Last week, the ACCC warned budding entrepreneurs to be wary of scammers that set up websites claiming to have access to government grant cash.
The rort, which involves paying a $199 fee to release the non-existent funds, is doubtlessly aimed at the thousands of start-ups that try, and fail, to get access to genuine grants.
“Start-ups always find it very tricky to get grants because of their lack of credibility,” says Peter Nolle, director of government grant consultancy Treadstone. Nolle started the business after experiencing his own frustrations in securing a grant.
“Start-ups in Australia are under-serviced when it comes to grants, compared to businesses in the US. The support, visibility and opportunities just aren’t promoted here as they are elsewhere in the world.”
Nolle paints a sobering picture for any start-up hoping to get their hands on a grant. But it’s not impossible. We outline 10 steps to help boost your chances of cashing in.
Grants, of course, aren’t open to every kind of business out there. Their ostensible purpose is to support industries that boost certain communities or Australia’s national interest. They aren’t meant to lavish you with a comfortable, risk-free lifestyle.
Before you apply for a grant, you need to see if you’re eligible. If you are, check on whether companies in your sector are currently enjoying a successful run.
“The money has been in solar, biofuels, water technology and manufacturing,” says Ben Cusack, grant specialist with management consulting firm CIS. “The government wants to be seen to be supporting these industries.”
Your business plan is the cornerstone of any grant application. Without a well set-out plan, you have little hope of securing any money.
“You need to show a clear understanding of your business, goals and direction, your marketplace, the problem you’ll solve and your competitors,” says Nolle.
Government agencies such as Commercialisation Australia, which offers matched funding grants of up to $2 million, are perennially inundated with applications for cash. What makes your plan stand out from the crowd? Without an answer to this question, don’t’ waste your time.
Your plan may need to be comprehensive, but that doesn’t mean that you need to give the government an overly detailed outline on every single aspect of the business.
“It’s all about succinct articulation,” says Cusack. “I’ve seen applicants put forward five pages where they only need 100 words and their applications have fallen over.”
And with this pithy advice, let’s move quickly onto the next tip.
The stark reality for start-ups is that, without some kind of demonstrated path to success, the Government is unlikely to part with its money.
“Money usually goes to businesses that need it the least,” says Cusack. “The Government is risk-adverse and wants to see experience before it gives away money. They probably worry that there will be a consumer backlash if they back a lot of start-ups that then fall over.”
“They want to back someone that has a project ready to go on day two. For example, to be eligible for money for a consultant to write you a business plan, you need to make $500,000.”
The situation may seem unfair, but there’s simply little alternative to working hard, proving your concept and pulling in plenty of sales. Once you’ve done this, be prepared to run the grant gauntlet again.
You may be able to catch the eye of a government apparatchik with your grant application, but can you actually back up what you’re promising to do?
“For matched funding, where the government typically puts in funding 50/50 with you, you need the money in the bank – it can’t just be a promise,” says Cusack. “I’ve seen companies that had great concepts fail because they haven’t got the money.”
