Target amount - stay realistic

Target amount - stay realistic

One question that comes up again and again is how to determine the “right” target amount. We’re not surprised it comes up repeatedly, because it’s not easy to answer, since it’s not clear who is going to support the campaign, how much they’ll pledge, and which goodies will be popular. 

Ideally, the target amount strikes a balance between the amount needed for implementation and the amount you expect to raise from your crowd. If you set the amount too low, you run the risk of not being able to fully implement the project as planned. Conversely, if the amount is set too high, this might cause the project to fail. 

It is essential to be able to actually deliver what you promise the crowd. This calculation can be used to make sure that the target amount is not set too low: 

Effective project demand
+ 5% reserve
+ expenses for goodies (don’t forget postage costs!)
+ PR / marketing costs
+ crowdfunding platform commission (around 10%)
= crowdfunding target amount

But think carefully about whether your crowdfunding target amount is realistic. If you fail to raise the amount within the specified period, all the money that has been raised will be returned to your supporters (the “all-or-nothing” principle). Therefore, you should consider the size of your target group, but also is composition. Use this information to choose attractive goodies and set their prices.

In Switzerland, the average target amount of successful projects is about CHF 10,000. Higher target amounts are certainly possible, but only for really terrific projects with a very high degree of commitment from the project initiators.

A tip: In your project description, illustrate how you intend to use the amount you raise. This doesn’t have to be a detailed budget, but a rough overview can help provide further transparency, which gives people confidence in you, the initiator. 

Crowdify also offers the option of stage funding. This allows you to divide your target amount into several sub-targets and reduce the risk of your project failing completely. This can be a good approach for scalable projects, i.e. when the project can be implemented with different budgets and different scopes.  

You have another possibility: setting up another financial goal after you’ve reached your target amount, we call it a stretch goal. Risk free: even if you don’t reach your stretch goal, you’ll still receive the full amount you’ve raised.