New ways to get funding for your business idea (Part 1)
Our technological era has brought many new ways to do business. One of these new tools is to look to the online community to finance your business idea via Crowdfunding.
Before you start looking for finance from any source you need to be very clear on your exact plans, so make sure you can answer the following questions, backed up by research
- What do you want to do?
- How do you want to do it?
- Where do you want to do it?
Once you’re clear about your objectives and how much you need to raise to convert that great idea into reality you can upload your project onto one of the Crowdfunding platforms in Spain. When you’re uploading the concept you need to apply your marketing mindset to attract your potential investors and clients and show them how important your project is and also how beneficial it can be for them. You need to make the presentation of your project as attractive as possible!
But before we go any further on how to present your project, let’s start with the basics so you understand the possibilities of crowdfunding for your business.
- What is Crowdfunding?
Crowdfunding is a system which is used to raise money to finance an idea or project as a collective. Group financing is very simple and allows anyone (professional or not) to take part and contribute towards making your project a reality.
It involves a large number of people collaborating by donating small quantities of money because they believe in your project and want to use your product or service. As well as a great way to raise money, it’s also a way to do hands-on market research, as you can clearly see who your potential clients are and get their feedback to make your business even better for consumers.
- How does it work?
When you publish your project on the crowdfunding platform that you feel is most suitable for your idea, you need to ask for an exact figure that you need to launch your product. Please study the new legislation which the Spanish government has applied to this, as it restricts what you can do and how much you can ask for. When you present your project you also must show how you will compensate each investor depending on the amount they invest, whether that be “payment” in products or a profit share structure.
You also have to set a time limit for collecting the funds and if you do not reach your target then you the project will be terminated and any funds donated will be refunded.
To make this work, you need to create a powerful and attractive promotional campaign to drive traffic to your project, using tools such as email marketing, social media and online marketing. By applying some simple marketing strategies you will achieve much better results and exposure and hopefully raise the funds needed.
- What platforms can you use?
Here are the three main platforms used in Spain, although there are a wide variety of them depending on your sector so do your research
http://www.verkami.com/browse/
https://www.kickstarter.com/?ref=nav
If you want to raise funds this way outside of Spain here is a great article recommending the top 10 crowd funding sites and there’s also a fantastic global resource where you can see all the projects out there and how it’s done thecrowdfundingcentre.com
If you think you’re ready to start researching and preparing to launch your project onto the Crowdfunding sites, but would like to discuss a strategic marketing plan to improve your chances of success, please don’t hesitate to ask us or arrange a free brainstorming session to take the next step to making your idea a reality.