Gary Usher is a pioneer of the crowdfunding model within hospitality. The Elite Bistros founder has run several successful campaigns to help grow his business over the past decade, raising anything between £50,000 and £250,000.
For the most part Usher, whose business now incorporates six restaurants concentrated in the northwest of England as well as a meal kit operation and a soon-to-launch pub, has stuck to a rewards-based crowdfunding model, with most of his finance coming from supporters effectively buying their meals in advance. It’s a method of funding used often by fledgling operators to try and secure the capital to open an initial brick and mortar site or support their early expansion.
Now, though, with some investors currently apprehensive about putting money into hospitality, crowdfunding is increasingly becoming a solution for larger businesses looking to grow, as well as smaller ones.
For Usher, the growing interest in crowdfunding within the sector has led him to receive numerous messages from operators across the sector seeking advice on how to ensure their crowdfund succeeds. And so, following on from the recent success of his latest campaign, which saw him raise £223,748 within a week from 1,352 backers, here is his top tips to helping you reach your own crowdfunding target.
1: Build a strong online community
This is the first thing I say to anyone who asks for advice about crowdfunding. Before you can even consider launching a campaign, you must have a community of people that already believe in what you do. When we did our first crowdfund, we already had one restaurant [Sticky Walnut] and 5,000 followers on Twitter, and we were engaged with them and communicating with them constantly. So, before we even launched the crowdfund, we already had that base. We were reminding them constantly about the campaign and when it was going to launch. If you haven’t built a decent community already that you interact with, I can honestly say that in my opinion it’s not worth doing the crowdfund.
2: Be honest
Honesty and transparency in your business and idea is very important. You can be ambitious, but you also need to be realistic and honest about how nervous you are and what you’re worried about. If you’re launching a crowdfund, it’s a massive thing in your life and being open about what you’re nervous about and what could go wrong is massive. One of the things about crowdfunding is you’re basically a salesperson and if your business hasn’t started yet and the only thing someone’s got to go on is you then you’re effectively selling yourself, and you need people to buy into that.
3: Early momentum is key
Momentum at the start of a crowdfund campaign is absolutely everything. When you launch the project you have a time limit, be it a day, a week, or a month – and you need to aim to hit at least 10% of your overall target within the first 24 hours. If you do that, then there’s a good chance you’ll reach your goal. So, you need to talk to people in advance – friends, family, and all those that are interested in the business and want to support it. And if they pledge an amount, you want to tell them to put it in as soon as the campaign launches. It creates the story of an amazing start to the crowdfund and that might be picked up by local or regional news.
4: Plan ahead
Planning ahead is crucial. You’ve got a captive audience, and you need to tell them about your crowdfund over and over again. You can’t launch a crowdfund next week or next month, you need at least six weeks to eight weeks of telling people so as to spread the message as far and as wide as they can.
5: Make a good video
Some people would disagree with this, but having a good video, in my view, is bloody important. That’s your sales pitch. It needs to be short and snappy and have great energy and, crucially, it has to have passion and make everyone that watches it want to put in £100. Because if it doesn’t, if you don’t look like the crowdfund means everything to you then why should anyone else care about it?
6: Keep on talking
This is a continuation of the planning and the early momentum. If I set a project for a month, I cancel all my plans because my focus is on the crowdfund. Your ability to react to things is so important, especially when the campaign inevitably lulls in the middle. Although you can’t force people to pledge, you can be in control of how you PR it. You need to constantly find new ways of getting people to talk about it, and you also need to be on hand to answer all the questions prospective supporters will ask you.
7: Have someone working behind the scenes to handle questions
There’s always loads of questions to deal with. People are offering to give you some of their hard-earned money and you need to show them it’s going to worthwhile cause. If you can, it’s ideal to have someone behind the scenes in your team who’s focused on just answering and monitoring questions, because they will be coming all the time from the moment the campaign starts until its end.
