Local businesses turn to crowdfunding for support

GRAND TRAVERSE COUNTY, MI (WPBN/WGTU) -- The website GoFundMe.com is a helpful tool for people raising money for different causes.

Anyone can set one up and get donations. Now, some local businesses are using it to expand or even to stay afloat.

Old Mission Multigrain Bakery is in the process of moving their business to a new location.

Its owner, Peter Brown, turned to GoFundMe to help pay for expenses.

“To make the necessary improvements to the new location, as well as paying for all of the necessary people and equipment to make the move,” Brown said.

He hopes his loyal customers will raise $10,000, in essence subsidize the business.

“That is why we turned to the GoFundMe," Brown said. "We’re hoping that our customers have enough kindness in their hearts to help us with our campaign to just make the move as quickly and efficiently as we can just to basically keep the products on the shelves so there’s no interruption.”

Down the road, the Ben Franklin store jsut launched a campaign to raise $100,000.

The owner said some of the money would help them pay for some inventory and catch up on some bills.

“I think that across the country, it’s becoming more popular as a way for people to get creative funding,” said Max Anderson, the executive director of the Traverse City Area Chamber of Commerce.

Anderson said crowd funding can be a good way for some companies to raise money if they don't fit into certain categories for bank loans.

“That was one way, or a family member, or a friend, a private equity firm, that kind of thing so it was definitely tough and this has made it easier," Anderson said.

Even though he said it is a good tool for some businesses, it probably isn't a good strategy for keeping your business afloat.

“It’s a great resource to turn to, but at this point, it’s not sustainable in my mind," Anderson said. "It’s nota sustainable method for funding a business long term. It’s meant for a one time quick hit, startup funds, expansion with a specific purpose. I have not seen personally any businesses that are using it as an ongoing funding mechanism.”

But is it ethical?

"I think that it's really about the consumer or the potential investor vetting the process and the business more than it is about what's ethical and what's not, because you can't exclude certain businesses that you don't find unfavorable," Anderson said.

So far the Ben Franklin store has raised $375 out of its $100,000 goal and the Old Mission Multigrain Bakery has raised $960 out of a $10,000 goal.