There is a big hill to climb for new business owners, but the good news is funding is available to help with that opening investment. In addition to loans, investments, and savings, grants are available to help fund small businesses. The sooner you can apply for a grant, the better.
There is often a lot of vetting and paperwork to fill out before you get approved. That’s often the hard part, but there’s still work to do once you get your funding. There are a few simple steps you should take to maximize your grant funding.
Do You Need a Grant?
Grants are a great, strings-free way to help fund your business, eliminating the need to pay back loans with significant interest rates. But because grants are more strings-free, the organizations providing them will usually require more vetting. Grants can come from the federal government, local governments, or private individuals, but all have a thorough application process.
When applying for grants for small business owners, make sure you have an immediate need for the money. If you’re simply looking to put more money away for the business’ future needs, the odds are your business will struggle against more in-need competitors for the limited pool. A grant can help a small business take off, and if you have a specific goal you need funding for, now is the time to go for it.
Cross Your T’s and Dot Your I’s
Congratulations—you were approved for the grant! Now’s the time to make sure this deal works for both you and the grant sponsor. First, make sure you do your research. Don’t assume the program officers will tell you everything you need to know. Review their website and documents carefully before signing.
After expressing your gratitude to the grant provider, it’s time to get to work. Make sure to come up with a plan for achieving goals and reporting back to the relevant authorities. You should plan to keep copies of any receipts and documents, as well as of the official contract—this protects both you and the grant foundation legally.
Spend Cautiously
When getting a significant infusion of grant money, it can be easy to get carried away. It offers a sense of freedom that small business owners rarely have. But that doesn’t mean it’s time to go on a spending spree and pick up anything you think your business might need in the future. It’s time to sit down and create a budget for your business that includes this windfall.
The best time to do this is before you fill out your grant application. Grant foundations will look positively on anyone who includes a budget in their application, and some might even require it. Make sure to think about all your potential costs and funding sources before developing your budget or making major purchases.
Follow All Guidelines
If you handle things well, a grant might not be a one-time thing. It’s common for businesses who stay in good standing with a grant funder to have a consistent line of funding and investments in the future. It’s imperative to know what your funder wants out of their grant and follow all their guidelines and principles.
Best practices for this include having a firm budget and keeping a focus on the responsibilities laid out by the grant funder. Do they want you to make a certain element your priority? It’s also important to stay in contact with them, communicating your progress and priorities, even if the grant doesn’t specifically mandate this.
Make it Public
When managing your grant, don’t be afraid to share this partnership with the public. Not only is it important to keep everything above-board for documentation and tax purposes, but it helps your business’ reputation. A grant shows that someone has faith in your business, and this increases your reputation. It also increases a sense of transparency and serves as a sign of the funder’s philanthropy—positive press that can be worth more than money.
Make the Most of Your Grant
A grant can be a gamechanger for a struggling business or give a successful one a little more breathing room when launching. Without the burden of repayment, it’s an opportunity to build a lasting relationship with someone who believes in your vision. With these best practices, it’s easy to turn an opportunity for funding into something that can pay lasting dividends.
