Small business grants are a much-desired - and little understood - way of accessing funds for business. Grants involve the awarding of some benefit, usually financial, by a company, foundation, or government, to a business to facilitate a goal or incentivise performance. Grants are essentially gifts that usually do not have to be paid back.

Small-business grants are a teeny part of a much bigger grants landscape, which are targeted to specific purposes, from starting a company or helping it run more efficiently to aiding its expansion.

At The Business Plan Company we often hear business owners state they are ‘going to find a grant’ but there seems to be little understanding of how it works or even if there is an applicable grant. Let’s unpack it.

Who gives out grants, and why?

Grants are offered by various organisations for outcomes and purposes that are aligned with their own objectives (i.e. it’s equally about them as it is about you). These can for specific programs outcomes, for philanthropic purposes or for organisational programs. Grants are made available to the market through a number of mechanisms and vary enormously in size, structure, duration and demands; almost no two grants are the same.

Governments and their agencies often create grant programs to achieve specific outcomes that are in line with their policies. For example, a state government has an objective to increase social outcomes (e.g. employment for women or refugees communities); grantee organisations can then deliver quality programs because they have the capabilities and community connections, understanding, innovation and skills to achieve better program results.

Governments can also offer grants to achieve an economic or innovation outcome, that support businesses and organisations to become better operators, to innovate new products or services, boost exports, skills or improve labour force performance. Grants can also be made available for infrastructure or equipment, usually for community benefit; we just worked on a grant application that helped a tour operator to increase access for disabled clients. A local government, for example, may wish to boost local small businesses, so offer grants for specific local promotions.

Grants from governments are from all levels – local, state and commonwealth - and vary a lot of amount and purpose. Processes are usually highly formal and require dedication of time to submit.

Privately run organisations, corporates or foundations offer grants that are in line with their objectives and corporate policies; these can be purely philanthropic or corporate, with grant programs, processes and amounts varying enormously. These types of grants tend to be more focused on the benefit of society, specific community cohorts or activities.

Where do small businesses fit?

The reality for small business owners and start-ups is that there are only a very small number of the available grants that are applicable, with few funds available to ‘start your business.’

Those that do apply fall into two categories:

  • Business-specific programs, where the grant offers funds to build, grow or educate. These are usually at state government or local government level, for smaller amounts, that can be used to fund particular activities such as digital development, planning, education and training. If your business happens to be part of a more specific niche, such as a charity, there can be programs that are targeted to these specific segments. Indigenous Business Australia (IBA), for example, offer grants to qualifying start-ups and small businesses.
  • Program delivery. Your business may have specific skills and capacity that allow it to deliver programs that are funded by the grant. For example, the grant may ask for delivery of communications to a specific cohort, for which your business may be able to deliver these. Or the grant seeks to increase community engagement for the elderly and your business deliver care services to aged car, so you could develop and implement a program.

Where to find grants

Published grant programs are easy to find, with a number of paid search and aggregation services, that send alerts for new tenders that fit your criteria (for example Grants Hub or Grant Guru). Each of the organisations that offer grants will also publish them on their site, such as local councils, state/federal government and philanthropic organisations.

For philanthropic grants and foundations, these take more digging and direct relationships with philanthropic organisations and corporate programs can be built over time. These are less applicable to small businesses.

Grants are not ‘easy money’.

Despite expectations for new business owners, there is (almost) no money available to help business owners start or grow their business. Programs are usually allocated for very specific outcomes or programs, such as digital skills development. Grant funds for the most part are tied to the program delivery, with tied deliverables that need to be reported on. For many grants, there is no excess funds left over and sometimes the grantee will actually be contributing funds themselves.

Decide if the grant is right for you.

When you see a grant opportunity that you think is right for your business, download the grant guidelines and also the grant application form. Take your time to understand these, as there can be a lot in these with small hidden conditions that preclude you from applying. For example, co-contributions are common, so if you don’t have funds to contribute, you may not then want to apply. It is also very useful to read the grant submission forms so you know what you need to submit – these are all different, sometimes easy, sometimes complex. If there is an information session, listen in so you can understand first-hand what they are looking for. Try to read between the lines to understand what the grant is really looking for and don’t try to fir your program into their criteria – you won’t’ win.

Grant programs can be assessed on a competitive basis, meaning they will choose a number from all the applicants. Alternatively the grant could be available until the funding pool runs out. One consideration for whether you should apply is how competitive the grant is likely to be, how many applicants are likely. Recently we worked on a grant for Australia Post, my expectation is that this grant will be extremely competitive as they publicity was very wide.

When you are making this decision, there are some things to consider:

  • Accept that your chances of winning are low-medium; grants are competitive. Grants that are more specific and niche to your business are much more likely to succeed.
  • Does your business really meet the conditions? Check carefully all conditions. Look over the key criteria to make sure you fit; sometimes your company can be excluded before you start.
  • If you are proposing to deliver a program, can you demonstrate capability to do so? Applying for a grant that is much bigger than your current business activities will not be convincing.
  • Consider who you would be competing against.
  • Make sure you have enough time for all parts of the process. Doing a half-baked application will show and you won’t get far.
  • Get all of the documents and read them. Sometimes this can be daunting but you need to look over them to understand key dates and all requirements.
  • Look at the application form/structure so you know what kind of information you will need to provide. See if you can download these so you can work offline as you put it together.
  • Read the grant contract there are lots of conditions that will impact if you want to do it.

Preparing your submission

The grant submission documents will clearly specify what you need to submit, usually with very specific questions that have word limits. Common formats also include writable pdfs and spreadsheets. Make sure you are very clear on which ones need to be submitted and the submission deadline. Give yourself a day or so in advance to submit before the deadline, as these systems sometimes don’t function well under pressure.

Word and character limits can be challenging, so write your responses without attention to this at first, then edit down to the limit at the end. Sometimes the short limits can make it feel like you can’t fully describe your proposal comprehensively enough, so use attachments to support your proposal.

As you are collating your information and writing responses, it’s much easier to work in an editable format like MS Word, then add into the final document once it’s ready. Editing in online forms is much more difficult.

Once it’s at draft stage, get multiple other people to read it before you do the last edit for submission.

Fulfilling and reporting

For many grants there are strict reporting requirements, so make sure you know these in advance and take the time to submit the reports on time. Failure to comply could impact the funding you receive and also reduce your chances of ever winning again.

How to win.

Grants need time and attention to win, but there are a few things that increase your chances:

  • Take time to understand the Grantor, what is important to the organisation and the criteria of the tender. Address these in your submission. Remember that the organisation offering the grant has their own objectives and will judge the submissions based on these, not your business’ wants.
  • Programs should be innovative and show how your business will directly respond to the criteria and achieve the outcomes specified in the grant guidelines.
  • Make sure the budget is right. Show how you arrived at the amounts you are asking for, oftentimes needing quotes to substantiate.
  • Make sure your house is in order. Your website, logo, social media profile and overall presentation to the market will be scrutinised. Make sure it’s all looking good. Many small factors that contribute 1% all up.
  • Answer all questions comprehensively. Grant applications tend to ask very similar questions over and over, so take time to really understand what they are asking each time.
  • Don’t be afraid to get help.

Other benefits of grant applications.

Grant submissions take time and effort, so you need to carefully weigh up the potential benefits with the costs before embarking on the journey. For the right grant program, there are potential benefits beyond the money itself, as they can help to build credibility, to be associated with a government agency and to promote your business as the winner. Just by completing the details of the grant application itself can also help in the strategy development of your business.

Dr Warren Harmer