While watching the pebble watch project on Kickstarter go soaring beyond the goal of $100,000 to over $10 million, I got to thinking about how people come up with a number signifying how much money they want to raise. As we get closer to launching our own crowdfunding site, we’re talking to many people who want to post projects with us (mostly women, of course) and the conversation inevitably comes around to how much money will the project need.
Ultimately, the questions get’s answered the same way it’s always answered in any business. What are the costs going to be, how much is needed to grow a company/idea/project and what are the obligations that go with the money. What are you promising as a reward to potential donators? What is it going to cost you to fulfill that promise? How much shipping material, postage, staff and actual product cost will you encounter? Also, if you’re doing research and development, how long will that take and how many dollars will it take to get you through that process? Will you have to do market testing after the R&D? Then there’s packaging, graphic design, website creation, manufacturing of your product, and distribution to markets. Let’s say you want to record a music album. Are you going to promise a copy of that album to donors? How long will it take you to finish the music once you have the money to go into the studio? How much will it cost you to ship it to the donors, once you get the CDs manufactured? Who will stuff the envelopes and print the postage? How much will that cost?
You get the picture? There are hidden costs and some unforeseen costs in any business, but if you create a business plan and try to anticipate all of the expenses you’ll incur for that specific period of time during your project launch, you can come up with a number for your goal. You may have to scale back what you can do in the nearer future, but you can always go back to the same people who helped you the first time around and ask for their help for the next phase of your growth. And if you prove that people like your idea, product or service by donating money to it, then you will have a better argument with traditional lenders.
Lastly, unless you have another source of income, it’s not wrong to include your own pay in your total number. How will you live/survive during the ramp up process of bringing your project to life? It won’t matter how good your idea is, if you can’t pay the bills. Not all of us will be as successful as the guy with the cool pebble watches, but if you pitch your project with clear descriptions, clear goals and some clever wording in your copy and video, then you have a good chance to make your dreams reality. This is not cake-walk, but it is a viable solution to your funding dilemma.
Posted From ; http://crowdfundinglive.com/events/goal-setting-for-crowdfunding-how-much-is-enough