Securing funding is among the most important tasks when it comes to starting or expanding your business. Both existing and future entrepreneurs face similar challenges on their way to acquiring the money necessary for their ventures, and while resorting to a commercial loan can be a solution, it’s better to explore your options and see whether you qualify for a grant.
The difference between the two lies in the fact that a loan, no matter how affordable it is, must be repaid, while a grant is a form of financial assistance which doesn’t require repayment. However, grants aren’t, as some might think, free money, since they come with a set of rules which have to be fulfilled.
Here’s what you should know before setting your grant application process in motion.
Where to look?
Ireland has become a start-up mecca, mainly because the process of setting up a business is easy. Another enticing factor for the booming of the entrepreneurial spirit in the country is a wide range of generous grants offered by the Government and investors. For example, Enterprise Ireland, a state agency, has poured €32 million into financing 229 start-ups in 2016.
A good thing is that these grants boost the country’s economy significantly, and the example of Logentries, a tech company from Dublin, illustrates this. The company which was sold for $68 million in 2015, has generated a 4,900 ROI as Enterprise Ireland invested €25,000 in exchange for 5,808 shares back in 2011, thus gaining €1.25 million. A downside to this whole thing is that grants can be hard to obtain, and in order to be eligible, you first need to understand how the whole procedure works, get acquainted with available programmes, and make sure that you apply for the right one.
How to start?
After you’ve picked a grant programme you’re interested in, get down to work and prepare the following:
- A detailed business plan which covers all aspects of your business and consists of an effective executive summary, company overview, industry research, product/service descriptions, operational and management structure, marketing and sales strategy, and financial details;
- A breakdown of how you intend to use the money;
- An account of your company’s financial records which have to be impeccable in order to prove that you’re responsible when it comes to money management;
- An abstract explaining how the agency or organization will meet their own objectives by awarding you a grant. Basically, you need to show them that their investment will be worthwhile and elaborate on how they will benefit from giving the green light to your plan;
- A proof that you have the rest of the money required for your project. Grants can cover only a portion of your budget, and sometimes it is required that you have an equal amount that you can invest.
It’s worth noting that a formal business plan increases your chances of succeeding by 16%, while being among the most important parameters for securing external funding. For this reason, it’s much better to hire an agency which specializes in helping entrepreneurs write their business plans and grant applications.
Applying for a grant can be an extremely overwhelming experience, which means that you need all the help you can get. Paying attention to detail is crucial for putting your best foot forward and convincing investors that your business idea is worth investing in.
- As many entrepreneurs are interested in obtaining a grant, available funds tend to dry up very quickly, so make sure to watch out for ongoing grant applications and be ready to act immediately.
- Get in touch with the grant manager before you submit your application. This way you’ll both find out whether your business is a good fit for the grant right away, and you’ll take advantage of some networking and connecting with people who could help you with your application with some useful advice.
- Don’t fabricate facts. Give sincere answers to all the questions from the application. It’s also important to keep your answers short and focused on providing the most relevant information.
- Connect and align the grant’s objectives with your business development plans. Highlight how investing in your company fits into the grant provider’s strategic priorities.
- Submit your application by the set deadline, as otherwise it won’t be taken into consideration. It’s a good idea to contact the grant manager and confirm that they have received your application.
- Once you are awarded a grant, it’s essential that you stick to all the rules and regulations, especially those regarding spending the money. In case you don’t spend the rewarded funds in accordance with the rules and regulations, and if you miss deadlines, you can be requested to give back the full amount of the grant, even if you have already spent it.
Applying for a grant is a demanding task which takes a lot of effort and persistence, but the trick to succeeding is to prepare and never give up.