How to Plan Your Kickstarter – part 1
This is the first in a series of posts that should help you get a firmer grasp on how to plan your first Kickstarter, how much money you really need to raise, and how much money should expect to raise before launch the project. If you’ve got a great idea for a project, but don’t have a lot of experience with business, budgets, and revenue projections, you’ve come to the right place. This approach should be most helpful for arts and creative projects that have funding goals not much higher than $10,000, though it can be of use for any crowdfunding project.
This series of posts will teach you how to use this spreadsheet, which has all the formulas in place along with some dummy data so that you can tweak numbers and get a feel for just how many people you need for this sort of thing. If you want to just play with the spreadsheet, go right ahead. Here’s the .xls version in case you have an older version of Excel. I’ll watch the comment thread and answer questions about the spreadsheet if you have them.
One Time Costs
This is a pretty straightforward place to start, but budgeting isn’t an entirely mechanical thing to do, especially for arts projects. We’re going to start with one time costs: things you only have to pay for once no matter how huge your Kickstarter gets. Even if your CD goes platinum you only need to record it once, right?
This is going to be mostly the money you actually spend on your art, as opposed to rewards, as well as fixed cost stuff like a backer party, or the graphic designer for the t-shirts and posters as opposed to the cost of printing each individual t-shirt and poster. For a lot of projects the boundary between “rewards expenses” and “art-making expenses” is really blurry, and often the best projects are the ones that blur that line the most, and turn their rewards into art on their own.
To make your budget, the first thing you do is break down your project into as many different things you’ll have to spend money on as you can think of in one sitting. Don’t obsess over this, just roughly do the categories. You don’t have to say “sandwiches and soda”, you can just say “lunch”. Here’s a sample of good stuff to be estimating:
- Renting Rehearsal Space
- Paying People
- Feeding People
- Graphic & Basic Web Design
- Recording Engineer & Mix/Mastering
- Filming & Editing the Footage
- Equipment Rental
- Hard Drives, Batteries, Misc.
- Backer Party
Just put a number next to each one of those categories that seems reasonable. It doesn’t have to be perfect, and you can come back and change it any time you want. You’re not writing your budget in stone. If you don’t really know how much graphic designers or recording engineers charge, or how much of their time you’re going to need, find out. But don’t try too hard – this is a rough budget, and we’re not looking for perfect. We’re looking for a rough idea. To research the cost of something, spend no more than 5 minutes doing one of these things: 1) ask someone you know who would know, 2) google it a little, or 3) if you run out of time just make it up and come back later.
No matter how much time you spend budgeting, you’ll always be wrong, so don’t overthink it. Here are the same categories again with some rough costs that I made up in a few minutes. They’re probably not quite right for your situation, but they’re a decent place to start. I also used them in the dummy budget I did for the spreadsheet.
- Renting Rehearsal Space – $50/hr
- Paying People – at least $100/person/day
- Feeding People – $25/person/day
- Graphic Design – $50-$75/hr
- Recording Engineer & Mix/Mastering – $50-$75/hr
- Transportation – $35/day for van and gas, $250 for out-of-town
- Costumes/Props/Makeup – $20/character
- Filming & Editing the Footage – $250 to film the show once, $50-$75/hr to edit
- Equipment Rental – $200/day
- Hard Drives, Batteries, Misc. – random stuff you have to buy
- Backer Party – $500
Add categories, take them away, break them up if you feel like it – name the people you’re paying, separate different days of shooting or recording, etc.
Make up numbers that look kind of okay, and when in doubt round up a little. DO NOT, under ANY CIRCUMSTANCES, put anything as detailed as cents in here. You’re only allowed to estime $5 amounts because $25 is half of $50, and gets sort of grandfathered into the “nice round number” category. Get it? This is a rough budget.
And, once you’re done with that, add 20%. Because here’s the thing: stuff breaks. People quit. Emergencies happen and your budget needs to absorb them. Also, and this is totally okay and nothing to worry about, you forgot some things when you were making your budget. It always happens. Don’t sweat it – everybody does it. And everybody knows that when you get the end of your arts production budget, instead of obsessing over what you’ve missed and what’s wrong with your numbers, you just add 20% and leave it at that.
Wow, that’s a lot of money
Yup. That’s a lot. This is the highest your budget will ever be. And you’re going to look for ways to do things for less, and come in under budget while keeping your team fed, paid, happy, and productive. And that’s great. What you have to remember about this kind of a budget is that it isn’t how much you have to spend. This budget does tell you how much money it’ll take for you to feel secure taking on the project.
If you’ve got a good budget, you can say, “I need $7,500 to make this happen” and know that you can back that up when people say “couldn’t you do it for free?”, and, much more importantly, you’ll know that if you can raise that much, you can definitely make it happen.
That budget number is NOT your Kickstarter goal
This is super important: That budget number doesn’t include making all the rewards, mailing them all over the place, or the 5% that you pay to Kickstarter, or the 3-5% that you pay to Amazon for credit card processing. It tells you how much you still need left in the bank AFTER you’ve paid for everything else.
In the next post, I’ll talk about designing your rewards and modeling their costs.