Raising capital for a startup. Crowdfunding to kickstart a new product line. Asking family for a loan. There are many types of fundraising for business purposes.
Regardless of the method, launching a fruitful fundraising campaign takes some work. Avoid the most common fundraising mistakes by following our tips for success below.
Plan, Plan, and Plan Some More
You know what they say: “Failing to plan is planning to fail.”
When it comes to fundraising for business, perhaps the most common and overarching mistake is a lack of planning. Not only must the fundraiser itself be well thought out, but there needs to be a deliberate plan for everything that goes into making it a win.
- Timeline – Determine your deadline and work backward from there. Don’t rush it. In fact, according to Martin Zwilling, the best time to start considering how to fundraise for a business is now. Regardless of when you will be executing your fundraiser, start planning as early as possible.
- Research – Get to know your target audience. What are their expectations and restrictions? How do their priorities align with yours? A little research can go a long way, regardless of whether you’re launching a Kickstarter campaign or scheduling face-to-face meetings with investors.
- Goal – How much do you need, really? Of course, you probably know how much you need to get your business or product off the ground. But that’s not the only thing that will cost money. Fundraising for business can include a few other expenses that might not be top of mind. Do you need to hire a PR person, pay a web developer, cover rent, etc.? Make sure you include all of those potential costs in your fundraising goal, too.
If we could give one word of fundraising advice, it would be DO. NOT. RUSH. Well, that’s three words, but you get the point! Bottom line: A well-executed fundraiser tomorrow will yield significantly better results than a rush job, today.
Think Outside of the Box
Repetition is boring! Implementing the same old fundraising ideas for small businesses is safe and comfortable. But that doesn’t mean they are the most effective (or efficient) way to raise funds.
The status quo won’t capture the attention of your backers, nor will it energize your team. Over time, a lack of creativity can result in flat or declining contributions, as well as missed opportunities. Who wants that??
Don’t underestimate the value of creativity as you consider how to fundraise for a small business. (Or a large business, for that matter!) Before deciding on a plan, really take the time to brainstorm some out-of-the-box ideas. The easiest way to formulate an innovative concept is to learn as much as you can about your niche and those in it. Once you really understand your consumers and investors, you’ll be surprised by the solutions you can come up with.
Remove Potential Barriers
It’s been said that customers make buying decisions in less than a minute. The same can go for investors. This means that they are making judgements about you, your business, or your product with nothing more than a single interaction. Even the best business fundraising ideas can flop if investors believe that you’re worth their money!
Focus on web design. Don’t let your website hold you back. You can have one of the best business fundraising ideas, but If your site is difficult to navigate, isn’t mobile friendly, includes distracting elements, contains poorly written copy, etc., potential investors are likely to take one look…and bounce.
Make contributing easy. A beautiful home page, a perfect fundraising plan, the ideal product. None of them matter if your method of processing payments isn’t functional. Honestly, how much effort would you spend trying to back a business if the process were a pain in the butt? Probably not much. You’d likely find another investment that provides the same value with less hassle.
In short, take the time to ensure that your investors and customers have a pleasant experience. Yes, this may mean extra time developing your site or extra money spent on payment processing software. Trust us! It will be well worth it in the end.
Put It Out There
Marketing works! Get the word out about the opportunity your business provides potential investors.
Utilize Press Releases. This often-overlooked step is simple and relatively quick. Write up and share a quick press release to let the world know what you have to offer!
Network. Networking isn’t about finding investors in the moment. It’s about what happens afterward, and it’s one of the best ways to gain word-of-mouth exposure. Why? Because even if your opportunity isn’t right for Joe, it could be perfect for his sister Debbie, his buddy Patrick, or his neighbor Leon. Always share information about your company, what you’re trying to do, and how fundraising will help. You just never know who Joe knows.
Don’t Stop. Once you feel like you’re “there,” don’t back off. Keep talking, keep sharing, keep marketing. Extra publicity is beneficial, both today and down the road.
Put Relationships First
While a kick-butt pitch and awesome product are necessary pieces to the fundraising puzzle, trust and rapport are critical components as well. Always cultivate and nurture relationships with your investors, regardless of how much they contribute.
Build relationships first. Take time to build relationships before asking for money. This gives your potential donors time to get to know you. It also gives them time to reflect and ask questions. This investment in relationship-building will naturally create value in the eyes of those you plan on asking for cash.
Say thank you. There are a number of inexpensive, creative ways to thank your supporters. Whichever method(s) you choose, say “thank you” early and often. Never let a kind word, a social media share, or a financial contribution get past you without expressing gratitude.
Check-in. Relationships are a two-way street. A happy birthday note or congratulations email will set you apart. Want to take it up a notch? Send a bottle of wine as a housewarming gift. Deliver a box of candy at the holidays. There are thousands of ways you can stay top of mind and give back to investors.
Utilize social media. Social media allows you to easily build authentic connections with your supporters. You’ll make them fall in love with you, your story, and your business, all by sharing frequently on social platforms.
Keep everyone current. Don’t undervalue the power of information. Let your investors know what’s happening. Show them how their investment is helping. By sharing your process, you will keep your stakeholders excited about what you’re doing!
Fundraising for Business Success with Hungry Media
The “ask” is just one ingredient in the recipe for fundraising success. Don’t forget to do the small things well, and consistently.
Plan ahead. Be gracious and genuine. Make investors’ impact understandable. Interact. Put your whole heart into your fundraising efforts for amazing results. Hungry Media can help with all of this!
We’re a leading digital marketing company with experience in a wide range of industries. If you’re getting fundraising campaign off the ground, want to kick around fundraising ideas for new business, or just want to avoid the most common fundraising mistakes, reach out! We’d love to help you plan for success. firstname.lastname@example.org
contributed by Melissa Lucas, senior staff writer