A Guide on how to get small business grants.
Are you in doubt as to whether small business grants are real? Government usually supports small businesses with small business grants in order to achieve specific objectives. Small business grants may come in different forms. It can be a free small business grants whereby the beneficiaries are not expected to repay. It could be that the government will provide the grants in form of loan but with less stringent conditions. Government may grant loans to small businesses with a long repayment period or at a cheaper rate. It could be in form of equity finance. This will involve equity participation. But the difference here is that the owner can repay the government thereby regaining the full ownership and control of his business. Whatever the case, I want you to believe that small business grants are real. If you don’t believe this, you may be missing some vital opportunities. This had happened to me once when our government decided to support young entrepreneurs having innovative ideas with small business grants up to $65,000. I didn’t take it very seriously as I did not even bother to apply. When the result was out, one thousand young entrepreneurs were granted the small business grants. The good thing about the small business grants is that it was free. The beneficiaries would not need to repay the grants. What a missed opportunity! Who knew whether I would have been one of the people who were awarded the small business grants if I had applied?
Perhaps you are looking for ways of financing your business, small business grants can be a good source of finance if they are available. However, I need to caution you that there are also a lot of scammers claiming that they want to offer small business grants to small businesses. If you are cautious enough, you can easily identify them. How can you identify the scammers?
- Some of them will ask you to purchase application form or pay a particular amount before you can be enrolled for the small business grants.
- They use fake email address. They usually use the real address of reputable organizations that ususally give out small business grants. But if you look closely at the email address, it will not emanate from the organization’s domain address. They may even have a website that look like the website of a reputable organization. If you are in doubt of the domain address, please, search internet to confirm if there are other similar websites.
- Call for urgency. They may tell you that you have only one of two days left to take action; otherwise you will miss the opportunity. If you can’t meet up with their deadline, you will be surprised that they will tell you that the date has been extended. (Please, note that not all organizations that extend the closing date for the submission of applications for small business grants are fake. But the genuine ones will not ask you to pay money).
After you have convinced yourself that the small business grants are genuine, then you can begin the process. The fact that you apply for the small business grants does not guarantee automatic success. Following the tips below will increase your chance of being considered for small business grants.
Read Also: Funding Options for Small Businesses
Understand the government objectives
No government will give small business grants to people for them to pursue their personal interests. Any time government announces that it wants to give out small business grants, you need to find out the motives behind it. Government objectives for giving small business grants to small business owners may include the following:
- To create employment. If your business will not generate a certain level of employment expected by the government if you are granted the small business grants, your application may be turned down. For example, an IT company may not be able to create employment in a way manufacturing company will do. Of course, if the same amount is poured into the two companies, the IT company may be able to generate more revenue and profitability. But that is not the government objective for the small business grants.
- To encourage investment in a particular industry. Government can be industry specific when it comes to releasing small business grants. Government may want to diversify economy into agriculture. No matter how good your business plan is, if it does not fall under agriculture, it will not be considered.
- To promote gender interest in entrepreneurship. Government may want to encourage or empower women to become entrepreneurs. If that is the reason for the small business grants, men are automatically exempted from the scheme.
- To encourage youth participation in driving economic growth. It is not unlikely to have many youths with innovative ideas who are not having enough capital to actualize their dreams. As a way of supporting such individuals, government may decide to give small business grants to youths with innovative ideas within a particular age range.
Therefore, it is very important for you to understand the purpose of the small business grants before you apply at all. This will ensure that you don’t waste your precious time. A lot of people are frustrated simply because they refuse to understand the reason for the small business grants before applying.
Fill and submit your application
In most cases, the government or organization giving out the small business grants will have a standard application form template which the applicants are expected to complete. Ensure you fill all the required information correctly. I will encourage you that you don’t do this alone. You can make contact with the awarding body before you apply. This will help you get first-hand information about the small business grants and what they expect from the applicants. You can also contact professionals to guide you in areas that seems technical to you. If you know someone who has benefitted from such small business grants, you can contact him for guidance. Ensure that all pieces of information in the application form are correct and true. You may need to defend whatever you fill when they call you for interview. Don’t submit your application late. Even if there is possibility that the closing date may be extended, you should not depend on that. Also, if the small business grants are goint to be in phases, it is better to be among the first set of peeple to apply. In most cases, small business grants are less competitive when first introduced.
Prepare your business plan
If you are not having a business plan yet, this is the opportunity for you to prepare one for your business. If you have one already, you may need to review it and make certain amendment or improvement to it. Your business plan should be in alignment with the application form submitted. It should also support the government objectives for the small business grants. The financial aspect of the business plan should specify what exactly you want to do with the small business grants if you are considered. It is important that you don’t totally depend on the small business grants. Government will like to see your own capital contribution into the business. Your capital contribution can be from your personal savings, money from friends and relatives and bank loans.
A lot of people make a mistake of giving out business plan to other people to prepare for them. If you do this, it is no longer your business plan but his business plan. And you may not be able to defend it. However, there is nothing bad in working with experts or consultants when preparing a business plan. They can help you ensure that no important information is left out and that the business plan is well and logically prepared. Most of the information in the business plan will come from you.
There is need for me to mention that small business grants are highly competitive. A lot of people will apply for the grants for the fact that the funds not be refundable. When there is need for repayment, the terms and conditions attached are friendlier when compared to bank loans. The owner of the business may not need to share control with anyone unlike venture capital. Therefore, you need to make your business plan stand out from the crowd. Your business plan should be convincing.
Read Also: How to Prepare a Good Business Plan
After you must have submitted your application, you should not just cross your legs. You need to follow up on your application. Follow up may mean that you keep yourself informed of any development regarding the small business grants. There may be changes in the events calendar. You need to visit the website and the social pages of the awarding body regularly. If you have any question or enquiry to make, don’t hesitate to send a mail. You can chat with them on their social pages. If you don’t have any enquiry to make, you can read other applicants’ enquiries and answers given to them.
Prepare yourself for the interview
No matter how detailed your business plan is, nobody will rely on that to award you small business grants. You will be invited for interview. It will not speak well if your business plan is well prepared and you are unable to defend the content. That is why I encourage you not to copy someone’s business plan or outsource it to someone to prepare for you. This is the area I usually have problem with people when they contact me for the preparation of business plan. If I tell them that we will do it together, they usually frown at me. They ask me question like, “why am I paying you?” If you give your money to someone to prepare a business plan for you, he will collect the money and give you a business plan. The question you will need to ask yourself is that, “is this my business plan?” It is better to ask yourself this question before you get to the interview. If you are asked the question, what will be your response? If you answer in affirmative, will you be able to defend the content? A lot of applicants for small business grants get disqualified at this stage.
Be specific on the use of the funds
What do you want to do with the small business grants? You should have a specific project you want to use the grant for. How much will the project cost? Don’t expect the small business grant to cover all the costs of the project. You are expected to contribute. Therefore, you should ensure that you have your own portion ready in case your application for the small business grants is considered. I advise that you don’t start the project until the grant has been released to you. The award of small business grants usually takes a long process. The closer the awarding body to you the faster the process. For example, the award of small business grants from private organization will be faster than the one handled by the government. Also, in most cases, the awarding body will not release the small business grants at once. If you start the project and the subsequent release of funds is delayed, you can fall on your own contribution to carry on the project.
Carry out the specified project
Don’t think that you can use the small business grants for other purpose(s) when released to you. That is one of the reasons the whole grant will not be released to you at once. If you have other projects you want to execute, you have to look for funds elsewhere. You need to understand that no goverment will give you small business grants to pay off debts or to meet operation expenses such as payment of salaries.
I advise that entrepreneurs should not depend on small business grants as a source of finance. The competition is always stiff. The terms and conditions usually attached to small business grants are so stringent that many small business owners will be disqualified. The process can be too slow to meet your needs. Therefore, I enjoin small business owners to consider other sources of finance. If by chance you succeed in getting the small business grants, it will only help you accelerate your business growth. On the other hand, if the small business grants are not forth-coming, it won’t be that your business operations are grounded.