Small Business Grants - My Top 10 Tips for Finding a Grant & Getting Funding 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.
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?
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.
TL;DR
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.