Crowdfunding is a great option for restaurants, bakeries, coffee shops, and more – if it’s done in the right way and on the right scale. Here’s how you can make crowdfunding work for your brick and mortar food business.
Make a plan
One of the keys to successful crowdfunding is to go in with a plan. This goes for all projects, not just restaurants. So, what should your plan include? Three things:
- How you’re going to tell your story
- Who you’re going to tell that story to
- How you’re going to reach them
First, you need to come up with a simple but compelling story about who you are – your brand story. No one’s story is simple, but you’ve got to boil it down for marketing purposes. We recommend focusing on your personal connection to your business. Erika Kerekes, from PieShell, told the story of how her diagnosis of type 2 diabetes changed her life and motivated her to make dinner tables everywhere a little bit healthier. She raised $15,000 on PieShell for her line of no-added-sugar gourmet fruit condiments!
Now that you’ve completed the first step, the next thing is to figure out who that story is going to. Think of your support group – who are they? Chances are very good that your family and friends already know your story, but you want to share it with a much wider audience. Think big: friends of friends, business associates, and everybody in that stack of business cards that you’ve been building for years!
OK – how are you going to get your story out to all these people? The most important thing is to contact folks in a way that is appropriate for the relationship you have with them. Divide your audience into different groups based on the contact method, such as personalized emails, social media, face-to-face, etc. For example, you should probably reach out to your closest friends in person, whereas it makes sense to contact the guy you met once at a farmers’ market through social media.
Make the right ask
When it comes to rewards-based crowdfunding, there is no magic number. Your goal will depend on your particular project, the time you put in, and the strength of your personal network. That said, we have some advice for all you brick and mortar folks out there!
Store fronts and restaurants are expensive, especially when you’re just starting out. Between build-out and equipment costs, starting inventory, licenses, fees, and working capital, starting a brick and mortar business can easily add up to hundreds of thousands of dollars.
When deciding how much money to raise, try to reach your next milestone, rather than raising enough money to pay for the whole shebang. If you decide that you want to raise a large sum, be willing to get creative. Our favorite example comes from a brewery in Minnesota that gave supporters free beer for life if they contributed $1,000 or more. They raised over $200,000 – just sayin’!
PieShell’s stepping-stones are designed to show the progression of your financial goals. It helps contributors see how much work there is in opening a restaurant, and how much money it takes for each step along the way. The first stepping-stone is your critical ask—the minimum amount you need to take your venture to the next level. The 2nd and 3rd stepping-stones are to show the next steps your business will take with increased funding; think of them like built-in stretch goals.
PieSheller Nicole Bandklayder, creator of Cookie Cups, reached her first stepping-stone goal of $5,000 to purchase appliances for her own commercial kitchen. Although she didn’t make her second or third stepping-stones, she was able to supplement her raise with other funding sources, and her store front bakery is set to open in Minneapolis, Minnesota this April. Now that’s what we call success!
Take advantage of customer interactions
Unlike online-only businesses or those without a permanent location, a physical location gives you the opportunity to interact with potential supporters both in person and on a regular basis. Use this exposure to reach people who love what you’re doing and want to see it continue.
Your “regulars” are the perfect people to tap for support, either by asking in person or by advertising your crowdfunding project in your space (get ready to make some killer table toppers!).
If you’re in the pre-launch phase, make sure that you invest some serious face time in the community where you plan to set up shop. That means doing things like being at local farmers’ markets, building a local audience on social media, and networking with other business owners to tap into their pool of customers.
Too often, crowdfunding advice gives the impression that you can rely on social media alone. PieShellers have found that there is no substitute for face-to-face interactions. This is especially true for brick and mortar businesses, where these personal customer interactions are crucial to success.
Crowdfunding is just the beginning
Crowdfunding is just the beginning of your relationship with your supporters. You can – and should – design your crowdfunding project to set yourself up for success as a business.
A great way to turn supporters into customers is by using your gifts wisely. Gifts should get people back into your establishment where they can experience the fruits of their contributions and develop a habit of being repeat customers!
For example, in 2010 in the small town of Vergennes, Vermont, Julianne Jones and her husband decided to take over a former laundromat space and transform it into a French-style bakery. They rewarded their supporters with tokens that could be exchanged for goods once the bakery opened – brilliant!
Learn more & get started
This article is just the beginning of the support we offer to the brick and mortar businesses who crowdfund on PieShell. Unlike other crowdfunding sites, we incubate each project before they launch, and provide support to the projects from start to finish.
We are so excited to welcome more brick and mortar food folks into the PieShell community in 2017! Learn more about crowdfunding for food + beverage, and see our current projects at PieShell.com!
Author: Caroline Halter on behalf of PieShell