Featured on Forbes’ website, contributor AJ Agrawal shares how a new business can raise funds through social media platforms in the article “How to Raise Money For Your Startup Through Social Media.”

“Raising money for your startup could mean the difference between turning your company into success or see it languishing by the wayside,” explains Agrawal in the article. “If you need to raise money for your startup, social media is the answer. Research states 84 percent of CEOs use it to make financial decisions. If you are smart about it, you have the potential to communicate with millions on a tiny budget.”

In the article, Agrawal shares five ways new businesses can implement an effective social media marketing strategy to raise some cash flow:

  • Know your platform(s). Every social media platform is different. “Every social media network has a niche, and it has its own nuances that you have to take advantage of in order to meet the needs of that niche,” says Agrawal in the article. You can’t apply the same strategy to every platform and expect the same results. Instead of trying to target as many platforms as possible, stick to the social media channels your target audience uses.
  • Choose the right networks. Similar to reaching your target audience, learn which social media platforms potential investors are hanging out at, such as LinkedIn, and make sure to be there, too. And, having an idea of what the perfect customer and investor are to you will help you focus in on the right social media platform(s) to target.
  • Spend money wisely. Although free to use, most social media platforms are “pay to play.” If you are trying to market your new brand to a vast range of potential customers and/or investors, you will most likely have to use paid tools/advertising. However, don’t just throw your money at these options. Make sure to study the paid platforms to determine how you can get the best return on investment.
  • Build a community. Social media gives you the ability to connect with people from all over the world. This creates an incredibly efficient way to network with your target audience, and often results in ample feedback and interaction as well. Don’t make the mistake of not responding to feedback or just leaving a generic response. Entice further interaction and discussion. Don’t sell to your audience via social media, but rather engage with them. “You need to go out of your way to form real connections,” asserts Agrawal in the article. “It doesn’t have to take a lot of effort. As long as you are acting like a person speaking to a friend you are going to see incredible results.”
  • Reevaluate your social strategy. Since it’s always changing, social media can cause some challenges. Once you fine-tine one strategy, it may end up being no longer relevant while a more effective approach emerges. “Startups have to remain flexible if they are going to continue to reach their target audience and increase the chances of attracting investment,” shares Agrawal in the article, adding that you have to keep up to date on the latest changes in social media when reevaluating your strategy. “Don’t wait until everyone has updated their strategies before you follow suit,” he continues in the article. “This is a constant arms race and you have to stay ahead of the game.”

Read more about how social media is a smart investment for your new business here.