4 Reasons You Should Crowdfund Your Business’s Growth
Your small business is ready to grow! Maybe you’re already running at capacity in your current space, and you’re looking at opportunities to expand. Or, you’ve finally perfected that perfect complement to your current product line, and you want to introduce it to the world.
You’ve been looking at ways to get capital to fuel this growth: grants, loans, savings… but have you considered crowdfunding?
The idea of crowdfunding is that a bunch of tiny drops can fill a bucket - instead of looking for one big loan from a bank, why not raise money from your friends, family, and loyal customers?
Crowdfunding your business’s growth with a Honeycomb Credit crowdfunded small business loan can get you more bang for your buck by being a fair means of accessing capital, improving your customer relationships, and boosting your name to the community.
If that wasn’t enough for you, did you know that Honeycomb alumni see on average a 60% increase in revenue after their crowdfunding campaign?
How’s this happen? Well, we’re about to tell you.
Darren Carter, owner of Carter’s BBQ in Cleveland, crowdfunded $29,400 for a food trailer!
Growing your business made simple with crowdfunding
Honeycomb Credit crowdfunded small business loans can help grow your business - on average we see a 60% increase in revenue in businesses that run a Honeycomb campaign with us. Find out more about how a crowdfunding campaign can boost your business.
1. Crowdfunding is a fair way of accessing capital for your business
If you’ve already been looking into ways to borrow money, you may have run into an issue getting a loan from a bank. Don’t feel bad, you’re not the only one. Bank lending to small businesses has dipped demonstrably in the past few years, as banks tighten up their lending criteria.
The small businesses hit hardest by this lending decline are businesses that are just starting out, are in “risky” industries (like restaurants), or don’t yet have enough of their own assets to put up as collateral.
If you choose to crowdfund your next capital raise, you won’t be dealing with the restrictions that banks have which would cause them to deny you a loan. The amount you raise will be entirely up to the amount you are able to get your customers to invest in you.
While at Honeycomb we do put businesses through due diligence, any of the above reasons won’t keep you from being able to launch a crowdfunding campaign. This makes fundraising much more accessible to small businesses at any stage!
2. Crowdfunding helps strengthen your small business’s relationship with your customers
Inviting your customers to invest in your business through crowdfunding is one of the best ways you can improve your relationship with them! This leads to increased engagement and increased revenue, as well as a stronger sense of community around your business.
So, how does this work? When a customer invests in your business, they become what we call a brand advocate. After all, they’ve put money into your business, so your success is their success!
Your brand advocates will be so excited that they invested in your business that they’ll tell all their friends about it, and maybe bring them around! They’ll also continue to support your business more than they did before investing.
We’ve also seen that the investor-business relationship often continues and grows after the crowdfunding campaign closes. Some of our small business alumni have told us stories of investors coming into their businesses and telling them that they invested and striking up a conversation with them!
This face-to-face relationship building is one of the most important reasons why you could run a crowdfunding campaign. Not only is it an opportunity to create a close-knit community around your business, but it can help increase your revenue and standing in the community as a result.
3. Crowdfunding can give your business a well-needed marketing boost!
If you play your cards right, crowdfunding can be a great way of marketing your business to your community, and to the country!
First of all, the act of crowdfunding is getting your name out there. How do you expect to raise money if no one knows you exist? Yet, as you get more active on social media with your crowdfunding campaign and encourage your followers to spread the word about your campaign, a snowball effect occurs, getting your business in front of multitudes of new people.
Crowdfunding with Honeycomb also gives you a unique opportunity to market your business. Because loan crowdfunding is such a new concept, oftentimes businesses choose to go to the press to announce their campaigns to a wide audience. Since it’s a new idea, the press is likely to pick it up and give your campaign a bit of a shout-out. This is good not only for your campaign, but also for your business!
We also do a bit of the legwork for your business too, in terms of marketing. We’ll post about your campaign on our social media and to our network of investors interested in small businesses, and will support you in giving you an opportunity to pitch your campaign and talk with potential investors.
This isn’t something every crowdfunding platform does! Sometimes, a crowdfunder will post a featured campaign, one that’s already doing well, but we promote every campaign that comes through our platform equally.
With Honeycomb, the marketing boost also doesn’t end after the campaign is over. Now that you’ve run a campaign with us, you’re a part of the Honeycomb alumni network, and we’ll continue to gas up your business whatever chance we get. We like to regularly give updates to investors on our alumni’s progress, and publish features about their success on our blog and Youtube channel!
4. Crowdfunding is fun for you and your customers!
We wouldn’t be here if we didn’t think that crowdfunding was an exciting way to raise capital for small businesses. Crowdfunding is so much more fun than walking into a bank to get a loan.
The crowdfunding process gives you a chance to really get out there into the community and show them that you’re a valuable part of your neighborhood! You can get creative with how you promote your crowdfunding campaign to your community, and have fun doing it.
We’ve hosted pitch events where distillery owners give cocktail demonstrations, invited alumni to sell food at community events, and been to a number of campaign success parties hosted by ecstatic Honeycomb alumni.
So, have fun with it! The more fun you have with promoting your crowdfunding campaign, the more likely you’ll be able to encourage others to invest in you, because they’ll want in on the fun too.
Grow with the community by your side by crowdfunding!
If you’re looking for a fair way to raise capital for your business, strengthen your customer base, boost your business’s marketing, and have fun doing it, crowdfunding might be the way to go.
Learn more about Honeycomb Credit crowdfunded small business loans by filling out the form below!