Bagels and Business: The Bagelry Talk Crowdfunding
Liverpool is reportedly one of the top 25 places in the UK to start a business, with 2,160 start-ups recorded in 2014 according to startups.co.uk. This is probably at least in part thanks to the support available to startups in the city, including access to funding from the Business Growth Grant scheme and the plethora of other startup support schemes and funds available to Liverpool businesses.
All of this aside, we should not underestimate the resilience, creativity and forward thinking solutions of the small business owners who have and are continually sustaining and growing businesses around the city.
Rhonda Davies and Natalie Murray, the founders of The Bagelry, are no exception, opening the doors to Liverpool’s first dedicated bagel shop.
“We began making bagels simply because three years ago it was near impossible to find a real bagel in Liverpool,” they explain.
“We didn’t originally intend to make it a business but people asked us to make them for their coffee shops and that’s how it started.” Now three years later they find themselves calling a smart looking shop in Chinatown home.
This, of course, didn’t happen without its difficulties. Just weeks before the shop was due to open, and after a series of setbacks, the pair found themselves rapidly running out of money and realised that potentially they were going to have to choose between finishing building the shops interior and buying a bakery oven.
“We had already taken a small business loan, neither of us had well paid jobs, savings or rich relatives and we were running out of cash from the loan as more and more set backs occurred.”
Having exhausted traditional means of raising funds and feeling out of options, the pair decided to try out the relatively recent, and ever growing phenomena that is crowdfunding. They turned to friends and fans of their home baked goods to help raise the much needed money.
“We couldn’t afford both the materials and oven so we asked people to support us and give money for the oven as this was a more tangible and exiting thing to buy and its rewards are the things we bake and can give back. ”
It paid off when in November, The Bagelry opened the doors of its shop for the first time, complete with bakery oven. It’s another story to add to the long list of crowdfunding successes and perhaps another confirmation that crowdfunding is here to stay, having graduated from digital gimmick to mainstream status.
The attraction of crowdfunding is fairly straightforward; it allows projects and businesses to raise capital without having to wait to be approved for a bank loan that comes with a hefty interest rate, as well as the added benefit of helping raise awareness for the project or business. It effectively takes some of the power away from bank managers who previously acted as gatekeepers and reduces the need for reliance on traditional grants and funding schemes.
Crowdfunding gives the power to potential customers or clients which can put project managers and business owners in a more promising position and giving them more control. When done right it can be a lifeline for businesses, like The Bagelry, who have exhausted all traditional avenues of funding.
But how do you get it right? What are the hallmarks of a successful crowdfunding campaign?
The Bagelry are quick to tell us that this was their first campaign. They spent time looking at other crowdfunding campaigns and focusing on if they would back them or not and why before designing their own campaign.
“The main things to consider when asking people to help you in this way are why should they? Put yourself the other side of it,” they told us. “For us we new we needed to be very honest but concise about what we wanted, present it in a fun way and without any arrogance or self importance.”
They also advocate knowing and playing to your strengths and avoiding falling into the trap of negativity – “focus on the positives, moaning doesn’t usually persuade people to help.”
For what is considered a non traditional method of raising capital, at least some the hallmarks of a successful crowdfunding campaign seem very traditional. Ideas like using your strengths to your advantage, maintaining a positive image and looking at your campaign from an investors point of view as you design it, could just as well be applied to designing a successful business pitch for traditional methods of funding.
The Bagelry’ Tips for a Successful Crowdfunding Campaign.
- Research other campaigns and ask yourself whether you would invest and think about the reasons for your answer.
- Focus on positivity. Moaning about shortfall doesn’t attract investment.
- Be honest and concise about what you want and be nice. Leave the arrogance at home dude!
- Bonus Tip! – Try and secure a third of your crowdfunding campaign goal prior to putting the campaign online. This may be easier said than done however if you manage to do it then your campaign will fall within the ‘popular’ sections on a crowdfunding site and you will be more likely to attract investment.
Words: Satin Beige