Staking a claim

Monday, 01 June 2015

Alexandra Cain photo
Alexandra Cain

    Winning a government grant can be a fantastic way for a business to expand its horizons, but understanding the application process is critical, writes Alexandra Cain.

    A grant can be a fantastic way for a business to expand its horizons, enter new markets and upskill the enterprise. But winning one can be an art form and the application process risks distracting management from core business. So what do companies need to do to give them the best chance of success when submitting their grant applications?

    John Matthews, who runs The Writing Wizards, which consults to businesses that are applying for grants, says the first step when applying for a grant is to fully understand the type of business or organisation for which the grant is intended.

    “Grants always have a range of conditions that have to be met. For instance, some are for start-ups and others are for particular industry sectors. It’s absolutely essential to complete all the mandatory application requirements. You’d be surprised how often people don’t do this,” he explains.

    Aside from basic housekeeping when it comes to completing grant applications, there are other must-tick boxes to increase chances of success. For instance, says Matthews, it’s essential to be able to show experience in the area the grant covers.

    “You need to show previous occasions where you have done something similar and the outcome that was achieved, and link this back to the grant’s objectives. You need to demonstrate your capabilities including resources and staff and your methodologies. It’s often also an idea to show you’re already part of the community in which the funds from the grant will help, to show you understand their issues,” he advises.

    When it comes to developing the budget to submit with the grant, Matthews says it’s important to break down the components of the project. “If you’re too cheap it might show you don’t fully understand all the elements of the project and if you’re too expensive you’ll also be knocked out.” Matthews’ other advice is to try to exceed the expectations of the people who will be assessing grant applications.

    A word of caution

    Mary-Anne van Adrichem, a consultant with Pinpoint Grants and Tenders cautions businesses against seeing grants simply as free money. “It’s important to view grants from a business perspective. If you think about it in terms of helping to solve a problem for government, that will change the way you apply for funding.”

    One of the main considerations of the people who will assess the applications is how the business will report back after having been given a grant. A large part of van Adrichem’s work involves assisting her clients to work out how they are going to capture financial information and statistics once the business has been given a grant so it can report back to the government. Businesses that can show they can do this during the application process stand themselves in good stead when it comes to winning a grant.

    “You need to be in a good financial position and generally will have to submit end-of-year accounts,” she explains.

    Says Matthews: “People often balk at including their financial information because it’s commercial in confidence. But the government wants to know the business is sustainable and they don’t want to be liable if it fails.”

    Seek advice

    Understanding the mindset of government is one of the reasons why it often pays to use a consultant when applying for grants. Matthews says the fact a consultant isn’t emotionally invested in the business or the grant helps to maintain an air of objectivity around the process.

    “We take an outsider’s perspective and we help businesses find the right supporting evidence for the grant. Often people will struggle putting what they want to say into words because their core business isn’t writing. Businesses should be assessed on their ability to do the project, not on their writing,” says Matthews.

    Samea Maakrun, managing director of organic skincare business Sasy n Savy, has had ongoing success in applying for grants. The business has been awarded export market development grants (EMDGs) over a number of years.

    “The criteria change every year, but the grants have been a real help when it comes to marketing for overseas expos,” she says.

    The grant has helped cover stand costs, flights and product shipment. But she says it’s important to realise there’s a lot of paperwork involved. “You have to justify every invoice and payment.”

    Maakrun says grants won’t generally cover the cost of insurance and freight. But you can claim for costs such as international phone calls and international intellectual property registrations. She says businesses can also claim the cost of free samples given out at trade shows, as long as they have the business’ brand on them. It is also possible to claim costs such as flights to bring international delegates to local trade shows.

    However, Sarah Hamilton, chief executive officer of subscription beauty business Bellabox, says for her business the process of applying for an EMDG has been an exercise in frustration.

    Bellabox is eligible to apply because it operates in Singapore and beyond. Hamilton applied for the EMDG, using a consultant, and the Government extensively audited her business as part of the process. Then after six months she was told her claim was disallowed for the 2012/2013 financial year. “It was sold to me as an easy process but it was beyond onerous,” she argues.

    Hamilton says she believes she addressed all the concerns that were raised along the way by the grant assessors, but that from the start there was a bias to not accept her application.

    “My advice would be to be circumspect about how much time you spend on it,” she says, adding that it took about four weeks of her time overall to prepare the application and respond to Austrade’s queries.

    Interestingly, the idea of applying came through Bellabox’s board, with one of the investors suggesting the business apply. “The board was involved the whole way,” says Hamilton.

    So what is the director’s role in this? According to van Adrichem, directors provide a useful reality check when reviewing grant applications of the businesses over which they govern. “It’s also important for them to make an assessment about whether the grant is really in the strategic interests of the business, rather than just going after funding for the sake of it.”

    Grants can be a useful source of funds for businesses whose operations squarely meet the objectives of the funding that’s on the table. But it’s important to do an assessment of whether the grant really is in the business’ long-term best interests before applying. If it is, then be prepared to be meticulous in the application process. There is no guarantee of success even then, but it is certainly worth a try if it will help propel the enterprise forward.

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