by Candace Huntly
After spending the day at the Enterprise Toronto Small Business Money Forum, held in the City Council Chamber, with a room full of small business owners and business advisors, here are a few points of inspiration. Some of them may even seem like common sense, but it’s good to keep yourself in check by reminding yourself of the common sense things.
#1: We are in an entrepreneurship wave
Dr. Sean Wise talked a lot about entrepreneurship, and what the business economy looks like right now. While more people are starting businesses than ever before, the reality of being an entrepreneur isn’t all sunshine and roses. Many small businesses don’t make it out of the first few years. It takes careful planning, and even then, there are unforeseen market turns.
While it’s not a new idea that we are riding an entrepreneurship wave, it’s happening because of lower start-up costs, global connection to resources/customers, better infrastructure, and less unknowns when it comes to starting a business.
#2: The cost of starting a business is way less than 20 years ago
Businesses are run successfully on a lean start-up methodology where profit margins are higher because the cost of doing business is lower. Twenty years ago it took years to test and launch a product. Now we can do it within a matter of days. The timelines are shortened because of so many lower cost resources available online and direct access to customers.
Because you need less money to get going, there is also more access to capital – it’s easier to get $50,000 in financing than it is to get $5 million.
#3: There are 3,424,971,237 potential customers online
#4: Validation is the key to your success
Whether you are going to an investor or looking for crowdfunding opportunities, you still have to be able to prove your business is viable and that you are trustworthy as a brand.
You have to love your business, but you can’t have blinders on – there has to be some sort of third party validation (no, your family doesn’t count). Crowdfunding is a good measure of that because you gain early access customers before your launch. To an investor, it shows that you have the potential to make money because your audience is actually interested. In some cases, when a campaign goes viral, early access customers can actually eliminate the need for independent investors.
#5: An ugly solution today is better than a pretty one next week
Starting your crowdfunding campaign with a prototype is essential, even if it ain’t pretty. As long as it fulfills the need for your target audience, you can make improvements on it after you have buy in. If you don’t develop a prototype, you run the risk of fulfillment taking too long once your campaign is done. By the time you are ready with a final product, someone else may have already beat you to the market and you will lose your first to market status.
#6: Don’t focus on money, focus on relationships
Crowdfunding isn’t about collecting money, it’s about building relationships and gaining a following of loyal brand ambassadors. Make sure you keep your focus on the right thing so you run your campaign in the right way. Your goal should be to make something happen with a crowd of people, not just to ask for money.
#7: Crowdfunding success relies on momentum
You have to start building momentum starting from the planning stages of your campaign. About a month before your launch, spend time building a list of everyone you know so that you can get them to spread the word. Prime the pump (tell everyone you know that the campaign is coming) and put together sharable content for your top influencers so they can share it with their networks.
In terms of social media, start building your community well before the campaign launches. If you have no one who is listening, then how will they know to back you?
Momentum shouldn’t stop when the campaign does. Make sure you have enough resources to follow up with your community and to execute the fulfillment within three months. Logistics should already be in place before the launch of the campaign.
#8: Crowdfunding is about optics
No surprise here. You want people to have a positive response to your campaign so that they buy into whatever it is you are selling. However, things like priming the pump before the launch, even if to friends and family can create an initial boost in your campaign, which makes it look more popular to others. You can also consider starting with a lower financial goal, which will be reached faster, showing more of a “green bar” on your campaign page.
There is always a risk of failure and what that might look like, however it shouldn’t stop you from running a campaign, but it should make you work harder to put together a better campaign.
#9: Keep your crowdfunding campaign simple and easy to understand
Lost in translation means a lost sale. Because you are running a campaign online, that means your audience is global, so you want to make sure you keep your campaign simple.
A huge component of that is your video. It doesn’t have to be highly produced, but it should represent your campaign and your brand well. Craig Asano, Founder and Executive Director of the National Crowdfunding Association of Canada says that a great video can boost your funding by as much as 170%!