How to Fund Your Startup With Small Business Grants

You have a great business idea. You’ve done your market research. You’ve even found a few people to get on board and help you bring your idea to life. All you need now is the money to make it all happen! While there are a number of ways to fund a startup, most first-time entrepreneurs overlook the potential of grants.

Federal and state agencies, as well as private companies, have many grants up for grabs that can help you fund your startup without going into debt or giving up equity to investors. Grants exist for all kinds of businesses. For example, if you’re a woman, veteran, or a member of a minority group, you can access special grants to fund your startup. You can even get grants to fund sustainability projects.

This all sounds great, but where do you start? While many people refer to grants as “free money,” a lot of work goes into researching grants and writing proposals. To have your proposal rejected can mean weeks of wasted time. Keep reading to learn more about the grant application process and ensure your grant proposal has the best shot at success!

Before Searching for Grants

Determine your grant budget before searching for grants. Your grant budget should include the cost of the program you want to fund, exactly what the money will be used for, and how you intend to pay for everything that’s not covered by the grant money. Not only is this important information to include on your grant proposal, but it will help you get a better idea of your funding needs as well.

Make sure you have a clear picture of your business’s financial health before applying for grants. Good accounting software is essential! Using the right tools to stay organized will help you get the most out of your grant money. For instance, you should look for a tool with inventory management features that take out the guess work. Automated inventory management can significantly reduce the amount of time it takes to track what you have in stock and process order fulfillment. The right accounting tools could help you keep your finances in check and help you avoid costly mistakes.

Where to Find Grants

There are several different types of grants to consider for your business. Government grants are available on the federal, state, and local levels, with federal grants being the most competitive since they tend to offer larger funding amounts. Local government grants are smaller but much easier to get, especially if your business is focused on improving your local community. Grants for women, veterans, minorities, immigrants, and nonprofits also exist.

You can search for grants through government databases, as well as your local Small Business Development Center and nonprofits that exist to provide funding to local startups. If you’re looking to fund a sustainability program, check for grants from the Environmental Protection Agency (EPA), National Science Foundation (NSF), and the Kresge Foundation.

Applying for Grants

When you find a grant that has potential, make sure your business fits the eligibility requirements. Is the funding available in your area? Does your business project match the priorities of the funder? Also, make sure the amount of available funding from the grant will meet your funding needs. It’s also important to review the amount of work involved in applying for the grant. Will you need to write a 50-page proposal? Can you get the application done before the deadline? All of these things must be determined before you commit to writing a proposal. Some grants can take weeks to write!

How to Write a Winning Proposal

Ready to start writing? DonorBox cautions against writing a single application and sending it off to multiple different foundations. You must tailor your proposal to each organization you are submitting it to. Writing a great proposal involves researching the organization and understanding the specific cause they are interested in funding.

Use clear language to make connections between your proposed project and the organization’s target cause. Try to use data to support your claims and drive home the impact your project will have. Importantly, be sure to double-check your grant application to ensure you’ve followed page number and formatting requirements and included all the required information, forms, and documents. Failure to follow proposal content, format, and length guidelines is an easy way to get your grant proposal rejected. Finally, make sure you submit your proposal before the deadline!

Working with Grant Writers

If you don’t have the time—or the research and writing skills—to write grant proposals yourself, consider hiring a grant writer. A qualified grant writer can help you find potential grants that fit your business and write amazing proposals that increase your chances of approval. Keep in mind that your grant writer will need some key information to produce their best work, including financial information and a strategic project plan. You can find freelance grant writers on job boards or by asking around for recommendations from other business owners in your field.

Keeping Your Funders Happy

While you don’t have to pay back grant money, you can’t do whatever you want with it. Keeping your funders happy is essential for winning more grants in the future. After winning a grant, Upstream Consulting recommends reviewing your grant proposal and updating your funder with any changes that have taken place since you submitted your initial proposal. For example, if you need to modify your project or timeline, it’s a good idea to clear this with your funder.

Remember to thank your funder when you contact them! When you get in touch with your funder, ask them about their public acknowledgment preferences. Some may not want any public recognition. Once you’re clear on their preferences, you can show your gratitude by thanking the funder publicly on social media.

Writing Grant Reports

Writing grant reports is important for securing lasting relationships with your funders. Remember, your funders want to know that their money is having a positive impact and contributing to their cause. Many founders include reporting guidelines with their awards, so check these for guidance. If your funder doesn’t have any reporting requirements, try to send a couple of updates as you launch your project and spend their funds.

Most grant reports follow a similar template. Start your grant report with financial statements that detail how your business spent the funding. After this, outline the projects that you’re funding with the grant money and explain how these fit into your bigger-picture business objectives. Highlight how the funding made a difference and contributed to your results. You can always refer to your original grant proposal as a starting point for these reports. Finally, include your future plans and projections to show your funder that their investment will continue to have a positive impact for years to come.

Grants are a great way to grow your business. While applying for grants takes a lot of time, the work is well worth it when you get the funding you need to launch an impactful growth project. Plus, getting approved for one grant will make it easier to receive more in the future, establishing a viable long-term funding source for your various projects and goals. Start searching for grants to fund your startup today!

Be sure to consider your lending needs as well. Entrepreneur Funding Experts can help you quickly secure the most funding possible. Call us at 833-568-4712.

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