5 Reasons To Use Crowdfunding In Business
Rather than relying on traditional methods of funding your business, you may want to look into the possibilities presented by crowdfunding. There are a number of reasons why this may be right for your business and we’ve listed five of them below.
1. Free Yourself From Banks
Banks are not always the warm friendly organization they want to present, nor are they that free with loaning out their funds. They want to make sure that the companies they give their money to will be able to pay them back. Crazy!
A bank funding model is very dependent on having a solid credit score as well as showing proof that your business can generate a profit. Crowdfunding is one way in which you can get around this model.
Having credibility in the business world can be a great asset and crowdfunding is one way in which you can try and prove that you have it. If you have shown people that there is a viable and interested public that is willing to support your idea, by supporting your crowdfunding campaign, you’ve taken a step forward in showing that you have a credible idea, and potentially business.
Using crowdfunding to raise funds also means a little “free” publicity. All of the people who get involved with the funding of the business, or at least check out the campaign are also going to be checking out your company, and that is a lot of free awareness in the community.
In the case of borrowing money from the bank, they tend to have very strict terms that can be a bit overwhelming for a new business. Then there’s the possibility of a “personal guarantee” which can add an additional level of stress on a startup. Thankfully that is not the case with crowdfunding. With this system, you can maintain total control over your business without a ton of strings, and that is generally a better situation for many business owners.
5. Ability To Attract Partners
When using crowdfunding you never know who is going to see your campaign, and that unknown can help take your business in a whole new direction. There’s countless examples of companies manufacturing a product that have been approached by distributors such as WalMart and Target when they see the demand through a campaign. If you’re producing a creative project you have an opportunity for distribution or partnerships, if you can show a real demand it’s an opportunity for you to call your own shots.
Take a look at crowdfunding, it may not be the right fit for you but it’s no longer an option that you should blatantly ignore. After all, what if your competitor gains the benefits from it because you ignored it?