Crowdfunding is when an individual or business accepts private donations from a group of friends, family, and others to raise money for a cause. For some restaurants, that cause is paying hard-working employees who have had to take a pay cut due to the pandemic.
Crowdfunding can be beneficial to small businesses. It works like this: a business or individual sets up a fundraiser with a specific financial goal in mind, such as $10,000. They then ask friends, family, patrons, and the community to donate money of any amount to the fundraiser. The crowdfunding website takes a portion of that money in fees, and the remainder goes to the recipient of the fundraising campaign.
A crowdfunding campaign is a choice that must be weighed carefully. First, you want to be sure you truly need the money. If so, you’ll want to select a crowdfunding platform that meets your needs and has fair fees and policies. Some platforms charge more fees than others, while some do not let you withdraw funds until your goal is met. Popular sites include GoFundMe and Indiegogo.
While your crowdfunding campaign’s success will depend on who you ask to contribute and how much they are able to give (remember, many people are out of work or surviving on reduced paychecks), some restaurants like The Crown Inn in Brooklyn have found some success. Your own results may vary.
A crowdfunding campaign can be a great way to rally community support for your business and help out your employees in this time of need. Just remember to do your due diligence before selecting a crowdfunding platform, and be sure to get the word out about your campaign on social media, mailing lists, and in-person, so it reaches as many people as possible.