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How To Start and Grow Your Small Business

Small Business Grants - My Top 10 Tips for Finding a Grant & Getting Funding for Your Small Business

How To Find Grants for Your Small Business

My Top 10 Tips & Favorite Sources for small business grants and funding.

1. Look local first
Unless you are building a very niche business, your best bet for grant funding may be from a local source.

Get to know your area: 

  • Economic development group
  • Small business support group
  • Small Business Center/SBDC or SBTDC
  • Chamber of Commerce
  • Business co-working space or local coffee shop
  • Local business launch or accelerator groups.

Make sure they know who you are, what you do, and how you need help.

Note: There are large organizations who provide small business grants  – just remember that there is likely a lot of competition and not an opportunity to build a personal relationship with these potential funders. You may be competing with hundreds or thousands of other applicants. 

2. Build relationships.
People support and give money to the people that they like, know, and trust. Get to know the small business supporters in your area. Make sure your business banker knows you. Tell them about your business and celebrate your successes with them. Build a small business advisor support team. Have coffee with them and get to know them. Don't forget that relationships provide value to both people. Ask yourself, "How do I bring value to this relationship?". 

3. Grantors want to know you can sell
Everyone has a million dollar idea. Grantors have to believe that you can use funding to build your business. They want to see proof that you can get customers, make money, and lead a business. This means that they expect you to show sales and show that you know your market. Lenders and investors call this 'proof of concept' or that you have an MVP - minimum viable product. 

4. Get to know the industry leaders in your community. 
Some communities have niche opportunities for businesses. Our local towns have grants for businesses who are opening a retail space in areas where they are trying to promote growth or strengthen communities. Some communities have specific investment opportunities for things that they are historically strong at doing - think agriculture, manufacturing, or life sciences. These opportunities aren’t always easy to find with an internet search and often run in cycles once or twice a year. 

 5. Keep clean records of your financials.
Make sure that all of your financial records are clean. Grantors want to know that their money will be well-invested. Use a software like Quickbooks to track all of your transactions. Be able to show how a grant will build your business and make it better.
For example: We had $87,000 in revenue from sales last year. We sold 340 vases, 200 plant pots, and 45 custom large pots. We have a 1,000 person interest waitlist for a self-watering pot. An investment of $12,000 would allow us to create 15 self-watering pots per week instead of the current 1-2 per week that we currently are able to produce. We will buy stamping equipment from Stamp company. They warranty their parts for 24 months and are the industry gold standard for this equipment. They have provided us with our other equipment and have been trustworthy.

6. Create a digital file that tells the story of your business.
Grantors want to know the 5Ws and 1H for your business:
  • Who is the business & who are you as owner
  • What do you do? What problem do you solve?
  • When are you solving this problem and for whom do you solve it?
  • Where do you solve the problem?
  • Why do you solve that problem? Why does your work matter?
  • How do you do what you do?
Prepare a bank of documents that answers these questions. Save them in a place where you can easily copy and paste or share as appropriate. Use them for grant applications, press releases, and to keep your website updated. They are a complement to your business plan and tell the story of what you do in a clear and simple way. Keep the buzzwords and word salad to a minimum.

7. Find a local CDFI.
CDFI = Community Development Financial Institutions are especially designated and created to advance economic opportunity. While they may not always provide grants, they are usually well-connected in the community and may sometimes have grants available. They also provide micro-loans (loans of under $50,000) to small business owners. Application requirements usually include a simple business plan and financial projections; additionally, they require evidence that the owner is capable of starting and running a business. They will sometimes provide funding for a business before it starts but often want to see that the business owner has shown proof that they can sell their product or service. CDFIs often provide training and additional resources to small business owners. 

8. Check your personal credit score.
Lenders and grantors want to know that you, as a business owner know how to manage your personal money. Grantors may look at a borrowers personal credit score before determining if they will provide a grant. 

9. Join email lists.
Building a network in person is worth the time and effort if you are cultivating relationships that benefit your business. If you can’t make the coffee networking hour, you can also look for local small business support email lists and social media pages for another way to stay connected with your local small business support organizations.

10. Build and tell the story around your company and brand.
Be your own biggest advocate. Share the story of why you are in business and build community. Stretch yourself to ask for help when you are stuck or aren’t sure how to move forward in your business. Building your business and getting funding is a long game. It can take awhile to build the trust that lenders or grantors need before providing funding. Patience can pay off if you stick with it.

Grants aren’t for every business. They can be a great opportunity but require planning and preparation. Don’t rely on them to start or grow your business. Instead, keep an eye out for opportunities. Build relationships with your local banker and CDFI. They can help you get a small business loan once you have shown that you know how to sell your product or service. Grantors don’t usually fund ideas - they fund results and the people who make the results happen.

Don't Start your Business with a Business Plan

All of the experts say to start with a plan, here's why you shouldn't.

If you are starting a business, you’ve probably heard these questions a dozen times, “Do you have a business plan?”, “How are you going to sell?” or, my personal favorite, “Do you think it will sell?”

The standard advice from every well-meaning supporter of small businesses is that you should always start with a business plan because you need to know how your business is going to make money. While it’s true that you need to know this, it’s also not where I believe you should start.

Here’s what you find when you search online for the first thing to do:

Indulge me while I share a story that is a fictional representation of a few business owners that I worked with over the years.

I once met with a woman who we will call, Tiffany. Tiffany was desperate to start making money in her business after two years of feeling like she wasn’t getting anywhere. She was working very long hours and felt exhausted. Her spouse was starting to question why the business wasn’t making money and Tiffany felt like she had tried everything. As we started to delve into the business, it became clear that Tiffany didn’t feel a strong pull towards the business or the products she was creating and selling. She shared with me that she used to love making these products as a hobby and decided to turn it into a business to make some extra money. She bought a lot of inventory and began to create as many products as she could. She quit her job to focus solely on the business.

The more we drilled down, the more Tiffany questioned why she started the business in the first place. She couldn’t come up with an answer besides that she always wanted her own business, didn’t love her old job, and was looking for more flexibility.

After spending some time thinking about it. Tiffany realized that she didn’t want to sell those products to make money. She wanted to enjoy it as a hobby. She decided to shutter that business and take a personal inventory of what she wanted out of her life and what mattered to her.

She realized that what she wanted was, to be a part of an organization that made a positive impact, make enough money to fit her lifestyle, and spend quality time with her loved ones. She looked at her skills and talents and met with a career advisor. She attended a few events for small business owners and ultimately decided to reenter the workforce by taking a job with a small business.

Tiffany’s story isn’t about successfully building a business, but rather about building the life she wants to live. I find that more gratifying than building a business that doesn’t connect with my lifestyle or personal path.

Starting with your own why, your goals, your dreams, your values, your skills and talents, and the life that you want to lead will give you the right lens to build the business that complements it. Rather than feeling constantly frustrated or at odds with your business, you’ll find flow.

Starting with your own why, your goals, your dreams, your values, your skills and talents, and the life that you want to lead will give you the right lens to build the business that complements it.

Now, this doesn’t mean you won’t need to compromise from time to time. But, I firmly believe that should be the exception. So, if you are feeling stuck in a business that doesn’t feel like it fits, it’s okay to pause and take an inventory to see if it matches the life that you have and want to build. That’s why we start with you, as the owner, in our step-by-step map for building your business – The Guided Small Business Planner™.

Do you know someone in the early phases of starting a business? Encourage them to start with why they are doing it, and if it’s you, it’s okay to take it slow and check in with yourself. It’s not about the destination, it’s the journey that matters.

How to Know if Your Hobby Should Become A Business

And what you should never tell the IRS

My best friend is an amazing seamstress. When the world shut down in March of 2020, she wanted to make masks and with the help of YouTube videos, she became not only an expert mask maker, but, I’ve been the very lucky recipient of custom tote bags with reinforced pockets, a perfectly sized pencil/pen holder and the very cutest toiletry bags. She sews beautifully.

photo of orange and white pencil and pen holder hand-sewnPerfectly sized pencil and pen holder.  

I have a sister who bakes amazing chocolate chip cookies and she won first place at a chocolate chip cookie party with her recipe which includes browning the butter and refrigerating the dough for 24 hours. It’s a little ‘extra’ and you can taste the effort. She bakes beautifully.

They excel at these hobbies and I would happily buy their handmade products. You may be here because you are evaluating whether or not to take the plunge and turn your hobby into a business. This can feel like a tricky thing to decide and I’ve counseled many small business owners who made the plunge based on their love of hobby. Here are a few more considerations for taking this step.

First and perhaps most tricky, there is a mindset shift when you decide to turn a hobby into a business. Think about it like dating. You can likely tell on a first or second date if you want to pursue a deeper relationship with someone. Some people may be really fun for dinner out but you know they aren’t the right partner for you. As a partner, their quirks might become big problems or their values might clash with yours. Similarly, your attitude around your hobby could be casual, perhaps you pick it up here and there because you enjoy it. While you are invested in the outcome in that you want to do well, your livelihood isn’t based on your level of execution. The mindset shift for going from hobby to business is not doing the thing just for the love of it, it’s doing the thing with the intent of creating a livelihood.

Ask yourself: How do I think about this hobby now? Am I willing to shift the way that I think about it for the sake of a business


From hobby to business. Just because it isn’t the same
doesn’t mean it’s not good.

Second, your physical actions change. A hobby that you’ve chosen to turn into a business usually becomes a lot less about your experience and enjoyment of performing the hobby and more about the operation of creating a sustainable business that will pay for itself and pay you!

Let’s say you have a soap business. Making ten bars of soap as a hobby is significantly different than making thousands of bars of soap and then finding customers who want said soap. The physical movements will start to focus on efficiency and you’ll probably be a little more incentivized to have an ideal outcome every time you manufacture. You may love making thousands of bars of soap or you may not! If you don’t, you can still build a soap business but you may be either hiring staff or outsourcing the production.

If you are considering starting a service-based business, for example: gardening or organizing. You may find yourself actively moving for 6-8+ hours a day. While some people will be excited at the idea of that much movement, it may not be feasible or realistic for everyone. This isn’t to say it’s not possible if you have limited mobility — but the way that you structure your business would need to focus on the right staff or team to make it happen.

Top two pictures: soap made at home. Bottom photo: soap made on a commercial production line with specialized equipment.

Ask yourself: Do I want to change the way that I move? How will it shift? Will I move a lot more or a lot less?

Third, a hobby doesn’t make money. A hobby is an activity done regularly in one's leisure time for pleasure. Source: Oxford Dictionary. Whatever you do, never tell the IRS that you have a ‘hobby business.’

Hobby: an activity done regularly for leisure time or pleasure

Here’s why: the tax code is very specific about what can and cannot be written off as a business activity and hobbies are not businesses. The IRS has made it clear that hobbies and businesses are two different things. While you can legally deduct business expenses on your income tax filing, you cannot deduct hobby expenses. Bummer, I know.

Many people have dipped their toes in the water of entrepreneurship by trying to sell their hobby to see if it is something they’d like to do as a business. This is often referred to as a side hustle and you can experiment with a hobby to see if it makes sense to turn it into a business — I encourage it! However, I do recommend keeping a separate set of expenses and income from your actual hobby activities so that you can measure your costs and expenses.

Here’s a snapshot of a spreadsheet example of how you might track expenses and sales.

Example expenses and income spreadsheet.

If it were me, this is how I would ‘test the waters’ before deciding to go full-time into a business from a beloved hobby. Want your spreadsheet to get started? Here’s a link to download your copy.

And here’s the wonderful thing about entrepreneurship — like life, it’s a daily process! Things will rarely all be perfect and that’s okay! You’ll learn and adjust as needed.

Ask yourself: What reminders, tools, and processes do I need to start tracking my work so that I can effectively measure my progress?
Example of reminders/tools/processes:

  • a calendar reminder to update my financial spreadsheet
  • a journal to recap what I do each day for my business
  • expert help from someone who’s already gone from hobby to business

Fourth, our customers are not our friends and family. Loved ones are going to support us in our endeavors but they alone can’t sustain our business. Of course, I’ll buy the cookies because my sister is an amazing baker but she needs more than just me as a customer!

Unlike businesses, hobbies don’t require a community of people (customers) who believe in and want your product or service. One of the biggest barriers that small business owners face is reaching their customers. The big scary word is ‘marketing.’ Marketing isn’t scary once you know how, but I get the fear behind not knowing! I have walked through those questions with many small business owners. That’s the reason that I created The Guided Small Business Planner™. It’s a step-by-step guide for every part of your business, including marketing!

Ask yourself: Am I willing to learn how to market so that I can reach my customers effectively?

I hope you find these questions helpful as you think about taking the step!

If you get through these questions and you still aren’t sure if you want to try to turn your hobby into a business, try it awhile as a side hustle. Track expenses and sales separately. See if you like the shift of focusing on business rather than hobby. You may love it and if you don’t, you don’t have to live with a big question as to whether or not you should have tried.