What makes the internet attractive to so many aspiring entrepreneurs? While traditional businesses and online businesses do have some similarities, they also have differences that are honestly night and day, and one the chief reasons why so many people are drawn to internet commerce is that an online business can truly cost absolutely nothing in startup capital.
It could be as simple as creating a blog on WordPress (which is absolutely free), signing up to Amazon’s Affiliate Program in order to sell some products, and perhaps starting up a side project on Fiverr in order to earn some additional income (which could be hundreds if not thousands of dollars a month).
None of it costs money, not a dime, and an additional benefit is that it can all be set up in a matter of hours.
But at the end of the day, you cannot escape the fact that some online businesses need capital, and one of the most exciting platforms that has emerged since 2009 is Kickstarter, which can completely negate the need for a banking loan and instead relies on crowdsourcing.
If you’re an internet entrepreneur in need of capital, Kickstarter has raised thousands, hundreds of thousands, and even millions of dollars for individual companies who were able to launch and complete successful campaigns.
Are you interested? If you are, then here are five crucial steps in making sure that your campaign is a success.
I) Simply because it’s “free money” doesn’t mean that your budget should be saturated with needless fluff and pie-in-the-sky budget projections. The more concrete, the more fleshed-out, and the more your project looks like it has a real business and implementation strategy backing it up, the greater the odds of success. Kickstarter actually helps you out with their Creator Handbook, which can be found at https://www.kickstarter.com/help/handbook.
But interested internet entrepreneurs really need to understand why you don’t saturate your budget with needless fluff and pie-in-the-sky budget projections…
II) With its all-or-nothing fundraising philosophy, Kickstarter greatly rewards humility and severely punishes greed. Always remember that if you surpass your fundraising goal, you get to keep whatever fundraising surplus you’ve earned as a reward. But if you fail to meet your goal, even if it’s just by ten dollars, you lose everything.
Discretion truly is the better part of valor when it comes to Kickstarter, and it pays to be both cautious and conservative when drawing up your fundraising goal. However, you should also take into consideration that with Kickstarter’s 5% commission, taxes and fees, as well as the rewards and gifts that are necessary for donors after a successful campaign is completed, you should expect that at least 10% of your total funds are going to be taken from you, so budget accordingly.
III) When drawing up your campaign, study those that have gone before you. One of the great aspects of Kickstarter is that they keep all of their past campaigns publicly posted for you to look at (both the ones that succeeded, as well as the ones that bit the dust in failure).
Use them as case studies to enhance the success of your own campaign. Whatever niche you’re focusing in, others have probably gone before you. Do your homework and discover what strategies and tactics actually worked.
IV) Prepare the launch of your actual campaign with at least four to six months of intensive advertising. If you go into a Kickstarter campaign with the belief that, “I guess I’ll just launch my campaign, say a prayer, and keep my fingers crossed and hope that it all works out for the best.” No offense, but you’re doomed. That is not how a successful campaign is either planned or launched.
Kickstarter truly is an internet platform where the strength of your social media networks can either make you or break you. Everything gets put onto the table – Facebook, LinkedIn, Twitter, Pinterest, StumbleUpon, blogs, and any other public platform you can think of (college alumni networks, professional associations, frequented chat rooms, etc.). If you’re not signed up to them, then that’s something you should remedy, because they truly are the primary engine to achieving success.
You’re campaign should be two-tiered. The first tier is grounded upon the very firm belief that no donation is too small, as well as understanding that the best form of advertising is word-of-mouth advertising. You might have someone that only has enough money to donate $5.00, but they’ve got a friend or relative that’s a completely different story.
The second tier is grounded upon those contacts that you know have deep pockets and can really throw down some serious loot if properly motivated. Everyone deserves to be schmoozed, but deep-pocketed contacts deserve a little extra love and attention.
V) If there is a “golden percentage” that your campaign should strive for, then that percentage is 20%. If you’re able to hit 20% of your fundraising goal, then your project has an 80% chance of success.
Says who? Says Kickstarter (https://www.kickstarter.com/help/stats). This is one of the reasons why yoking the strength of your social networks is so important. If you’re able to hit your campaign hard right from the outset and reach that 20% mark, then the campaign snowballs and hits critical mass as the pile-on effect kicks in and takes over.
Conclusion – There’s honestly never been a better time to be an online entrepreneur. The inherent nature of many internet industries already have very few barriers to entry and require little to no startup capital, but companies such as Kickstarter, Indiegogo, Smallknot, RocketHub, Spot.us, Gigfunder, and a host of other crowdfunding sites are also revolutionizing financing for those internet businesses that do need capital.
No longer do you have to go to a bank, hat in hand, and throw yourself at their mercy in the hopes of receiving the “privilege” of taking on mountains of debt. A smart, hardworking entrepreneur with a golden idea can literally raise tens of thousands of dollars within a month. If you’re an internet entrepreneur that needs capital to start and grow their business, embrace the 21st century economy. Try crowdfunding first before voluntarily becoming a debt slave.