Crowdfunding not only can help launch a business, but it can help save a business, too.
Several Phoenix businesses have turned to sites such as Kickstarter and GoFundMe, which ask community members for contributions, to help the shops stay afloat.
Audrey Iffert-Saleem, executive director of entrepreneurship and innovation initiatives at Arizona State University, teaches classes on crowdfunding campaigns. Iffert said it’s becoming an increasingly acceptable way to get ideas off the ground.
“If you look at trends, Kickstarter and Indiegogo are just the tip of the iceberg,” she said.
“I think it’s going to continue to grow.”
Independent small businesses often turn to crowdfunding because they don’t have investors and additional funds if unexpected expenses come along.
Two Phoenix businesses have found success with crowdfunding, and one aims to have the same success.
All About Books and Comics
All About Books and Comics, a family-owned comic book shop on Central Avenue and Camelback Road in Phoenix, launched a Kickstarter campaign to relocate.
Owner Marsha Giroux said the office next door bought the building to expand – and that meant her store had to move.
“We called our landlord, and I asked if there is anything we could do,” she said. “We were told ‘it’s too late.’ ”
The store had been at the same location for 33 years.
Giroux and her husband, Alan, found a nearby building they could use.
But that means creating new signs, moving more than one million comic books, painting, adding drywall, setting up a security system and installing flooring.
It will cost between $60,000 and $70,000, Giroux said.
Giroux said they looked at bank loans, but they turned to Kickstarter after her son suggested it.
Kickstarter allows donors to get something ¬- like comic books, T-shirts and naming rights to a section ¬-in return for a donation.
“It gives us an opportunity to raise funds in a creative way, so our customers can be a part of the community,” she said. “Saving small businesses is saving the culture of our community, and we’ve been a part of the north central community for 33 years.”
Last week, All About Books and Comics exceeded its goal of $33,000 by more than $4,000, and 538 donors backed the campaign.
“We’re reassuring everybody that we are going to make the shop even better,” she said. “We kept it nearby. The rent is more money, but we’re confident we will be able to keep our customer base.”
Mary Coyle’s Ol’ Fashion Ice Cream
Mike Stoffey turned to Kickstarter after his shop, Mary Coyle’s Ol’ Fashion Ice Cream, shuttered last October. Stoffey purchased the long-standing ice cream shop in 2011.
Although the store made a profit on ice cream sales, the building had too much extra room and cost too much, Stoffey said.
Josh Feig, who works for Air Integrated Marketing, approached Stoffey to launch a Kickstarter campaign to revive Mary Coyle’s Ol’ Fashion Ice Cream in the form of a food truck.
“It took awhile to get it going and get the Kickstarter thing figured out,” Stoffey said. “I was unfamiliar with it but did a little research and said ‘sure, let’s make a run at this.’ I saw other businesses resurface and stay around.”
Although the mindset and landscape of the city has changed since Mary Coyle’s opened in 1951, the ice cream shop was such a great fit for the Phoenix community, Stoffey said.
Stoffey said he wanted to go with a food truck rather than brick and mortar store because of the popularity of food trucks.
“I was convinced the truck would allow us to take ice cream to the people rather than them come to the store,” he said.
As of Thursday, Stoffey’s campaign raised $2,980 of its $45,000 goal.
If Stoffey doesn’t raise enough funding, he plans to reevaluate.
“I don’t think by any means it’s the end of Mary Coyle’s in Phoenix, but it will be a challenge to bring it back,” he said.
Bragg’s Factory Diner
Dana Stern of Bragg’s Factory Diner launched a GoFundMe campaign last year with co-owners Liam Murtagh and Emily Spetrino-Murtagh after repair costs and a slow summer season put the restaurant on the brink of closing.
Bragg’s Factory Diner opened two years ago in the Bragg’s Pie Factory building, which is on the National Register of Historic Places. It’s located on Grand Avenue in Phoenix, which is home to several art galleries and small businesses.
The diner raised more than $8,000, which covered rent, basic utilities, food and employee wages.
The diner actually got a boost from customers who didn’t know the restaurant existed until the campaign, Stern said.
Stern said she was overwhelmed by the generosity of patrons, and she definitely sees benefits in crowdfunding.
She had some advice to other business owners who want to try it.
“Be extremely clear in what you are doing with the money people give to you and follow through. Use it for things that count and don’t get sidetracked,” she said. “Everything on ours was used for that.”
Stern said the diner is at the point now where they can plan for the future, rather than wondering if they are going to stay open for the week.
“Things are always a work in progress,” she said. “That’s the nature of business.”