How to Launch and Finance Your Social Good Business Through Crowdfunding

If you have an idea for a social good business, find out if there is a need for your product or service. Research your market and see if people really want your more ethical version vs. the less ethical thing that probably already exists out there.

The Empowerment Bag_social_enterprise

 

 

I am the Founder of The Empowerment Bag. We are a brand of practical & eco-friendly bags that empower survivors of sex trafficking. All our bags are made by women at risk of sexual exploitation in West Bengal, India. These women are given an alternative to the sex trade through literacy training, sewing skills, and fair employment. 5% of sales goes back to provide shelter, education, and healthcare to trafficked women and their kids. We started as a side hustle and launched our crowdfunding campaign on Indiegogo in August 2018. We raised $910 the first day and $2,250 in the first week! If you have a social good business idea you have been playing around with, crowdfunding can be a great way to get it going! Not going to lie, it is an intimidating, grueling, and emotionally draining process. However, it is also a great way to validate your idea, gain market traction, and make money of course!

 

I had been wanting to start an innovative project that fights sex trafficking for a long time. I was part of a number of anti-trafficking groups in high school and college. However, I wanted to do something bigger! I toyed around with different business ideas. But it was not until I noticed a need for an affordable and reliable line of bags that are ethically made that I started creating The Empowerment Bag.

 

 

 

social good business_empowerment_bag

 

If you have an idea for a social good business, find out if there is a need for your product or service. Research your market and see if people really want your more ethical version vs. the less ethical thing that probably already exists out there. Do your google searches, ask your network, and read relevant articles to become an expert in your area.

 

I reached out to as many social entrepreneurs and bag designers and brands as I could via LinkedIn and email. LinkedIn is a highly underused tool when it comes to launching a business. Make connections with relevant people in your field! When you ask to connect on LinkedIn (desktop version only), you can choose to add a short note. Concisely explain who you are, what you are trying to do, and what your shared interests are in this note. Most people will accept your request to connect. You can send a longer message or ask the person to continue the conversation over email (or lunch if live in the same area!) after you have connected.

 

 

Once you know what your business concept is, you can start finding manufacturers, suppliers, or other collaborators for your project. I highly recommend using Common Objective (global) and Maker’s Row (USA-only) as platforms for discovering makers, retailers, and other brands. You might also want to hire designers, photographers, videographers, and copywriters to help out. We are not all good at everything, and that is OK! Even if you are a jack of all trades or want to DIY, you may not have the time. Consider looking at freelancers on Upwork or Fiverr for inspiration. These resources offer freelancers with a wide array of skills for a large spectrum of budgets.

 

Now for the fun part: how the heck do you finance your business idea?

 

There are a few ways to go about this. Here are the most common ways people consider:

 

1.) Personal savings

2.) Outside loans

3.) Venture capital/angel investors/other investors

4.) Crowdfunding

 

Using your own savings is nice if you do not need much capital; but let’s face it, most of us do not have or want to use our hard-earned savings just to launch a business that could take a long time (and even more money) to grow. You can also go to a bank or other lender and get a loan, but then you are going to have to pay back more than you borrowed through interest. Also, if you feel like your loan request will not get approved, a loan may not be an option for you. Famous shows like Shark Tank and The Pitch have made venture capital and trying to get investors glorious. There is no doubt that if you need A LOT of money, you may have to go through investment rounds. However, if you are just starting and have not even proven your idea in the real world, try the last option- crowdfunding.

 

Crowdfunding is a way of raising money for your project or business without taking a loan or selling equity. The people that give you money are called backers. The only thing you give these backers in exchange for their money is whatever perks or rewards you set up. Typically, these will be some version of your product or service, so you are really just selling what you wanted to sell anyways. I highly encourage you to visit The Empowerment Bag’s crowdfunding page to get an idea of what crowdfunding entails.

 

There are over 600 crowdfunding platforms in the world. The two most well-known ones are Indiegogo and Kickstarter. As seen in the link above, I used Indiegogo. Through crowdfunding you should be able to raise money from not just friends and family but also from people you do not know yet. This is what makes it a great way to not just make money but also to get your idea in front of strangers. At the start of your crowdfunding campaign, you have to state a fundraising goal (covered more below). If you have a flexible goal model, you will get the money that you raise regardless of whether or not you meet your goal. With a fixed goal model, you must meet your goal to collect the money you raised.

 

You may be thinking, “Why would I pick the fixed goal model…I want the money!” Well, this type of model can be especially useful if you just want to test the market and see if there is a good enough demand for your business.

 

Setting up a crowdfunding campaign is a lot of work! It is recommended that you spend at least 2-3 months just preparing for your launch.

 

Here are the steps you need to take when preparing for your crowdfunding campaign:

 

1.) Decide which crowdfunding platform to use.

2.) Set your crowdfunding goal and decide if you will use a flexible or fixed model (if your platform gives you the choice).

3.) Make a pre-launch page and start telling people what you are doing. Collect email addresses!

4.) Create an awesome campaign video!

5.) Write copy for your campaign page.

6.) Create and add graphics/photography to your campaign.

7.) Keep contacting people and get them to agree to back your project.

8.) Edit and proofread. Make everything look pretty.

9.) LAUNCH!

 

All of these steps should be done somewhat simultaneously except #8…do not launch until you are ready! Deciding which platform and what model to use go hand in hand. Certain platforms only allow the fixed model. Think about your goal carefully. We would all love to make as much money as we can, but your goal should be a feasible, even easy-to-reach amount. If you can raise your goal amount early on, then your campaign will get more attention as you continue exceeding your goal. Make a simple pre-launch page. Indiegogo allowed me to make one off their platform. If your platform does not let you do this, just create a simple landing page. The key is to collect emails so that you generate interest early on and hopefully turn these people into your first backers! You will need a great video, images, and text for your campaign page. This is your time to shine and brag about how cool your idea is.

 

Explain what you are doing, why you are doing it, and why the viewers should back you up. Again, visit my crowdfunding page for guidance. Make sure you create enticing perks (usually your products or services) that people want to purchase. While you are doing all this, do not forget to keep networking. You should still be reaching out on LinkedIn and other social media, attending events, and telling everyone you meet about your crowdfunding campaign.

 

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Every day I encounter people who truly want to make a difference through social entrepreneurship. They have wonderful ideas. However, so many of them think they are unfit to run a successful business. I often hear a wide array of excuses including I do not have an education in business, I have not been a c-level executive, or I cannot go back into debt after having paid off my student loans! While these are all legitimate concerns, there are alternative funding options like crowdfunding that make it quite simple and cost-effective to start a social enterprise. It will take hard work, but you can launch a crowdfunding campaign and start making money for your social good business!

 

Related Post:

An Open Letter to Social Entrepreneurs From The Founder of Krochet Kids

 

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Vaishali Umrikar

Vaishali Umrikar

Founder at The Empowerment Bag
Vaishali Umrikar is the Founder of The Empowerment Bag - a brand of lifestyle bags providing financial independence and safety to survivors of sex trafficking. She launched her brand through crowdfunding in August 2018. Vaishali is passionate about anti-trafficking, social entrepreneurship, and ethical fashion. She hopes you will join her in the fight against trafficking by supporting The Empowerment Bag.
Vaishali Umrikar

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Written by Vaishali Umrikar

Vaishali Umrikar

Vaishali Umrikar is the Founder of The Empowerment Bag - a brand of lifestyle bags providing financial independence and safety to survivors of sex trafficking. She launched her brand through crowdfunding in August 2018. Vaishali is passionate about anti-trafficking, social entrepreneurship, and ethical fashion. She hopes you will join her in the fight against trafficking by supporting The Empowerment Bag.

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