The economy needs the innovation, skills, goods and services and job creation generated by small business. As such, the government and other major players offer a myriad of funding opportunities, including grants, to support small business service provision.
Small businesses are essential to big businesses with them relying heavily on small business to provide resources that larger companies aren’t willing to (or can’t) undertake.
According to the Australian Government, small businesses (defined here as those with fewer than 20 employees) make up almost 98% of all businesses and account for 35% of our gross domestic product. So, in turn, small business is big business in Australia.
If you are thinking of going down the grant route for your small business, there are a few key factors to consider before you embark on applying.
- Due diligence. Your business may be eligible for more than one type of grant, so don’t put all your effort into just one application as there may be better alternatives out there.
- Supporting documents. These are often required in addition to your application. Take time to ensure that you have all the required information and documentation ready to go.
- Early submission. Submit your application as early as possible. Then if something is amiss, you have the opportunity to rectify any oversights.
- Seek help. Many applications are subject to bureaucracy and red tape, and deal with long lists of criteria and legalities, so it might be in your best interests to contract a professional to handle the application in some instances.
- Leverage buy-in. Private investors will be more inclined to work with you if you are eligible for Government grants; they help validate and legitimise your business.
Which type of grant is right for me?
There are many different grants available; state and national Government grants, industry grants, tax-incentive grants, and more. Which type is the most appropriate for your business will depend on your type of business or industry, the amount of money you are looking for and what your intentions are for it, and doing your homework.
Some Australian Government grants
- RESTART. This is a wage subsidy program to encourage employers to help hire and retain employees over 50 years of age.
- CSIRO Kick-Start. Launched in 2017, this is a relatively new incentive offering up to $50,000 for local start-ups in the research and testing phase of their new product or service when they partner with the CSIRO. Eligibility includes being a company registered for GST with an annual turnover of $1.5 million or less in the current and previous 2 financial years.
- Research & development (R&D) tax incentive. Companies with an annual turnover under $20 million can apply for the tax offset against R&D expenditure; it aims to encourage innovation in even the smallest ventures.
- Australian Government Entrepreneurs’ Programme. This scheme encourages new ideas through competition and production. It consists of four sub-categories to help businesses grow and compete in new markets, all of which include funding and mentorship.
- New Enterprise Incentive Scheme (NEIS). The NEIS encourages self-employment and provides training in a small business qualification and a mentorship program for job seekers with eligible business ideas to set up and run their business.
- Certain Inputs to Manufacture (CIM) Program. This program permits manufacturers to import raw materials and goods without paying import duties. Recipients must demonstrate that imported materials perform better for the end product than similar goods already produced domestically.
Some state & local government grants
Here are of some of the most popular state and local government grants in Australia.
- NSW: Small Business Grant of up to $20,00 encourages small businesses to employ staff. The City of Sydney also offers business grants to encourage business improvements and contribution to the local community and lifestyle.
- VIC: Boost Your Business Vouchers program encourages business owners to grow business, employ people, and increase accessibility and profitability.
- QLD: Grants exist to support small business, tourism, innovation and growth.
- SA: Government grants include those for regional growth, commercialisation and start-ups.
- WA: WA grants encourage small business improvement, event sponsorship and specific industry funding opportunities.
- NT Government and Tasmanian Government provide grants and scholarships to support business, community and individuals across a wide range of industry.
Private grants & other funding
There are also private investor networks and other businesses that support innovators and start-ups. The Angel Network allows you to pitch your idea to investors looking for interesting start-ups to back. H&R Block has a new incentive for start-ups and small businesses with their Grants for Growth program. Review a diverse list of alternative grants here.
When searching and applying for funding, bear in mind that there will be eligibility criteria to meet. Consider building a network of support to assist you in building your skills and knowledge in this area so that when the time comes, you are as well prepared as you can be.
Lachlan Grant is the CEO of Vital Addition, a fast-growing Australian company providing fresh, honest, and reliable accounting, financial, and tax advice. He believes in ‘strength in numbers’, empowering SMEs to make business decisions with confidence, and face the challenges associated with growth with informed optimism.
Related: 60% of small businesses shut down within first 3 years: H&R Block has ‘Grants for Growth’ to stop it