Letting the crowd fund your startup doesn’t mean allowing your business plan to go unwritten.
In the business world, approximately 543,000 new businesses get started each month and funding those businesses comes from a variety of sources.
Most recently, startups are beginning to utilize crowdfunding sites to promote their ventures and raise the capital they need through online platforms.
Similar to the popular TV show Shark Tank, startups have the opportunity to present their business to a number of “backers” who can potentially finance their business. Such crowdfunding websites are making it easier for new business owners to spread the word of their company and search for possible investors.
5 Reasons Why A Business Plan Is Essential When Crowdfunding Your Startup
1) A business plan will be used as a blueprint for your crowdfunding campaign.
It will help define the purpose of your business/project, how it will operate, specify the exact amount of capital needed, and it how it will reward/benefit those that invest. These details are the key ingredients necessary for a successfully funded campaign.
2) A business plan is a SYSTEM (S)aves (Y)ou (S)tress
(T)ime (E)nergy and (M)oney when building and launching your business, both on and offline. Going through the process ahead of time, can prevent and even correct mistakes that might have otherwise gone overlooked.
3) A business plan is one of the most compelling marketing tools available to enroll others in your mission. After all, a crowdfunding campaign is only as successful as it’s amount of supporters.
4) A business plan will be used as an internal tool for you business as well, guiding your company through the first 3-5 years. Following this document with in your business will provide structure and stability, even during the most uncertain of times.
5) Eventually crowdfunding capital runs dry, and you need to look for your next funding source. Most likely that would be an angel investor, an individual who typically invest between $25,000- $100,000 of their own money. Angel investors want to see facts and figures. They want a well thought out business plan, one that demonstrates you have taken the time to do research, plan and organize your startup business. Exemplifying less risk and more return on investment.
2015 will be a revolutionary year for crowdfunding; with current trends stating an average of 325 new crowdfunding campaigns launching everyday.
This means investment opportunities and competition for funding are expanding at a rapid pace. Are you ready to #GetFunded?
Don’t let your business plan remain unwritten.