How to do – utilize a grant
Commonly you need money to start. There are many grants offered by government and other organizations. It will be a great help if you can get such money up front.
However, a grant affects on your mentality in an interesting way. When I was about to start my business, I applied for a government grant. I did not get it, which I was really grateful after all, and I learned a lot from the experience.
- Dead line pushes you to come up with ‘a’ proposal
Usually a grant application has the dead line. In my case, I had only a month and a little bit. To meet the deadline, I rushed to propose this and that. I didn’t have enough time for research and critical thinking.
But, if you propose something to someone, you had better be sure what you are proposing. I now think the all time I took for additional research, trials, tests and farther thinking since the grant application made my start much more solid and flexible.
- The requirement for the application can confuse your direction
The reason to start my own business was to connect with people and deepen our lives together. To make things work, the business has to be sustainable. I was thinking of two pillars, workshop and retail, for stability.
The program I applied was to promote the local tourism. My uniqueness was Japanese/oriental, not really Nova Scotian, which was weak to fit the concept. But to meet the requirements, I started focusing on tourism.
Someone suggested working with a local winery. Wine with Japanese food sounded quite attractive to tourists he said. I thought about it. It would do well if I established a good relationship with some winery. It was not a bad idea business wise. Tourists want different ideas, unique experiences and entertainment. Something more fun than serious would be appealing to the majority.
Somewhere in my mind, I knew casual entertainment was not quite what I wanted to devote my time and money. Nevertheless, to increase the chance to win the grant, I didn’t eliminate the idea from my business plan. I hinted there was a possibility that I would work with local wineries.
The intention to get the money (=greed) made me bend my original direction and purpose of the business. Something that didn’t go along with my reason to start the business took the lead.
- Free money accelerates your spending
A detailed budget was requested to support the business proposal. It was a great occasion for me to review all I would need with concrete numbers.
My original budget was a few thousand dollars, which I could manage by myself. But I could get up to $20,000 grant as far as I reasoned why I needed so much very well. It’s like the song ‘If I had a Million Dollar’ – I started thinking to buy this and that, more and more.
Originally I was thinking of phases. Small spending means small loss if things go wrong. But, to get the limited time offer free money as much as possible (again, greed), I moved up a few years business plan to a year or so. I budgeted quite a bit for kitchen utensils and tableware, 10 or 20 sets of this and that. If I had gotten the grant, I had to purchase those things by certain time. Purchasing is easy but storing, managing and utilizing is another work. Did I really think through it? Would I be ready for it? Large spending brings large sequences. If I can’t manage it, the result is a large mess, which may be too large to fix in a timely manner.
When you get unexpected money, you can put into your bank for later usage. But when it comes to a grant, it is given based on the proposed immediate spending. You can’t save for now and spend as needed. There is not much flexibility.
If you apply for the grant, I recommend you have a solid idea of your business direction / purpose first of all. It often helps you make a good decision. Don’t grab free money just because it is free. Have your vision first and budget for it, not vice versa.
Summary:
Are you really ready to start? Do you need the grant right now?
Does the type of grant fit your business purpose and direction?
Do you really need that much? Large spending brings large sequences.
Your business purpose first, not the budget.