Small business grants are perhaps the most coveted of all types of small business funding. Grants don’t have to be repaid and, unlike equity funding, you don’t give up any ownership of your company. (The IRS does want its share, though, so be prepared for a tax bill.)
How do you actually win a business grant, or at least increase your odds of getting one? Here entrepreneurs who collectively won a variety of small business grants share tips for getting one.
1. Know your numbers
Grant winner: Chris Ronzio, CEO and founder of Trainual, which provides online training manuals and standard operating procedures for growing businesses.
Grant won: $150,000 from the Arizona Innovation Challenge (AIC).
Grant used for: Marketing: Company grew its marketing team from one person to five people, increased monthly ad spend from $30,000 to $100,000 per month, and invested in sponsoring events and podcasts to drive more traffic to its website and fuel growth.
Preparing for a grant is like preparing for an investor pitch—likely even harder, because they don’t have a stake in your business as the downside protection for the investment.
- Tip #1: Land your first paying customers before applying. Judges want to see traction, and nothing proves your idea is great like revenue.
- Tip #2: Build your story. A compelling investment has a story that people can rally behind. This story will be important for the grant judges, but even more so, it will give them confidence that you can recruit employees or raise investment as your business grows.
- Tip #3: Understand the metrics of your business inside and out. When you compete for a grant, the committee will want to see how you’ll use the money to evaluate impact. If you don’t know your numbers, you can’t share explicitly how the money coming in will impact the money coming out, and that could put you at a serious disadvantage.
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