When you’re setting your budget, it’s easy to fall into some traps. It needs to walk that line between being achievable, while still being able to complete your purpose.
It can be a bit of a catch-22.
If you ask for too much, you risk falling short and not being able to achieve your goals. If you don’t ask for enough, you may fail to achieve your goals and leave yourself open to some tricky questions from your Backers.
So let’s look at a few tips for setting a budget that will achieve your goals, without making things harder.
First, download our rewards-budgeting calculator. This simple spreadsheet will make life a lot easier for you.
Write down all the things you need to do in a list. Then put a price on each of those things. This is your project cost – the amount you need to achieve what you want to do, before fees and rewards costs.
Kelly has done a lot of research on her project and knows in order to go she will need to cover…
£2,000 – Flights, train tickets, and car rental
£500 – Local accommodation and food
That’s a total of £2500 before rewards costs and StudentBackr fees.
Now work out how much each reward is going to cost you to create;
this should be above and beyond anything that is already covered in your base budget.
Kelly works out that her £5, £10, £50, £500 and £1000 levels will essentially cost her nothing but a little time to provide, once she’s got the main costs covered.
The £100 reward will cost her money in the future, but she’s happy to pay this out of her ongoing earnings once she enters the workforce in the next few years, as opposed to out of her project costs.
The £250 reward is already paid for, and if she needs to post it to someone who isn’t her best friend, it’s only going to cost £10 to package and send.
The only reward that has a real cost to it is the £25 reward of a box of cookies. Kelly sets up a trial run: she works out how much her packaging will cost, and how many cookies she’ll need to provide in a box. After doing some shopping and making a batch of cookies, she realises it will cost £5 per box she sells – 20% of the reward cost itself!
Next, for each reward level, figure out if there will be a postage cost, and what it will be.
We recommend you spend some time figuring out postage because this is what often comes back to bite students on the ass. Better to over research than under research, undercharging for postage is a quick way to spend money.
Look at the difference between the amount of money you are charging for the reward, and the amount of money it will cost to produce and post. This is the amount of money, multiplied by the number of Backers you get, that will need to be added to your project cost.
Two of Kelly’s rewards have a potential postage cost – the £25 and £250 levels.
It’s going to cost £5 per box for Kelly to send a box of cookies – meaning a box of cookies costs £10 to make and send to a Backer (£5 production cost + £5 shipping cost). When she thinks about losing almost half of every donation to costs, she reconsiders her rewards levels.
Kelly decides to switch her £25 and £50 reward levels. She’s happy to spend £10 for every £50 she is given, but it just doesn’t make sense at £25!
The Backer-count is a little difficult – it’s all about approximation. Consider who you know and what they may be able to give you. If you can get a reasonable grasp on who will back you at the higher levels, it’s easier to approximate the lower ones.
In general, you can expect your most popular rewards to be £25, £50, £100, £10, £5 – in that order.
Kelly knows her father will give her £1,000 to help out.
She’s also talked to the organisation she used to volunteer for, and they said they’d be willing to pay £500 to contribute to the cost of the research.
Her best friend is interested in her collectable, so Kelly can reasonably work out how many supporters she will get at the other levels.
After plugging in her data, the Dashboard of the calculator shows her she will need around 33 Backers, and it will cost around £90 to make and deliver all her rewards.
The calculator will automatically calculate your fees for you. StudentBackr has two types of fees:
Fully-funded projects are charged a 5% fee.
Partially-funded projects are charged a 10% fee.
The calculator will show you what the fee will be if you reach your goal – which is the number you need for working out how much you need to ask for!
After calculating her project, Kelly has made a quick change to the rewards structure, and has a new total to ask for. The funding goal Kelly will try to raise is £2,775. The extra £275 above her project cost will cover the costs of making and sending the cookies, as well as her StudentBackr fees.
There’s an art to setting the right funding goal. The trick is to create crowdfunding rewards that cost little or nothing to offer to Backers. There is real value in digital rewards for this reason. The best reward will cost absolutely nothing beyond your base cost and time to create and fulfill. Remember that you are making a promise to your Backers that you can do the thing for this amount of money. Also remember that the less you ask for, the more likely you are to get it.
A crowdfunding campaign involves a lot of effort. Choosing the correct launch date is crucial. You don’t want that going on when you’re just about to face 2 weeks of solid deadlines or exams at school.
It pays to put some thought into WHEN you are going to run your campaign.
45 days is the ideal crowdfunding campaign length. It’s enough time for getting the word out as far as possible, without losing momentum. Momentum is really important because you’ll get the largest number of donations in the first AND last week of your project. The choice of the launch date deserves all your attention and brainpower: studies have shown that the FIRST 3 DAYS f a campaign are decisive for its subsequent success or failure.
Each campaign at StudentBackr lasts exactly 45 days, so all you have to do is set the start date!
Looking at the calendar, Kelly realises that her birthday, and the day she will officially graduate with her Masters Degree is on the 5th of October.
She decides that she would rather have any birthday and graduation gifts be put towards this goal. She decides to open on her birthday, so her end date worked out as the 19th of November, 45 days later.
By closing after graduation, it means she has time to hustle and follow up with her friends on graduation day if she hasn’t hit her goal yet. And people are always great on her birthday – what better present than a donation towards her crowdfunding campaign!