This business support module provides business owners with simple tips and advice for writing your next grant application.
Key learning outcomes:
Hi, my name is Di Brown. I'm a chartered accountant and business advisor with SRJ Walker Wayland. I've got over 20 years industry experience working with various different size clients and businesses across a wide variety of industries. But my passion is education and working with business owners, such as yourself, to develop your plans for success, and action items to implement those plans and actually achieve your profitability and growth goals.
So today is the second part of our webinar series in terms of ensuring your business is best prepared for grant success. So in webinar number one, I talked about some specific tips to focus on in terms of helping you identify various funding opportunities in the grant space. And today we'll focus on tips to assist you, to prepare, and write your detailed grant applications.
So one of the things that I've developed over the years, I've had a lot of experience working in the grant space, across a wide variety of different sized programs and a number of different industry specific programs. And throughout that time, I've developed a seven-step process. And I always use this process to work with clients to ensure that their business is ready for grant success.
So step one in this process is considering your readiness for a competitive grant. Step two is identifying the suitable project and I focus more on those two steps in the first webinar.
So today we're going to focus on the remaining five steps, which are understanding the detail to stand out in the application process; preparing and planning for your grant success; maximising your funding potential; and understanding and preparing your financial contribution; and finally, ways you should be working with your relevant business advisors to maximize your chance of grant success.
So in the last webinar, I talked about the importance of ensuring your business has a plan for your business success. And that strategic plan needs to be looking at where your business is now, where you want it to be, and then implementing strategies - broken down into detail action items - to help you actually achieve those goals. And when we're looking at specific funding programs, we're looking at different grant funding opportunities, to tap into how we can finance and fund those various action items that are detailed within our plan.
So the grants fund the action items. And as I said previously, there are two different eligibility criteria for grant programs. One is around your business and your structure, your turnover, your employees, your industry, your location, your years of operation, and the second one is about the project itself.
So throughout today, I'll be giving you some practical tips that you should be following. So my practical tip number one and two is ensuring that you've got your strategic business plan and that, that strategic business plan is the foundation for your business success. But it's also the foundation stone on which your grant application is based. And in some programs you may actually be required to submit that strategic business plan to accompany application.
Practical tip number two is always phase review the data that application guidelines. So whenever I'm looking at a funding program, the first step is download detailed application guidelines. Don't just read the little blurb that's contained on the first website page. You need to go through the detail. Your step up two is you're making sure that you meet both the business and the project eligibility criteria before you go any further.
And finally when you're determining if it's something that your project could be funded. You need to look at what specifically won't be funded, because quite often the information that they give you in grant programs about what will and what won't be funded is more detailed in what won't. So that's a good place to start. And if you are unsure, always phone the specific office that is releasing or responsible for administering that grant funding program and ask them a query. I usually like to request that they respond via email in writing, just so that I have a little bit of cover for myself should I require it down the track.
So step three is making sure that you understand the detail contained in those guidelines. And that you are mapping your application to those guidelines in such a way that it's very easy for the assessor (on the under other end of that program) simply to tick that you have addressed all of the criteria and make your application stand out in the process.
So the first thing that you need to realize is that grants are allocated on a competitive basis. So that means there's no guarantee if you go through all of this work in preparing a grant application, that you will actually receive your funds. So that's why it's more important than ever to ensure that you are planned, that your application is detailed, and that it is specifically mapped the relevant assessment criteria, to ensure your best place for business success and grant success.
So the first thing that you need to do is you need to identify what are the core objectives of that particular grant. And as I said in my first webinar, grants are political beasts. They're all about supporting the economy and supporting two key elements within our State, Federal, and Local economies, and that is jobs and growth.
So you need to be making sure that you are familiar with all of the different assessment criteria, and that you're mapping your project and your application to address each of the core objectives and the relevant assessment criteria.
So practical tip number four, is identify and map your project and application to the relevant criteria and objectives. So some key grant criteria, I'll just run through a few different examples. So there will always be something in every grant program about revenue growth and employment outcomes. So when you're looking to address those, revenue growth, you need to be specific. So that means your potential percentage increase in growth, and the potential dollars associated with that. And you're just looking at your turnover figures. So top level only here.
And secondly, you're looking at employment outcomes. So it's really important that you can be specific in terms of if the government gives you this fund, how many jobs, both directly for your business and indirectly for the area in which you operate (so your Local industry, and your Local and State area), how many jobs will that actually provide to your area? And you need to be looking at things such as what are the flow on benefits. If the government gives you these fundings, what are the flow on benefits to Queensland and to Australia?
What are the improved owner or employees skill sets that are going to be generated from undertaking this program? And how is that going to support your business resilience?
In some programs, it's all about becoming more competitive. So either becoming more competitive is on a national basis. So how will this funding allow you to move into trade in other States, such as new South Wales and Victoria, or even internationally, in some cases, are you trying to tap into an export opportunity?
And then each individual grant program will have its own specific objectives. So those ones are just some of the general objectives that we tend to find, and some of the general assessment criteria that you need to be able to address in any grant application.
The other thing that's really important in terms of grant submissions is that you only get one shot. So if you forget to address something, once you've hit that submit button, it's too late to go back. So it's really important that you are across all of the supporting documentation that you need to submit to accompany your relevant application.
So in most grant programs you will have to do submit quotes. You will have to submit an employee head counts. You'll have to submit your revenue either for the current or the previous financial year. And it's important that when you are asking your suppliers for quotes, that you tell them what it's actually for. And I always like to give suppliers, if it's not something that we are providing for our clients, I like to run them through the different assessment criteria so that they know what they need to be mapping to on the quote, because it provides more support for your application.
In some situations you'll be asked to provide your business plan. You might be asked to provide some industry benchmarking. You might be asked for financial projections, such as forecasts, profit and loss balance sheet, and in particular, cashflows. They always really keen to see cash flows, because it's important that they know that you have sufficient working capital throughout the program to ensure that the program is completed and successful.
Sometimes, depending on the program, they will also ask for your growth strategy, which should be linked to your strategic plan itself. So this is why it's important that step one is, ensure you have your business plan done, as part of the support for your grant application.
On top of that, you still got to address how your applications specifically meets each of the objectives and criteria.
Some of next practical tip number five is checking the devil in the detail. Make sure your supplier is aware of what's required on the quotes. And practical tip number six is always make sure that you have uploaded every item of required supporting documentation before you click submit, because if you don't, your application is automatically deemed ineligible, and it won't be considered further. So you've got to make sure that you've got your supporting documentation uploaded and that you have version control correct. So if you are changing that supporting documentation, you need to be making sure that the one you submit is your final documentation.
So the other thing that I say is make sure that you are prepared and planned in advance before programs are open. And the reason I say that is most grant programs are open for really short timeframes. The average grant program will be open for around 28 days. Although in some cases it can actually be shorter than that.
For example, the recent round of the small business adaption grants that came out in May, was fully subscribed within four days. So can you really have all of your information together and be ready to submit that final grant application in such a short timeframe? The other thing that I would say is different grant programs have different application processes. For some of the larger funding programs there might be a two tiered application process where you have to submit an expression of interest. And then if you get through that stage, you're asked to submit the detailed application. Don't be lulled into a false sense of security by that.
Most of the key things that are in the objectives, you need to have been covered on in you’re EOI. So you need to have done a lot of work at the EOI stage, before even submitting that first stage to ensure that you can get through to supply all your detailed supporting documentation etc.
So if you are in the innovation space, it's really relevant for all businesses, although particularly in the innovation space where the risk from a funding perspective is higher. So in that space, it's really important that you have identified and articulated your value proposition. So what makes your product or service unique or innovative?
That you have identified and quantified your market opportunity. So if they give you these funds, what potential market reach will you have? And that needs to be quantified in terms of location, demographics, and dollars size. Address see management capability. So if the government is going to give you funding to particularly towards larger funding programs, they need to know that you have the skillset, and your business has the support network within it, to be able to make this program a success. And if you don't have everything that they're looking for, what can you do to address those management skills gaps? And a good example is considerate of an advisory board for some of those larger funding programs.
You need to have outlined your execution plan. So that's things like strategic plans, financial forecasts. It's things like growth opportunities, product analysis. So your execution plan, and your project plan, and your project management becomes critical in this space in particular. You need to articulate your need for funding and I’ll come back to that point in a minute. And also what are the flow on benefits to Queensland and Australia? As I touched on earlier.
The other thing that I say to my clients is try to maximize your funding potential. So when you're looking at a program or a project and you're applying for funding, make sure you consider what supporting activities sit around that project that could potentially also be funded.
So can you fund training for staff to use at that particular piece machinery? or to develop the skills to be able to make that project a success? Can you fund the installation or implementation costs?
And always apply for the maximum grant amount. So when you have a grant funding program, let's say that funding program is for $20,000. If you only choose to apply for $10,000 of that funding program and you are successful in getting that $10,000, that doesn't mean in the next round, you can turn around and apply for the remaining $10,000. It means that you are automatically excluded from applying for that particular funding program, usually for a period of up to five years. So you want to make sure that you've got a project that is going to allow you to maximize the use of that particular funding project.
The other thing that I like to say to clients, and that I do a lot with our clients is, I leverage from existing grant programs. So for example, I've got a lot of clients that operate within the manufacturing space. We know manufacturers are doing a particularly tough at the moment. So I love to work with them, to put them through a Federal funded program. And as part of that program, you are allocated an individual government assessor as such that comes out and does it free business assessment of your business. And at the end of that, they will produce a report. And that report is then used to access different funding opportunities.
So in the past, I've put clients through a Federal funded program. Use the Federal funded program to deliver reports, and have those reports, and cashflows, and forecasts, and strategic plans funded by the Federal government. And the independent program report that is provided by the Federal government advisor, we work with them to make sure that we have documentation in there of other action items that that particular business might need. Such as, we recommend they implement this particular production system, or this particular piece manufacturing equipment. And as we all know that setting up any production line improvements to production processing manufacturing is expensive, particularly where you're buying very innovative and advanced equipment.
So we use those reports to roll into other funding programs, at either a State and Federal level, that will fund the equipment. And because you have a recommendation in writing from one particular Federal government department, recommending you apply for that grant program for that specific action items to achieve your business growth and profitability, grow your head count and your employees. You are more likely to be better placed to grant success. So leverage yourself from one program to another.
How do you know how to do this? You get yourself educated. You work with the networkers. You go through webinar one, where I spoke about the different ways you can become educated on the various funding programs before they come out.
Another really important step that clients need to consider before you apply for grant program is your financial co-contribution. So in the vast majority of cases, and I only know of one recent grant where this wasn't the case, but in the vast majority of cases, grants require a funding co-contribution from the business. And that co-contribution is usually a 50% co-contribution, but can be as high as 75%.
Why does the government do this? Because they want you to have some skin in the game. So if you're going to put some of your own heart and dollars into a funding program, you are more likely to make that project a success, which means the government is more likely to get value for money from you. In which case they will usually require a financial co-contribution.
9 times out of 10, you will need to provide evidence to confirm that you are able to meet your financial co-contribution, before you actually submit your application. For the larger grant funding programs, that will be things like cash flows, forecast, PNLs, budgets, et cetera, to make sure that you can actually fund it.
However, be really careful with your cashflow, because most of the grant funding programs, you don't get the grant upfront and then you use that money to go and undertake the particular project or service. 9 times out of 10, it's either issue retrospectively. So what that means is if you are applying for a $10,000 funding project, such as, I don't know, something under the small business digital grant, for example. So that means that $10,000 grant with a 50% co-contribution. So the project itself is a $20,000 project. So that means in that particular grant, you have to fund the full $20,000 upfront, complete the project, then you launched your acquittal documentation before you get your $10,000 grant funds. So can you fund that $20,000 upfront?
So these are things, things that you need to be thinking about for the larger grant funding programs. I'm just working with a client on at the moment, who's just received $1.5 million under a particular State government project. So under that $1.5 million, they actually get that at various milestones throughout their project plan. So we had to work really closely with them to make sure that they cash flow and their project plan, supported each other. So we had to change the milestones to make sure that their funding, as it was coming in, was sufficient for them to continue to move on to the next milestone in that particular project. So your cash flow becomes critical when applying for launch of parent funding programs. So bear that in mind.
The other thing that I would like to say to you is when you were applying for particularly larger grant funding programs, have a look at a sample funding agreement before you apply, and before you start looking at how you're going to finance your co-contribution. And the reason I say that is, depending on the program, the funding agreement may contain restraints around how you can finance your co-contribution.
For example, I put a client through the maiden Queensland program. We received $900,000 under that particular program to buy an advanced piece of equipment to facilitate some innovation in their manufacturing space. As part of that funding agreement, we were not allowed to have any security taken by the bank, or any other financial institution, over that particular asset. So the asset itself was worth $1.9 million. Now they had to fund a large chunk of that upfront when, and then receive their $900,000 grant and various programs.
What bank will actually lend you $1.2 million initially without taking security over a particular asset? So we were able to do it through related entities, for example. However what I will say, it's really important that you are thinking about these things whenever you are considering how you are going to fund the cashflow and your co-contribution particularly for larger grant funding programs.
So my practical tip number eight is identify and monitor the impact on your own cashflow, and make sure that you've addressed any potential issues on the timing of the grant funding.
My last step that I want to talk to you about is working with your advisors. So you should be developing some really good relationships with your key industry stakeholders, as I talked about in my first webinar. And also with your business advisors and your accountants. Work with them to develop your strategic business plan. Work with them to help identify how you're going to fund your detailed action items within that business plan. And get them to help you with the supporting documentation. So your cash flows, your benchmarks, your growth strategies. Make sure that you are across your cashflow and that you are mapping your milestone grant funds received with your required cash flow for your business.
So start developing those relationships with your networks, with your industry stakeholders, with your business advisors, to help you firstly identify relevant grant funding programs before they come out. And secondly, to ensure that your business is prepared, planned, and best placed for grant success. Thank you very much.