[Funding Planner: Week 1, 5-Minute Summary] #3. How to Set Your Target Amount

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<WADIZ School Funding Planner>
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Don't forget to take this with you!

• When preparing for a funding campaign, we recommend setting not only a campaign goal but also a business goal.
• This is because you can work backward from the business target amount to determine marketing costs and Rewards strategies.
• The formula for calculating your target amount can be expressed as: Number of subscribers × Conversion rate × Average rewards per subscriber.

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The Funding Planner You’ve Only Seen at School—Here’s a 5-Minute Summary

wadiz is wadiz Schoolto provide a variety of educational programs to millions of makers. Among these is a regularly offered three-week course called “Funding Planner”. Designed for makers who understand the basics of funding but find the practical aspects challenging, this course consists of three live sessions that provide insights to help you refine your project. However, for those who find it difficult to attend the lectures, we’ve prepared the “Maker Tips” series, which lets you grasp the lecture content in just 5 minutes. 

This <Week 1> Part 3, we’ll explore the funding goal you aim to achieve. In particular, you’ll learn how to set a business-oriented funding goal linked to your revenue and develop a strategy to reach it.

1. Two Types of Funding Goals

First, the studio funding goal

When preparing for a funding campaign, you need to set two funding goals. The first is the Studio Target Amount. As the name suggests, this is the amount you can set within Maker Studio, can be set anywhere from a minimum of 50만 원 to a maximum of 1억 원. Once you set this amount in Maker Studio, it will be displayed to your supporters and serves as the benchmark for your funding achievement rate.

Second, the business target amount

Business Target Amount—which I’ll explain in more detail in this lecture— refers tothe business revenue the maker aims to generate through this funding campaign. While this amount isn’t displayed within the wadiz system (such as in Maker Studio), it’s a figure determined by the maker themselves. It’s set at a level that allows for a profit, taking into account factors like minimum order quantities and marketing costs. We recommend setting marketing costs at 10–30% of the target amount. We’ll cover this topic of promotion and marketing in more detail in the follow-up episode of <Week 3>. 

2. How to Set Your Funding Goal

First, how do you set your business funding goal?

If we think of the maker’s business target amount as the sales revenue of a typical store, Target Amount = Number of Notification Subscribers × Conversion Rate × Average Rewards PriceTo help you understand, let me explain each concept by comparing funding terminology to a typical retail store.

	To explain this in funding terms	To use a comparison with a regular store
Number of people who signed up for notifications	The number of supporters who signed up in advance to receive notifications when the funding campaign launches	Customers entering the store (number of visitors)
Conversion rate	The percentage of those who signed up for notifications who actually go on to participate in the funding campaign	The percentage of visitors who actually make a purchase
Average rewards value per customer	The average amount of funding per Reward	The average funding amount contributed by purchasers

Wadiz’s Tip

Since people who sign up for notifications are waiting for your funding campaign to launch, they can be considered your “potential customers.” Don’t forget that they play a crucial role in determining your funding campaign’s early success!

Second, how do you utilize the number of notification subscribers, conversion rate, and average Rewards value per customer?

To help you develop the strategy mentioned earlier, I’ll explain the relationship between these three factors needed to set your business funding goal. First, on wadiz, the conversion rate is generally around 10%. If we assume your average Rewards value is 50,000 won and your funding goal is 100 million won, you’d need to secure 20,000 notification subscribers—that is, potential customers—in advance.

However, if you set your funding goal at 1 million won, you’d only need to secure about 200 notification subscribers. Ultimately, after setting your funding goal, you can develop strategies for each of these three factors—the number of subscribers, the conversion rate, and the average Rewards price per unit—to achieve it.

Wadiz’s Tip

Since wadiz has about 5 million supporters, there will be people who provide funding for your project even without subscribing to notifications. Therefore, please note that the “conversion rate” I mentioned—which is estimated at an average of 10%—is a conservative estimate. 

<WADIZ School Funding Planner> Series

• Documents to Submit During the Review Stage
• How to Set Your Target Amount
• How to Achieve Your Target Amount

Wondering if a new Funding Planner School will be held soon?
Check it out at wadiz School

Written by Han Ji-hye; Planned and Lectured by Joo Hee-jae; Edited by Ryu So-mi