One of the first challenges that any entrepreneurs face is funding their business. Bootstrappers tend to pay for any startup costs out of their own pockets while others might seek funding from friends, family, angel investors, or even venture capital firms.
Depending on your product and team (professional investors will look at your qualifications and track record) you might find yourself attempting to build a product for which it costs more than you have to create and produce. At the same time you might be too small or not experienced enough to raise a seed round from angel investors and venture capitalists. When this is the case there is another option: pre-sales.
Pre-sales is when you ask for customers to pay you up front for a product or service that you will deliver to them later. The people that are most likely to place an advanced order for your product are the people who will get the most value out of it. These are your ideal customers. If you are doing presales manually you should confirm their interest and patience (prequalify) prior to asking them to place an order as you do not want to take money from people who will distract you from product development by demanding delivery or their money back.
With the Internet pre-sales is even easier as you can just put an order form up on your website and start taking orders. This is a somewhat different process than Kickstarter because there you can take pre-orders but if you do not meet your funding goal you will not get any money at all.
For people to take the step of ordering your product in advanced they need to be reasonably convinced of your ability to deliver the product that you promise in a timely manner. Make sure your website is professional looking and post about your progress either there or on social media. Doing so will show potential customers that you are serious about your business and that you are not going to take their money and run.
Finally, sometimes people need an incentive to place an advanced order. This can be another product that you have that you give for free (e.g. television commercials that say, “order now and we will throw in…”) but often the best incentive is to offer a reduced price to people that pay in advance.
This is one of the many challenges you will face on your entrepreneurial journey but with a bit of creativity and hustle you will get your product made and out into the world.