Marc PeskettFollow on twitter www.mprgroup.com.au/cms-business-advisory/
The five-step process to landing a start-up grant
With over 600 grants and a combined value of about $50 billion in cash available to businesses in Australia, grants should be part of every start-up and SME business funding strategy.
The return on investment is usually well worth the effort to obtain this cash, if you do a little homework first to determine where to direct that effort to get the maximum return.
Here is my five-step process for successfully evaluating the opportunity and then getting a grant:
1. Get your strategy right before considering grants
Grants fund projects and activities, not organisations.
Businesses can fall into the trap of being dazzled by the money available and allow the temptation of that money to direct their business strategy. This can be a dangerous proposition to tie your business to as market changes, new innovations and government policy changes can mean a grant program is short-lived and funding cut short.
This makes grants an important supporting resource, but not the driver of your business strategy. Your business and commercial objectives should be the driving force for this.
2. Have a plan to identify relevant grants and prepare early
When you’re setting your strategic objectives and projects for the year, it’s a good time to turn your attention to which grants might be available to fund those activities. A grant funding plan should be a key part of your overall business strategy.
Grants can fall into several categories:
- Prospective grants – awarded for future investments the business is planning to make.
- Retrospective grants – where you apply to recoup expenses already incurred.
- Competitive grants – basically involve a tendering process, where applicants need to provide a more compelling case for being awarded the grant over other applicants.
- Entitlement grants – have a predefined formula that is used by government departments and agencies to allocate the grant pool of funds to applicants that meet the criteria. The Export Market Development Grant works in this manner to divide the pool of funds set aside each year in two tranche payments.
Finding and applying for the grants is then a question of time, skillset and return on investment spent on obtaining the grant.
Do you have the right people with time and the right process to invest in researching, evaluating and pursuing grants for your business? If not, consider getting some initial support with some or all of these stages so you can take advantage of this valuable source of funds.
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3. Evaluate if you’re the right fit
It helps to define your projects and activities in order to gain clarity about which grants you might be eligible for. You may find you can obtain different grants for different stages of the project.
Having that definition will also help to find the right match and alignment with the type of projects the various grant bodies intend to support.
Some questions that will help with that definition are:
- What are the objectives of the project?
- What problem or opportunity will it address and what benefits does that provide?
- Who are the people, businesses and markets that will benefit?
- How will you implement the project and who will that impact?
- What is your timeframe to implement the key stages or milestones of the project?
- What resources, people, equipment, cash and services will you need to implement the project?
- What is the actual likelihood of your project going ahead?
- What benefits and return will the success of your project deliver?
With your project defined, you’ll be in a better position to determine how your project matches the objectives of the grants body in awarding that money to businesses.
The program guidelines are a good place to start. They often outline the objectives of the grant, eligibility criteria, application process, and any other conditions, agreements or requirements you need to meet.
You need to make your application shine so it stands out from others. To do that you need to address the guidelines and eligibility requirements. You also need to consider the grant body’s perspective and show how you will support their aims and objectives and provide a return on their investment, along with sustainable solutions, in order to support why you should be funded.
Here’s a quick checklist that will assist your grant writing:
- Answer the question
- Use professional language
- Stick to word limits
- Be clear and neat
- Don’t assume prior knowledge of the assessors, within limits
- Build your case
- Show value for money
- Be consistent across the application
- Make sure your budgets and projections are realistic, include all costs and contains no errors
- Be able to record, measure and justify your results
- Present realistic and measureable timeframes
- Be honest, upfront and proactively deal with any downside or negatives
- Use supporting documents where appropriate
5. Ongoing requirements
It isn’t over after you submit your application.
If you’re successful you might need to sign contracts, provide reporting or submit your application to audits as part of the conditions associated with some grants.
You should also make it your aim to develop good working relationships with the grant makers, which will make the process of providing progress updates and feedback easier.
As government grants are often funded for multiple years or rounds of funding, good relationships may also help with early notice of changes and the opening timeframes of subsequent rounds of funding that you might be eligible for. This will help you prepare and apply early.
If you’re not successful with your application, have heart. Set aside any bitterness or cynicism and call the administrator to politely ask for feedback or advice that can be useful for your next application.
They may also have some insights into other related programs they have knowledge or interaction with, that you might also be able to pursue.