Starting a small business can be exciting and overwhelming at the same time. There is a lot to accomplish in the beginning such as research, writing a business plan, determining the location of the business, securing a small business grant and learning all the regulations.
Accessing capital for your startup can be challenging. Loans may seem much harder to qualify for especially in the start. This is the reason why grants are available. Grants are a great way to get a startup running. Startups face many challenges securing a business grant because unlike loans, grants do not need to be repaid or there is no need to forfeiting equity.
Here are five tips to ensure you are on the right track when requesting for a business grant:
It is important to understand the requirements of grant providers. These organizations will be lending money that you do not have to pay back which is why there is a lot more effort and planning involved. The grant request should be prepared in a way to convince the grant officer that the business is a serious entrepreneurial pursuit and that the grant is essential for the business to prosper. Learn about all the regulations, who are the grant providers and what are their requirements to apply for a grant. Being eligible for the grant is the first and vital step. Do not miss important application criteria.
2. Choose a grant provider
There are many organizations that offer small grants. Government agencies are amongst the biggest providers to support many enterprises that meet their vision to promote industry growth in various sectors. A few examples include child care services or an environmental conservation business. Governments know the role that a startup plays in the economy which is why they are willing to support aspiring entrepreneurs.
Make a list of the potential funders, review their application process and select a provider that fits your needs. Look for grant providers in your industry which makes it easier for you to apply. Read the details of the grant program to make sure your business meets the interest of the grant provider. The grant application involves a lot of work, patience, research, time and efforts. It would be best for you to focus these efforts on a grant that is of a good fit.
3. Highlight your business contributions
In your application, highlight the contributions to the economy or community. Demonstrate how the funds will help you achieve specific goals such as job creation, industry objectives, economic developments and community benefits.
4. Present a compelling proposal or plan
To ensure you secure a business grant to help get your business running, requires a solid business plan. This can convince the lender such as the government, councils, charity foundations or other financial institutions that you are able to transform your idea into a lucrative business. Government funders will be interested in knowing how the funds will help business growth.
You must incorporate both short-term and long-term objectives, and be truthful about achieving them. Explain how the funding will contribute to your business strategy and company goals. You can be sure to secure the grant if your business plan is strong and meets the vision of the lenders.
5. Request for the right amount of funds
Be realistic about the amount you are requesting. Complete a thorough financial analysis for your business. A realistic and detailed explanation of the fund requirements will ensure you secure the right amount for your business. Asking for a little more as a contingency is not always bad. However, asking for less may result in under capitalization. Being realistic will win you credibility with the grant providers.