When it comes to creating crowdfunding campaigns, good planning saves face. Now, if you are not familiar with that expression, just think about the last time something happened that caused you to feel embarrassed. Chances are, the blood rushed to your cheeks and your face turned a bit red. Maybe you looked ashamed and unhappy.
Blushing and looking embarrassed isn’t a patch on the unhappiness that can occur when loyal backers do not receive the goods that they were promised during your campaign. This boils down to disappointed customers – no matter how good the reasons why your campaign failed to run as anticipated.
Planning your crowdfunding campaign: Pay the tax man, pay your partners…
Running a crowd funding campaign, even though it is hard work, is often a simple, direct operation compared to following through with your promises after the campaign closes. There are a number of different things that should be taken into consideration before you spend a dime of the money developed through a campaign.
Pay the tax man. Regardless of your country of origin, there is likely to be a government official or bureau that requires payment if your campaign is successfully funded. Best to take those funds off the top before paying out for anything else.
Next, pay the people who will be making your product or doing the creative work that will be displayed. But don’t forget to hold out money to rent a hall, pay the postage or keep the server running – whatever it is that will be necessary to develop the product or service that your campaign was developed to cover.
Decide early in your campaign whether your product will be sold locally – that is, only in one country – or if it will be shipped internationally. If the latter is the case, be prepared for variable expenses because shipping and customs vary from location to location.
Work with factories or developers who have made your kind of product before and are known to be reliable. Also, look for companies that pay decent wages and treat their people right – besides being the humane thing to do, it lessens the chance that something will go wrong at the location where your product is being made. It is just common sense. Workers who have good working conditions and who are paid fairly have more of a vested interest in making products.
Leave a margin for the unexpected. Even if you have made the best contingency plans you possibly can manage, there is always the chance that something unexpected will come up.
Communicate with your backers for a successful crowdfunding campaign.
If your product is still in the development stage, be sure to tell the people who are interested in backing your idea about just how developed or undeveloped it might be. It is a good idea to at least have a working prototype of your product before seeking funding, but some things are just too expensive for private funding.
Maintain excellent communication with your backers. While they might not enjoy hearing that something has gone wrong with your product or service, they are more likely to be understanding if they hear about it from you first. Share the good stuff as well as the disasters, make your backers part of your entrepreneurial journey.