Kickstarter, Indiegogoand GoFundMeare popular crowdfunding platforms that have successfully introduced new products to the market and raised capital to launch new businesses. However, in the past few years, crowdfunding has been a surprising source of income for struggling businesses.
Business owners who have been turned away from traditional lenders or who don't qualify for disaster recovery have turned to their local communities to raise the funds they need to save their business from going under. Today, the coronavirus crisis has affected businesses across the nation, leading small business owners to turn to alternative forms of fundraising to save their business.
These five businesses launched crowdfunding campaigns that spurred their community into action and saved them from permanently closing their doors in one form or another.
[Read more: 9 Wildly Successful Crowdfunded Startups]
City Lights Books (GoFundMe)
City Lights Books has been a staple in the Bay Area community since 1953. Over its near 70-year history, the bookstore and publishing house has been a second home to authors, poets and readers over multiple generations. Like many small businesses in 2020, City Lights Books was heavily impacted by the COVID-19 crisis and had to close their doors to the public on March 16, halting their income and dwindling their cash reserves.
To continue paying their bills and staff with full pay and healthcare, Elaine Katzenberger, CEO and co-owner of City Lights Books, turned to GoFundMe to raise funds. The campaign had a $300,000 goal, which it reached in just a day and a half from enthusiastic supporters all around the world. The owners of the bookstore and Lawrence Ferlinghetti, the original co-founder, are eager to reopen when the crisis is over.
Sunny's Bar (Kickstarter and Indiegogo)
Located in the Red Hook section of Brooklyn, Sunny’s Barhas been regarded as a creative hub for writers, artists and musicians. Unfortunately, in 2012 Sunny’s was destroyed in the wake of Hurricane Sandy. The basement, which housed all the bar’s mechanical equipment, was entirely flooded and the floors and musical instruments on the first floor had also been damaged by water.
During their 10-month shutdown, Sunny’s launched campaigns on both Kickstarterand Indiegogowhile also hosting various fundraising events. Luckily, the bar’s loyal customer base came through: Sunny’s was able to raise over $100,000 across platforms to make the necessary repairs and reopen their doors once again.
Spring Mountain Motorsports Resort (GoFundMe)
Founded in 2004, Spring Mountain Motorsports Resort is an exclusive motorsport country club and racing facility located about an hour outside of Las Vegas. Like many non-essential businesses in 2020, the resort was temporary shutdown to prevent the rapid spread of COVID-19 and over 100 employees were temporarily laid off.
To help support their staff during this time, Spring Mountain Motorsports Resort launched a GoFundMe campaign with a goal of $75,000. The donations are going to be divided among laid-off employees — not management staff — including mechanics, kitchen crew, instructors, maintenance and more.
Books of Wonder (GoFundMe)
Books of Wonder, a Manhattan bookstore that recently celebrated its 40th year in business, has supported the children’s book community through “Storytime” and other family-oriented events. The independently run shop had planned to relocate to a more affordable spot in the Flatiron District, but despite 40 years of business, Books of Wonder simply didn’t have the capital without the support of their previous sub-tenants, both of whom were facing their own financial troubles.
In October 2019, the bookstore launched a GoFundMe campaign to raise funds for the big move. A few short months later, the original lease offer fell through, and Books of Wonder continues to search for a new home. As of April 2020, the business has raised over $40,000 of its $250,000 goal on GoFundMe.
[Read more: 6 Crowdfunding Mistakes to Avoid]
To continue paying their bills and staff with full pay and healthcare, Elaine Katzenberger, CEO and co-owner of City Lights Books, turned to GoFundMe to raise funds.
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Llanerch Country Club (GoFundMe)
Located in Haverford, Pennsylvania, the Llanerch Country Club is a private club that has been in business since 1901. The club features a 129-acre golf course, seven tennis courts, a swim club and a club house for dining and social events. In 2020, at the height of the coronavirus pandemic, the club closed its doors and temporarily laid off staff members.
To help support these employees, Llanerch started a GoFundMe campaign for $100,000 to distribute to temporarily laid-off staff, which include waiters, waitstaff, cooks, bartenders, dishwashers, bussers, housekeepers, golf professionals, caddies and membership administrative teams.
Black and Nobel (GoFundMe)
Philadelphia-based Black and Nobel is one of the last black-owned independent bookstores in the country. Most of its revenue comes from shipping books to prison inmates, but it also hosts community lectures and open mic nights for aspiring artists. However, the store was facing a shutdown in 2017 due to a decrease in book sales and subsequent overdue rent.
Black and Nobel’s GoFundMe campaign launched that year to help pay rent, as well as expand community outreach services, which included buying a tour bus to take its books and programming nationwide. As of April 2020, the store has raised just short of $10,000 of its $250,000 goal, and its Philadelphia-based pop-up shops remain open for business.
Café Milano (GoFundMe)
Founded in 1992 by Franco Nuschese, an Italian immigrant and restaurateur, Café Milanois a Washington, D.C.-based hub for politicians, diplomats and celebrities. However, in response to COVID-19 emergency closure mandates, Café Milano had to close their doors and lay off staff members. To alleviate the financial burden of laid off employees, Café Milano launched the Team Relief Fund in which the proceeds of gift certificates purchased between March 23 and April 15 would directly support employees. Additionally, the café launched a successful GoFundMe campaign with a $75,000 goal. The contributions raised by the community will support the staff and their families until the restaurant opens again.
The Brasslab (GoFundMe)
The Brasslabwas a brass repair shop based in New York (first Chelsea and then Brooklyn), owned by husband-wife duo Cynthia Keane and Chuck McAlexander. Unfortunately, after a mix-up in records, the business suddenly learned they owed 10 years’ worth of sales taxes. Though the taxes were paid quickly, The Brasslab still needed to finish paying off accumulating penalties and interest. The shop launched a crowdfunding campaign on GoFundMe in March 2016, with a goal of raising $50,000.
Although The Brasslab's crowdfunding campaign didn't successfully raise enough money to save the shop — the store closed its doors for good in April 2017 — it did generate enough money to pay off back taxes. The campaign also generated enough interest from new and former clients that the owners were able to move their business online. Their online store, called The Brasslab Two, sells brass-based accessories, gadgets and tools, and McAlexander also continues to take repair jobs on a case-by-case basis.
[Read: Everything You Need to Know About Crowdfunding]
Crowdfunding is a great way for small businesses to raise capital and rally community support during times of need. While not all campaigns meet their goal, crowdfunding can offer business owners hope and the opportunity for a second chance.
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