Discover The Top 4 Things You Need to Budget For Before You Launch Your Campaign
A good budget is crucial to a successful crowdfunding campaign. However, if you think the ideal time to crunch the numbers is after you’ve raised your funds, then you are sorely mistaken.
The best time to budget is during the planning stage of your campaign, before you launch. If you figure out all the expenses that you need in this time, you will not only set yourself a crowdfunding target that can cover all your costs, but will give your campaign a level of transparency that will reassure your backers. They will know exactly where their money is going and so will you.
We want to save you from serious financial headaches down the line. So we’ve put together a list of all the crucial areas you should consider when budgeting for crowdfunding success!
How expensive is your project or product? This may seem like an obvious area that your budget needs to address, but it’s amazing how many crowdfunding campaigns fail due to zero research into production costs.
Ever heard of Triggertrap? This company launched a crowdfunding campaign called Project Ada for a device that would remotely activate a series of cameras. Despite raising six times the amount they asked for, they underestimated the costs of making their device and blew 80% their successful funds on R&D. The company closed its doors for good in 2017.
A vague idea of how much it might cost isn’t good enough. Do your research. Visit product designers, check the price of equipment, build a list of precise numbers that you can total. If you know how much it will cost to make your product, then you can save yourself a lot of anxiety down the road. It will also spare you from a crowd of angry backers who didn’t get their money’s worth.
According to EasyShip, roughly 12%-20% of your crowdfunding funds should be set aside to cover shipping expenses. Ultimately the amount you spend will depend on the logistics of your shipping, which you should try to work out before or early on in your crowdfunding campaign.
Where exactly are you planning to ship your product once it is finished? What are the prime locations?
Once you have that figured out, you can then consider the tax of shipping your product out there, and the packaging you’ll need to make sure it arrives safely.
Therefore, it is crucial to know how much shipping will cost, as well as the key locations you should be shipping to. A shipping policy is not only good for your budget, but also gives backers the opportunity to see where their product is coming from, and when it will arrive at their door.
“If I’m successful on Kickstarter, I won’t need to worry about marketing. I’ll have a big following and be a viral sensation!” If this is what you think, then you need to burst that bubble before it’s too late.
Success on a crowdfunding campaign will help you to build an audience loyal to your brand. Yet, as the old saying goes, the best things in life don’t last forever.
How you market yourself after your crowdfunding success is crucial to keeping your brand in the public eye. The best way to learn how not to market your product is to look at the mistakes others have made in their marketing efforts. This applies to both crowdfunding campaigns and big businesses alike.
Once the buzz around your project has started, you need to keep it going with your marketing. Hiring freelancers, making promotional videos and photos, booking your place at events, paid promotion on social media and websites; there is a long list of things to budget for, but it's definitely worth it in the long-term.
Lastly, it’s important to budget a safety buffer into crowdfunding budget. All businesses and entrepreneurs run into small or unexpected costs.
Travel expenses, printing costs and emergency funds are just some of the things you might run into when your crowdfunding campaign is successful.
You cannot prepare for everything, but by setting aside soem of your budget for a rainy day, you can put yourself in the best financial position possible should problems arise.
So the next time you sit down to budget for crowdfunding success, be sure to go through our list and see if you’ve got everything covered! Do you have any tips on budgeting that we missed here? Let us know in the comments below. Also, be sure to follow us on our social media to keep up to date on the latest posts!