How to Combat the Labor Shortage with Crowdfunding
One of the problems that defined 2021 for small business owners was the “labor shortage” keeping businesses from being fully staffed and functional. This shortage isn’t necessarily a question of supply and demand, but is really caused by a complex variety of economic factors, which we’ll get into a bit.
However, the fact of the matter is as a small business owner, you’re facing the reality of having a hard time finding and holding onto employees. If you’re expanding and worried about not finding quality employees to help with your growth, crowdfunding might be one solution to helping fix your labor shortage problem.
What is causing the current labor shortage and how can I overcome it?
The hard fact of the matter is that many employers simply aren’t paying enough for potential employees to want to work for them. The $15 minimum wage that is being proposed and implemented across the country in many places isn’t enough for a living wage.
Budgeting for increased employee wages is one way that business owners can find and keep employees satisfied, but it’s really just the tip of the iceberg when it comes to reasons people have for not working.
Other life responsibilities aren’t compatible with work schedules
One of the hardest things about the unpredictability of the coronavirus pandemic for many people is struggling to balance work with all the other responsibilities one has, especially if they’re a parent or have some other caregiving role.
Offering flexibility with scheduling, or working with employees to solve these problems could be one means of attracting and retaining employees.
Prioritizing health and wellness in the wake of the coronavirus.
Some employees are quitting workplaces or refusing to find work because of fears about the coronavirus pandemic. Essential workers have been working throughout the pandemic out in public, although the level of safety they’ve experienced varies by workplace.
Putting adequate Covid safeguards in place like requiring masks and a vaccinated staff is one way you can make employees feel safe enough to come to work. Also being flexible with scheduling in case people do come in contact with or contract Covid can work wonders.
So how can crowdfunding help me fight the labor shortage?
If your business is already looking for a way to finance a major growth project, such as opening a new location or expanding, you can actually kill two birds with one stone with crowdfunding and fund your growth while also preparing for new employees!
Crowdfunding a small business loan allows you to access the money you need to grow your business with the help of your community, who can invest in your business for a return! We’ve found that businesses that crowdfund their growth on average see increased customer support and marketing power, resulting in a 60% yearly increase in revenue.
So how does this involve finding people to work for your business? We’ve had several businesses use part of their crowdfunding campaign to raise funds to hire new workers. Usually, they’ll budget for a couple month’s worth of wages as part of the loan so that by the time they get the ball rolling on their business’s growth they’ll be able to use revenue to pay employees.
If hiring new employees is part of your business’s growth plan, then figuring out how much you can fairly pay them when your business is running and then crowdfunding that can be a low-stress means of onboarding new employees.
Also, crowdfunding is a great way to market your business and communicate your values - not just to your customers and potential investors, but also to future employees! Let them know that your business is not just growing, but it’s a great place for them to work and grow along with you.
Other reasons to consider crowdfunding
There are numerous other benefits to crowdfunding, besides just raising the money you need to grow your business.
We mentioned before that crowdfunding is a great way of marketing your business - this is especially true if you’re crowdfunding a loan! Because this is such a new form of business financing, it’ll cause people in your community to take note. We often see businesses get press attention for running crowdfunding campaigns, especially if they’re one of the first in their area to run a Honeycomb campaign.
When you crowdfund, you also strengthen your existing customer relationships by turning your regular customers into investors, which turns them into brand advocates! Now that they’re invested in your business’s success, your customers’ loyalty to your business will continue to grow, and they’ll bring more of their business to you.
Finally, running a Honeycomb campaign helps your business better connect with your community. By offering the community the chance to invest in your business, you’re showing that you’re a part of the neighborhood and you’re there to make it a better place. This kind of sentiment means a lot to your customers, your investors, and your employees, which in kind will benefit your business for years to come.
Working together to build up our communities
Everyone involved in a small business is important - from the owners to the people they employ to their customers. Get everyone involved by running a Honeycomb crowdfunding campaign to launch your business’s next steps. Find out more by filling out the form below!