If you are considering opening a new business, getting funding can be one of the major hurdles. You can have a business plan and a vision for the future, but it is difficult to get there without the proper funding.
One tactic that some business owners consider is crowdfunding. To do this, you typically use an Internet site that allows individuals to invest in the business. Rather than getting a loan for $100,000 from the bank, you may essentially get a $100 loan from 1,000 different individuals. You can then use this as the seed money for the company, and the people who invested eventually get something in return.
You need to have a product
You can crowdfund your business if you would like, but you need to have some sort of product that you can sell. This product will be offered as a reward for those who invest. Many crowdfunding sites focus on emerging technology, consumer products or even creative works. You may also be able to sell services or memberships, such as a membership to a climbing gym.
At this point, it is very important to have a comprehensive financial plan. You need to crowdfund and raise enough money to get your business off the ground, but that money also needs to pay for the products that you are selling. People who have invested in your business are essentially buying those products early. You still have to fulfill those orders, so you must set aside enough money for production and shipping, at the very least.
No matter how you fund your business, be sure you know exactly what legal steps to take to set it up.