Taking the steps to become an entrepreneur and start your own company is a huge deal, and we commend you for it. But one of the harsh realities of being a small business owner is that it isn't cheap.
A lot of entrepreneurs have learned that grants are a great way to get their dreams started, but the process of getting one can be overwhelming and confusing.
We'll cover all of the basics of getting some money to get your business off the ground.
How to Earn Free Money to Start a Small Business
Yes, you read it correctly. Free money.
Of course, that doesn't mean someone is going to just hand you a wad of cash, wish you luck, and walk off into the sunset. You'll have to put a bit of effort and hard work into it in order to earn your share, but these are some pretty great opportunities if you need some financial help.
You've probably heard of the likes of GoFundMe and Kickstarter. It's mostly creatives that use these platforms in order to find support for their passion projects, but there's so much more space for other industries as well.
If you're looking for some starter funds to develop an app or launch a website, turning to the public isn't a bad idea. People may donate in small increments, but every dollar counts.
If you're a skeptic, think of it this way: what's the difference between asking the people you know (and the people they know) for assistance and approaching a millionaire for some seed money?
The people you know are far more likely to invest in you than the stranger.
Speaking of strangers, while it might not be your best bet to approach someone directly to ask for money, that wall is dropped if they're holding pitch competitions.
These are opportunities for entrepreneurs to pitch their business ideas, products, and services to individuals or teams that have the resources to back them.
Prime example? Shark Tank.
And while the hit reality show requires winners to give up equity or return the investment, there are several other competitions not airing on television in different verticals that offer cash prizes just for having a great idea.
Some even come with pitching workshops with the intention of getting you up to par with your presenting skills.
A lot of universities award students, faculty, and alumni with grants and access to resources for startups. Really, all you need is a good relationship with the school and then you're on your way.
Even if you can't earn financial help from a university, many offer up their research facilities for use by entrepreneurs that are pursuing fields of study that the university can get behind.
These are programs geared toward getting you into prime condition to launch and run a successful business. There's a wide variety of accelerators to choose from, and some do come with a cost, but not all of them.
If you take a look in your area, you may be able to find some that don't require you to forfeit some of your equity and offer cash prizes.
Yes, the government will fund your startup if you apply for the right grant! Not many people explore this route, but it's truly an underused resource.
We'll dive in deeper into what these offers look like.
What Is a Startup Grant?
A government startup grant is a specified amount of money offered to entrepreneurs on federal, state, regional, or city government levels.
Eligibility is largely dependent on where you're located, and many come with certain rules, but they'll never ask for the money back, which is a huge win for some business owners.
Certain stipulations ask for regular reporting and extensive forms, but these grants are offered in order to invigorate economic development.
The idea is that if the government invests in you, you'll create jobs and bring more talent into your local area. That means growth and more business, which in turn means more spending and that continues to support the economy.
We're no political science or economics majors, but we're pretty sure that's how that works.
Pretty cool, huh?
How to Determine If You're Eligible for Startup Grants
Naturally, they're not giving out grants to anyone and everyone. There are certain requirements and stipulations that will qualify you as eligible.
Unfortunately, with such a wide variety of government grants available to business owners, there are different requirements for each. A lot of them determine eligibility based off of:
- Type of organization
- Company size
- Foreign or domestic status
There's a lot of paperwork and researching involved, not to mention a huge investment of time, so it's always best to do your homework before applying for a grant.
You can check your eligibility at Grants.gov to make sure that you're targeting the right startup grant.
If you can nail down just what type of organization you're going to register as, you can start considering specialty grants offered to startups that meet special requirements. These include:
- Nonprofit organizations
- Women-owned businesses
- Minority-owned businesses
- Green businesses
- Rural businesses
- Veteran-related businesses
Tips for Getting Approved for Small Business Grants
If you're concerned about getting your application up from the bottom of the pile, there are a few things you can do to make sure you stand out.
Be Accurate and Thorough.
You'll want to provide complete, accurate, and comprehensive details on your application in order to make sure there are no hiccups in your review process.
An incomplete application can either be dismissed or delay the approval process.
Describe Yourself as a Worthy Candidate.
In order to stand out from the crowd, you'll need to demonstrate how your business will be able to benefit from the startup grant.
Present a well-made business plan explaining how you'll be able to satisfy the goals of the grant. This makes you appear as a more viable candidate who's speaking directly to their mission and values.
Seek Professional Input.
Gaining expert insight when appropriate can be a huge advantage in filling out your application. Professionals, like accountants or consultants, can bring credibility to your entire application process and put you at the top of the list.
Learn About Your Grant Officer.
If you can develop a relationship with the person in charge of your grant application, then you'll be able to stay on top of whatever they may need from you.
Get to know what sort of time and information constraints they may have and make an effort to ease the approval process for them by working within those parameters.
Follow Up Regularly.
This one is crucial. Keep in touch with your grant officer on a regular basis. Remember to keep it professional, but don't be afraid to ask after any questions or concerns that they may have.
You'll also be able to keep tabs on your application and how close you are to getting the grant.
Finding and applying for a grant isn't a light challenge and shouldn't be approached casually. But for those who are serious about getting their small businesses off the ground, government startup grants can make a huge difference in funding.
Just make sure that you have a solid business plan in order, from your digital marketing strategy all the way to a brand style guide. Make it clear that you have plans for growth, along with actionable solutions showing how you plan to hit those goals and deliver value for your industry.