Why Grants Are A Great Way To Fund Your Business
If you’re like many Australian entrepreneurs and have chosen to launch your business with less than $5000, then you’re used to looking for return on investment from almost every dollar you spend.
Much needed injections of cash can come from a range of sources, including co-founders, grants, banks, angel investors, crowdfunding and venture capitalists.
“There are many ways you can access funding… different avenues suit different ventures and may be more appropriate at different stages of commercialising an idea or starting your business,” says innovation strategist and funding navigator Pia Turcinov.
What makes grants unique over other forms of cash is, in many cases, the money doesn’t have to be repaid. Grants also have a distinct advantage because:
- You don’t have to pay interest on the money, like you would with a bank loan.
- Grant conditions are usually more relaxed than investor terms.
- You don’t have to give away equity in your business, as you would with an investor.
- If you’re bootstrapping your business, holding on to your equity means you still have ultimate say in the future direction of your business.
For startups that don’t have proof of concept yet, the valuation you receive from an investor is also likely to be less than the one you receive after you have proof of concept, which is another reason why grants are so appealing when you compare them to investor funding.
The best places to find grants
Grants are available from a wide range of government and private sources. Because these are scattered across a myriad of different websites it can be hard to find the right one for your business, so knowing exactly where to look is key, says Inspiring Rare Birds Founder and CEO Jo Burston.
“The funds you receive from equity deals can be used to operate your business, and for working and capital expenditure. Grants on the other hand, are usually for a highly specific purpose, so unless you know where to look it can be difficult to find one that fits the specific challenges you’re experiencing in your business right now,” she says.
“Even when you find a suitable grant, applying for it can be a minefield so it’s important to get professional help from grant specialists. Often these experts are paid from the proceeds of the award, so it’s really a no-brainer getting this assistance,” she says.
The types of grants available
Grants are available for a huge range of specific purposes, from improving your competitiveness and productivity to research and development. They’re competitive by nature though, so the key to making a successful application is “knowing what options are available before you jump in the deep end,” says Pia Turcinov.
These are Pia’s 9 tips for grant applicants:
- Have a clear idea of the process behind accessing funding before you apply for it.
- Be clear about how the different funding streams will affect your business as it grows.
- Make sure you have a robust business plan that includes sensible financial projections and planning.
- You’ll be competing against other entrepreneurs for grants, so make sure you understand the eligibility criteria and do everything possible to meet it.
- Understand your value proposition and clearly articulate it in a succinct manner.
- Have someone else read through your grant application before you submit it.
- Don’t take shortcuts and assume that because something is obvious to you it will be obvious to the reader.
- Make sure you understand any co-funding and reporting obligations that may come with grant funding.
- Get professional support from a mentor or grants expert to help you prepare your grant, especially if it’s for a large sum of money.
Do you need a grant for your business? Inspiring Rare Birds Funding Business Growth Program has grant specialists available right now, who can work directly with you to apply for grants and secure money to help your business grow.