What does it take to start a small business?
A dream? An innovative idea? A boatload of determination and hard work?
Yes, yes, and most definitely, yes. It also takes some funding. That can include your own cash, business loans, or money from investors, friends, and family.
There is one source of funding that often can get overlooked: a small business grant.
A small business grant is money that’s typically available to businesses whose work contributes to specific goals of government agencies, nonprofit organizations, and even for-profit companies as a few examples.
It’s also money that usually doesn’t have to be repaid, which can make it a very attractive source of funding.
While a grant is essentially, “free money,” it’s not free of restrictions and requirements. There is usually a very specific application process for each grant, and the application process can often take a lot of time.
Still, just being a small business owner is no easy task, so you’re likely not afraid of hard work, especially if it can help fund your business.
We can help make the process easier to understand by showing you where to look for small business grants and how to apply for them.
Chances are you may not have heard much about business grants. Still, there is a healthy supply of grants that are typically available if you know where to look. Here are a few suggestions to get you started:
This website features more than 26,000 grants and other funding opportunities from a variety of sources, including government agencies, charitable foundations, and corporations.
You can easily navigate to a “small business” section to help narrow your search. However, to get all the details on the grant, you’ll likely have to pay to subscribe.
But if you’re short on time (and what small business owner isn’t?), Grantwatch subscription plans offer a variety of services, including search help.
The SBA provides limited small business grants and grants to states and eligible community organizations to promote entrepreneurship. There is a strong focus currently on businesses involved in scientific research and development.
SBA grant programs include the Small Business Innovation Research (SBIR) and the Small Business Technology Transfer programs (SBTT). Both focus on businesses involved in scientific research and development.
To be considered, you need to have a for-profit business with fewer than 500 employees, as well as meet other eligibility requirements.
Every quarter, NASE reviews grant applications for established businesses that are ready to grow, but may lack the cash to do so. The maximum amount for each grant is $4,000, and it comes with considerable flexibility for how you can use it.
The list of requirements is shorter than many other grant programs, but one of them is that you need to be an NASE member, which requires a paid membership.
As you might expect, there is a lot of competition at the federal level for grant money. So another good place to look for grant opportunities is in your state. There’s likely to be less competition and a range of grants at the state level that may be a better fit for your type of business.
You can get started by checking out this state-by-state grants list.
There are a lot of businesses willing to lend a hand to other businesses. The companies offering these grants are as varied as the businesses and entrepreneurs they look to help.
From grants for minority- and women-owned businesses to grants for home services businesses, you can find a wide-ranging list here.
If you’re a woman, veteran, or minority small business owner, there are a number of grants specifically to help support your organization. Here are just a few examples of what’s out there.
This program, run by WomensNet, awards a $10,000 grant each month to a female entrepreneur. At the end of the year, one of the 12 recipients can get an additional $25,000 in funding.
Applying is as easy as filling out an online form and paying a $15 fee.
Veterans or spouses of veterans who own over 50% of the business can apply for the Veteran Small Business Award. With the goal to inspire, educate, and support veterans, businesses can receive up to $15,000 in grant funding.
The NBMBAA scale-up pitch challenge is a competition where black-owned businesses can pitch their ideas to early-stage investors and venture capitalists. Three finalists compete in person before a panel of judges.
Grant awards include a $50,000 Grand Prize, with additional top prizes for 2nd place ($10,000), 3rd place ($7,500), and the People’s Choice Award ($1,000).
You must be a member of the NBMBAA to participate in the annually held competition.
No single article (including this one) can unearth all the grant opportunities that might suit your business. A key to securing a grant is making sure what the awarding organization is looking for, and what your company does, align as much as possible.
Spending some time online can help you find the best opportunities so that you’re not wasting your or anyone else’s time.
If finding grants feels a bit like searching for gold, applying for grants is where you’ll be doing a lot of the pick-and-shovel work to get your hands on that funding ore.
While it can seem like a lot of work, here are some steps to follow to help give you a better chance of striking a rich vein and not just an empty hole.
Since grants are often created for specific purposes and types of business owners, it’s important to make sure you understand all the criteria used to award the grant.
At the same time, it’s just as important to make sure you meet all — and not just most — of the requirements.
Federal, state, and corporate grant providers have different ways to access the application forms you’ll need.
Federal grants — You usually need to register on their website to get a username and password to submit information through a federal online portal.
State grants — It’s best to contact the agency sponsoring the grant and request the necessary forms.
Corporate grants — Much, if not all, of the forms and information you need will likely be found on their website.
If you don’t have one now, this could be a good reason to put your business plan together. A good business plan can help in other areas as well, including loan applications and long-term planning.
Business plans take many different forms, but it should cover what you do, why it’s important, the problem or challenge you’re trying to solve, and how you plan to execute it.
We have a short article and a free business plan template that can help get you started.
For many people, writing can be intimidating. The good news is that much of the heavy lifting for the grant proposal can likely come from your business plan.
Grant proposal writing is a specialized field, and you can hire a writer to handle your proposal for you. If a professional writer isn’t in your budget and you’re writing it yourself, organizing your proposal around these points can be helpful:
Why you’re suited to receive the grant — This is the “why” part of your business, not the “what.” Why did you choose to start your business? Why are you passionate about it?
What you will do with the money — Be specific here. Help the grant officer clearly understand how the funds will be spent and how it will solve the problem or fulfill the mission behind the grant.
Share your secret sauce — Include statistics and accomplishments that help illustrate how your business is working toward achieving the goal behind the grant. Highlight your skills (and those of your employees) that you believe can get the best results from the grant funding.
This can do two things for you. It can help start a more personal relationship with the person who will be awarding the grant. And as a small business owner, you likely know the value of a good working relationship.
Speaking with the grant officer also can help you better understand what the organization is looking for. It gives you a chance to understand their “why,” which can help you do a better job writing your proposal.
There’s generally a lot of competition for grant money, so you don’t want to do (or not do) something that might knock you out of the running.
Many of the same grants are awarded annually. So if you didn’t win this year, you can reapply next year. Including what you’ve done during that year could make a big difference in your favor, especially if it’s in line with the grant organization’s goals.
As we’ve mentioned a few times already, there’s a lot of competition for grants, so you want to be as buttoned up as possible when you’re being considered by grant officers and organizations.
Whether you’re a for-profit or nonprofit business, you could face significant risks. Business insurance is designed to help protect you and your business if any of the risks materialize.
When you have the right insurance, it can help eliminate the concern grant organizations may have about their money being lost due to a claim that could threaten your business.
Grant officers may have good reason to appreciate business insurance. According to a study from the Small Business Administration, 36%-53% of small businesses surveyed reported being involved in a lawsuit in a given year.
General liability insurance can help cover you for a wide variety of risks and hazards, including:
Here’s a scenario for you.
Let’s say you run a cleaning service and you’re cleaning a customer’s kitchen floors. Your customer walks into the kitchen, and before you can say, “Careful, the floor is wet,” they slip and fall. After an ambulance ride to the hospital, they end up needing physical therapy for eight weeks.
Without general liability insurance, there’s a good chance you and your business could be held liable for those costs. That could mean a lot of financial pain for your business.
Even if you’re extremely careful and conscientious, a simple mishap can have serious consequences for your business. That’s where professional liability insurance can have your back.
Here are some of what professional liability insurance usually covers:
Let’s take a look at an example. Imagine you’re a mental health counselor with a patient who is severely depressed.
You suggest a treatment plan and continue to follow up as needed. Several months later, your patient claims that your services made their depression worse. As a result, the patient wasn’t able to go to work and lost their job. The patient sues you for negligence and the cost of unemployment. Professional liability insurance can help pay for legal costs and damages, up to your policy’s limit.
Whether you’re applying for grants or just running your business, having the right insurance can pay off when you really need it.
While you may only apply for a grant once a year, your business insurance is working for you 24/7/365. It’s not only there to help protect you against claims, it can provide the same kind of assurance to customers, vendors, and financial institutions as it does to grant officers.
Here at Simply Business, we’re laser-focused on making business insurance easy to understand and easy to get. We can find general liability coverage for you from leading insurers, often starting as low as $19.58/mo.*
You can get started online right now, or you can speak with one of our helpful and friendly insurance pros. You can reach them at 855-869-5183. They’re there to walk you through the simple process Monday through Friday from 8 a.m. to 8 p.m. (ET).
And once you get started, it usually takes just 10 minutes, which could give you a nice break from working on those grant applications.
If you’ve started a small business, or if you’re thinking about doing so, there’s likely a driving force (or several) behind your decision. Maybe you want to be your own boss. Maybe you believe you can offer a better solution to an existing problem. Or maybe you also want to create jobs and become a positive force in your community.
One way to approach small business grants is to look for government, charitable, and corporate organizations that have goals similar to the ones behind your small business.
At the very least, you’ll know there are others out there working with the same goals you are. And if they also happen to offer a grant, it can be a great way to fund your business and work toward achieving your higher ambition.
* Monthly payment calculations (i) do not include initial premium down payment and (ii) may vary by state, insurance provider, and nature of your business. Averages based on January - December 2020 data of 10% of our total policies sold.
As a 9-year-old at summer camp, I hated it — especially after being pulled screaming from the pool during the swimming competition. While this left me without an aquatic achievement patch, it also inspired the letter to my parents that got me an early release from Camp Willard. That showed me the power of writing. I’ve done my best to use it only for good ever since, such as writing helpful articles for small business owners.
Ed writes on a number of topics such as liability insurance, small business funding, and employee management.
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated insurance carrier by AM Best. Harborway Insurance is a brand name of Harborway Insurance Agency, LLC, a licensed insurance producer in all 50 states and the District of Columbia. California license #6004217.