What is the appropriate funding goal for my project?

Don't forget to bring this!

• The target amount is the minimum amount you, as the maker, aim to raise through your project.
• Setting the target amount too low or too high can cause problems.
• Check out the four methods for calculating your funding goal and find the one that works best for you as a maker. 

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The key to a successful project is the funding goal!

“I’ll definitely deliver the Rewards to the supporters who trusted me and participated in my funding!”

I’m sure every maker about to launch a project shares this sentiment. But in order to deliver the Rewards, the project must first succeed. And the key to that success is the “funding goal.” What do I mean by that? Let me make one thing clear right away. You need to find the right funding goal for your project. I’m going towalk you through every step of that journey, soall you have to do is apply what you learn. From the basics of funding goals to FAQs, I’ll explain everything step by step.

1. What Is a Funding Goal?

The funding goal is the minimum amount you, as a maker, aim to raise through your project, and it can be set starting at 50만 원. Whether your project succeeds or fails depends on whether you’ve raised 100% of this goal by midnight on the project’s end date.

• If you raise 100% or more of your funding goal → the projectis successful → payments are processed → and you must provide Rewards to your supporters.
• If you raise less than 100% of your funding goal →the projectfails → payments are canceled → and you do not provide Rewards to your supporters.

2. The Importance of the Fundraising Goal

Here’s why the funding goal is so important: the likelihood of your project’s success depends on how you set it. So, wouldn’t it be best to just set it to the minimum amount of 500,000 won?

As you know, of course not. The target amount must be the amount realistically needed for the project. It’s a promise to your supporters: “If you trust me and provide funding for this project so I can raise this amount, I’ll do my best to deliver the Rewards.” That’s why, once the project is launched, you cannot change it for any reason. Therefore, for your project to succeed, you must set an “appropriate target amount” with the utmost care!

“So, what is an appropriate target amount?”

If the target amount is too low,
you may not be able to cover the minimum costs required to produce the Rewards. 
In other words, even if the project succeeds, the amount raised might be too small to cover the production costs of the Rewards. If you’re unable to deliver the Rewards, you’ll have to cancel a successful project, which could negatively impact your next funding campaign, so please be careful!

Conversely, if your funding goal is too high,
you may not be able to reach your goal by the end date.
The project will fail, and you won’t be able to provide Rewards to the supporters who provided funding for it.

As you can see, the target amount is relative and depends on your financial situation and the type of Rewards, so there is no single “right” answer. Therefore, you’ll need to find the solution that works best for you as a maker.

3. How to Set Your Funding Goal

Here are four methods to help you find the right funding goal for you as a maker. Try them out right now to set your funding goal! 

1) Create a Budget 

1. Get quotes from vendors to determine the production costs for the Rewards.
2. Estimate shipping costs. (Don’t forget to factor in additional shipping fees for remote and mountainous areas!)
3. Allocate a budget for the maker’s labor costs, which they’ve worked so hard to prepare.
4. Allocate a contingency fund to account for payment failure rates and product damage (10% each). (20% of production costs + α)
5. Add any other necessary incidental costs (e.g., transportation, storage, etc.) if applicable.
6. Add up all these amounts to calculate the total budget required.

2) Calculate the Daily Funding Amount Needed

If you’re having trouble gauging whether your target amount is appropriate, check how much funding needs to be provided per day.

• Target Amount ÷ Number of Days for the Funding Campaign = Amount to Be Raised Per Day 

For comparison, let’s look at examples with target amounts of 1 million won and 5 million won. Assuming both projects run for 30 days, the daily funding amounts would be as follows.

• When the target amount is 1 million won
  1,000,000 ÷ 30 days = 33,333 won
• When the target amount is 5,000,000 won
  5,000,000 ÷ 30 days = 166,666 won

If this calculated amount seems too high, you should lower your target amount; if it seems too low, you should raise it.

BONUS TIP! You can also use this formula to work backward and estimate your target amount.

• Estimated minimum daily funding amount × Funding campaign duration = Target amount

3) Try using the “Launching Soon Services” feature.

Take advantage of the “Notification Subscribers” feature, which is exclusive to the service launching soon.

If you’ve registered for a campaign that is launching soon, you can check the number of notification subscribers in Maker Studio’s [Launching Soon Status]. On average, about 30% of notification subscribers participate in the actual funding round. Therefore, you can calculate the estimated funding amount using the number of notification subscribers and the average funding price per Reward. If you set your goal amount slightly lower than this estimated fundraising amount, you’ll be able to establish a reasonable goal, right?

• Number of subscribers × 0.3 × Estimated funding amount per person = Estimated total funding amount 
  

4) Calculating Based on the Estimated Number of Supporters

This method is for those who are new to funding or not very familiar with it. Try to estimate how many people—including your acquaintances—might back your project.

• Number of acquaintances who will provide funding × 2 × Estimated funding per person = Estimated total funds raised 

For example, if 10 people you know are likely to provide funding for your project, you can estimate the number of supporters to be twice that number—20. However, this method may not be appropriate depending on the nature of the Rewards. If the calculated amount doesn’t feel right, please choose the method that works best for you from the various options we’ve provided.

4. FAQs About Funding Goals

• Q.If payments can be canceled even ifthe projectis successful, could the actual amount raised be less than the target amount?
• A. Yes, although the probability is low, this situation can occur. 

The average payment success rate over the past three months is approximately 91.9%, and 77.1% of all projects have shown a high payment success rate between 90% and 100%. However, there have also been projects with low payment success rates ranging from the 80% range down to as low as 27%.

In other words, payment failures can result in a significant discrepancy between the fundraising goal and the actual amount collected, and in some cases, the final amount raised may be lower than the goal. Even if the total amount raised is lower than the funding goal, the project is considered a success, and Rewards must be sent to the supporters who funded it!

Therefore, it’s best to set your funding goal conservatively to prepare for such situations.

• Q.What is the typical target amount for asuccessfulproject?
• A.According to data fromthe pastthree months, the average funding goal for successful projects is approximately 1.3 million won.

On the other hand, the average target amount for failed projects is approximately 4.4 million won. Please keep in mind that if your target amount is too high, it will be difficult for your project to succeed.

However, this is an “average” amount that does not take into account the types of rewards or the maker’s financial situation, so it may not feel appropriate depending on the circumstances. If you’d like a more specific example, browse other projects in similar categories to see which rewards are popular!

• Q.I’ve raised far more than myfunding goal! What should I do?
• A.If you need to produce more unitsthan expected, please confirm whether you can ship them according to the schedule you promised in the Story. 

To prepare for such situations, it’s essential to confirm the quantity you can produce before launching your project. If you’re having trouble meeting the promised deadline, please use the “News” section to provide supporters with specific updates on your progress and the reasons for any delays. After all, your supporters are eagerly awaiting their Rewards!

You might also want to check the funding goals of other projects.

As you read this, did you try applying all four methods? Which one worked best for you as a maker? Also, did you check whether your funding goal is sufficient or perhaps too high?

Since this is a factor that can determine the success of your project, many of you may feel overwhelmed just by setting it. As mentioned earlier, whenever you’re unsure, you can always check how other projects have set theirs for reference. You can view the funding goals, amounts raised, and number of supporters for both ongoing and completed projects. It’s best to look up projects that are as similar as possible to yours. So go ahead and set your funding goal right now in Maker Studio!