Struggling to get funding for your business? Crowdfunding could hold the answer to getting your company up and running.
If you’ve just started your own business, you’ll know that times are tough at the moment. As an entrepreneur, you face two key challenges: getting funding for your business, and then getting people talking about your business. We’ve got two unique solutions for both of these perennial business challenges!
Challenge 1: Getting funding for your business – Crowdfunding
Despite the government’s best efforts, the banks are still dragging their feet when it comes to lending money to small businesses, to say the least.
So if you’re left high and dry by your bank, what can you do?
As a business, you’ll probably already have started looking into the various alternatives that exist – from asset-based lending to micro-loans.
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But one alternative you might not have considered is ‘crowdfunding’ – an idea that’s gathering a lot of attention at the moment.
The concept is simple: you pitch your business idea online (together with a target amount of money you need to raise) and if people think your idea is a good one, they’ll invest. People can invest anything from £10 to thousands of pounds – but if you can put a good pitch together, it’s perfectly possible to attract hundreds of willing investors, all chipping in towards your fundraising target.
In return for their cash, investors get a small stake in the business (rather than earning interest on a loan).
So it’s a bit like going on Dragon’s Den – only instead of pitching your idea to Theo Paphitis, you’re pitching your idea to literally thousands of individuals who have money to lend.
The crowdfunding craze started in the US with sites like Kickstarter.com – but the idea has quickly spread to the UK. Now there are numerous sites offering people-powered investment for UK businesses, such as Banktothefuture.com, Seedrs.com, and Crowdcube.com.
(Crowdcube.com only launched in February 2011, but can already boast of over 20 businesses raising more than £3.9m via the site. Obviously most people don’t raise that amount – but there are plenty of other more modest success stories, with businesses getting off the ground by raising thousands rather than millions of pounds.)
Challenge No.2: Getting people talking about your business
If you’re a mum with a new business, you’ll also know that advertising and getting your business brand out there doesn’t come cheap.
That’s why Gemma Johnson (founder of MyFamilyClub) and Jane Hopkins (founder of MumsClub) have created a unique campaign to help mums promote their businesses online without spending a fortune.
Both Gemma and Jane know first-hand the challenges of running a home and a business at the same time, and how crucial they found the support of other mums when they were starting out – which is why they wanted to support other mums who are beginning their own business journeys.
Need help setting up your business?
If you’re looking to set up your own business, don’t miss our interview with Apprentice star Saira Khan.
As an entrepreneur and mum, she gave us 10 reasons why you should start your own business.
And for step-by-step practical help, don’t miss our essential guide on how to start your own business. It takes you through the process step-by-step and is packed full of invaluable advice.