Are you thinking of starting your own business and looking to fund your business with small business grants? During this current state of economic uncertainty where the unemployment rate is rising fast, employees are having little job security. People are seeking ways to avoid getting laid off unexpectedly from their jobs, and as a result, many turn to starting their own businesses. However, the most common problem faced by budding entrepreneurs is the lack of capital or funding in order to kick-start their businesses.
The best option that a business owner has with regards to funding his or her new business is to apply for small business grants that are offered by the federal government, state, and private organizations. Grants are the best funding solutions because they are essentially risk-free capital, without the need for repayment and interest rate charges. There are however, grants that require you to fulfill a set of key performance indicators (KPI) set by the granting organization after you receive your initial grants so it is not just about getting approved and spending the new found funds dangerously.
Having said that, applying for small business grants is certainly not an easy task. Everybody can apply for grants, but not everyone who applies for one receives one. It is not impossible to secure these grants, but the problem lies in the stiff level of competition for the grants and the limited budget that can be granted out. It is essentially a time-consuming process and your business needs to fulfill certain criteria to be considered. Very often, applications are rejected due to minor filing errors and you will want to avoid that in your applications. It will appear to the granting organization that you are not taking your application seriously and as a result, you will not be treated seriously as well. Businesses that are geared towards public good and non-profit objectives (social purposes) will stand a better chance of having their grants approved. Hence, your business model should have a strong case of public benefit elements, and possess legitimate public interests that shine through your business plan. In addition to that, businesses that are geared towards research and development in technology, medicine, and energy will have an added advantage too.
To apply for small business grants, there are certain steps to be followed to strengthen your application and the chances of being awarded. You will first need to have a proper business organization with a well worked-out business plan. A winning business plan must consist of the following; executive summary, business description, market strategies, competitive analysis, design and development plan, operations and management plans, and financial components. These will be reflected in the business proposal which you will subsequently submit to various federal, state, and private organizations for your small business grants application. It can be overwhelming to put out these plans and ideas on the proper documents. This is one of the reasons why small business owners put off this very task that will give them the required funding to grow their businesses. If you and your partners are not well versed in writing a winning proposal, consider hiring a consultant to handle the whole process for you for a fee. Another alternative will be to spend some time working out the plan yourselves and have it vet through by members from your local chamber of commerce. Submit it to a lesser known granting organization and if rejected, ask for feedback and suggestions for improvement. You will have better results the next time you apply.
A very helpful organization you should turn to is the Small Business Association (SBA) as they can provide sound advice with regards to your grant applications and match your business profile to the proper funding organization. Do note that grants for small businesses are not easily obtainable and even if you do not manage to get one, SBA will provide the right funding program, in the form of small business loans. These forms of assistance come in terms that are generally more generous than the traditional lending institutions. Be active in your local chamber of commerce as they can notify you if a suitable funding program or grant is currently accepting applications. A referral by them carries huge credibility and adds more weight to your application than if you were to carry out the sourcing and application yourself. The Small Business Development Centre (SBDC) and your local community college can also be a good resource to turn to for more information. The trick is to leverage the influences of the commerce heavyweights to turn the application in your favor.
Focus on state and city grants in the beginning where there is less competition as opposed to the federal grants and the criteria for acceptance are not as strict. Persistent follow-ups regarding your application are necessary to prove that you are a serious business owner who wants to take your business further. Attention to detail and making a thorough error-free application are crucial to boost your chances to be granted the required funds. Be honest and detail out exactly how the grants will be utilized and you will have a good go at it. Apply for multiple grants at once so as not to put your eggs in a single basket. Take some time to gain a deep understanding of the local granting organizations so that you have a stronger case when you submit your application for your small business grants.
Resources:
US Small Business Administration: http://www.sba.gov