How to Set Fundraising Goals
“Stop working 9-5 and start building your own dreams!” Sounds familiar? Seems like a marketing campaign but in reality, if you are a worker or an employee, you may hear this once or twice or maybe more in your lifetime. According to a report, 41% of employees started a business to achieve financial stability or wanted to enhance their income. A promising number, right? I, myself, went through this route too – from corporate to a business owner. (Want to know the five things I wish someone told me when I first launched my business or startup? Find it here!) But according to the US Bureau of Labor Statistics report, 20.8% of private businesses in the US fail within the first year.
Well, what is the catch? Why such a high failure rate? Well, cash! Cash is queen and not enough of it to set yourself up for success is a quick way to find yourself a part of that unfortunate statistic.
In this article, we’ll share how to set fundraising goals that will help you achieve your mission:
WHY ARE YOU DOING THIS? “THE WHY”
Before setting fundraising goals, you must first identify what you want to do and why you need to do it – in short, the business “milestones” you need to achieve. You should know your “WHY” you need capital and what that capital will help you to achieve. You must have a clear understanding of your financial plan to help you determine the purpose of the fundraising campaign.
Ask yourself: What are my milestones over the next 12-18 months?
- Do you need to purchase new equipment or launch a new product?
- Do you want to expand your business?
- Do you need to hire more employees?
It’s essential to have a well-defined purpose for the fundraising campaign. This not only gives direction to the campaign but also motivates investors to contribute to your business. A clear purpose can be the difference between a stagnant fundraising campaign and a successful one.
PRO TIP: Take some time to evaluate your financial plan and identify what you are trying to accomplish. With a clear purpose in mind, you can create realistic and attainable fundraising goals that will help you take your business to the next level.
HOW MUCH DO YOU NEED? “THE ASK”
Once you have a clear understanding of your “WHY” or the business milestone you are going to pursue, let us do the $$$ side of fundraising – the “ASK.” Once you have the business milestones you want to achieve through fundraising, determine the amount needed to achieve your milestones and when you will need it.
Ask yourself: What are the costs for my milestones?
And to answer this, you need to consider the following:
- Set incremental goals/major activities for each milestone to help build momentum and keep investors (and yourself) motivated!
- Set a date when you want to achieve the said milestone and for each activity.
- Include the costs or amount needed for each major activity. You sum them up to get the total amount needed to achieve the milestone.
“THE ASK” is always a question from every investor to a small business owner. You need to do this step not just to show the investors that you know your goals or priorities and the costs associated with them, but ultimately to show them that you are 101% prepared to achieve the milestone.
Want to nail this step? Do the planning with your profit playbook beside you!
WHICH WAY TO GO? “THE ONE”
Now you have the milestone in mind with the amount needed to achieve it, this step is finding the “ONE.”
Before you even consider fundraising, you must fix your mind on what kind of financing options you will go with.
Ask yourself: What financing options should I go with?
The good news is that there are several financing options available to small businesses but the process of choosing “THE ONE” can be overwhelming and downright daunting. And to help you understand the different financing options available to you and be better equipped to make an informed decision about the option that will best suit your needs, check these personally handpicked articles for you:
- Financing Options for Small Businesses to ConsiderThis guide outlines the top financing options available to help you make the best decision for your business.
- Tips for Finding the Right Investors for Your Small BusinessLearn the top three tips for finding the right investors to help grow your business.
So, you’re ready to start building your own dreams? Remember, fundraising is a marathon, not a sprint. It takes time, effort, and dedication to raise the capital you need to grow your business. But if you’re willing to put in the work, remember Benjamin Franklin said, “You can do anything you set your mind to.”
BONUS: Don’t rush into a partnership blindly! Doing fundraising for your business is like finding a true business soulmate. You need to know yourself first to win this long game. Whether you are just launching, already off to the races, or preparing for an exit, always ask for help if you find it difficult to determine your fundraising goals. Ask for guidance and support (PLUS get a 2nd brain) of a business finance expert to develop your overall fundraising strategy and approach from Day 1 planning to execution to success!