Calculating the amount of money you need to raise through crowdfunding can either be one of the easiest parts of setting up a project or the hardest, it just depends.
The basic method to determine is simple, look at your project determine how much it will cost to accomplish your project, then add in the cost of the rewards you are offering plus the costs of fulfilling those goals and last don’t forget to include the fees due to the crowdfunding platform. That total should provide you with your funding goal, simple right?
Now let’s break this down in to smaller pieces.
First let’s define the steps needed to accomplish your project.
If you intend to produce a film you can budget the costs elements of the film, writer, director, actors, cinematographer, sets, lighting, sound, craft services, post-production and editing. All of these items are easily quantifiable and their total gives you the production budget for the film, well maybe. Let’s say you are making an independent film, but a friend of a friend knows a big name actor who might be interested in spending a few days working with you on the set, but his cost exceeds your entire budget up to that point, do you increase your funding goal to get the big name or do you stick with local actors and your original budget. This is an issue that hits every film project no matter how big or how small and the answer may be the difference between the film making or losing money, or even obtaining distribution outside of the filmmaker’s YouTube channel. The greater issue for a crowdfunded film is how much more money can be raised with the big name actor. If the increase in budget size is less than the extra money you can raise, then by all means raise the goal. On the other hand, if the bigger name will not add anything to the fund raising, stay with the smaller goal. The great thing about crowdfunding is that you can exceed your fund raising goal and if you raise enough to hire Mr. Big Name actor then you probably do so.
Film are pretty easy to budget, but let’s say your project is starting a new business. The items to include in fund raising goal become a little more soft and squishy. For an entrepreneurial project you need to look at the project based on reaching milestones. Figure out your milestones and then budget to each one. Your first milestone might be completing a saleable prototype of the product you want to sell. The second would be delivered the finished product ready for sale into the marketplace. You as an entrepreneur need to figure out how much it will cost to reach each of these milestones.
What will be your costs for making prototypes, should they be made here in America or should they be outsourced to Asia?
What about going into production on your product, can it be made in the united States or does it make more sense to build it offshore, what are the time differences in having production done in another country and how does that effect your costs for freight and import duties?
Do you charge your project a salary for your time? If you were working for somebody else you would get a salary, but entrepreneurs often don’t make any money until the new business is starting to generate some cash flow. Who else will you need to hire to meet your milestones and how much should they be paid?
What are your legal and accounting costs going to be for running you business?
Do you need to rent space or can you start this business out of your garage?
Take all of these factors into account and then you have an idea of how much you need to raise to successfully complete your project. Remember we started this exercise by figuring out milestones for your business, it may be necessary to look at each of those milestones as separate projects.
The next issue is how much can you realistically expect to raise from crowdfunding for your project? The amount depends on several factors, including how big of a crowd you think you can attract to your project and the interest level of the crowd. Projects can raise from a few hundred dollars to two million dollars or more. Take an honest look at the network of people you can get to work on building funding interest in your project (for thoughts on how to premarketing your project read our earlier blog post). If you think you can generate a tremendous amount of interest and crowd size with your network and your project, then the sky is the limit on what you can set as your funding goal. On the other hand if the interest and the crowd is more limited than there may be some constraints on how much you can set as a funding goal. There are no hard and fast rules, but you want to make a careful consideration that your fund raising goal does not exceed your funding raising potential.
On FunderThunder if you do not reach your funding goal, then you do not receive any of the pledged funds. We want to give you every opportunity to succeed with your project and that includes providing you with the funds you believe are necessary for the success of your project, if you think it will take $5,000 to make your project a reality then only giving you $2,500 will not provide you with the proper resources and may well become a waste of your funder’s money.
Last but not least in figuring out your funding goal, do not forget to factor in the cost of fulfilling your rewards and paying the crowdfunding platform fees.
Pingback: What is the right funding goal for your Crowdfunding Project? | Funder Thunder Blog | Fund Fever
Pingback: What is the right funding goal for your Crowdfunding Project? | Funder Thunder Blog | Rictandag's Blog
I just want to tell you that I am just very new to weblog and seriously liked this blog site. Probably I’m want to bookmark your blog . You absolutely have good articles. Thank you for sharing your web-site.
I just want to tell you that I’m beginner to blogging and seriously enjoyed this page. Likely I’m planning to bookmark your website . You really come with perfect writings. Cheers for sharing your website.
Very informative! I am looking forward to seeing your venture expand in scope.
hope you never stop! This is one of the best blogs I have ever read. You have got some mad skill here, man. I just hope that you dont lose your style because youre definitely one of the coolest bloggers out there. Please keep it up because the internet needs someone like you spreading the word.
There is evidently a whole lot to know about this. I consider you produced certain good points in capabilities also.
I do not even know how I ended up here, but I thought this post was good. I don’t know who you are but definitely you are going to a famous blogger if you are not already
I’m extremely impressed with your writing skills as well as with the layout on your blog. Is this a paid theme or did you customize it yourself? Either way keep up the nice quality writing, it is rare to see a great blog like this one these days..
I admire what you’ve done here. I really like the part where you say you’re performing this to give back but I would assume by all of the comments that is working for you as effectively. Do you’ve got any a lot more info on this?
Excellently written post, doubts all bloggers offered the same content material because you, the internet is really a greater spot. Please maintain it up!
I truly wanted to type a brief note to appreciate you for those awesome advice you are sharing on this site. My time intensive internet research has finally been paid with good quality know-how to exchange with my friends and family. I would express that most of us readers are undoubtedly lucky to be in a fabulous site with very many lovely individuals with interesting techniques. I feel truly blessed to have used your website page and look forward to plenty of more brilliant moments reading here. Thank you once again for all the details.
An impressive share, I simply given this onto a colleague who was doing just a little analysis on this. And he in actual fact purchased me breakfast because I discovered it for him.. smile. So let me reword that: Thnx for the deal with! But yeah Thnkx for spending the time to debate this, I feel strongly about it and love reading more on this topic. If potential, as you turn into experience, would you thoughts updating your blog with more details? It’s extremely helpful for me. Large thumb up for this weblog put up!
You’ll be able to certainly see your enthusiasm in the function you write. The earth hopes for far more passionate writers like you who aren’t worried to say how they believe. Always follow your heart.
There is evidently a lot to know about this. I think you made various nice points in features also.
I am not real superb with English but I line up this really easy to interpret.
My brother suggested I may like this web site. He was entirely right. This post actually made my day. You cann’t imagine simply how so much time I had spent for this info! Thank you!
I was looking through some of your articles on this internet site and I think this website is really informative! Keep posting.
You should take part in a contest for one of the best blogs on the web. I will recommend this site!
Very interesting details you have mentioned, thanks for putting up.
Howdy! I could have sworn I’ve been to this blog before but after checking through some of the post I realized it’s new to me. Anyways, I’m definitely glad I found it and I’ll be book-marking and checking back frequently!
very good post, i certainly love this website, keep on it
This is very interesting, You’re a very skilled blogger. I have joined your feed and look forward to seeking more of your fantastic post. Also, I have shared your site in my social networks!
Im sitting right here at my personal computer trying to get some work carried out and I keep discovering myself distracted by internet sites like yours. Excellent job at slowing down the production speed of society, buddy!
Some genuinely grand work on behalf of the owner of this site, absolutely great subject material .
Just want to say your article is as amazing. The clarity for your put up is simply excellent and i can assume you’re a professional on this subject. Fine along with your permission allow me to seize your feed to stay updated with coming near near post. Thank you a million and please keep up the enjoyable work.
Dead pent articles , appreciate it for information .
Very interesting info!Perfect just what I was searching for!
Great post! Finally identified thie facts that I was looking for – all here! http://neworleansmedicalbilling.com/?p=533
This really answered my problem, thank you!
Great write-up, I am normal visitor of one’s blog, maintain up the excellent operate, and It is going to be a regular visitor for a lengthy time.
Great post. Thanks for the thoughts.
Great Blog Just Great.
Wonderful work! That is the kind of information that should be shared around the net. Shame on the seek engines for no longer positioning this post upper! Come on over and talk over with my website . Thank you =)
What’s Happening i’m new to this, I stumbled upon this I have discovered It absolutely useful and it has aided me out loads. I’m hoping to give a contribution & help other customers like its aided me. Good job.
This is very interesting, You’re a very skilled blogger. I’ve joined your rss feed and look forward to seeking more of your magnificent post. Also, I’ve shared your site in my social networks!
Great article! I loved the knowledge and the information given . Additionally, your blogging style is very pleasing to read. If you have time kindly make sure you visit my new website and tell me what you think.
Excellent goods from you, man. I’ve take into accout your stuff prior to and you’re simply too great. I really like what you have received right here, certainly like what you’re stating and the best way by which you say it. You are making it entertaining and you continue to take care of to keep it sensible. I can’t wait to learn far more from you. This is actually a great web site.
Hey there, You have done an incredible job. I will certainly digg it and individually recommend to my friends. I am confident they will be benefited from this site.
very nice put up, i definitely love this web site, keep on it