Whether you’re planning on introducing a new product or opening a new location, securing funds for your next move can be difficult. Traditional lending avenues often have rigid standards that new retailers can’t meet. In response, peer-to-peer lending, which allows business owners to borrow money from individuals rather than banking institutions, is growing increasingly popular.
To make your crowdsourcing campaign successful, it’s important that you go through the proper channels. Although you can utilize a crowdfunding website, you may have more success reaching out directly to your existing customer base. When you appeal to people who already use and enjoy your products, you have a much higher chance of a successful fundraising campaign.
To sweeten the pot for potential investors, you’re going to need to offer incentives. That’s why seeking investors from your current audience is a sound strategy. People who already patronize your business are much more likely to appreciate receiving free products, coupons and first dibs on new offerings. If you don’t have any luck finding investors who are already familiar with your company, that’s the time to look into alternative options.
Before resorting to asking complete strangers to support your retail business, try to find people you already know who may be willing to invest in your company. Friends, family members and business associates may be more willing to trust you than a random angel investor. However, you should still treat a familiar investor with just as much respect as any other investor. Give a professional presentation, offer incentives and interest, and create a contract to instill confidence in potential investors.
If you’re not able to secure funding through your existing customer base or people you know, then it’s time to reach out to the internet. Research crowdfunding websites such as Kickstarter, Indiegogo, GoFundMe and RocketHub, and decide which one best fits your company. Try not to get discouraged if you don’t succeed the first time. Stay persistent and passionate, and eventually you should be able to find investors who share your vision.