How To Leverage GoFundMe For Your Business

An analysis of more than eighty unsuccessful businesses found that financial difficulties accounted for 16% of failures. Entrepreneurs with little personal funds and without the qualifications to obtain money from financial organizations may find it difficult to access business funding.

Crowdfunding could be an option if you need more experience or collateral to secure conventional company financing. When looking to raise funds for your business, GoFundMe is a strong alternative because it is one of the most popular crowdfunding platforms.

To assist you in deciding whether or not using GoFundMe is a suitable fit for your business, we will examine its ins and outs, how it works, and the steps required in beginning a GoFundMe campaign.

GoFundMe Explained

GoFundMe is a crowdfunding website that emphasizes supporting small businesses and charities. Instead of raising a massive amount of money from a few investors, you solicit small donations from many investors – or crowdfund – to meet your business's financial needs.

You may use it to make a campaign to share your story, establish a fundraising target, promote it on social media, and receive money directly from the platform.

A campaign involves setting up a fundraising page on the GoFundMe website and providing visual aids, such as images and explainer videos to demonstrate why you're seeking funding. Businesses can create fundraising campaigns for a variety of reasons, including but not limited to the following:

  • Paying for renovations
  • Expanding your product line
  • Purchasing new equipment
  • Simply getting your firm off the ground

Donations from individuals are an option that can aid in the achievement of these goals.

GoFundMe also equips you with the means to keep tabs on your fundraising progress and keep in touch with your contributors.

How It Works

To start a GoFundMe, follow these steps:

Signup and Create a Campaign

Initially, you must create an account using your name, email address, and password. It will help your campaign if you develop a gripping narrative and a practical objective.

Before looking for money publicly:

  1. Have a plan and a goal.
  2. Define the core elements of your story, focus on the information at hand, and zero in on the specifics that will make your narrative shine.
  3. Keep in mind that your audience will want to know the who, what, where, when, why, and how of the story you're telling.
  4. Set your goal amount while considering the costs and fees you may incur.

Each donation has a transaction fee of 2.9% plus $0.30 taken out of it automatically.

Get The Word Out

Inform people about your campaign and where they may send donations using social media and other methods of communication. You can update your social handle feeds straight from the GoFundMe mobile app. When utilizing a mobile device, you can also upload a screenshot of the homepage graphic and the title, hashtag, and link to your campaign in your bio.

Further, compile a mailing list by gathering the email addresses of those interested in your cause. You may use this mailing list to share news about your company and any other information you deem appropriate.

Engage Your Network

Before launching a public campaign, getting family and friends on board can be helpful. It’s an opportunity for relatives and friends to establish the legitimacy of their contribution and investment. They may contribute to your campaign before making your intentions known to the wider public. Thus providing social proof that may assist in winning over the general public.

More than just making monetary contributions, friends and family members can help spread the news about your fundraising page. Get them actively involved in your cause by encouraging them to share your campaign information offline and online.

Collect Funds and Keep Donors in The Know

Once you have completed the verification process, your funds can be sent to your bank account at any time during the campaign, without affecting the status of your page or the progress you have made toward your objective. Appreciate the assistance of your supporters by expressing gratitude and providing regular updates on the amount of money raised and its application.

How GoFundMe Benefits Your Business

Business Exposure

A campaign can be utilized as a promotional tool to create buzz about your business. Typically, a GoFundMe campaign relies on extensive social media exposure, which can help get the word out about your business and attract new clients. If your crowdfunding campaign is successful, you connect with your target audience and build your customer base. It's also an excellent method for attracting business associates.

An Opportunity To Test The Market

If backers express an interest in and contribute to developing a product or idea, crowdfunding can be a valuable instrument for testing the market. New and established businesses have used this route to test the waters with their ideas and showcase their product prototypes to customers while generating much-needed capital. Investors' willingness to part with their money for your idea or product may signal that the time is right.

Minimal Risk

If your crowdfunding campaign fails, you will not be required to reimburse backers. You also do not cede any control over your firm. Another benefit is how inexpensive it is to get started and how soon you can receive the funds.

Accountability

Through crowdfunding, contributors are provided with detailed information on where and how their money is being used. Donors can watch the total rise in real time as more money is donated, increasing your project's credibility. Many crowdfunding campaigns allow you to specify a fundraising goal, which explains to potential donors how much money you need to accomplish your mission. In general, people are more willing to donate to a well-defined cause.

Disadvantages of GoFundMe

Taxes May Apply

Donations made to “crowdfunding” campaigns, including those hosted on sites like GoFundMe, are typically treated as gifts and, therefore, are not taxable to the campaigns' intended beneficiaries. However, crowdsourced funds may be considered taxable business income by the Internal Revenue Service in certain circumstances.

Negative Publicity

Crowdfunding can put your business in the spotlight for all the right reasons. Still, if your campaign is poorly managed, it also has the potential to backfire if your backers have a negative fundraising experience. One misstep during the fundraising stage can damage your brand's reputation and put off potential buyers.

GoFundMe Fees

One major drawback of using GoFundMe or other crowdfunding services to raise capital for your business is that you cannot keep the total amount of each donation. The platform itself will collect a fee. On most crowdfunding websites, prices for utilizing the platform and processing payments are standard; even though they are minor, they deplete the funds you raise.

Requires Extra Efforts

For a successful business GoFundMe campaign, you'll need to reach out to a large number of people.GoFundMe corporate fundraising campaigns involve extensive marketing and innovative framing strategies. Creating a GoFundMe page for a company is relatively simple in theory but can be difficult in practice.

Be prepared to put in the work, which involves a lot of ingenious advertising and networking, if you want to raise a sizable sum of money for your company. Lastly, be prepared. Unless your campaign goes crazy viral, it's expected that the money you raise through fundraising won't be as much as the money or credit you can get from business loans or business credit cards.

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This article was produced by and syndicated by Wealth of Geeks.


Amaka Chukwuma is a freelance content writer with a BA in linguistics. As a result of her insatiable curiosity, she writes in various B2C and B2B niches. Her favorite subject matter, however, is in the financial, health, and technological niches. She has contributed to publications like ButtonwoodTree and FinanceBuzz in the past. In addition to ghostwriting for brands like Welovenocode, Noah and Zoey, and Ohcleo, amongst others.  You can connect with her on Linkedin and Twitter.