Want to launch a crowdfunding site? here is a complete guide to getting started with a crowdfunding website with no money and no experience .
Ok, so we’ve provided you with a detailed sample business plan for a crowdfunding site. model. We also took it a step further by analyzing and writing a sample crowdfunding website marketing plan backed by actionable guerrilla marketing ideas for crowdfunding websites. In this article, we’re going to go over all the requirements for starting a crowdfunding website builder business. So put on your entrepreneur hat and let’s move on.
Why Start a Website Crowdfunding Business?
Business ideas abound and one of the things to watch out for when starting a business is the viability of the business. One viable business that you can start is the crowdfunding business. Being a social entrepreneur can be a wonderful experience.
If you are truly a social entrepreneur who talks a lot about ICT skills and want to be your own boss, one of the successful and profitable social businesses you can start is a crowdfunding website.
A crowdfunding website is a means by which people can raise funds to fund personal, charitable or business projects with funds received from different people across the world through cyberspace. Donation is the term commonly used to describe this type of donation.
A crowdfunding website is one of the social businesses that an entrepreneur can successfully start on a small scale and possibly with a functioning home office without breaking the bank. cash.
It is very important that you analyze the existing crowdfunding sites in your country and abroad. Know how many there are and why they are fundraising. You will also need to check existing competitions to find out their strengths and weaknesses. Knowing the weaknesses of existing crowdfunding websites means that you can learn from their mistakes and, in turn, create a better crowdfunding website free from the mistakes and weaknesses of others.
So, if you have completed the necessary feasibility studies and market research, you might want to consider this social enterprise. If you are bothering to build your own crowdfunding website but don’t know how to do it, this article is worth considering; it will surely provide you with the facts, figures and directions you need.
Building a Crowdfunding Website for Businesses The Complete Guide
- Industry overview
Crowdsourcing service providers, as you know, mostly crowdfunding projects and businesses. The industry also includes websites that provide access to temporary workers through an online network. These employees generally perform work on the Internet on an individual basis. Industrial clients perceive labor when it is too expensive to hire full-time or part-time workers to complete projects.
Since its inception in early 2000, the crowdsourcing service provider industry has experienced explosive growth. The increasing prevalence of online services has largely contributed to the growth of the industry, as social workers and entrepreneurs can easily raise funds and workers can more easily perform tasks from remote locations.
Crowdsourcing platforms generate revenue by charging fees to downstream companies that use them. service platforms by charging companies a portion of the wages they pay workers and receiving a commission (a percentage) on funds raised for a project or individual. The crowdsourcing services industry is expected to continue to grow.
The crowdsourcing service industry will continue to grow in all regions of the world, especially in developed countries such as the United States of America, Canada, and the United States. UK, Germany, Australia, South Korea, Japan and China, etc.
Statistics show that in the United States of America alone, there are approximately 1,664 licensed and registered crowdsourcing service providers and crowdfunding sites along their length. and the breadth of the country, and they are responsible for employing approximately 8,646 people. The industry receives a whopping $ 233 billion per year, with a projected annual growth rate of 3.3% in 2011 and 2016. It is important to note that no organization can boast of a dominant market share. in industry.
A recent report published by IBISWorld shows that the crowdsourcing service provider industry has a low level of capital intensity, driven by reliance on a highly skilled workforce and the relative youth of the industry itself. Depreciation, used as a proxy for capital expenditures, is expected to account for 2.2% of industry revenue in 2021, while salaries for the same year are expected to be around 29.6%.
This means that for every dollar spent by operators on payroll, only $ 0.07 is spent on fixed assets. The report goes on to say that capital intensity has increased slightly over the past five years and is expected to grow as the industry matures. Small businesses in this sector are often more dependent on labor than their better-known counterparts.
The crowdsourcing and crowdfunding industry will continue to thrive as individuals, social workers, start-up entrepreneurs, small and medium-sized businesses will not search indefinitely for funds (donations) to implement a project or support the launch and the growth of their businesses.
The field of crowdfunding is open to all; Anyone living in the United States who is interested in fundraising can use a crowdfunding website to start their own social business. It is important to point out that the industry is heavily regulated to combat fraud and crime.
Creation of the Crowdfunding website. Market studies and feasibility studies
- Demography and psychography
The demographic and psychographic makeup of those who need the services of a crowdfunding website is not limited to people, non-governmental organizations and businesses in your immediate community or state, but encompasses people, organizations. non-governmental organizations and businesses around the world that can access the Internet. Indeed, most crowdfunding sites are aimed at clients around the world who have real reasons for wanting to raise funds; it can be for a social enterprise, for a business, a project or start-up capital for a business.
So if you want to define the demographics of your crowdfunding website, you have to include everything. It should include business people, social entrepreneurs, social workers, and small and medium-sized businesses in the United States of America and beyond.
List of niche ideas in that particular business to specialize in
Most crowdfunding websites tend to provide fundraising services to individuals and businesses, and even provide professional advice and support. This is why there does not appear to be any niche in the industry.
But on the other hand, some crowdfunding websites may decide to tackle some key areas such as:
- Active online platforms for businesses and individuals to raise funds for their projects or business
- Online operational platforms that allow companies to outsource tasks like experience-based tasks, freelance tasks, microtucks, software maintenance tasks and idea generation tasks, etc., to an individual or to a group
- Organization of virtual networks of clients and independent workers
The level of competition on the crowdfunding site
The level of competition in the industry crowdfunding website in no way depends on the location of the business, as most crowdfunding websites can operate from any part of the world. world and remain competitive in the website crowdfunding service industry.
When it comes to website crowdfunding services, distance is never a barrier in the struggle for a client, especially international clients. Most clients (individuals and businesses) want the crowdfunding website platform to help them raise the capital they need, so they are ready to use the services of the crowdfunding website no matter where in the world. the world they work in, provided they have a good track record and can deliver great results. fundraising results for them.
But beyond that, there are several crowdfunding sites dotted around the United States and across cyberspace. So, if you decide to open your own crowdfunding website in the United States, you will certainly face stiff competition not only among crowdfunding websites in the United States, but also from around the world, especially if you choose to specialize in working internationally. businessmen and women, charities. Also, there are some great crowdfunding service providers that are setting the trends in the industry and you should be prepared to compete with them for clients.
List of famous brands in the crowdfunding industry
In all sectors, there are always brands that perform better or are better perceived by buyers and the general public than others. Some of these brands are the ones that have been around the industry for a long time, while others are best known for the way they run their business and the results they have achieved over the years.
These are some of the leading crowdfunding service providers in the United States of America as well as the world;
- drop a gift
- Circle up
When it comes to building a crowdfunding website, all you need to do is get a feasibility study and market research right before you start. It should be noted that a crowdfunding website is a social enterprise, so you need to have a good background for donors to be able to donate to your website.
While start-up capital to start and run a crowdfunding website isn’t the best, it won’t be appropriate if you remember certain things before you start a business.
You are expected to hire experts who will provide you with a comprehensive business economic analysis at the location where you intend to start your business. If you get your economic and cost analysis right before you start a business, you might not have to stay long before you break even.
Start your crowdfunding website from scratch or buy a franchise
If you want to start a crowdfunding website, you will have to start from scratch because you will hardly find any crowdfunding website that does franchising. It is a company that has fairly low barriers to entry, therefore; it is open to all.
In addition to the fact that starting a crowdfunding website from scratch is less stressful than other small businesses, which usually require detailed preparation before starting. With a crowdfunding website, you just have to try to find the right employees, a user-friendly website, build business relationships and reach out to key stakeholders, then use all the marketing tools at your fingertips. available, especially the Internet, to promote your services.
As a reminder, most of the big, successful crowdfunding websites offering crowdfunding services started from scratch and were able to build a strong business brand. Success in business requires dedication, hard work and determination.
Threats and potential challenges you will face when starting a crowdfunding website builder business
If you do decide to open your own crowdfunding site today, one of the biggest challenges you face is probably having well-known cyberspace crowdfunding websites, as well as other organizations in the world. fundraising related that offer the same services. that you plan to offer. The only way to avoid this problem is to create your own market.
Some other threats that you are likely to face as a crowdfunding service provider operating in the United States are adverse government policies, the emergence of a competitor. in your area of operations, cybercrime (hacking and fraud) and the global economic downturn, which generally affects purchasing power / purchasing power. There is hardly anything you can do about these threats except to be optimistic that everything will continue to work for you.
Crowdfunding Website Development Business Legal Issues
- The best legal entity to use in this type of business
Typically, you have the option of choosing a full partnership or a limited liability company, commonly known as an LLC for a business such as a crowdfunding website. Usually, a full partnership should have been the ideal business structure for a small crowdfunding website, especially if you are starting out with moderate start-up capital.
But people prefer a limited liability company for whatever reason. In fact, if you are intending to grow your business, and have clients, companies, and individuals, from all over the United States of America and other countries around the world, choosing a full partnership doesn’t is not an option for you. A limited liability company, LLC will replace it for you.
LLC training protects you from personal liability. If something is wrong with the business, only the money you invest in the limited liability company is at risk. This is not the case with general partnerships. Limited liability companies are simpler and more flexible to manage, and you don’t need a board of directors, shareholder meetings or other management formalities.
Here are some of the factors to consider before choosing a legal entity for your crowdfunding site; limitation of personal liability, ease of transfer, acceptance of new owners, investor expectations and of course taxes.
If you take the time to critically research the different legal entities that will be used for your crowdfunding site, you are accepting this limited liability company; An LLC is the most suitable. You can start this type of business as a limited liability company (LLC) and in the future turn it into a “C” corporation or an “S” corporation, especially if you intend to go public.
Attractive business name ideas suitable for website crowdfunding
When it comes to choosing a name for a business, you are expected to be creative, because whatever name you choose for your business, it will take a long time for you to get a feel for it. what the business is. It’s generally normal for people to follow the trend of the industry they intend to work with when naming their business.
If you are thinking about starting your own crowdfunding website, here are some catchy names you can choose from;
- Social Geeks Crowdfunding, Inc.
- Live The Dream Crowdfunding, Inc.
- Get Money Crowdfunding, LLC
- Charity Enterprise Crowdfunding, Inc.
- Good Hearts Crowdfunding, LLC
- One Vision Crowdfunding, LLC
- Penny Wise Crowdfunding, LLC
- Excel Crowdfunding Project, LLC
- Brother’s Keeper Crowdfunding, LLP
- Gat Your Back Crowdfunding, Inc.
- Every Drop Matters Crowdfunding, Inc.
- Saving the Dream Crowdfunding, Inc.
In the United States and most countries around the world, you cannot run a business without some of the basic insurance policies required for the industry you want to work in. Therefore, it is necessary to budget for insurance policies and possibly consult an insurance broker to help you choose the most suitable insurance policies for your crowdfunding website.
Here are some of the basic insurance policies. coverage to consider when purchasing if you want to open your own crowdfunding website in the United States of America;
- general insurance
- risk insurance
- Credit insurance
- deposit insurance
- health insurance
- liability insurance
- workers compensation
- overhead disability insurance
- group insurance for business owners
- payment protection insurance
intellectual property / trademark protection
If you are planning to start your own crowdfunding website, you usually won’t need to apply for IP / trademark protection. This is because the nature of the business allows you to run it successfully without having any reason to challenge anyone in court for illegal use of your business’s intellectual property.
But if you just want to protect your company logo and other documents or software that are unique to you, or even mix them with multimedia production concepts, you can apply for intellectual property protection.
Do you need professional certification to run a crowdfunding website attraction business?
When it comes to running a crowdfunding website, you don’t need certificates. All you need is some informal training that will get you involved in fundraising and management, run your website, and run your business effectively.
On the other hand, if you come across some form of certification that can help you, you need to be good at running your social business on a crowdfunding website and then try to get that certification.
List of legal documents required to run a crowdfunding website
Here are some basic legal documents that you would expect to be in place if you want to legally operate your own crowdfunding website in the United States of America;
- Registration certificate
- Commercial license and certification
- Business plan
- Non-disclosure agreement
- Employment contract (letters with proposals)
- Operating Agreement for LLC
- Insurance policy
- Contract documents
- Company charter
- Memorandum of Understanding (MoU)
- Apostille (for those intending to work outside the United States of America)
Fund your crowdfunding site
Starting a crowdfunding site can be profitable. Securing a standard office in a good business district, outfitting the office and paying your employees, and of course creating a user-friendly and secure website are some of the things that consume most of your startup capital.
One of the main factors to consider when it comes to financing a business is writing a good business plan. If you have a good, viable business plan document, you may not have to work on your own before convincing your bank, investors, and friends to invest in your business.
Here are some of the options you can use when looking for seed capital for your crowdfunding site;
- Collect money from personal savings and sell personal stocks and property
- Raise funds from investors and business partners
- Sale of shares to interested investors
- Submit your business idea and apply for business grants and seed funding from donor organizations and angel investors
- Source of concessional loans from family and friends
Choosing the right location for your crowdfunding business
A social business that runs crowdfunding websites and most businesses based on online services doesn’t necessarily require you to physically communicate with your customers, so it can be found anywhere since most your business transactions are carried out online.
Just because you can run your crowdfunding site from your home doesn’t mean that location has little to do with the success of a crowdfunding site. If you have taken the time to research the crowdfunding service provider industry, you will find that industry players are willing to pay high rent to stay in a bustling business district; a place where commercial activity is at its peak.
So if you are looking for a location for your crowdfunding website, make sure it is a location in your city’s business district, a visible and easily accessible location, and a location that has a large number of donors and clients. Of course, you wouldn’t want to locate this type of business on the outskirts of town. Your customers should be able to travel easily and find your office without too much difficulty.
Creation of a Crowdfunding website for companies. Technical and personal data
On average, no dedicated technology or equipment is required to run this type of business, except for specialized payment software, social media management apps, and other financial apps. In addition, you will also need computers / laptops, internet, telephone, fax machine and office furniture (chairs, tables and shelves).
When it comes to choosing between leasing and leasing office space, the size of the business you want to build and your overall budget for the business should influence your choice. If you have enough capital to run a standard organization, you should consider renting space for your office.
When it comes to how many employees you’re supposed to start a business with, you’ll need to consider your finances before making a decision. On average, you’ll need a CEO or President (you can fill this role), an administrator, and a human resources manager. fundraisers and social workers, accountant, marketing / business development manager, customer service specialist or registration agent and ICT experts
Additionally, you will need a minimum of 5-10 key employees to effectively run an average but standard crowdfunding service. Note that there will be times when you will need to be able to hire experts to help you manage some high profile crowdfunding deals, especially with large companies.
If you are just starting out, you don’t have to. have the financial capacity or business structure to retain all of the professionals who are expected to work with you, so you should consider partnering with other fundraisers and industry experts who work as freelancers.
The process of providing crowdfunding website services
The job of crowdfunding service providers varies from organization to organization, but ideally a crowdfunding website should first create a user-friendly and secure website with a reliable business profile before opening. its website to individuals, non-governmental organizations, social networks. companies and companies that wish to raise funds for their project will give them an advantage over their competitors,
Essentially, crowdfunding service providers provide offers to their members, businesses, and marketers to help them generate public interest and seek more potential opportunities for their projects.
The crowdfunding service will receive 4-5% of each fund raised, and 3% will be charged for credit card processing, plus $ 25 for wireline campaigns and projects outside of the United States. For example, if you requested a flexible fundraising plan and your campaign missed its target, some crowdfunding service providers will charge around 9% of the fund, but you can still collect the remaining funds.
It is important to clarify that a crowdfunding service provider can choose to improvise or adopt any process and any business structure that guarantees good return on investment (ROI), efficiency and flexibility; The above corporate semen service process is not canceled.
Start a business marketing plan for a crowdfunding site
- Marketing ideas and strategies
As a crowdfunding service provider, you will need to prove your worth several times before attracting donations from donors. So, if you are thinking of starting your own crowdfunding website, you will first need to build a successful career in social entrepreneurship and fundraising.
So, when developing your marketing plans and strategies for your crowdfunding site, be sure to create a compelling personal and business profile. In addition to your qualifications and experience, it is important to be clear in practice what you have been able to achieve in the past in terms of fundraising and the organizations in which you have worked. This will help you improve your chances in the market when looking for donors.
Here are some platforms you can use to promote your crowdfunding website;
- Introduce your business by sending cover letters with your brochure to all corporate organizations, social entrepreneurs, NGOs, businessmen and entrepreneurs, entrepreneurs, households and the international community of entrepreneurs and charities in the United States.
- Visiting international exhibitions, seminars and trade fairs of social enterprises, etc.
- In terms of commission, create different packages for different categories of customers to work with their budgets.
- Internet leverage to promote your business (when you write regularly on key business issues, people see you as an expert in the field)
- Join local chambers of commerce and industries around you for the primary purpose of networking and marketing your services; There is a good chance that you will get rich donors from these networks.
Strategies to increase awareness of your business and create a corporate identity for crowdfunding
If your intention to start a crowdfunding website is to develop a business outside of the city in which you intend to operate to become a national and international brand, you must be prepared to spend the money on promote and promote your brand.
When promoting your brand and corporate identity, you should use both print and electronic media, as well as social (internet) media. In fact, using the internet and social media platforms to promote your brand is beneficial, and it is also quite effective and widespread.
Another strategy is to sponsor relevant community programs, TV and radio programs, to advertise your business in relevant magazines and newspapers. Below are the platforms you can use to promote your brand and promote and advertise your business;
- Advertise in related magazines and newspapers, radio and television stations
- Encourage the use of word of mouth advertising from your repeat customers
- Leverage on the Internet and social networks such as; YouTube, Instagram, Facebook, Twitter, LinkedIn, Snapchat, Badoo, Google+ and other platforms to promote your business
- Make sure you place your banners and billboards in strategic positions throughout your city
- Distribute your flyers and flyers in targeted areas in and around your region
- Reach out to corporate organizations, social enterprises, non-governmental organizations, business people, households, international businesses and charities, and others by calling and informing them. their organizations and the fundraising services you provide
- Promote your business on your official website and apply strategies that will help drive traffic to your website
- Mark all your official vehicles and ensure that all your employees and management staff regularly wear your branded shirt or cap