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Every business needs money to succeed and that money requires a lot of work. Some businesses are blessed with angel investors and others seek loans or seek support of an investment group. However, every business has its own unique situation.
Not all businesses have the privilege of surviving and thriving off the investment of a few individuals. Not all businesses are lucky enough to have their needs coincide with eligibility for a loan. Fortunately, the are other fundraising opportunities available. Since every situation is unique, it is important to have a basic grasp of what to do and what not to do.
Start with a clear goal
This is the most important step to do yet many businesses and fundraisers fail because they have no clear plan or goal. Make sure you address the most basic building blocks first. Some issues you need to address include:
- Who are you as a business?
- What is your purpose?
- What are your goals? (These must be specific or “SMART,” which stands for “specific, measurable, attainable, realistic, and timely.” Instead of “raise more money,” frame your goal as, “raise $50,000 by a March 1.”)
- What are your values?
- What is your company worth?
- What kind of growth can you realistically expect in the next year?
- What are your needs?
If you are not able to answer those questions above, you are not ready to start fundraising. A clear sense of identity and purpose are required to get investors interested. A clear understanding of your current status, needs, and future plans are required to get investors to give.
Explore the available options
Familiarize yourself with all the options that are available because it is not a one-size-fits-all. Targeted mailings and product-based fundraisers are great options even though they are simple. Targeted mailings include sending out fliers, letters, postcards, or other physical introductions to your company and requests for investment. Product-based fundraising operates by you partnering with another company to sell a product and receive part of the profit towards your fundraising.
Businesses that seek to serve in and become a staple of a small-r close-knit community may benefit more from personal options. Some companies choose to do something like car washes to display the work ethic of the business while networking with potential investors and customers. Other companies like to hose social events or other community-building endeavors.
Using the internet to crowdfund has become popular over the last few years such as KickStarter and Indiegogo. However, there are hundreds of sites and services dedicated to crowdfunding.
Avoid mistakes
Crowdfunding sites are appealing because they are equipped with all the information you need. Local fundraising requires more work. Before your start, learn the restrictions and rules. It is very important that you read the fine print especially if you are not sure if you will meet your goal or not.
For those utilizing product sales, make sure you are selling something people actually want. Make sure that your market is not already saturated with that product. Do not go with what is popular.
Perfect your pitch
When you have figured out your company’s strengths, goals, and needs, it is easier to come up with a pitch that fits and works. While concrete figures and company goals are very necessary, it takes a lot more to make a perfect pitch. A pitch needs to be engaging yet succinct. Make sure your tone matches your business’ personality and make sure that it will appeal to your target audience.
Explain what you are going to do with the money. Be transparent and create a story that will generate more interest. People want to know what their money will accomplish. Also, try to make a simple video explaining your mission and why you are raising funds.
Social media
Do not neglect social media. Your fundraiser does not have to be social media based for it to be a powerful tool. Social media has two primary functions: it helps disseminate information and it helps create relationships. Regardless of fundraiser type, many people will seek more information about your business.
A well-maintained website and active social media accounts are key to information and engaging prospective investors and clients. An active social media account is key to informing and engaging prospective investors and clients. As a bonus, such sites help reassure donors of your legitimacy.
When you are fundraising, be present online. Be active, be informative, and be engaging. Use social accounts to draw attention and push traffic towards your fundraiser. Use pictures, infographics, and video to show the investors’ money working.
