I think one of the biggest stumbling blocks for anyone in the handcrafted industry is in getting banks and other financial institutions to take you seriously, especially when so many of us get our start in kitchens, basements and spare bedrooms.
What do you do when you get to the point where you are rapidly outgrowing your allotted space, but you not have the capital required to make the jump to the next level, whether it be a bricks and mortar retail location, or the craft and farmers’ market circle?
For many years, people in underdeveloped countries have been able to take advantage of micro loans through organizations such as Kiva. In North America, there have been few such alternatives until recently.
A new funding model has arrived, spearheaded by organizations such as Kickstarter and Indiegogo. Unlike Kiva, which solicits loans from visitors to the website on behalf of the applicants, Kickstarter and Indiegogo invite users to launch campaigns to raise funds for their projects. These funds are not loans, and are not repaid.
Since I have decided to make the move to all natural ingredients, and include organic whenever available, I have been finding it difficult to make this move without increasing my price per bar. The problem is that organic ingredients are two to three times more expensive than non-organic, and to get a break in the price you need to be able to buy in bulk.
There are two funding formulas: under the Fixed Funding model, Indiegogo keeps 4% of your contributions, but you only get the money if you meet your financial target. The Flexible Funding model charges you 4% if you reach your goal, but if you don’t reach your goal you receive any money that was contributed, but they charge 9%.
In order to really get noticed on Indiegogo, you need to increase your gogo factor, which means you have to actively promote your campaign through social media. This is what gets you moved up the ladder and on to their front page and in their feeds, where you have a better chance of being noticed.
So, this is an experiment….honestly, I think I will fall flat on my face if my campaign gets noticed at all among the thousands listed, let alone generate any funds, but you never know! At the very least it is encouraging me to be more diligent in my social media marketing!
Check back later for an update!