The question we often get from majority of Formula Bharat’s participants is on how can they raise funds to build their Formula Student project. It is no easy feat to raise 13 to 30 lakhs each year to fund the project, operations and competition fees. So how are other teams able to do it? Where can one begin?
There are many avenues for raising funds But before you begin treading down the path of fundraising, it is very important to put a preliminary expense sheet together. Even if you are a new team, you can still build a skeleton model of a budget. Start with each assembly on the vehicle, and break it down further into component costs. Don’t forget to also add manufacturing and delivery costs as well! For community support, this would also be a great time to take the opportunity to connect with other Formula Student teams to put together a preliminary list of line items that your team should consider.
Another aspect that would be helpful in organizing your expense sheet is determining your goals for the season. This includes but is not limited to goals set for vehicle design, competitions your team intends to participate at, marketing, recruitment, testing and overall team management. For example, if your team plan on installing turbo on your combustion system, then the engine assembly costs increase significantly. If your team intends in participating at two competitions in the upcoming season, then not only do you have to plan for payment of registration fees, but also on competition logistics such as shipment of vehicle and hospitality of team members such as transport, meals and accommodation at each competition. If you plan on participating in tradeshows in your city, then you will need to budget towards vehicle delivery and manning of the tradeshow booth. Hence, creating a set of goals is crucial to developing your budget.
Note that it is not just the Team Captain’s responsibility to put a budget together. Each section lead on the team is responsible towards delivering their budget requirements to ensure all aspects of the expense sheet are covered.
Determining your fundraising goals
Once you have a preliminary budget model put together, it is time to break it apart for the fundraising exercise. Highlight components and machining jobs that could be sponsored in-kind and create a tentative list that can be shared with each Section Lead. Make it the responsibility of every Section Lead to research vendors in your area and to create a connection for a possible sponsorship opportunity. The worst that can happen is that the vendor says no, but keep trying! Getting components and machining sponsored drastically brings down the monetary investment in your project.
Now that you have set aside your in-kind goals, tabulate your required monetary investment in order for your team to finish the project on time and within budget. This is going to be your ‘fundraising’ amount.
Creating a fundraising plan
Now that you are aware of what you need, you need to come up with a fundraising plan. This means putting together marketing materials, training team members on marketing strategies, determining the avenues of funding, and creating a fundraising timeline for the season.
Your marketing materials could involve e-brochures, posters, visiting cards and reusable banners. Pictures of your workshop, your vehicles and team members working together on a project are great images to add to your marketing materials. If you are a new team, building a mini-scale model of your project (with toothpicks?), showing CAD model imagery and photos of the leadership team is a great way to build a preliminary portfolio. Include a sponsorship levels and benefits list as well. We advise that you don’t spend money on printed material unless you have an in-person event.
Next you need to create scripts for sponsorship calls and fundraising pitches. Make these scripts available to your team members with a list of common questions asked by those curious so that they are confident to answer without hesitation. A historical download of your team’s legacy which involves when, where and how it began, number of cars built, competition history and vehicle design history should be provided as well. It is important to know how much you want and what the amount will be going towards. Some sponsors may be only interested in certain aspects of your vehicle if they dedicate money towards it. This may seem like a lot of work but if you want your team to ‘know their stuff’ in front of a potential sponsor, then scripting goes a long way.
Note: A lot of times, students forget to include their “passion for Formula Student” in their marketing pitch and a lot of the times, sponsors “give in” to passion. Hence it is important to indicate your commitment and passion to the project in your pitch!
There are many avenues for fundraising. We have already covered one above which is in-kind sponsorships. In monetary forms, a few options available include sponsorships, crowdfunding and hosting special events.
Sponsorships are one of the most sought out funding avenues for a lot of teams. But many young teams make the mistake of skipping the networking line. They try to connect with big corporations directly, only to have doors immediately shut. Here is a suggestion – start networking amongst people you know.
I recently inquired with a couple of team captains as to the level of awareness their immediate family members had on the project that they were working on. The majority of them said that it was too cumbersome to explain Formula Student to their family and hence that they don’t bother talking about it. But isn’t that an opportunity missed? You see, even if our parents or relatives do not work in engineering, the fact that you are a ‘close’ family member gives them an opportunity to help (only if you ask!). I know a few teams who were able to connect with the CEO of a large Tier 2 automotive company because their relatives knew someone, who knew the CEO! What are the chances? Unless you talk about your project and ask for help, you wouldn’t know the expanse of your network!
Another example is securing sponsorship from a bank. It is most likely possible that a parent or relative knows a bank manager on a first-name basis. Isn’t that a foot in the door, compared to you knocking on it yourself? Wouldn’t the bank manager be more responsive to your sponsorship request because of your relative’s relationship with them?
Here’s another scenario applicable for South Asians. A valuable “capital” accessible to students is family-related networking events. Weddings and other family functions are great avenues to talk about (and pitch) your project. The more people know about it, the more likely they will remember you in conversations they have with potential vendors who are more likely to sponsor.
An area that students exclude, is procuring sponsorship from any vendor that aren’t in the engineering or automotive industries. Why exclude potential sponsors? You would be surprised by the number of medium-sized grocery owners, sweet shop owners and even retail store owners who always wanted to be a part of a ‘Formula’ related activity. Tap into that passion and sell your dreams and aspirations for that sponsorship opportunity!
Inquiring with your faculty or university for funding towards your project is another option as well. This is not reciprocated often, especially if a team is new or has not shown improvement in results, but again, no harm asking! If they have given you a dedicated space to work on your vehicle, you are already off on a good start. You can also connect with the administrative wing of your institution to inquire if they have a list of registered vendors who would be interested in building a relationship with an extra curricular club at the institution.
Another avenue of fundraising is crowdfunding. For this, you must be extremely realistic with the amount you are trying to raise. Too high of an amount and you may overwhelm your team and the funders. Too low of an amount, and you could miss the boat on extras. Research the crowdfunding platform you wish to use and the fees involved in crowdfunding. Provide a realistic marketing and fundraising timeline. Also make sure you ensure that the method of collecting funds is secure, as fraud is rampant and retrieving lost funds is a nightmare. Engage your entire team in the crowdfunding effort. Get them to activate their social networks (not just social media, but friends and family networks as well) to develop a greater reach. Focus on your team’s passion and why you are invested in this project. Understand your audience and cater your marketing strategies to developing a connect with them.
Hosting mini-events such as bake sales, bbq nights, speaker sessions and karting nights are another way to raise funds. While you can raise quite a lot of money through mini-events, hosting them can be more cumbersome and labor-intensive than the options mentioned above. So plan accordingly and run a cost-resource-benefit analysis before embarking on hosting mini-events as fundraisers.
Believe it or not, you need to receive your funds by a specific time. You may need it for paying your competition fees or for procuring a component perhaps a few months before the competition or for booking a logistics provider for shipping your vehicle to and from the competition. Hence it is very important to look at your expense sheet and determine how much you will need, for when. This will help you outline your fundraising goals in an incremental manner which will be less burdensome, instead of trying to raise the entire season’s amount in one go.
Has your team hit a roadblock with fundraising? Let’s chat! Email formulabharat(@)gmail.com to book an office hour with our Event Manager.
This post was authored by Cathy D’Souza.