A Look Inside Small-Business Crowdfunding: Q&A With SubText BooksSeptember 8, 2014
By Mike Keliher, Group Account Director
It seems every small business on planet Earth, and probably even a few enterprises based elsewhere, has latched onto the crowdfunding trend. Kickstarter and Indiegogo and GoFundMe campaigns are being foisted upon us at every turn. In my hometown of Stillwater, in just the past couple of months, I’ve seen crowdfunding campaigns to move a coffee shop, add a coffee bar to an existing retail store, build out a new brewery’s taproom — and more I can’t even remember right now.
And as you might imagine, they’re run with wildly varying levels of sophistication — and experience varying levels of success.
The appeal is obvious. The beneficiary raises “free money” from passionate supporters to grow or improve business operations, and the supporters (and all of the other patrons who don’t contribute!) enjoy the newly improved operation.
One of my younger brothers, Matt, works at SubText Books in St. Paul’s lovely Cathedral Hill neighborhood, and he’s helping the shop run its own crowdfunding campaign to help finance some expansion and other improvements. (The bookstore is downstairs from Nina’s Coffee across the street from W.A. Frost, and it’s rad. Check it out.)
I picked Matt’s brain for a little bit of insight into why and how a small shop like SubText approaches this sort of thing. I also picked his brain because it afforded me this opportunity to shamelessly plug SubText and its crowdfunding efforts. Enjoy!
First, tell our readers about what you’re doing with Indiegogo. What are you working toward?
When SubText opened its doors in the summer of 2012, we had some help from the gracious folks at Nina’s Coffee Cafe. They helped us cover some of our overhead in order for us to find our foundation and establish a loyal customer base. Now, two years later, the time has come for this bird to leave the nest. On November 1, we become a truly independent bookstore, and our hope for this Indiegogo campaign is to ensure a smooth transition into that independence. If successful, we hope to be able to afford some valuable new additions to the store, such as a new AV system, with a mic, stand and projector for our events.
What made crowdfunding appealing as a way to accomplish that goal?
Crowdfunding appealed to us because it is a tremendously effective way to raise capital and it is an excellent alternative to taking out a small-business loan. Bookstores have been forced to evolve due to the rise of a certain distribution leviathan (behemoth?), and the crowdfunding model offers a new strategy for brick-and-motor stores to remain competitive. Many bookstores, and other small businesses, have successfully used this model. It offers a certain level of flexibility and access to capital that we would otherwise be closed off from.
The book-selling business makes for tight budgeting, and the debt that can accumulate from taking on a loan could be life-threatening to a bookstore. Crowdfunding allows us to bypass these issues. We have a truly amazing community supporting us, and they’ve demonstrated time and again that they value their neighborhood bookstore.
And why did you choose Indiegogo over other crowdfunding platforms?
We chose Indiegogo for a few reasons. It allows for “flexible funding,” which lets us keep whatever money we raise — whether we meet our goal or not. This is opposed to Kickstarter, which only allows you to keep the funds raised if you meet your predetermined goal. Also, Indiegogo has a much better interface and tech support than something like GoFundMe, which is quite basic. The Indiegogo platform offers structure and a playbook you can follow to make creating and managing the campaign significantly easier.
So how did you approach the project? What sort of research or planning went into preparing your campaign?
Our approach was simple: be open and honest with our needs and humbly ask the community to come to our aid. We did tons of research beforehand, and months of planning went into the campaign. We researched which platform would best suit our needs, and we compared how other bookstores and small businesses had created successful campaigns. We wanted to make sure that the perks we offered were both enticing to donors but also not too costly for us to fulfill, which took a lot of tinkering.
Creating the web page itself took about a month. We wanted to be certain that the campaign didn’t look patched together, so there was a lot of trial and error with the title and our copy writing. Luckily, we have a fantastic team of people working towards our goal. SubText is a family business, and every member of the family played an instrumental role in this process.
Now that it’s launched, what are you doing to push this thing past the finish line before its end date?
We have been pushing it on our social media sites. Facebook has been of tremendous value to us. It is a great way for us to stay connected with our patrons and the ability to reach a vast number of people with relative ease has been huge for us. We’ve put flyers up at neighboring businesses. We’ve been mentioning it at all of our events and encouraging people to share our story with their friends and family. The Twin Cities has one of the greatest literary communities in the country and the support of that community is our lifeblood.
What’s the response been like so far? (As of this writing, SubText has raised $1,690 of its $15,000 goal.)
The response has been incredible. In under a week we raised more than 10 percent of our goal, and the continued support of our community is something we are truly grateful for. We are hopeful that our transition to independence goes smoothly and that we can continue to call the Cathedral Hill home for years to come. It’s our greatest joy to be able to promote good literature and spread happiness through reading.
And who’s that gorgeous child on your Indiegogo page?
That adorable little guy is my nephew (Author’s note: my son) and that picture of him is one of my favorites. His mother is a lovely individual, and his father is an oft-mustachioed home brewer who loses at ping pong every Christmas. (Author’s note: That’s patently false. Matt loses.)