How Much Money Should I Ask For?
This is perhaps one of the most overlooked aspects of planning your crowdfunding campaign, but it’s one of the most important. Why? Well if you don’t hit your target, you don’t get any money so you need to think carefully. We’ve outlined a few key points to keep in mind.
1. The size of your community
So you have a great idea, and you just know that people will want to back you in return for the cool rewards that you’re going to offer. But how big is your community? How many people do you know? Some project owners make the mistake of thinking traffic will flood to their project automatically. Unfortunately that’s not the case.
You need to relate your target to how many contacts you have and whether they can sustain your target. Also think about how much money your contacts would be likely to put in eg. family and friends might only put in a tenner, but your business contacts might put in a few hundred for a sponsorship reward.
2. What’s the bare minimum?
Now we’ve all heard about the wild successes of some American crowdfunding platforms but let’s be honest, crowdfunding in the UK is still relatively new and people might be a bit more cynical and reserved so you need to convince them that the money you need is essential – not just a frivolous spend. Break it down to the minimum you need, and then also explain why you would love to raise more and what the excess would be used for.
Be honest and backers are more likely to respond – it’s a good idea to include a breakdown of how the funding will be spent if it’s for more than one thing.
3. What costs are involved?
Linking to the point above, your bare minimum should also include any costs involved. Do you need to pay for materials to produce or transport your rewards? That needs to be included or you’ll end up spending precious money that you need!
Remember, Bloom also takes a 5% commission but only if and when you are successful. PayPal also charges a small fee for processing your backer’s promises (which is around 3%) so make sure you work that in too.
4. Dream big but start small
We hope that all our project owners have big dreams for the future, and maybe we can help them achieve those dreams. However, backers are going to be skeptical if you ask for a large amount straight off the bat. Start with step one – what do you need to do first and how much is it going to cost you? Remember you can always come back to crowdfund step two or three, or when you’re a bit futher down the line. If you’re just starting out, set a realistic target and build credibility before you ask for the jackpot.
Our key message is: asking for more money doesn’t necessarily mean you’ll get it. Keep your goals SMART – Specific Measurable Attainable Relevant Time-bound.
(Image courtesy of dreamchoosers.com)