Growing a business is always a bit of a balancing act. Most business owners have first-hand experience of overdraft facilities, loans, directors’ guarantees and more. It’s that well-known cliché ‘Speculate to accumulate’ into action.
However, although there are still business angels, investors and bank loans available, the face of business finance has changed with the advent of crowd-funding.
Before you get excited about the prospect of ‘free money’ here are some tips that will not only help your crowd-funding activities to succeed, but also build a group of people who are interested in helping again on future projects.
1: Know what your audience wants
You need to have a very clear idea of your target audience and what they’re interested in. Rambling on about your business won’t cut it.
If you understand your target audience well the benefits should be easy to present – and I’m not just talking about the rewards to investors. What else is important to them? It might be ticking their corporate social responsibility box, helping the environment, providing information that they want, giving them a feeling of involvement, being part of an elite community. Every audience is different.
2: Wrap your pitch in a good story
As the saying goes ‘information tells; but stories sell’. A series of facts, no matter how impressive work far better when presented as a story. With a story you’re moving the pitch from intellectual to emotional – and people buy emotionally.
There’s a big difference between:
‘This book will be aimed at professionals in the [industry type] who belong to the industry associations and institutions.’
‘It was only when my colleague, Pat, exclaimed “I wish you were next to my desk all day, you have so many unusual answers to the questions I have” that I realised I needed to get my ideas out of my head and into a book. And I know that in Pat’s industry there are thousands of people just like her, with the same questions that the book will help.’
3: Create interesting rewards
If you’re pitching to fund a product then your rewards will probably include the new product, unless it’s a very high ticket item. Bigger investors might be offered a bundle of the new product and/or other products you sell.
If you’re pitching something that is too high ticket for lower end investors, you might offer them a discount or a VIP pack.
Always include a no-brainer option of £5 or £10, but don’t be afraid to include £1K+ options. It depends on what you’re pitching, but don’t make big investors have to complete the pitch process several times because the maximum option is £100!
If you’re pitching to create a knowledge product – like a training programme, book or conference, your rewards might include access to Elite webinars for investors to give them something others can’t have. This could include Q&A sessions or group coaching sessions.
4: Shout about it!
When your pitch goes live don’t assume that everyone will mysteriously know about it. Get on social media, tell your story, ask for help and give them the link to go and read your pitch.
Don’t just post once – the social media feeds move so fast that many of your audience may not be looking during the few minutes after your post goes live. Post daily until the closing date of the crowd-funding project – and at different times of day. Ask people to share your post too.
See if the industry journals or magazines would be interested in learning about your project and add the crowd-funding link to the end of it. Talk to your local press and don’t forget the online press.
The more people that know about it, the more investors you’ll get.
5: Build your community
A great crowd-funding campaign includes keeping in touch with your investors to let them know how the project is progressing. This is especially important if the funding includes product development and there is an extended period between the investment and the product being manufactured.
However, even a shorter-term project it’s important that people don’t invest and then hear nothing. It’s all about gaining long-term commitment. If you communicate with your investors they’ll be willing to invest again in the future.
It’s easy to get so involved with your new project that you forget to send out rewards or let people know when they can expect them. The more information people get, the more comfortable they feel with their investment.