you set daily activities on marketing then you are 180% more likely to succeed.
• Also your marketing plan during crowdfunding encourages you to to consider how will you continue marketing and reaching your audience after crowdfunding.  Read: Crowdfunding - A Test Run for your Marketing Strategy

Also for product-based businesses, as Serena explained about Ozmo, they received feedback on their product that enabled them to improve their early prototypes. This ensures that when you go to market, you have the best version of the product possible.

We continually challenge our campaign owners as to how they will build into their crowdfunding campaign the steps, learning, and mechanisms that will help them to continue to grow the business after the campaign finishes.

So if you are ready to turbocharge your businesses future and really push yourself out of your comfort, why not give crowdfunding a go?