{"id":744,"date":"2015-09-15T08:35:37","date_gmt":"2015-09-15T12:35:37","guid":{"rendered":"http:\/\/shiverbureau.com\/?p=744"},"modified":"2015-09-15T08:35:37","modified_gmt":"2015-09-15T12:35:37","slug":"kickstarter-calculating-your-goal","status":"publish","type":"post","link":"https:\/\/shiverbureau.com\/wordpress\/2015\/09\/15\/kickstarter-calculating-your-goal\/","title":{"rendered":"Kickstarter: Calculating your Goal"},"content":{"rendered":"

The tricky part of\u00a0Kickstarter is determining the funding goal. This is the method I used to arrive at my goal for Shiver Bureau<\/a>\u00a0which is running on Kickstarter <\/a>now. \u00a0There is no perfectly correct answer, but this can\u00a0help to arrive at a decent best guess.<\/p>\n

The basic equation is<\/p>\n

Product cost + Shipping costs + KS\/Xfer Fees<\/p>\n

Step 1 – Determine production costs<\/strong><\/p>\n

Regardless of what you’re making, you need to know how much it will cost to make it. \u00a0I will use graphic novels as the example because that’s what I know. \u00a0We are going to print 2,000 books. \u00a0Just an aside, if this is your first kickstarter, then printing 2000 books could be a bad idea. \u00a0You need to look at your readership, similar projects, and marketing skills to determine appropriate print run. \u00a0That is outside of the scope of this article. \u00a0 So back to printing 2,000 books. \u00a0Using various sites like KA-BLAM, Lightning Source, RA Direct, Print Ninja and accessing their pricing calculators, we can get a pretty good idea of what 2,000 books will cost. \u00a0Be careful when you price the books, some calculators include shipping and some don’t. \u00a0Let’s say we decide to go with some random company called BookPrint and it will cost around $10\/book. \u00a0This includes shipping.<\/p>\n

So our total production cost is 2000 books x $10 = $20,000.<\/p>\n

Step 2 – Determine shipping costs<\/strong><\/p>\n

This cost is a little more elusive. \u00a0The first part in figuring this out is by looking at your production costs, finding projects in same category and determining how many backers it took to raise that much. \u00a0If we find other projects on KS that have raised $20,000 or more we will see something like this…<\/p>\n

Project A raised $26,000 with 600 backers. \u00a0~$43\/backer<\/p>\n

Project B raised $38,000 with 900 backers. ~$42\/backer<\/p>\n

Project C raised $31,000 with 300 backers. ~$100\/backer<\/p>\n

Project D raised $25,000 with 600 backers. ~$41\/backer<\/p>\n

With the exception of Project C, a project is averaging around $42\/backer. \u00a0Project C actually brings up a very important note. \u00a0Project C is a project to print the 3rd volume of a very popular webcomic. \u00a0It has a huge builtin fan base and it also has the ability to sell book bundles. \u00a0Book bundles are basically including all 3 books in a single reward tier. \u00a0Book bundles are huge incentives for backers. \u00a0So we are going to pretend this is our first graphic novel and our first kickstarter, so we will ignore project C because it isn’t in our same category. \u00a0This research method can also be used to determine how many books you should try to print. \u00a0How many backers do you think you can get compared to other projects on Kickstarter? \u00a0That will give you an idea about how many books to print.<\/p>\n

Okay, so now divide our production costs by our backer average, $20,000 \/ $42 = 476 backers. \u00a0We’re not done yet, we have to figure out shipping costs to all these wonderful people. \u00a0We figure that shipping costs (delivery costs plus buying all the tape, packages, tape, labels, printer ink, etc) is going to be about $7 per backer. \u00a0Again this will require some research on UPS, Fedex, packaging suppliers, etc.<\/p>\n

Shipping cost is 476 backers x $7 = 3332, let’s just say $3500. \u00a0Of course our new total is now 20,000 + 3500, which means we need more backers, which means it will cost more to ship. \u00a0This is an endless cycle and we will never reach the end. \u00a0So what do we do? \u00a0Nothing, the shipping costs will be baked into every reward tier. \u00a0So that will offset the uncertainty. \u00a0Remember this cost is elusive. \u00a0Also, high level rewards will help to offset some of these costs, not everyone will pick the minimum. \u00a0Also some people may pick a digital only reward which requires no shipping. \u00a0But just to be safe, lets make $3500 into $4000.<\/p>\n

Step 3 – Determine Kickstarter Fees<\/strong><\/p>\n

This part is easy, just add on another 10% (check the Kickstarter site before you run your campaign to make sure this is still the correct %) buffer to your total cost thus far. \u00a0You just have to make sure you do the math correctly. \u00a0Our total right now is<\/p>\n

20,000 + 4000 = 24000<\/p>\n

The incorrect math is 24,000 + 10%. \u00a0This will put the total at 26400. \u00a0If you subtract 10% from 26,400, you will get 23,760. \u00a0That’s lower then our 24,000 goal. \u00a0We could just make up some number and most likely be okay, say 27,000.<\/p>\n

But for all you math heads out there, the correct formula to determine the amount you need is<\/p>\n

Cost \/ (1 – (KS fee \/100)<\/p>\n

24000 \/ (1 – (10 \/100) => 24000 \/ (1 – (.1) => 24000 \/ .9 = 26666.66<\/p>\n

I think we’d end up calling this 27,000. \u00a0So our guess above was correct.<\/p>\n

Closing<\/strong><\/p>\n

This should get your pretty close to something reasonable. \u00a0Every kickstarter is different and will require you figure out your own specific costs. \u00a0For example, say you want to create shirts. \u00a0You have to add that to the production and shipping costs. \u00a0The more rewards you add, the more complex and error prone your goal could get. \u00a0It could be a good idea to keep things simple for your first kickstarter and keep the amount of knick-knacks to a low or nonexistent amount. \u00a0This means you wont be able to raise as much money, but the stress level and pitfalls will be a little more contained.<\/p>\n

I wish you the best of luck with your project and I’d love to hear your thoughts on this method…especially if I screwed up any of the numbers. \u00a0Dammit Jim, I’m an artist, not a mathematician. \u00a0Same thing with grammar. \u00a0I’m a writer, not an editor!<\/p>\n

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