Crowdfunding campaign seeks to boost business, with a payoff at end
Source: Winnipeg Free Press
Winnipeg business owners are embracing a new initiative to boost spending in the local economy and are offering a token of appreciation in return to customers helping bridge the financial fallout of the COVID-19 pandemic.
Local Futures is a homegrown crowdfunding website created specifically to support small businesses hamstrung by restrictions related to the novel coronavirus and staring down months of financial uncertainty.“Businesses don’t want handouts,” said Iain Coates, a business architect with the local software and business development studio Protegra. “They have sustainable businesses but they don’t have a business that can weather a forced closure for a month or two months at the drop of a hat.‘It gets cash into businesses’ hands now and and it’s a really great value for customers down the road’‐ Obby Khan, owner of Shawarma Khan
“We want to enable them to be able to raise funds from their most loyal customers or those who can afford to give at this time.”
The free-to-use web platform was created by the folks at Protegra — the same firm behind the Local Frequency loyalty program — and Orange Theory franchise owner Megan Gabert.
Business owners who register a campaign on Local Futures set a capital goal they believe can help them maintain operations or prepare to reopen their doors in the future. Contributions are solicited from customers who, in exchange, are rewarded with future discounts and deals once business gets back to normal.
The transactions are processed only when a campaign reaches its goal, which cannot be exceeded. Each reward is different, but if a customer contributes $100 to the campaign, for example, they can receive a 20 per cent discount on future purchases until their contribution is met.
“This is just another mechanism to help them raise cash,” Coates said. “It lets them continue to earn revenue, and they will still have profit from every discounted order that they sell in the future, it just won’t be as much.
“It lets the business owners thank these people that were willing to contribute to them when they need it most, at a time that they can afford to and pay it back.”
Funding from the Johnston Group, World Trade Centre Winnipeg and PKF Law means the venture is not-for-profit and business owners collect all the funds without having to cover administrative costs (excluding credit card processing fees).
Restaurant owner Obby Khan said he signed on to the program immediately after the developers at Protegra pitched it to him. His business is hoping to generate $5,000 to manage the mounting pile of invoices and bills after closing two storefronts and laying off staff.
“It gets cash into businesses’ hands now and and it’s a really great value for customers down the road,” Khan said. “Once we do, hopefully, get back to normal, this is going to entice loyal customers and people who buy this to come back to the store.”
Khan said he currently isn’t able to process gift card transactions online, so Local Futures is stepping up with the e-commerce infrastructure to support businesses such as his.
River Heights grocery and deli owner Aaron Bernstein registered a campaign for Bernstein’s Deli — which laid off six employees and reduced its operating levels significantly — to have a cushion of cash available to tap into right away. Navigating government support for businesses has been a challenge, he said, and he expects any financial injection to be weeks, if not months, away.
“We don’t want our customers or community to think we’re desperate,” he said. “We’re not looking for charity. We’re looking for a way to partner with them to ensure that we have long-term viability.
“Whether or not we actually need that, we’re willing to give the gift of the bonus regardless.”