What a great question! Unfortunately, there’s no one-size-fits-all answer. There are, however, a couple of things that you should take into consideration before you launch.
First, how many donors do you need to meet your goal? Pull out your calculator. You’re going to do a little math.
Let’s say you want to run a rewards crowdfunding campaign and raise $10,000. The average person will contribute about $25 to your campaign. So, if all of your contributors donated $25, you would need 400 contributors to meet your goal.
I don’t know about you, but I don’t have 400 close friends and family members that would support my campaign. Maybe you’re more popular than me and you’re pretty positive that you have a personal network of 400 people that will support you. I hate to break it to you, but no matter how great you think your project is, not all of your friends and family are going to back you. It hurts, I know. But, it’s reality.
So, you need to branch outside of your personal network. When you’re dealing with people that you don’t know, the conversion rate is going to be much lower than if you’re dealing with people that already know, like and trust you.
Let’s be conservative and assume you had an average 3% conversion rate from everyone that came across your campaign, including your personal network. If that were the case, you would need to get your campaign in front of 13,333 people.
That’s a lot of people! How are you going to reach them?
I suggest you spend some time creating a crowdfunding marketing plan. If you want to cover all the bases, your plan should include social media, email, press and bloggers. Plan to spend two-to-three months minimum developing your plan and building up your network before you launch your campaign. At the end of three months, assess where you are and give yourself more time if your numbers and engagement aren’t where they need to be.
Second, did you know you might have to pay taxes? The guidance on this is unclear at this point and I’m not a Tax Attorney, so don’t take my word for it. But, it wouldn’t hurt to ask a CPA or Tax Attorney before you launch your campaign.
There’s a possibility that if you don’t use the funds you receive from your campaign for legitimate business expenses related to your campaign within the same calendar year that you received them, the money might be considered income. So, be sure to take this into consideration when thinking about when to launch your campaign.
If you’d like assistance in developing a crowdfunding marketing plan,visit www.Strategic Crowdfunding.com for more information.