In India, equity crowdfunding is still illegal, meaning that start-ups having big plans have to resort to other means. However, small businesses are profiting a lot from the recent spurt in crowdfunding in India. And it is really a good thing that this is happening, because the government has otherwise failed miserably in providing jobs. Not only that, India crowdfunding small businesses has an enormous potential to help otherwise neglected sections by government policies- women, Dalits, tribals. Women entrepreneurs have especially benefited a lot by crowdfunding their small businesses, especially the poor women who are unwilling or unable to let go of their traditional lifestyles.
Depending on the kind of business and the kind of circumstances you are in, you need to think of the type of the crowdfunding campaign you need. For example, if you have no capital at all, donation-based crowdfunding would be the best for you. Reward-based crowdfunding works best for joint ventures with some amount of capital. Equity crowdfunding, the best suited for many business models, is illegal in India, as has been already mentioned. Peer to peer crowdfunding in India works best for businesses that have social benefits.
So the question here is, how to go about with crowdfunding for those into small businesses? Here are a few tips:
- It starts with choosing the right crowdfunding platform. Crowdfunding among a certain section of the middle class has become quite competitive and popular, meaning that many people without the proper know-how are joining the crowdfunding business, often compromising on the campaigns that they endorse. Small businesses have a lot at stake. This is why it is best to choose reputed crowdfunding platforms, like Crowdfunding India.
- It all depends on the type of crowdfunding model that you choose. Nowadays the crowdfunding platforms are diversifying in terms of the services that they offer. So, based on the requirement of the business, they can get a campaign custom made for their business, depending on the flexibility of the platform. Rewards-based crowdfunding, for example, is the best for creative businesses.
- Engage with the consumer base is vital for small business. Potential and current donors would have interest in the campaign and would try to ensure that the project turns out well. Also, many brains are always better than one in getting rid of faults in a project, or to add that extra bit.
With these things in mind, crowdfunding should not really be a very difficult thing to navigate, and there is nothing to stop you from using it for your small business.
