Questions

How can we know if a business venture will be successful in crowdfunding?

My nephew is starting a business in the fitness. He’s 24 years old just graduated recently with a bachelor of business administration degree and he is shirking the idea of getting a day job and his parents made him a deal he has 18 months to build a business that at the very least breaks even he asked me for some advice and I recommended crowdfunding as I think this provides an opportunity to ramp up his business and break even much sooner. He is very familiar with this building, very familiar with social media reach, growing a social following and I am reaching out to some experts in a crowdfunding arena to see if it’s even worth going for funding.

5answers

Crowdfunding for startups is a difficult task if there isn't a tangible product at hand currently. If he kept the funding on a personal level and only involved family and friends, then it could work, but that opens pandora's box of "borrowing" money from people you have a non-business connection to.


Answered 7 months ago

Hi:
As Sean offered, crowdfunding is very challenging without a tangible product. Plus, has your nephew defined the target market for his fitness business? I'm guessing it is much smaller than the average crowdfunding universe--at least as he's starting up.
Instead, I think investing that time and energy into building his business base would be much more productive. Defining his target market, determining the best avenues to go after that market and delivering service that ensures repeat business--and referrals--are core building blocks to establishing a personal service business.
If you (or he) wish to discuss, send me a PM through Clarity for 15 free minutes.
Cheers,
Kerby


Answered 7 months ago

The way to know is start a few projects + see.

Likely best to only start one project at a time... meaning only one crowdfunding site running the project at a time.

So use different sites in sequence, rather than simultaneously.

And... There's a far better way to do this... at least as a test.

1) Come up with something to sell.

2) Open a http://Meetup.com group with fitness as the category.

This might not seem so powerful + here's a tip.

When you start a Meetup group, once your group is approved by the Meetup Trolls (dark beings who issue such approvals), sometime in the next few days, they will send an email to every Meetup member camped on the fitness category.

You can't find out the numbers any more, because Meetup stupidly (was one of the best marketing tools on the planet) turned this off several years ago.

And, just so happens, last time I helped someone setup a fitness related Meetup group in Austin, TX there were...

15,000 Meetup members in Austin, camped on this topic.

So, when you setup your Meetup group, set the zipcode of your Meetup group to the closest zipcode to you which has the highest population density.


Answered 7 months ago

Crowdfunding can work well when there is a real product, as already commented earlier. But whether you have a great idea or not, it is important also to understand that crowdfunding is complex. Successful crowdfunding campaigns are most often run by professionals or marketing agencies. So the odds to succeed on raising funds can are not that high. Also you need to find the right type of crowdfunding. From a learning point of view though trying to do a crowdfunding campaign can be a great experience. If the business is a physical business in fitness, like a gym, there might be other ways to fund it, but being a fresh grad and having zero experience in business will make difficult to raise funds that way...


Answered 7 months ago

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