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How to Use A Sense of Community To Access Better Business Funding

Sometimes it takes a whole village to run a business, and you probably feel like some days you need a dollar from every villager to keep it going! Accessing better business funding isn’t just a case of stringent research and business plans, though those do help; it (literally) pays off to get involved in the community around you. Whether you’re an e-commerce start up on the hunt for product advocates, a burgeoning tech company with a cool app or a local cafe-bakery — working with and for the local community can help you find better funding opportunities. Here’s how.

Find your business value proposition

The best businesses are those who are focused on the people and communities they serve. Take FreshBooks: They make every single new staff member, even the CFO, spend their first month working under customer service reps on the frontline. This experience is then fed into FreshBooks marketing, finances, product development, etc. This kind of commitment to customer service is a powerful research tool as FreshBooks executives are never far from the customer service coalface and the beating heart of their user base. A similar commitment to customer research pays off with a mature and well-rounded business strategy. A strategy that’s focused on customers is much more likely to thrive.

  1. Are you going to save people time, money or trouble (or all three)? Be clear on how your business serves people in order to justify your existence. Focusing on your value propositions will help you write better business loan applications as well as help you grab headlines for the right reasons.
  2. Value proposition-led advertising is a great way to get company press releases and ads in front of the right people. By focusing on what you can offer people, rather than simply what you sell, you can gain powerful PR traction. By raising more awareness of what you do, you will be able to increase turnover and qualify for more competitive business loans.

Talk to local investors

Speaking to investors in your area is a great way to find out more about what issues and causes motivate them. Working with investors isn’t for every business, but talking to interested parties in your local area can help you pinpoint potential growth opportunities.

  1. Listen to people’s reactions to your pitch and business plan and take their feedback on board. Other people’s opinions, especially investors’, are worth their weight in gold in the beginning. However, it can be hard to get distance from your business idea during the early days — you can’t always trust your gut or friends and family when it comes to commercial decisions.
  2. Finding investors in your local area often starts with business networking and contacting local groups. These places are a source of invaluable finance and business information. You can find out how other similar businesses got funded and what grant, loans and support groups are available to you.
  3. Staying local be a great way to start your funding journey and maximize the power of personal relationships, your existing connections and personal brand. Some investors are specifically looking to invest in the local area and will be especially interested to hear from local business owners. They may want to support a specific part of the city or the school you went to.

Serve the needs of a certain group of people

Being everything to everyone isn’t a good idea for your business. You need to niche down and focus on a specific community or user group instead. By being more specific about which community you want to serve, you can streamline your business and build it around your best customers.

  1. In terms of business loans, it can pay off to focus on your industry. Speak to the local movers and shakers in your niche, and don’t forget the power of online communities too.
  2. Focus your product and service offerings around a core set of features and benefits, and don’t try to diversify or grow too soon. Make sure you make the most out of what you do best, and spend time in your customer community to find out more about what motivates them to buy from you.
  3. There are a ton of forums and groups out there, full of useful advice and help for business owners and start ups. Whether you use them for customer research or product validation, make sure you are seen and heard in the right places.

Be visible in the community

Making noise about what you do is a great way to pick up fruitful partnerships and funding opportunities. By making yourself open to collaborations and conversations, you will have first pick when other businesses and organizations come scouting for opportunities.

  1. Service exchange is a great way to get useful things for free from other small businesses. Could you maybe do a skills swap with a video agency? Or a service exchange with a local printers? These are great ways to spread costs and help other growing businesses too!
  2. Being visible can be done in a variety of ways: from putting up flyers and networking to social media and online forums. Reaching out to people is all about integrity and tenacity. Get good at writing emails and use a small business CRM like Insightly to help you manage community outreach.
  3. Communities have their own rules, some of them unwritten. Make sure that you spend time listening to others and contributing to projects — don’t just go barging in asking for business funding or introductions.

Empower staff to be community advocates

Sometimes the best ideas don’t come from board level but from grassroots actions executed by dedicated staff members. A great way to find out about funding opportunities and serve the community is to encourage staff to get involved in local events, groups and culture.

  1. As a business owner, you can’t be everywhere at once. Use your team to help you take your community outreach to the next level.
  2. As a business, get involved in your team members’ communities and projects. Leverage their networks and individual personal brands for a stronger business standing. The best businesses use collective effort to build a community around shared values and beliefs. Dedicating business time to staff projects makes people feel valued.

Community-led business funding

Crowdfunding has changed the ways that businesses seek funds, and it can be a legitimate way to supplement more traditional business loans. Though crowdfunding rarely replaces traditional funding due its ‘all or nothing’ nature, crowdfunding does open up the playing field for innovators and creators.

  1. Crowdfunding is all about trust. You need to have a super credible brand, a great idea and clear messaging to get people want to spend money with you. Remember, people are buying into your business idea and your business as a brand as much as they are investing in what you actually sell.
  2. Solving specific problems for specific customers is a funding tactic that translates well into crowdfunding. Walnut Studio is a perfect example of a small business (run by a husband and wife team) that found funding success thanks to a very clear niche offering. Their quality, handmade leather bike accessories make life easier for committed cyclists who want to look stylish. These Oregon entrepreneurs found fame and fortune on Kickstarter, moving their e-commerce operations from Etsy onto a dedicated store built with Shopify — a typical example of how e-commerce businesses scale, moving from marketplace to dedicated store once cash flow allows.
  3. Don’t believe all the crowdfunding hype. It’s still hard work, and it’s definitely not ‘no strings attached’ money. This crowdfunding advice from a few years ago still rings true: Don’t run off and start signing up for funding sites without a strategy.

You don’t have to be a social enterprise to use the power of community. It’s out there for all businesses to enjoy! Look at how you can use your local community, as well as online communities, to better serve customers and run a more agile, competitive business. What’s the one thing you’ve learnt about your community in the past few years?

Patrick Foster is an e-commerce consultant and marketer with 10+ years in the industry. Patrick is currently writing as a side project whilst building passive income. He loves to create content for entrepreneurs and business owners that helps them succeed and live their dreams.

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