3 Small Business Fundraising Myths You Shouldn’t Believe
Have you ever believed something that wasn’t true? According to Forbes, there is a direct connection between what you think and the outcome of your work. In other words, you’re lowering your results if you aren’t believing the right thing. This sentiment rings true in the world of small business fundraising.
In small business circles, there are a lot of opinions stating that fundraising is not a viable strategy. However, organizations that don’t take advantage of it will likely face missed opportunities, limited funding, and overall restricted growth. In fact, as a critical source of sustainable funding, fundraising just might be the key to your small business goals.
In this guide, we’ll dispel common small business fundraising myths that can quickly steal your potential and replace them with updated realities to inform your fundraising efforts. Let’s begin.
Myth: Fundraising is only for nonprofits.
The term “fundraising” is most commonly used in nonprofit fundraising. So, it’s no surprise that many believe fundraising is off-limits for small businesses. However, this belief is simply not true.
Reality: Fundraising is not limited to nonprofits, as small businesses can also benefit from fundraising for capital growth, expansion, product development, or other business projects.
As an example, let’s explore how a new gym might use fundraising to hit its business objectives:
- Facility expansion and upgrades: As a gym grows in popularity, additional fundraising dollars could be used to open new locations, hire more experienced trainers, or invest in new equipment. Finding support for new gyms to get their feet off the ground is essential.
- Marketing and promotion: It’s always nice to have extra wiggle room in your small business marketing budget. For gyms, they can spend fundraising dollars to plan community outreach programs or fund eye-catching outdoor campaigns to spread awareness.
- Member incentives: If your business has a membership program, you know that member perks are a primary driver for member acquisition and retention. A gym can use fundraising to increase membership and become more competitive.
Fundraising can diversify your organization’s revenue streams to give you an extra leg up on your competition. Accessing additional funds can be a game changer, especially if you’re just entering the small business market.
Myth: Fundraising is too complicated and time-consuming.
If fundraising feels like too much trouble, there is a good chance you’re thinking about it in the wrong light. Fundraising can be easy to conquer if you delegate responsibilities, choose proven methods, and set realistic goals.
Reality: Although fundraising does require planning, the right tools and strategy make it a valuable addition to your business development.
Fundraising can quickly become too complicated if you dive in without a plan and a proven method. For inspiration, here are some top fundraising strategies that are easy to pull off:
- Crowdfunding: Online crowdfunding is a reliable way to market your business and raise funds. According to NXUnite’s guide to crowdfunding, you could look into either reward-based or investment-based crowdfunding. For reward-based crowdfunding, companies could use a platform like Kickstarter to send supporters something in return for their support. On the other hand, investment-based crowdfunding involves selling a part of your business in exchange for funds.
- Grant research: For startups, especially, grant research is a worthwhile fundraising strategy. Resources like The U.S. Small Business Association and Google for Startups offer valuable grant opportunities. For example, Google’s program provides funding for every stage of your development with its “start, build, and grow” opportunities.
- Fundraising web store: For an easy fundraising solution, host a fundraising web store to sell branded merchandise. Select an easy-to-use platform that will enable you to easily stock your store, price your products, and streamline the checkout process. If your business is newer, a fundraising web store offers the additional perk of spreading your visual brand.
Don’t overlook more traditional fundraising options either. Walk-a-thons, auctions, and other virtual events can offer a high ROI.
There are other creative options your organization can explore as well. For instance, did you know you get paid to repurpose your used running shoes to earn cash? Simply partner with a sneaker recycling provider like Sneakers4Good. Then, collect gently worn used or new sneakers and running shoes from your team, ship your sneakers to the provider’s warehouse, and receive a check. Your sneakers are then repurposed to fuel micro-enterprises within developing countries.
Myth: Fundraising is all about revenue and persuasion.
Another common fundraising misconception is that small business fundraising is about persuasion and revenue generation. Although making monetary requests is part of fundraising, it’s not the only facet of a productive fundraising strategy.
Reality: Successful fundraising is built on trust, authenticity, and connection between the fundraiser and donors or investors. Fundraising goes beyond monetary requests and creates meaningful relationships based on shared values.
There is a lot more that goes into fundraising than simply persuading supporters. Refining your communication and creating a connection is essential to build their trust. You might use these tips as a starting point:
- Network: Strong relationships take time to build. Be sure to connect with your supporter community and offer them more opportunities to get to know your business. For example, you might host a pop shop for others to learn about your business, ask questions, or sign up.
- Support others: A great way to earn trust and support is by rallying around a cause your community cares about. Research your community’s needs and look for ways you can enhance your current company practices to support them. For instance, you might offer a corporate matching gift program for your employees.
- Maintain transparency: Be transparent in communicating how your organization will use any raised funds. Once supporters have backed your cause, regularly update them to share their impact. Doing so will foster trust and credibility with all of your stakeholders.
- Share online: Build up your online presence by posting regularly on social media. Share a behind-the-scenes look into your business and allow others to get to know your everyday schedule. You could even host a giveaway to boost engagement. Through digital marketing campaigns like these, your audience will be more familiar with you before you start your fundraising efforts.
Link to your website for others to learn more about your organization. This way, they can better understand who you are and why your fundraising efforts matter.
That said, conduct a website audit to ensure your website is accessible and informative. Make sure users can easily navigate pages and get an accurate sense of your organization.
Fundraising for your small business does not need to be intimidating. You’ll see results faster,by connecting with your target supporter groups and choosing lucrative fundraising options. Be open to combining fundraising options as well. For example, you could apply for grants to cover a new facility and host a community fundraising event to cover additional costs.
