Crowdfunding is a very tactical method through which you can raise the required capital for your business. Not only is it an effective way to raise capital, it also provides the products of your business a great traction simultaneously, giving you double benefits.
To set up crowdfunding is more simple than you might have thought. There are various platforms which you can use. You can set up your profile and the company profile. Create a page for the project or the service you are looking to fund. Some key aspects would be required such as funding goals, and then you are all set. This crowdfunding can be in various forms such as donations. Or you can choose to sell the products, or can offer other rewards or equity. Take up the best business insurance when you are doing a business
Some benefits of crowdfunding
Crowdfunding has great benefits especially for small businesses. Not only it helps you to find key resources such as capital, it also helps in promotion of your products. This is very vital for all businesses because often advertising is very expensive. To enjoy the best benefits, you need to have the right business insurance Ireland.
Some key advantages of crowdfunding over loans is that you do not have to bear the extra expense of interest rates and you already get customers waiting for your product, instead of first making the product and then finding the customers. Also, take up a business landlord insurance when you are opting for a loan.
Various types of crowdfunding
The most common methods of crowdfunding for small business and MSMEs and mentioned below:
Based on Rewards
The nature of crowdfunding based on reward is very simple. In this type of crowdfunding, the donors who participate, they tend to receive a service or a product in regard to the project they have funded. It can be informed of discounts, or early access, or some goodies. Often worth more than what you have paid.
This type of funding is great for business owners, for this enables them to sell their products and create a great Word of Mouth marketing. This also creates very less liability in comparison to the other form of funding which is based on equity. It is necessary for them to opt for the best Business insurance.
Based on Equity
This type of crowdfunding involves shares of the company. In this the donors who made payments opt for a part of the company based on the amount of money they have chosen to invest. A small business which has strong plans to show growth can opt for these types of funding.
However, having external investors can have its pros and cons. They do bring with them great resources and connections but it also gives them a say in how you should be doing your business, which you may not always like.
Some important points
Engage your existing network – you can pool up all the networks you have created in life, and use their support in simple ways to get great traction and visibility.
Value for money – you should always make sure that you give back more value for money. These people are showing great faith in you at a time when many people will not. Make sure their trust reaps great rewards.