Funding can be the difference between slower organic growth and fast-tracking your business to success, whether it’s used to hire staff or pay for resources to boost your progress.
There’s a way to kindle your business without needing to bootstrap on your own or appealing to investors too early in your journey. Grants are a great way to support your business in the early stages of growth.Depending on your industry, purpose or the position of your founders, you can access many types of grants. Situations that tend to attract funding include innovation and research and development, founders with particular backgrounds or alumni status, and businesses with a social purpose.
When we started Adatree, we secured a $25,000 MVP Grant from the NSW Treasury and a competition win from the University of Sydney’s Genesis program, which included $25,000 funding, expert mentoring and media exposure.
Here’s how you can leverage grants and funding to fast-track your business.
1. Research widely
Grants come from a range of sources. Government grants are usually accessed through specific departments – for example, if you are a tech business, you might try the Department of Industry, Science, Energy and Resources. However, also consider if you could access grants in another department. If you’re producing agricultural technology, you may also look at the Department of Agriculture and Water Resources. General business grants are also available and at different levels of government; your state government and even local councils have grant programs.
Other sources of grants include universities and other research and educational institutions, industry bodies and professional organisations and foundations. If you’re a tech business, I recommend applying for Amazon’s AWS Activate or Microsoft for Startups, which covers you for tech expenses with credits. While $3,000 or $5,000 here and there doesn’t sound like much, it adds up and can help cut costs.
Putting yourself out there is also useful. Go to networking events, enter pitch fests and even conferences. When we had applied for the NSW MVP Grant, we met their team after they saw us pitch at a conference, so it was great to make that connection in person, too.
2. Read the fine print
Take a comprehensive look at the eligibility criteria before you start writing a grant submission. Grants you think you’re suitable for may have specific criteria that disqualifies you.
We looked at a female founder grant; I’m a CEO and the largest shareholder in Adatree, but I wasn’t eligible since I had male co-founders, and the grant required me to own 50 per cent or more. Some grant programs, such as a lot of the COVID ones, are only for struggling established businesses or not-for-profits.
It’s rare to see funding-only grants. Other than cash, you might receive other in-kind support, from free desk space and access to facilities to expert advice and mentorship, or ancillary services that can help you run your business. So consider what would be really helpful to you before you apply.
The fine print will also state what they expect in return. For example, you may need to complete certain activities by a deadline, or it may not be a cash grant but an offset requiring you to keep receipts and claim back costs at a later date. If you don’t have suitable cash flow, then the offset grants may not be right for you.
3. Treat applying as an investment
The application process requires a lot of rigour. Check the submission deadline before you start to ensure you have enough time to apply, and double-check all the information you need to provide. Some of this may be budgetary, some of it may be external endorsement, such as a letter of recommendation from an expert.
We applied for an R&D grant through AusIndustry that we found particularly complicated. It is hypothesis-based, starting with a framework and a lot of documentation.
The rules for rebates change frequently, so it’s worth hiring a consultant who’s on top of all that. I recommend getting professional help in general. There are specialist grant writers you can hire, or you can get training from organisations like Grant’d, whose purpose is to help navigate these grants and applications.
4. Partners can be an asset
If you partner with research organisations, there are myriad grants available should you co-apply for a grant that requires a business and a research organisation to submit together. If you can find and partner with Australia’s top researchers in a specific focus or topic, you’ll often find the grant organisation will subsidise their involvement. That’s a huge supplement for your company, and it really boosts your IP. One example is CSIRO Kick-Start.
Just like any investment, grants take time to come to fruition, and sometimes they don’t bear fruit at all. So while you shouldn’t rely on them to run your business they are still a valuable output for a couple of reasons.
Firstly, the application process helps you define your business and refine your offering. Secondly, when they do come through, the funds can save you from dipping into your savings for all the costs that come from starting a business. The alternative is often pursuing a capital raise earlier than is ideal, which can dilute your company ownership.
If a grant can help you shape your business to be the best it can be, as early on as possible, then it’s certainly worth seeking.
- Applications are now open for NSW Small Business Month grant applications, which close on August 5. Details here.