Making a budget and estimating costs is critical to the success of any endeavor, especially crowdfunded products. I am always looking to learn more on this process, and wanted to share a brief bit that is not often talked about. I was reading a recent guide, and the numbers they provided matched my own experiences, so I'll repeat them here.
Overestimating costs to provide a buffer for the unexpected is important, and while exactly how much you budget in is up to you, here are some simple and reasonable numbers to use as a guide:
- Add a 10%-15% buffer onto any costs that are not shipping or manufacturing.
- Add a 30% buffer to shipping and manufacturing costs.
You'll ultimately have to decide how much of a buffer works best for your project, but these numbers aren't unreasonable. This is especially true for creators who are crowdfunding on Kickstarter or similar platforms, where your budget needs to be cemented ahead of time, and manufacturing and shipping might be some time in the future.