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The Funding Option 98% of Small Businesses Haven't Tried

17. April 2015 08:13

raining money

According to a recent Manta survey, only two percent of businesses have tried crowdfunding to back them. That's a pretty surprising number, considering the survey also found that 69 percent of respondents think the lending environment hasn't improved in the last year.

But if the majority of small-business owners think the lending well is dry, why aren't more of them exploring alternative funding options like crowdsourced backing? The Manta survey offers some insight...

Meanwhile, 70 percent of respondents have sought traditional banking loans. (And if that's your scene, read about how the SBA is trying to make small business borrowing easier in "SBA's LINC Connects Small Businesses with Potential Lenders.")

If the fear of the unknown is keeping you from exploring alternative options to get your business backed, let this be an introduction to what crowdfunding is and how it can benefit your business.

What Is Crowdfunding?

Crowdfunding is the method of raising money for a project or venture through many individual investors – friends, family, customers, fans, etc. – usually via the Internet. Several sites have cropped up to simplify this process, such as…

The nice thing about crowdfunding is that you don't have to worry about paying back loans or interest like you would with traditional lending. The only "payback" required is that you fulfill the campaign's promised rewards to backers (if applicable). Crowdfunding also gets your community involved, and a successful campaign can generate a lot of buzz around your business's launch or newest product.

Find out how small-business owners like you used crowdfunding to launch their businesses in "Crowdfunding with Peggy Jean's Pies" and "Crowdfunding with Zest Tea."

Tips for Crowdfunding Your Business

There are tons of crowdfunding platforms to choose from, but it's important to do your research before settling on a site. You'll want to know…

Once you've done your research and found the site that fits your needs, it's time to build a campaign. Most of the major crowdfunding sites offer plenty of pointers for building a successful campaign, so be sure to read the site's FAQ section.

You want your campaign story to strike an emotional chord with backers, so take time writing the content. Make it personal and compelling. Though you want to hit on the technical details of your project and how you plan to use the funds to launch or grow your business, you also want to engage the audience and make them feel a personal stake in your success.

Lastly, don't rely on the platform to market your campaign for you. Spread the word across all your social media channels and highlight the cool perks that come with backing your campaign and what backers can look forward to once your campaign reaches its goal.

Tags:

How to Grow Your Business | Small Business Trends | Tips for All Small Businesses

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