Kickstarter Budgets

Posted on May 12, 2015 By

I recently had a successful Kickstarter project.  While it didn’t create new sales records, it did fund and I’m busy fulfilling the orders during May 2015.  I’d like to share some key ingredients to having a successful Kickstarter project.

Here is the project, if you want to take a look:

A budget is completely necessary.  It’s easy to get carried away while doing research and development creating new products. Kickstarter projects are definitely a category of product creation, marketing and product fulfillment.  I don’t consider myself an expert on each, but your team does need to think of it in three phases.

Product development:

  • Create an outline of what you want the new product to do.  White board time.
  • Find other products that already do that.  There is very little that is new under the sun.  Do some market research and find out how successful/unsuccessful they were.
  • Go back to your outline and improve on your product.
  • Many companies suggest that their employees never look at the patent office filings because they would be subject to lawsuits.
  • Make your product more awesome.
  • Create and research manufacturing methods.  Prototype it.  Test it.
  • Make it more awesome.

Marketing:

  • Research other kickstarter marketing campaigns.  Note what worked and what didn’t.
  • Consider buying an email list of previous kickstarter campaign supporters.  This is not something I did, but I think it would be helpful.
  • Have your product reviewed at least six weeks before the campaign.  In the game category, I discovered on other blogs that some reviewers only review for money and other consideration.  I also found that some game sites do not support listings unless it falls into their supported categories.  My guess is that like most large review sites; it takes a year of work to be regarded as a community member.  Figure out where your project needs to get reviewed/posted.
  • Many kickstarter campaigns get supporters ready to go before the campaign.  The large dollar pledge bump then kicks it up in the kickstarter algo.
  • I wouldn’t bet the farm on being a kickstarter approved project.  Many of the kickstarter projects fail.  It does take a while to find them on there, since they are buried in the algo.  Try looking in the projects in their final days.  It’s the easiest way to see how many projects fail.
  • Create a story, video and compelling rewards.  There are tons of humble brag blogs about these topics.

Fulfillment:

  • Create a costing sheet prior to creating rewards.  Add Shipping as necessary.
  • Make sure the rewards cover the product cost, shipping and any stretch rewards.  Remember that kickstarter and the credit card company takes about 10% in total.
  • Make a time budget as well.  Many kickstarter campaigns have been time starved.  There are projects that never deliver or are three years behind in delivering the products.  Be real.  At least 45 days to deliver from China.  Just say’n.
  • Number crunch again.  Make sure there is a decent profit margin.  Remember that you have to pay taxes on it, as well.

 

 

Laura Dodson
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Laura Dodson

Laura Dodson, CPA is a Seattle Financial Planning & Analysis consultant.She has attended Western Washington University, Pierce College and Bates Technical College. She has written four accounting instructional books. She has worked for small family businesses, mid-sized businesses and a Fortune 500 company.She founded and operated Blue Stone Accounting LLC for five years.She currently runs Paper Butterfly Forge LLC.
Laura Dodson
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