The best practices for fundraising can be summarized using specific, measurable, achievable, relevant, and time-bound (SMART) objectives. It is a good way to plan the steps to meet the long-term goals in your fundraising journey.
Every business owner or entrepreneur has critical goals and purposes but without the funds to get them done, their missions will never be achieved. Fundraising is necessary in the profit and nonprofit world, but not everyone is comfortable or educated on the best ways to raise funds for their businesses.
This article discusses 5 SMART best practices businesses should participate in to raise more money and reach their goals.
Mr Clark, an expert in fundraising explains “Over the years I’ve worked with profit and nonprofit organizations of every size and shape. During that time I found that there are a few best practices that every organization needs to follow in order to achieve consistent success in fundraising.” https://christopheclark.com/
1. Set Performance Goals – The best practices for fundraising
The most important tool in every project fundraising toolbox is measurement. It means setting performance goals. Performance goals are objectives that businesses set in order to improve their success rate in raising funds.
Performance goals help businesses measure where a business is compared to where it wants to be with the funding and can help bridge the gap between the two.
Entrepreneurs need to communicate organizational goals and how they link to funds they’re seeking to raise. This is in order to be energized and ready to accomplish desired results. While developing performance plans, entrepreneurs can talk about how their past accomplishments and the new fund will support organizational goals. By aligning their past performance with organizational goals, they direct their efforts toward maximizing accomplishments and supporting their business strategic plans.
Bottom line, measurement helps you set realistic performance goals. This is then followed by determining your success or failure, allocating funds and effort to achieve the best return, justifying further investment, and making needed adjustments.
2. Develop a Fundraising Action Plan—Document and Communicate
A well developed fundraising action plan will help you to channel all the fundraising activities in the right direction. The action plan will enable you to implement all the plans effectively and achieve actual growth. It is important to create a timeline for a specific work period so that you can regularly check whether things are on the right track.
Many businesses, particularly seed stage startups and early stage start-ups, operate without a fundraising plan. When someone has a business idea, he or she simply puts things together and goes for it. They may send out messages here and there, and do some meetings, and when the bank account seems to be low, they often go into “panic mode” and race around trying to find cash to keep the doors open.
Use those measures and performance goals to set the basis of your fundraising action plan. This will help you set up all the actions and tasks required to fulfill your plans. It is also the tool needed to communicate to investors, strategic partners and staff what’s going to be required of them. They all need to know where things stand.
3. Use a Comprehensive Fundraising Strategy that aligns with your business model.
Before seeking funding, founders must use a strategic plan. A strategic plan focuses on a company’s mission and lays out how the company will reach it. A comprehensive strategy can provide a stable source of funding across a wide mix of revenue sources.
This will provide a financial base that can be relied upon. And it can prove to investors and partners that you have your act together as a business entity. They will, as a result, feel more confident in providing you with that first funding or continuing and expanding their current level of support.
A complete fundraising strategy will lay out a roadmap for you and your team to follow at every stage of the fundraising process, helping you avoid stress and stay organized and productive. As a result, you’ll raise more money and deepen relationships with your investors!
A comprehensive strategic plan must include organizational goals, annual budget, funding goals, fund management, partners alignment, operational management techniques, and more. Strategic plans require everyone in your business to participate.
When creating your strategic plan, it is best to develop SMART goals to ensure the success of your fundraising. SMART goals are specific, measurable, attainable, relevant, and time-based. By setting these goals, your fundraising office and board of directors are more likely to stay on track and not get distracted.
4. Check Past records in your industry – The best practices for fundraising
You shouldn’t have to look into a magical crystal ball to tell you what kind of investors you should have. If you’ve done fundraising in the past that were successful, look to them for inspiration. If you have not, check past records of your competitors and the investors that have invested in your industry or sector.
Obviously don’t repeat the same fundraiser over and over again. Keep things fresh and new to encourage existing and potential investors to participate!
If you shopped on Black Friday or Cyber Monday, chances are you did what smart shoppers are supposed to do around the holidays. You saved your receipt, just in case. When it comes to investment, the equivalent to “saving your receipt” is keeping good records of investment activities going on in your industry, such as social media messages, announcements, statements, press release and other investors data.
At times you might find the volume overwhelming, especially as the time period expands. And there may be times, perhaps when markets swoon. But reviewing and managing your information is essential. It’s the only way you’ll know the investors that are currently investing.
5. Keep Your Budget in Mind – The best practices for fundraising
There’s no reason to seek funding that ends up costing more money and time than it brings in. Make sure you consider all of the costs and try to account for any unforeseen expenses. Potential costs depending on your project can include: telephone bills, employee hiring, advertising, location fees and time cost.
Being aware of these and other expenses that your organization might run up against is vital in planning your fundraising.
One of the keys to successful budgeting is giving your budget a real purpose. If you sit down before you begin your budget to make a list of your financial priorities and goals, you will likely be more successful in sticking to your budget.
Keeping your priorities in mind also helps you shape your budget to match your fundraising plan. Another tip? After you set up your budget you should analyze your budget to make sure it will help you close the fundraising request.
Start by deciding why you want to budget. It’s not enough to know that you should budget because it is the financially responsible thing to do. To be successful with your budget, you need concrete reasons as to why you are setting a budget, and the funding that you are working towards.
In order to plan and execute cost effective fundraising campaigns, you can use a venture capital broker that will help you to streamline all the processes and develop a rock-solid fundraising strategy and implementation. It is equivalent to the role a bank plays during merger and acquisitions or IPO. https://en.wikipedia.org/wiki/Fundraising