Whether you need to start up a new business or take your current business to the next level – we all know that it often takes cash to make it happen. So let’s talk about funding.
There are a lot of options out there when it comes to sourcing the funds you need to take your business to the next level – or get it off the ground!
In this article, we will:
- Provide a brief overview of the funding and grant options available to small businesses in Australia
- Explain what you should know – and what to do first! – before you choose one
- Share some tips and tricks from some of our ASBAS advisors who specialise in this area.
What to do before sourcing funding
We know you’re excited but, rather than heading straight to the closest friend or bank, there are a few things that absolutely must be in place before you start sourcing funding.
- Create a detailed budget and cash-flow forecast. Yes, sounds boring but unless you understand your entire financial situation first, no amount of money will guarantee your success later. Even a high profit business can fail if they don’t understand where their money is coming from and where it is going. You’re also going to need this documentation for any funding you apply for later.
- Refine your expenses. What do you really need to get going? List out the ‘nice to haves’ and the ‘must haves’. Could you make do with a less-fancy computer or a simpler website? Prioritise what you need to invest in now and what you can make do with until you have the profits to splurge with later. This also helps you get a realistic view of the additional funds you should actually be applying for.
- Talk to a pro. Getting advice from a business consultant and/or accountant is also an important first step. They can help you decide if you do need funds to grow or if you have other alternatives to explore first, along with advice on your financial position and tax-related strategies to make the most of.
Rhonwyn Learner, startup strategist and Digital Advisor with ASBAS, advises, “I’m a big fan of lean startups and zero-debt growth. If you’re borrowing big money for big leaps in growth, you must have the systemisation, capabilities and capacity to support the leaps. Often being patient and growing organically will highlight weaknesses in your business model and allow you to adjust and refine while you grow.”
So, the first step in your funding journey is to take a hard look at your idea, your goals and your growth potential and think twice before getting into debt if you don’t have the right foundations to support you!
Funding, finance and grants, oh my!
So, what options are out there for small businesses who want to start up or grow?
This includes all the usual suspects, like loans, vendor financing, microenterprise finance or business credit cards, and they all have their pros and cons. This type of debt is often easy to get into and hard to get out of – so do your homework, your budgeting and talk to your accountant first!
Make sure that anything you borrow is for a tangible purpose and is a must-have – don’t go into debt because you just had to have the latest iMac in your brand colour!
Funding & Grants
Step 1 – Find the right one for you
Look for Government grants that are specific to your industry as well as from Industry Bodies or major private organisations. This tool is helpful for seeing what Grants and Programs are available in Australia for businesses like yours.
Types of funding and assistance can come in the form of Grants – mostly ‘co-funding’ – Rebates, Subsidies, Incentive schemes (tax offsets), Research fellowships, Training and Development, Advisory and mentoring services, or Low-interest Loans.
Many funding options require ‘co-funding’ (dollar-matching where the Government provides 50% and you match it 50%), so it’s important to make sure you choose one that doesn’t present a heavy risk by requiring a large outlay from your pocket.
With so many options to consider, researching grants and funding can sometimes feel like as much work as starting up your business itself! That’s why the ASBAS program offers a team of expert advisors who can do the heavy lifting for you and provide personalised funding and grant advice as well as business support and recommendations.
Rhonwyns top tip – “Did you know that the ATO offers an R&D Tax Incentive? This is a 43.5% refundable tax offset to support research and development activities to help you grow and expand your business. Magic!”
Step 2 – Get yourself ‘grant ready’
David Ashton, business strategist, grant & tender expert and Digital Advisor with ASBAS suggests, “Once you have found a grant you are interested in, speak to the funding body themselves to determine if you meet the eligibility criteria. Don’t send off your application cold. It is important to build the relationship with the funding body and get their assistance in understanding and preparing the application. This way, you save time and give yourself the best chance of success.”
For the majority of applications you will need:
- A solid business plan and strategy
- A detailed budget and cash-flow forecast
- Proof of past turnover (for businesses in the growth phase)
Step 3. Apply!
How you apply for a grant is key in winning it, so it’s always best to work with an experienced business consultant/strategist who is experienced in preparing applications that don’t just meet the eligibility criteria, but also demonstrate how your proposal will assist the funding body to achieve its objectives – so everybody wins if you win the grant.
We recommend booking in a session with one of our Advisors to give you the best chance of securing the funding you need to grow.
Would you like personal support from an expert to help you find the right funding and create a winning application?
The ASBAS program was created to help small businesses succeed, and we have a pool of amazing advisors who can be the support you need in the tricky world of funding and grant applications!
We took advantage of the expertise of two advisors to help write this blog – here is more about them and how they can help you…
Rhonwyn Learner: She specialises in lean growth strategies, helping you work within your means to boost organic growth and grow WITH your business. This may commonly include growth through strategic partnerships for leverage or pay-in-advance revenue models. She can help you select and apply for the right grant or give you the right advice to help your business grow in the best way for you.
David Ashton: David can assist in all types of applications, from initial training in how to find and write a grant application, to independent review of an application before it is submitted – or even project manage the whole, or part of, the process for you.