“Every platform takes a chunk of your money,” Durwin said. Fees can range from 3 percent to 5 percent on Kickstarter, and Van Ness said overhead costs can be as high as 8 percent to 10 percent when you factor in credit card fees.
One should also consider the cost of rewards to backers and the time it might take to fulfill them.
Van Ness said the great thing about crowdfunding, which did not exist when he opened his theater in 2006, is that it creates a sense of community and ownership around a project. It encourages backers to go to your business. The fundraising technology is “pre-built and fully customizable.” Fundraising via an all-or-nothing site also adds an element of drama to the endeavor.
One of those attending last week’s workshop was Monique Illona of Marblehead, the owner of Hand in Hand Massage in Marblehead.
She has an ongoing campaign on Indiegogo to crowdfund a book called “A Dual Path, Sacred Practices and Bodywork.” The money would also help fund a bodywork institute. She is trying to raise $26,000 but so far has attracted just $3,800. Her campaign ends Nov. 15.
“It’s going beyond our clientele,” Illona said about trying to drum up awareness.
Durwin suggested Illona send appeals to everyone in her email address book and use social media to drum up support.
“You just need to do more,” Van Ness told her.
Staff writer Ethan Forman can be reached at 978-338-2673, by email at firstname.lastname@example.org or on Twitter at @DanverSalemNews.
TIPS FOR SUCCESSFUL CROWDFUNDING
These suggestions are provided by Paul Van Ness, owner of CinemaSalem, who reached his $60,000 fundraising goal in just 12 days.
- Research successful Kickstarter campaigns that are along the lines of your project to see what works and what doesn't. Van Ness researched other movie theater conversions.
- State your challenge simply and dramatically.
- Use humor in your campaign.
- Make a video that shows your face. Kickstarter is all about funding individuals and their projects.
- Connect with conventional networks like the local chamber of commerce to spread the word about your campaign.
- Use traditional media like newspapers to publicize the campaign before you launch it.
- Make sure your staff knows about the campaign and can inform customers about it.
- Be available to provide updates on how it's going.
- Deliver rewards to your backers on time, and keep the rewards affordable. Make sure your rewards are flat, like certificates or coupons, so they can be mailed for the price of a stamp.
- Use Facebook and other social media sites so that your campaign goes viral.
- Keep a permanent relationship with your backers through email updates.
- Take two to three weeks to build the site and arrange finances, and consider the tax implications of raising the money, because it must be declared as income on individual tax forms.
- Know that about 5 percent of backers will back out of their donation.