Crowdfunding vs. COVID-19: how can businesses survive the pandemic and emerge from it as winners?

The coronavirus pandemic has been a test for everyone, but especially for the economy and businesses. But despite all the difficulties and limitations imposed by viruses on our lives, COVID-19 also offers a wealth of opportunities. After all, you can profit from any crisis – or at least survive it with minimal losses. That’s why you shouldn’t be afraid to launch a crowdfunding campaign during this period or cross your fingers, expecting it to fail. The pandemic offers several economic benefits and opportunities, and you can take advantage of them right away:

  1. Traffic to crowdfunding platforms remains stable. While offline business remains in suspended animation due to quarantine measures, online business continues to flourish and develop. Traffic has even increased: after all, people in lockdown at home have more free time, including time to spend on the Internet, studying crowdfunding. For example, according to Indiegogo, traffic increased by 24% in March 2020 alone.
  2. A boom in products that offer entertainment and make life easier. During a pandemic, people have nothing to do with themselves, and therefore the most successful projects during the first period of isolation included an e-bike at the price of an ordinary entry-level bicycle. The same can be said about the silent air conditioner Midea – demand for household goods has also significantly increased.
  3. An opportunity to make money to stay afloat. Even if you focus on offline activities, you have the opportunity to survive the pandemic with the help of crowdfunding platforms. For example, these days, many companies are announcing fundraising campaigns to hold out until the end of quarantine. Many platforms even waive commission fees for businesses launching campaigns of this nature. 
  4. An opportunity to improve the reputation of your company. How? By helping others! Crowdfunding is perfect for this. Announce a fundraising campaign – not for your own project, but to support people struggling due to COVID-19. You can also promise to send a fraction of the collected funds to charities. After all, coronavirus is a disaster that brings people together. Find out more about how to support others through crowdfunding at the end of this article.

However, while the COVID-19 pandemic offers a wealth of opportunities, it also features some serious drawbacks that can significantly harm not only the finances of your business, but also its reputation. 

How can you inform your sponsors about difficulties related to the coronavirus?

Let’s say you’ve already launched your crowdfunding campaign. Your business continues to function during the quarantine period, but the delivery time of the goods (offered as rewards to sponsors) is delayed for legitimate reasons. This usually happens due to the closure of transport roads or air links between countries. What can you do in this case? How do you tell your sponsors and customers that due to the COVID-19 outbreak, you are unable to deliver their well-deserved rewards in a timely manner?

Here are some tips that will allow you to explain your delays without impacting your company reputation or future campaign financing: 

  1. Be honest. There’s nothing worse than inventing non-existent reasons and endlessly making excuses. The key to the success of any crowdfunding campaign is the same as for any business – maximum transparency. Explain to donors how COVID-19 has affected your business. You can devote a whole video or an article to this explanation, where you can explain everything in detail.
  2. Provide sponsors with a new timeline. People want to know when they will receive their rewards. The key is to approach the situation realistically: there’s no need to promise a deadline which you might not meet. Try to provide realistic dates, but don’t pretend that you’re not responsible for the delays (this upsets sponsors and clients more than anything else).  Update your crowdfunding platform page and your website according to your new plan.
  3. Add this issue to the Frequently Asked Questions (FAQ) section. Post new information about all changes occurring in your business in a timely manner. You should also provide sponsors with your contact information so they can contact you at any time and ask their questions directly. 

To understand how best to communicate to sponsors about your difficulties, check out this excellent announcement as an example. It looks like this:

«Dear sponsors of the N campaign, once again we want to thank you for your support and your attention to our cause. We have already sent out several reward units that our sponsors should receive before the New Year holidays. Once they receive them, they will certainly post photos or unboxing videos. We hope this shows our determination to deliver rewards by any means necessary. We will send out rewards to all our sponsors shortly!

However, our previous delivery plan was delayed due to the COVID-19 pandemic. This came as an absolute surprise to all of us. I would like to remind you that our product is manufactured in Shenzhen, China, where the government has decided to extend the quarantine until February 10. These new measures will enable China to take control of the spread of the virus and allow people to stay at home without risking their health. Due to these measures, transport ports have also been closed, including the cancellation of international flights.

Over the past few days, we have been trying to contact authorized persons to clarify the quarantine time frame and adapt our delivery times to this schedule. Our production factory will resume operations on February 10, unless the quarantine is extended by the government’s decision. We will also update our dates as soon as we receive the exact dates from the transport services. Delays in delivery may occur due to the large number of shipments and restrictions implemented to slow the spread of the virus.

We are very sorry for making you wait so long! Here at N, we will do our best to find a solution as soon as possible. Stay tuned for updates on our website – we will make sure to update information on plans and delivery times in a timely manner. We hope you will stay with us until the end. Please give us some time and we will never let you down!

Thank you in advance for your understanding! Company N»

How can you support other people who have suffered due to COVID-19?

Helping others during a pandemic is a truly noble gesture that will build your reputation and that others will meet with gratitude. After all, the coronavirus pandemic is a global crisis shared by everyone. Just as you can help your sponsors, they can also help you. 

There are several ways you can help those affected by COVID-19:

  1. Fundraising for individuals for basic needs. You can set the goal of the project to cover the costs of living, utilities, medical care, the purchase of food and medicine (this is especially relevant for people who lost their jobs due to the pandemic). 
  2. Small business support fee. You can run a fundraiser for someone else in the same way you can do it for yourself. For example, you can launch a campaign to support your team’s favorite restaurant. According to statistics, it’s best to promote such companies on Facebook or Twitter, where it’s easy to attract the attention of ordinary people using hashtags.
  3. GoFundMe project. This is you can where you can raise funding for the provision of medical care.  For example, payment for urgent surgery or medications. Moreover, with GoFundMe, you can support both charitable organizations and individuals.
  4. Creating a “care package”. These packages can include medicines, hygiene products, food, mobility aids (such as walking sticks for people with disabilities), etc. A similar strategy was chosen by volunteers in Chicago, who announced a fundraiser to help the elderly.

Only a comprehensive approach to solving problems and responsive assistance can help a business during these difficult times. Remember that any crisis is a hidden opportunity. Interact with sponsors and other startups, be honest and meet people halfway – that way, you will not only survive the COVID-19 crisis, but also emerge from it victorious!

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