Whether it's seeking investors to launch a new company, allocating money for research or managing cash flow to meet payroll and expenses, financing is never far from the mind of small business owners.
This is why "free" money in the form of grants can significantly boost small businesses at any stage of development. Grants can provide the resources necessary to create that breakthrough product, expand operations to a little (or a lot) bigger or jump from a business plan to an actual company.
But here's the reality: There's a lot of competition for relatively few grant dollars. Landing a grant requires the same savvy and strategic thinking needed to run a successful company.
Grants often impose various conditions, restrictions, etc. regarding the use of grant proceeds. A company must carefully read the grant terms and conditions and discuss with its attorney.
Here are three steps to follow to give your small business the best chance to receive a grant.
Step One: Do your Homework about Grants for Small Businesses
A large number of organizations offer grants. For instance, individual departments in the federal government ranging from the Department of Agriculture (USDA) to the Department of Commerce, hand out grants to support small business research and development (R&D), entrepreneurs in rural locations, and companies whose businesses operate in disadvantaged communities. The Small Business Administration (SBA) supports Small Business Development Centers[1] in locations around the country whose primary purpose is to deliver training, technical assistance, and grant access. Grants.gov provides a comprehensive resource to understand which federal agencies offer grants to small businesses. State governments and large companies such as FedEx and Patagonia offer grants to support small businesses.
Step Two: Strategically Apply for Grants
While there are a considerable number of grants available to small businesses, it's essential to remember that not all grants are designed to support all small businesses. Entities that provide grants do so because they are trying to achieve a specific objective, like fostering minority-owned or rural companies or protecting the natural environment. To put yourself in the best position to receive a grant – and to avoid wasting valuable time applying for a grant you are unlikely to receive – take the time to understand precisely what objective a grantor has and whether your small business can help them achieve that goal. If the strengths and purpose of your small business match the grantor's objectives, it's worth the time and effort to apply.
Step Three: Put your Best Foot Forward in your Grant Application
Grant applicants need to understand that funds are rarely offered up for use as you see fit. Study the grant application and craft your answers to demonstrate why your company has a clear plan to use the funds to meet your needs and theirs. Pay particular attention to the information a grant application requests – if you don't provide it, you won't receive the grant.
While it's essential to ensure you are meticulous in providing all the details requested in a grant application, don't forget the power of a good story. All small businesses have a story to tell – some want to solve a problem that impacts society, and others grow out of a need to help family and friends. Relating your struggles and inspiration will help you stand out from other applicants.
Finding and applying for grants can be time-consuming. Take the time to research options and find options that support your business goals and growth.
