INTRODUCTION TO SMALL BUSINESS FUNDING SMALL BUSINESS FUNDING COURSE provided by:
Objectives
This course covers the basics of applying for funding for your small business. By the end of this course you will be able to:
1.
Identify, evaluate and choose different government funding types. 2.
Identify potential private funding types
3.
Consider you funding objectives
4.
Avoid common funding mistakes
5.
Understand eligibility requirements
6.
Follow the application process and requirements
7.
Create a compelling business plan
8.
Fill out effective grant and loan applications
UK Government
Funding
Introduction to government funding
You know that government funding exists, but do you know why?
There are many myths about government funding, including what it is and who it is for.
Let’s take a close look at some of these misconceptions and see if we can clear up the facts about government funding programmes for small business.
Government Funding Myths 1The government gives out “free money”
The government does not offer free money to small businesses. Government grants for business funding are funding programmes that provide money to qualified and approved applicants, but do not require the funds to be repaid. This is why many people come to think of them as”free money”.
2
3 4
The government gives money to everyone
The truth is that all financial assistance has eligibility conditions that are typically restrictive, limiting who can apply for grants or loans to those small business owners and entrepreneurs who could make good use of the finacing provided.
Government funding wastes tax dollars
What goes around comes around. All residents within the UK benefit from small business and entrepreneurship striving. This builds a better economy and helps create jobs.
Government funding can be used for anything
While the government does provide funding programmes for a number of things, it is restrictive what the funds can be used towards. The funding obtained can only be used for the vary specific things you apply for.
Levels of Government
There are three levels of government funding; local, regional and national
When you are looking for government grants and funding, it is important to decide which level of government you are going to approach.
Local
Fewer in number
Focuses on small business owners in the immediate vicinity
Competition is high because there is less financial
assistance available
Regional
A good balance offering the best of both worlds. Focused on specific regions of the UK
Must show how the business has benefits beyond their own
neighborhood
National
Multiple businesses can get funding in same programme Designed to help UK residents regardless of the location High competition due to highest applications
Can include tax benefits for small businesses
Loans vs Grants
When deciding what funding to apply for, you also must decide whether to apply for grants or loans. There are a lot of misconceptions about the differences, similarities and availability of grants and loans.
Let’s see if you can separate true from false ( Answer are on the next slide )
True or False
True or False True or False
All grants have conditions you must meet
Government loans are the most common type of government funding for businesses available.
You should consider applying to both grants and loans
True or False True or False True or False
Grants are the best funding programmes available
You must already be very successful to qualify for a government grant
A business plan is not required to apply for government funding
Loans vs Grants (ctnd.)
If you’ve taken a moment in the slide before to test your government funding skills, you can see how well you did by reviewing the answers below. If you didn’t get them right, that’s okay – government funding is complicated, but nothing that can’t be figured out without a bit of help!
All grants have conditions you must meet: If you do not follow the conditions of your funding agreement, you may be True called upon to return the money for break of contract.
Government loans are the most common type of government funding for businesses: They outnumber government True grants and other sources of government provided financial assistance because they are considered low-risk investments.
You should consider applying to both grants and loans: Don’t limit yourself by applying for harder to get grants. True Loans are just as beneficial for many entrepreneurs, not to mention easier to obtain!
Grants and the best funding available: Some British entrepreneurs may gain more benefit from a larger government False loan than a small grant because of the amount of money they need and the ease of obtaining them vs grants.
You must already be very successful to qualify for a government grant: Funding is available for all levels of False business success, whether that means growing an established business or one that hasn’t even started just yet.
A business plan is not required to apply for government funding: A business plan is a critical document that majority False of the government funding agencies will want to review before deciding to fund your business or not.
Loans vs Grants (ctnd.)
Let’s take a look at some more true or false questions to give you some more insight into government funding and the various types of funds available.
Let’s see if you can separate true from false ( Answer are on the next slide )
True or False
True or False True or False
All loans are money you have to pay back
Grants often have more stringent application criteria than loans
Some government loans have no interest
True or False True or False True or False
Grants are free money
All loans are created equal
You should never apply for multiple programmes at the same time
Loans vs Grants (ctnd.)
Let’s review the answers from the previous slide and see how well you did. If any questions are unclear, keep in mind that experts at UKStartups.org are always available to assist and answer them for you!
All loans are money you have to pay back: Regardless of the label that a government provided uses to describe it, False any”non repayable” form of financing is, in operation is not if not in name, a grant.
Grants often have more stringent application criteria than loans: Government business grants are created and True offered to serve either a specific purpose or a range of related objectives that serve a large purpose. Not for everyone.
Some government loans have no interest: Far rarer than loans of the low-interest variety, no interest government True loans are also typically more difficult to get approved for, but are available.
Grants are free money: Despite what you may have heard, the UK government, be it national, regional or municipal False level, is not handing our free money to businesses. Grants however may be available based on a number of conditions.
All loans are created equal: You need to know the differences so you can make sense of what they mean to your small False business when the time comes for you to apply. Not all loans are the same.
You should never apply for multiple programmes at the same time: Applying to multiple programmes can help your False small business have all or most it’s funding needs funded. The more you can apply for, the greater your chances are.
Government Grants
When searching for funding, you will come across several types of funding programmes. The first are always grants and there are multiple types of grant programmes available. Take a moment to get familar with the different types:
Traditional
Government Grants
Government grants are financing programmes that are entirely government funded and controlled.
Government grants for small business owners are provided by a funding agency that is itself part of the government or operated in cooperaton with the government.
Government
Backed Grants
Government backed grants have funding provided by whole or in part by a government sources, but control is partially or wholly in the hands of a non government body, such as a charity or a bank.
The government act’s as your guarantor or co-signer.
Non Repayable Grants
The government uses this
euphemism as a way to sidestep the stigma attached to giving out what some people misinterpret as “free money”.
Don’t be deterred from applying to non-refundable loans. Do
thorough research to ensure you don’t miss out on
business financing over a
unfortunate misunderstanding.
Government Loans
There are many different types of government loans. Loans can be a combination of any of the following:
Most Common
Better interest rates than banks
still benefit the government
Rare
Represent
confidence in your ability to use the money
appropriately and succesfully
A bank or commercial lender lends money, but it’s backed by the government who takes responsibility if
recipient is unable to fulfill their part of the agreement.
Loans that are
meant to be brief, as in repaid soon
Usually for smaller amounts
Loans paid back
over time,
attached to a
repayment
schedule of
months of years
Usually for larger
investments
Given to people within specific groups within society based on a perceived need to bolster a specific community
Knowledge Check
Before we move on to the next topic, let’s make sure we have a solid understanding of the many different types of government funding.
National funding:
This funding type is entirely government funding and controlled
Government backed grants:
This funding type if provided by a government source, but is controlled by a non government body such as a bank.
Local funding:
This funding level focuses on the needs of small business owners and communities in the immediate area.
Non repayable loans:
This funding type is often overlooked even though it does not require you to pay back the funds. Often referred to as a grant.
Low interest government loans:
This funding type is the most common type of loan and has better interest rates than those of a bank.
Private Funding
Introduction to Private Funding Types
In addition to government funding, many small businesses also look to private funding options.
Private funding options are great alternatives to government funding, however can end up costing more. Be sure to understand the various types of private funding options before you decide on the funding.
Private Funding Types
1Personal Finances
If you have savings, the first choice is to fund the business yourself. Funding your business yourself is a great option as it allows you to keep full control of the business in your own hands. You can spend only what you have, ensuring that you are not over-spending with somebody elses money.
2 3 4
Banks
Your bank is typically the go to private funding source when somebody things about “borrowing”. The banks offer short term business loans, lines of credit and even credit cards. Often, personal credit cards/business loans and lines of credit can also be used towards your business.
Private Investors
Private investors can loan you startup money. This money can be interest based, equity based or have another condition attached. Crowdfunding is another form of attracting multiple private investors.
Friends and Family
Family members are often more flexible when it comes to interest rates, security and generally speaking the”requirements” to get funded. However, consider the consequences of borrowing from family and friends and the risks of going into business in case you cannot afford to pay back.
Private Investors
If you decide to consider seeking private funding via private investors, you should now that there are many private investment types to consider:
Equity Financing
Investors that provide equity funding get a share in the ownership of your business and in your profits in return for their investment. The amount that you pay the investor depends on how well your company does and the arrangement you come to together initially.
Angel Investors
Angel investors are generally wealthy individuals who invest in small businesses and startups with the intent of earning a higher rate of return than they could through other investments. Many of them are successful entrepreneurs who can provide both financing and business expertise to the businesses they invest in.
Venture Capitalists
If you have savings, the first choice is to fund the business yourself. Funding your business yourself is a great option as it allows you to keep full control of the business in your own hands. You can spend only what you have, ensuring that you are not over-spending with somebody elses money.
Family and Friends
From your point of view, family members are often more flexible when it comes to interest rates and security. From their point of view, they could earn a return while feeling they’ve played a part in your success. Or they may even have a stake in the business and be rewarded by it’s success.
When?
Some people turn to friends and family first, even before approaching commercial lending institutions such as banks. Others do it only after they’ve been turned down elsewhere. Still others contact family after they’ve had some success with other funding sources as well.
How?
You should be ready to treat them with the same respect you’d pay the bank. Prepare your funding proposal and business plan carefully, and be prepared to answer their questions.
Be specific. Determine what you’d like to pay in interest, what terms you’d like, and a repayment schedule. Set this down as part of your proposal.
Be honest with them. If you’ve been turned down by a bank, let them know the reasons. If you feel any of those reasons were valid, explain what you’re going to do to address them.
Funding Purposes
Introduction to Funding Purposes
There are many purposes which a UK small business entrepreneur may seek funding for.
The UK government offers different funding options to eligible entrepreneurs seeking assistance with any and all business activities seen on the next slide. However, the amounts of funding as well as the eligibility for specific entrepreneurs is evaluated on a case by case basis.
As of right now, there are nearly 12,000 recipients of the government funding who have actively reported their funding success, so receiving government funding for your business is possible.
The more programmes you apply for, the greater your chances of obtaining government funding for your business.
What you can get funding for
As a small business in the UK; the below are some of the business activities which you may be able to obtain funding for.
Knowledge Check
Before we move on to the next topic, let’s make sure we have a solid understanding of the many different types of funding purposes.
True or False? Don’t looking for funding until you know how you will spend the money! False. While it’s always good to have an idea of your objectives, you might find funding that is specifically for objectives you hadn’t yet considered. Keep an open mind.
True or False? Some government funding programmes also have other parts, such as mentorships and training! True. While money is important, don’t overlook the potential opportunities that these extra programmes can provide.
True or False? Many government loans and grants help supplement hiring staff!
True. There are many government funding programmes that will partially or fully subsidize wages, especially for marginalizing groups.
True or False? If a funding programme does not specifically specify your objective, you should not apply. False. While you should definitely apply to funding that meets specific objectives, you should also consider funding with broader objectives.
True or False? If you don’t get funding on your first try, you should give up!
False. It can sometimes be a long and frustrating process, but the key is to keep trying. Sometimes it might take several applications, but the payoff will be worth the effort.
Funding Dos
and Dont’s
What to do and what not to do…
Funding is complicated so before you make the same mistakes that thousands before you have made, review these dos and dont’s.
You can avoid being intimidated during the funding process by preparing yourself with straightforward answers to the question you will be asked by potential investors and government funding agencies.
The key questions that every new small business owner should know the answer to are on the next slide.
Important Questions To Know
As a small business owner seeking funding, you will run into many questions being asked. The best thing you can do is be prepared. Here are some questions you should consider and know the answers to before you go forward with your funding search.
How do you get your product to
What is your vision? This includes your grant plans and where you see your business down the road.
What’s your product or service, what are it’s benefits and what makes it different from the competition?
Where’s the market and what is it’s potential? Is the market new,
Who are your customers? Describe them in detail, include existing customers, potential customers and the actual decision makers.
Why does your customer want or need your product/service? What does it do for them, and what actual investment value does it provide?
your customers? Include the sales process, cost of costumer acquisition and the lifetime value of the customer.
Who’s the competition? What advantages and disadvantages do they have over you, what makes you better and who might join forces with you?
Who’s in charge? Profile your management team and their relevant experiences.
What are your financing plans? How much have you raised, how will you use it and how much more money does your business require?
growing or declining, and how much of it can you realistically claim?
How and when are you profitable?
Funding Dos and Dont’s
Don’t make the same mistakes others before you have made when applying for funding. Follow the below dos and dont’s for a better understanding of the right and the wrong way to apply.
Do This
Don’t Do This
1.
Create a strong business plan.
1.
2.
Follow the programmes requirements and guidelines
2.
3.
Use proper, professional spelling, grammar and formatting
3.
4.
Consult with an agency that can help answer your questions
4.
5.
Consider and apply for a wide range of funding options
5.
6.
Contact someone at the funding agency before you apply/send in app. 6.
7.
Ensure you meet the eligibility criteria for funding you apply for 7.
8.
Apply on or before the deadline!
8.
Take on the wrong investment partners
Give up if you are denied grants or loans
Open a business with insufficient funding
Skimp on the research
Sign paperwork you don’t understand
Agree to financing without properly understanding the terms Set goals beyond your means
Assume all government grants/funding programmes are identical
Eligibility!
Are you eligible for funding?
Funding eligibility varies from programme to programme.
Many different factors are considered when you are trying to figure out if your small business in the UK may take part of any government funding.
Each programme is different and each have it’s own set of criteria and requirements which you as the business owner must meet in order to benefit from the funds.
It is recommended to contact the funding agency of interest to determine if you are eligible before you spend your time applying.
More on Eligibility
Here are some of the typical requirements for a grant or a loan via government funding programmes and what they may ask on their applications:
Be a specific type of business:
Several grants and loan programmes target specific business types of industries (even locations)
Small business job creation:
Many financial assistance programmes require applicants to create one or more positions within their company. This might target specific demographics such as students, unemployed persons or people with disabilities.
Attend mentoring sessions or other training/education:
Many programmer require recipients to attend a small business skill set workshop or be partnered with a mentor.
Put up an investment of one’s own:
An entrepreneur who is unwilling to risk their own money while starting a business shows a lack of confidence in themselves. Asking for applicants to contribute themselves filters out people who are not serious about starting a business.
Fit a specific objective:
Although the objectives can vary tremendously, it is common for funding to be offered to be used for a specific goal. Sometimes this is serving a specific demographic
or reaching a specific goal for a business improvement (such as green energy)
Factors of Eligibility
Here are some of the typical requirements for a grant or a loan via government
funding programmes and what they may ask on their applications:
1 Your Location
When it comes to government funding and your application, there are many
2 3 4 5 6 7 8
Your Industry
Your Specific Funding Needs Amount of Funding Needed Time of Year You Apply Your Business Plan
Credit Score
The Application
factors that are considered before you are approved or denied the funds.
Your location, industry, specific funding needs, the amount which you need, the time of the year you apply, your business plan, credit score and the entire application process – are the critical steps.
Since each funding agency has different funding criteria which they look at, at times it is best to get professional help through the entire process.
Help is available: UKStartups.org & the Small Business Startup Portal.
With the team at UKStartups.org you will work with experts who will take you step by step to ensuring your business plan is perfected for a funding search and that you stay on top of the latest funding programmes which you may actually be eliginle for. Get help today if you need it.
Application
Process
Are you eligible for funding?
Once you know that you need funding for your small business and you spent all this time looking for the best government funding programmes to apply to, but unless you know how to apply, it’s all pointless.
The application process is the one that decides for faith when it comes to obtaining government funding for your small business.
The Application Process
The application process of getting funding from the government is divided into 8 steps. See below for further explanation:
Create your business plan: Use the Business Plan Builder Tool to write a business plan for your business. Ensure you #1
complete all sections and pay very close attention to explanation of your business model and financials as they are the ones that will help to instill confidence in your potential investor or the funding agency
Identify your funding needs: Use the financial projections from your business plan to identify the business activities for #2 which you will require funding, andhow much funding you will need – and when.
Find programmes: Use keywords related to your industry, to your location and for the various funding needs which you #3
have to find a grant, loan or assistance. Be sure to consider private funding programmes that may be suitable for your business as well.
Review Results: Scroll through your search results and build a shortlist of those programmes that your business may #4
qualify for based on the eligibility criteria. Don’t be too selective about the type of programmes you include in your list, any funding should be welcome when your business is in need.
The Application Process ctnd.
Access the eligibility: Read the programme details and determine whether your small business and your needs meet #5
the programme qualification criteria. Remove any programmes from your shortlist which you do not believe you may be eligible for based on your needs the the criteria.
Find out how to apply: Inform yourself about the application procedure and what information and documentation you #6 are expected to provide along with your funding application. Be ready before you apply.
Submit your application: Gather your completed application form and the supporting documents. Ensure you have #7
attached all of the information and documents requested. Consider contacting the programme administrators to ensure your application is completed prior to submitting; and upon submission follow up to acknowledge receipt.
Apply to other programmes: Applying to one funding programme may be enough, but in most cases if you can repeat #8
the process and apply to multiple programmes to meet your full funding needs, your chances of getting the funding you’re after will grearly increace. The more programmes you apply to, the more chances of funding you will have.
5 Steps To Success
1Check the government funding programme guidelines
Many small business owners miss out on funding because they do not take the proper amount of time to ensure they understand the application process required of the funding programme. The likelihood of this happening increases if the applicant is trying to apply for multiple programmes simultaneously and gets the requirements confused.
To avoid these problems, try breaking down what is required into a checklist with each of the items you must provide and every associated task as a separate point to be checked off at completion. If you are unsure of something, call your contact at the government agency and ask for help.
2Make use of your relationship with the government funding provider If you haven’t already made a contact within the government funding progreamme you are applying to, do so now. Do not delay it.
Many of the small business owners who have received help from the UKStartups.org have also praised the help of their contacts within the programmes that approved their applications.
it is their job to help you out with your application. These government employees help the applicant better understand the programme and proposal process, including giving feedback that can lead to neccessary changes or improvements that incrase the cahnces of success.
5 Steps To Success ctnd.
3Keep an eye on the funding application deadline
Although you don’t want to rush your funding application, remember that you have limited time to
submit. Each funding programme has a deadline and every day brings you closer to it. Mark it down,
don’t forget it and be sure to not miss out getting funding assistance because you lose track of time.
4 Use a business plan to organize your ideas
Your business plan is your best friend when it comes to funding. If a business plan isn’t asked for as part of the application process, getting one made is still a good idea. It will help you better prepare yourself for the funding process by collecting and organizing all of the vital details that the government will want to know. Don’t be afraid to spend some money on this if you don’t know how to do it on your own.
5Double check everything
Even if you’ve already checked everything over, you may have missed something.
If you have a business partner or somebody else adequately experienced and knowledgeable, get them to look it over too. Your contact at the funding agency may even be willing to proof read everything before you submit it off. You don’t know the extent of the help unless you ask.
Verify everything required including the proper format, grammar, spelling and all sections are fully completed.
Business Plan
Your business plan is critical
A business plan is a guide for your business that outlines your goals, reasons the goals are attainable and your plan to achieve those goals.
Your business plan should describe your business, the factors that influence your business and your plan to succeed within that market.
A business plan for small business can help entrepreneurs in many ways:
Clarify future goals for business development
Paint a clear picture of who works for the company and what their role is Detail financial projections for the next 3 years or so
Explain how that financing is meant to be arrived at
All of this information should be backed up with research data
Did you know…
how great the relationship between funding and your
business plan really is?
As much as small business owners themselves benefit from all the information contained within a well constructed business plan, consider how valuable these details can be for the UK government funding sources looking to obtain a better understanding of your business!
Your business plan may be what makes the government decide to give you the grant or the loan you deserve, so give it your all!
Critical Business Plan Questions
A business plan is a formal document that explains your business model, how it all comes together, what is expected and how you will accomplish your goals. At any time, if a potential investor or funding agency reviews your business plan, they should be able to answer the following quesitons:
1 What is your small business and
what does it do?
2 3 4
Who does your small business employ?
What are your businesses current finances like?
What is the economic benefit of helping your small business?
Let’s review more in-depth on the next page
Critical Questions ctnd.
1
What is your small business?
Government agencies may ask you to include a business plan as part of the writing proposal in which
the learn about your business, the market it servers and the industry it is classified as. Potential
government agencies will also need to see what your company specifically does within the frame work
in terms of explaining how your company stands apart from competition.
2
Who do you employ?
Like any other investor, the government want to know that the business it is funding has employees capable of doing the work. In addition to explain why you, the owner of the business and person filling our the funding application are capable of properly using the funding money, you need to show that your team is equally ready for the challenge. Be sure to explain questions such as who have you taken on as management and why? How does their previous history strengthen your business?..etc 3
What are your finances like?
The government will want to see what your business is bringing to the table in terms of assets and business financing to be certain you will also be contributing to your success. You must understand that the government is not offering you a free ride via whayever financing helo they provide first and foremost, they need to see that you plan to also help yourself financially. 4
What is the benefit of investing in your business?
Even though the government does not want to share ownership in your business, they still expect a return on their investment, even if it means just paying taxes. Eligibility criteria are meant to show the government which businesses could help them meet their goals. As every government funding program for business is available for a reason, with your business plan the government is going to look for indicators that you need the funding which will server this agenda. Only at that time will they consider youy
Business Plan Essentials
Every business plan should include the certain elements which government funding agencies and private investors look for in order to better understand your business model. Be sure to include them as is, or some sort of variation. Not all business plans are created equal, but the information needed often is the same.
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Business Plan Essentials ctdn.
Executive Summary: A clear, concise summary of your business plan that is less than three pages. Keep it short and on topic. Be sure to discuss in brief your funding needs.
Vision and Goals: Outline what you intend to accomplish as a small business. Include long and short term goals that are realist based on your supporting financials and your research.
Company Description: Provide a detailed examination of your products/services.
Explain the history of the company if it is established. If it is new or does not yet
exist, explain what you want your business to be, what it will do and how you want
potential customer to perceive it.
Products and Services: Clearly explain what your products/services are,
including any relevant elements of purchasing, manufacturing, packaging
and distribution. What are you selling? How much will it cost to sell?
How do you plan on standing out from the competition?
Industry Analysis: Explain the nature of your industry. What are the forces
that affect the industry, the trends? What are the challenges and the
opportunities for growth? How does your business fit within this landscape?
Clarify for people who have no experience or understanding of your industry.
Back up any claims with facts, figures and citations.
Competitive Analysis: Offer an objective (honest review) of your competitors and compare them to your business. Explain how you will surmount their stengtsh, and how you will exploit their weaknesses to your advantage.
Business Plan Essentials ctdn.
Marketing/Sales Plan: Provide facts and figures about the current and future state of the market in your industry. Summarize your plan to obtain market share and be sure to cite any references
Management Team: Describe each of your employees and how they will contribute to the goals you listed. Explain their roles, what power and authority they will have, and why each was selected. You may consider including their CV’s
Operational Plan: Describe the equipment, facilities and labor your business requires along with all processes involved in the operation. How will you use everything to achieve your objectives?
Financial Projections: Following accounting standards, indicate your
expected operational and equipment costs. Include projections for the first
three years broken down annually to illustrate your prediction growth and
how you plan to deal with debt. Be realistic regarding the money that will
go in and out of your business.
Appendices: Include any documents required to support the information
provided elsewhere in the business plan, such as more detailed financials,
graphical elements, charts..etc
Business Plan Dos and Dont’s
Don’t make the same mistakes others before you have made with their business plans. Follow the below dos and dont’s for a better understanding of the right and the wrong.
Do This
Don’t Do This
1.
Create your own business plan.
1.
2.
Consider your audience
2.
3.
Hire a consultant to review your business plan
3.
4.
Grab the readers attention with a hook
4.
5.
Ensure your business plan is well organized
5.
6.
Illustrate how you manage money and expenses
6.
7.
Ask for reviews from colleagues, customers and industry leaders 7.
8.
Determine what makes your product/service unique
8.
9.
Write an outstanding executive summary
9.
Rely solely on a business plan template Be dishonest about your competition
Try to impress people with too much content Make claims you can’t support with reasons or date Have inadequate or incorrect research
Bore them with corporate lingo and business jargon Have spelling or grammatical errors
Leave out important details
Do only one version
10.
Ensrure our business plan has a clean, attactive design with a logo 10.
Assume the reader knows the business or even the industry
Knowledge Check
Before we move on to the next topic, let’s make sure we have a solid understanding of business plans, their importunate and that you are ready to start with yours.
True or False? You do not need a business plan unless you have employees!
False. A business plan is a must for any sized business; big or small as a way to show the model
True or False? A business plan is a great way to show that your objectives match the funding agency objectives. True. Within your business plan, the government is going to look for indicators that your need for business funding will serve the agenda of the funding available.
True or False? You should include your marketing and sales plan in your business plan. True. Provide facts and figures about the current and future state of the market in your industry. Summarize your plan to obtain market share and be sure to cite any references.
True or False? You should downplay your competition in your business plan so your business looks stronger. False. Offer an objective and honest review of your competitiors and compare them to your business.
True or False? You should only include short term goals in your business plan.
False. Outline what you intend to accomplish as a small business with realistic long and short term goals based on supporting financials and your research..
Filling out your
Applications
Don’t do whatever you want while applying…
Ultimately, you should do as you are told if you are applying for government grants or loans for your small business if you hope to have any success.
Always remember, the instructions are there to be followed and are for the intended reasons, so follow them.
Majority of the funding applications denied are due to being incorrectly filled out. Make sure you avoid the same mistakes.
Application Scenarios
Applying for funding is a scary, difficult process. Many mistakes happen – so you have to do all you can to ensure you avoid the mistakes. Take a look at the below scenarios to get a better undetstanding of the process.
Scenario 1:
You have located some government funding programme (let’s say it’s a government grant). You believe that this funding will help your small business, but you don’t think the explanation of how to fill out the pplication makes sense.
What do you do?
If you are unclear about any of the steps outlined in the programmes application procedure, be sure to search online for additional information or even reach out to the programme administrator.
Remember, they are there to help you.
The same situation applies if you can’t renew your password applications without the required documentation; don’t apply without all of the right documentation otherwise it will simply be rejected.
Take the time to get ir right from the sart to save yourself time and improve your chances.
Application Scenarios
Scenario 2:
You look at the instructions for filling out an application for a specific funding programme and you see that it did not ask for some information that you believe may be helpful for the agency to know about your business to help them decide your funding odds.
What do you do?
If you think there is vital information you can provide that the government funding agency, and if they have not asked for it in their application process or within the accompanying business plan, do not take it upon yourself to add it to your own accord.
The government agency in question has far more experience wit the process than you, so don’t second guess or seek to correct them. You’ll only and up hurting your chances of getting the financial aid you need.
That being said, upon the application process if a phone conversation is requests, you may build a relationship with the agent in charge and share any helpful information if they are open to it.
Preparing To Apply (Do’s & Dont’s)
There is the right way to apply for funding and the wrong way. If you want to ensure you have the greatest chances of obtaining funding, follow the list below:
Do This
Don’t Do This
1.
Communicate with the programme officer regarding your business
1.
2.
Pay attention to published qualification criteria to ensure your project is appropriate 2.
3.
Start early: give yourself plenty of time to gather information and resources 3.
4.
Review the associated website for detailed instructions and helpful information 4.
5.
Read the programme application procedure carefully for the following
5.
1. Application format
2. Budget limits
3. Due dates
4. Focus
Submit an incomplete application
Submit a proposal written for another programme Wait until the due date to submit your proposal Not have a business plan ready
Forget to include your funding needs broken down
Components (Do’s and Donts’)
There is the right way to apply for funding and the wrong way. If you want to ensure you have the greatest chances of obtaining funding, follow the list below:
Do This
Don’t Do This
1.
Focus on how you will use the money you are applying for.
1.
2.
Design measurable objectives that relate to the funding programme
2.
3.
Include references
3.
4.
Relate your project to the mission of the funding department
4.
5.
Align timeline and milestones with the project description text
5.
6.
Consider the sustainability of the project after the duration of the funding 6.
7.
Use a external reader to help you proofread
7.
8.
Organize your proposal logically as it relates to the programmes qualifications 8.
9.
Identify the target audience
Waste space on poor images or try to save space by bulleting everything Add details that are not integral to the project
Use inappropriate methods to engage target audiences Ignore significant requirement or the programme
Include web page URLS that don’t work
Use to many acronyms, buzzwords or jargon
Fail to identify your projects audience up front
Forget to leverage your past success
The Funding Budget
Your budget is a key component of your government grant or loan application.
Many of the people at the government agency you are submitting to will turn to this sction first, so make sure it does it’s job,
Your Funding Needs/Budget Is Critical
Your small businesses’ budget should be clear and easy to undertsnd at a glance.
Be sure to summaries the key figures in an easily read table that is accessible and references as a summary of your budget. Layout your more detailed numbers in straight forward tables as well; but seperate them for the peple who really want to delve into your financials.
What to include:
A budget for a small business should include the following, especially if the intent is to prepare documents to convice the government sources to provide you with funding assistnace:
1
Include (realistic) projected revenues and (realistic) projected expenses
Include as much detail and explanation as necessary to help the reviewer understand your expenses
2
3
Be certain you’ve budgeted enough to accomplish the project for which the money’s intended, but be realistic about how much you need Be flexible about your budget in case the funder chooses to negotiate the amount of money to be approved4
Why Applications Fail
Many funding applications simply fail. Often; it’s due to simple mistakes made by the business owner which can be avoided but generally there are many reasons. Make sure you don’t make these mistakes:
1.
Not following government funding application instructions 2.
Using unsuitable funding proposal examples/templates 3.
Being dishonest in your application
4.
Using a weak or non-existent business plan
5.
Including inadequate research
6. Applying for funding that you do not qualify for
7. Limiting your options (Consider all funding options)
8. Including spelling or grammatical errors
9. Downloading an out of date application form or applying to closed programmes 10. Forgetting to send all required documentation
Your Next Steps
By completing the Small Business Funding Course, you’ve hopefully picked up a lot of knowledge in regards to the various government funding options, how to apply, eligibility criteria, private funding, your business plan, application process – many do’s and dont’s so your next steps are to go and do it all for your small business.
As you know; this course has been provided by UKStartups.org as a independent provider of small business funding assistance, business plan help, consulting/coaching and support for all UK residents looking to start up. Contact UKStartups.org today to get help with your needs.
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