You have so many great ideas. Most of them never leave the drawing board. You just don’t have the money. Hang on; there’s a solution–crowdfunding. Crowdfunding is a modern solution to finance and launching new businesses. All you need is a campaign, a platform, and an idea to get started.

Starting a business is daunting. There are countless things to consider before you can transform your fantasies into the real world. You need to pick the right business, secure every one of the grants and required documents, consider the manpower, and considerably more. In any case, the greatest worry that most business proprietors face is the accessibility of monetary assets and where to source them, says renowned Astro Strategist cum Business Astrologer Hirav Shah.

Hirav says, “Previously, independent companies have had limited resources with regard to financing their business. As a rule, business proprietors needed to go to loaning organizations, seek after bank credits, or utilize their own cash. With present-day financing strategies, things have changed, giving extra choices. Today, crowdfunding for a private venture is well known to the point that it has become the primary method of raising capital. In any case, is it useful for your private venture?

What is Crowdfunding?

Hirav Shah explains, “Crowdfunding is a form of crowdsourcing and alternative financing to raise small amounts of capital from a large number of people to fund a new project or business. Crowdfunding for startups works by receiving donations from various individuals in return for a special reward. This reward could be in the form of exclusive discounts, free products, premium merchandise, first exposure to new products, a chance to become involved with the team, or even becoming a major capital investor. Crowdfunding has one ultimate goal – and that is to raise the required amount for the project or business to take off.

Now crowdfunding might seem like a daunting prospect to those unfamiliar with it. But it’s simple, really; all you have to do is convince crowds to fund your initiative through the internet.

Hirav Shah says it just takes four simple steps

1) Research

Before you get those funds in, you need to do your homework. You need to know your market, your audience, your funding needs, and your funding platforms. It is only then that you can devise a funding strategy or business plan.

2) Select audience

You need to choose your audience. It makes everything more streamlined when you know your market and appeal to them directly. Your audience could be the target consumer of the product/service you want to sell. The audience can also be those sections of society that are more likely to fund the initiative. Say you are a startup for women’s rights. You will need to target people with specific genders, economic classes, and political orientations.

3) Select platform

Now that you know who you need to target, you will need to select the right platform. It will need to be a platform that allows for your funding plan and reaches a wider audience. Do make sure that the platform is efficient, user-friendly, and operates in your area.

4) Offer incentives

You can’t just ask people for money. You need to give them an incentive, a motivator. This could range from t-shirts or contests, or social media shout-outs. Social media influencers often use this strategy to do crowdfunding marketing. This means that they use the funding opportunity to further their brand image. This stirs interest in the crowd and creates brand loyalty.

All this might seem a little complicated. Maybe you don’t want to risk depending on strangers for your dream. Maybe you would prefer traditional forms of capital funding, like loans. Maybe you’re not tech-savvy and want to stick to face-to-face options.

But that might be a mistake. Crowdfunding can raise your capital very fast. There are no added burdens of repaying loans and interests, which might weigh heavily on a new business. Crowdfunding platforms are also often user-friendly and don’t need much technical knowledge.

Besides, Hirav Shah mentions there are many other benefits to crowdfunding, like:

Increased reach

When you use a crowdfunding website, you will get access to many markets and many investment opportunities. You can raise capital from individual strangers and from professional investors as well. You can get the capital need quickly and efficiently. You also get to see how popular your business would be and see the true shape of your target market.

Organization

Even if you do not get funding, you can get a solid business plan out of the whole thing. You can then use business outline and funding proposals to send to potential investors on other media and channels. In any case, you will have a solid strategy for your business operations going forward. This can help tremendously with the organization’s structure.

Awareness

Crowdfunding campaigns are a great way to get people talking about your product. It raises brand awareness and encourages traffic to your social media site and website. You can get potential customers and can even sell your first products.

That sounds pretty great, right?

So, how do you crowdfund?

In one of three ways:

Donation-based crowdfunding

This is a crowdfunding opportunity where investors will not need to be financially compensated. When you get contributions, they will simply be donations. This is an ideal strategy for new businesses that can’t be bogged down with repayment schedules.

Rewards-based crowdfunding

This is another crowdfunding technique that already established brands, individuals, and businesses can use. As the name suggests, you will need to reward your contributors in some way. Campaigns often pre-sell their new product for a discount and deliver the product a few months later to the backer.

Equity-Based Crowdfunding

This is different from the other two techniques. This will effectively make your investors or contributors have stakes in your company. They will trade capital for equity shares and become part-owners. They will then need to be compensated financially as a return on investment, much like the traditional dividend.

Hirav Shah suggests nine crowdfunding sites in India that are shaping the way ideas and startups grow:

Kickstarter: one of the first crowdfunding sites in India
Wishberry
Indiegogo
FuelADream
Fundable
Ketto
Catapooolt
Milaap: crowdfunding for personal and social causes.

Hirav Shah concludes by saying, “Crowdfunding has proven time and again that those who want to start a small business but lack financial resources can still make their dreams come true, but beware of the terms and conditions.