As a small business owner, getting government funding could mean the difference between success and failure.
While there are no tricks or gimmicks when it comes to getting government funding for your small business in Canada, there are methods to ensure you are successful.
These 35 top secret government funding strategies will help.
Government Funding Strategy #1 – Invest in your business plan.
We hear this all the time. Business people who successfully attract funding constantly stress the importance of their business plan. It tells the grant agencies that you’ve done your homework and shows that you know where you’re heading. It helps you communicate precisely why you need the money and why investing in you is a smart move. Beyond that, it’s an indispensable guide to your next steps, a tool to help you measure your progress, and a map to keep you from veering off-course.
Government Funding Strategy #2 – Look for programs that pay you money while you start your business and develop your business plan.
Many programs are designed to generate investment in new business or to take people from the ranks of the unemployed to the exciting world of business ownership. It’s hard to start a business when you have the weight of the world on your shoulders; says a public relations professional who received $20,000 from the Self Employment Benefits Program. “Knowing you have to make money to pay rent and feed yourself takes away from the focus. The money really helped”.
Government Funding Strategy #3 – Ask yourself these 10 questions before you seek funding.
Answer these questions yourself first. Then you’ll be prepared for fast answers when talking to potential funders.
1. Why do you want the money? (Launch your business, grow your business, etc.)
2. What are you planning on using the money for? (Capital improvements, marketing, hiring, inventory, etc.)
3. How much of your own investment are you putting into the business?
4. How much money do you need?
5. Do you need short-term or long-term funding?
6. How and when do you plan to repay it?
7. Do you have any security?
8. How much of your security are you willing to bet on your venture?
9. Why should a funder invest in you?
10. Have you considered other potential sources, and why do you think this one is your best move?
For more ideas on how you can prepare to meet with funders, call 1-800-288-9691
Government Funding Strategy #4 – Don’t neglect these valuable funding sources.
Make sure you cover all the bases. Explore every opportunity for funding and use this checklist to make sure you’re not missing a single one.
Friends and family
Government loans or loan guarantees
Cash flow hiding in your business
Government Funding Strategy #5 – Build a track record from nothing.
Potential funders want to have the confidence you’re going to succeed at your new business. But if this is your first time launching a business in this field, how can you give them confidence. It's a Catch-22. Here are three ways to leverage your experience and measure up.
1. Demonstrate your experience
Even if you’ve never started a business in the industry, if you’ve worked in the field that’s a plus. If you’ve managed a company in the field, even better.
2. Spell out the parallels
Maybe you’ve successfully launched or managed a business in a different field. Make a convincing case for the similarities between the two industries, and show how your experience is an asset to your new
3. Hire experience
While you’ve built a case for the applicability of your experience to the new venture, don’t ignore the gaps. Identify where your experience falls short, and find someone to complement your skills.
Government Funding Strategy #6 – Seek experience and funding at the same time.
Marilee Atkinson makes custom-fitted sheets for pleasure boaters. To get started, she was able to take advantage of a program which helped her create a business plan – and paid her while she was doing it. She stresses
these key factors:
1. Try and get a job with a company similar to the one you plan on starting. That way you get paid to learn the business.
2. Make sure you have some money behind you before you start a business. Unless you have a spouse (or another angel) who can support you financially while you get things going, she recommends seeking financing
wherever you can.
Government Funding Strategy #7 – Get involved at a community level.
An entrepreneur from West St. Modeste, Newfoundland made sure he was the first to hear about new programs by volunteering. Both he and his mother (who was also his business partner), volunteered with economic
development organizations, and was in the loop when a new program came along that applied to him. $58,000 in interest-free funding later, he’s convinced it was well worth the time!
Government Funding Strategy #8 – Wear the trappings of experience and success.
1. You want to be a successful company, so act like one. Learn what the funders are looking for, so you don’t waste their time. Have your business plan in place and understand the terminology which may crop up in
2. Surround yourself with experience. Successful entrepreneurs realize they can’t do everything themselves, and they welcome ideas from others. Gather a group of experienced and knowledgeable advisers and directors
who are prepared to work with you. They can help you develop a financing strategy and lend credibility to your fledgling business.
For more tips on getting your business started, call 1-800-288-9691
Government Funding Strategy #9 – Analyze every funding opportunity before you act.
It’s easy to get caught up in the idea of free cash or low-cost loans. But estimate how much time and effort you’ll need to put into the application. If you can increase sales or otherwise raise the money through your business by simply putting in that same time and effort, the grant or loan may not be worth it. On the other hand, if you have under-utilized staff who may be able to devote time to it, here’s a job for them.
Government Funding Strategy #10 – Don’t lose the big picture.
When trying to get funding for a particular goal — a piece of equipment, a new employee, a building expansion — you can get hung up on the details. For example, you might spend a lot of time describing what the equipment does and how it works. This is important, but kick off with what it will do for your company — how it will take you to the next level. Paint a picture of where your company will be a year after installing the equipment, and demonstrate how it’s going to transform the way you do business.
Government Funding Strategy #11 – Make sacrifices – consider a consultant.
An entrepreneur who received $33,000 from the federal government was grateful but a little disgruntled. “The government can probably distribute the money in far better ways than they have been,” he tells us, and he advices that you sacrifice some of the income to use outside sources to help you win the grant or loan. “If a company really wants the money and doesn’t want to lose any sleep over it, they would be better off,” he says. “Then they wouldn’t have to lose valuable time pursuing it.”
Government Funding Strategy #12 – If you’re using a consultant, seek programs that will help you hire them
Here’s a sweet deal. Programs exist which will help you hire consultants – who can in turn help you get government funding. But better yet, get the consultant on board early on. If the program’s going to give him money, he’ll be willing to help out with the first application.
Government Funding Strategy #13 – Establish a solid credit rating
A good credit rating goes a long way to getting you funding. Here’s how to establish it for your business.
- Get a retail credit card in your business name. Charge items on it, and pay the bill in full on time.
- Get a general purpose credit card in your business name. Charge items on it, and pay the bill in full on time.
- Borrow a small amount from the bank, such as $2000. Put the loan money in a GIC and pay off the loan at maturity.
- Continue this process with larger amounts, paying monthly payments as required.
- Send credit info and company info to agencies such as Dun and Bradstreet and the Better Business Bureau. You may need to ask your bank to forward a credit update on your business, or a letter covering your credit history with the bank.
The entire process can take a number of months — even a year – but in addition to building a good credit rating, you’ll establish a good relationship with your banker.
For more ideas on how to establish a stronger credit rating, call 1-800-288-9691
Government Funding Strategy #14 – Pursue programs that may pay off in more ways
Don’t ignore programs that might only provide a fraction of the cash you need. Beyond the fact that every little bit brings you that much closer to your goal, an investment, grant or loan from a government agency can free you from putting up collateral on a bank loan, and it sends out a signal to the banks: this is a serious business; we’re behind it.
Government Funding Strategy #15 – Arm yourself with the information to win
Don’t be afraid to phone the funding organization or department, find out who you’ll be meeting with, and learn more about what they’re looking for. Ask questions. Get guidelines. Determine the format of the presentation and how much time you’ll have. This demonstrates your interest in their needs, gets you noticed in a positive way, and contributes to a more effective, presentation.
Government Funding Strategy #16 – Make connections
“Get to know the program officer very well,” says a marine kitchen appliances manufacturer who received funding to hire engineers and help develop his new product “The people who administer the program are the key. If you don’t get to know them very well and you expect them to do what you want them to do, it doesn’t work out that well. We try to get to know various representatives and get them to know our business.”
Pick up the phone and talk with those who give the money away. By establishing personal contact with the bureaucrats who oversee government programs, you may find yourself in the right place at the right time. The official may solicit projects from you, let you in on new programs that are being planned, or introduce you to non-competitive or inside-track awards.
Government Funding Strategy #17 – Think outside the box
If you’re having trouble finding programs directed at businesses like yours, improvise. Even if you’re not eligible yourself, you may be able to profit from a program. For example, you may be able to help a non-profit apply for funds which will help them hire you for a project. Use these four tips.
- Target groups that are likely to be in line for government funding. Keep on top of where the money’s going, and do what you can to expand your services these groups.
- Read the newspaper and scan the internet for announcements of government contributions, and be first through the door.
- If you are submitting a proposal, do your background research to find out what kind of funding they received. This gives you a better sense of the budget they’re working with to help you win the bid. And it can give you a sense of the program’s requirements and rationale, so you can echo that language in your proposal.
- Don’t wait for the RFP. Market to these groups and organizations regularly, so that when the time comes, you’re top of mind.
Government Funding Strategy #18 – Learn the secrets the non-profits use
Academic and non-profit agencies are pros at mining for government funding. Have a look at their resources and glean tips and tactics you can use in your quest. Search for websites directed at non-profits. Talk to local agencies, and learn what they do. Pick up a book written for non-profits. Talk to their associations.
Government Funding Strategy #19 – Read between the lines
You may be able to take advantage of government grant and loan programs you might never check out in a million years. It opens the funding possibilities wider than otherwise possible.
Remember that program descriptions are written to satisfy various political mandates, which might seem to preclude you. But a program directed at rural communities might provide opportunities for a big city supplier who can help them reach the goals of the program, for example.
Case history: A small Internet Service Provider in Manitoba took an innovative approach to getting their money. The Manitoba Industrial Opportunities Program provided loans in return for a fixed asset investment and the potential for long-term job creation. The ISP wanted to expand their high speed network so they could get more customers. By crafting their application to fit the program’s mandate of business growth and job creation, they received $225,000 to bring high-speed to 22 rural communities. The Trade and Mines minister saw high-speed Internet access as “a magnet that attracts people and industries…”
Government Funding Strategy #20 – Learn from the pros who attract major investment
Entrepreneurs who go for the gold of venture capital can teach you a few things about getting government dollars. Here are three cash-generating tricks the pros use to raise investment.
- Go after more than one agency. It can take months to get a firm “yes”, so don’t wait until you hear “no” before going after new sources. Seek as many sources as you can, and hit them as soon as you’re able.
- Plan on getting funding for key stages along the way. If you want it all and you want it now, you may be unrealistic. Plan to a tangible point in your growth, such as the development of a prototype.
- Create a strategy and be proactive. Rather than waiting till you hear about a program that suits your needs, actively seek those that do. The more effort you put into choosing a program that’s right for you, the better your chances of getting cash.
For more ideas on how to become a financing magnet, call 1-800-288-9691
Government Funding Strategy #21 – Consider making a move to where the money is
Manufacturer Warren Carriere moved from Manitoba to New Brunswick and inked a deal worth about $3 million. It included a forgivable loan from the province of New Brunswick, a repayable contribution from the federal government, and a $1 million lease. “There are a lot of government programs out there,” says Warren Carriere. “If you have patience, they can really help you.” One thing he had to do was move. The money wasn’t available in his home province, but in order to attract business and increase employment opportunities, New Brunswick was willing to extend a very welcome offer.
Government Funding Strategy #22 – Need money fast? Threaten to close
If you’re in dire need of funding, a last-ditch effort might include the suggestion that without the funding, you’ll be forced to close your doors. If you employ even a small number of people, the government may be enticed to help out.
Springhill Farms hog plant in Neepawa, Manitoba received $3 million after coming close to folding. And Palliser Furniture got the provincial government to start talking with them after threatening to take 700 jobs out of Winnipeg.
Since funding opportunities vary from province to province, and some provide funding to help you relocate, you may even be able to use an offer from another province to leverage your position. Once you have an offer on the table, make it clear that you’ll be forced to move out unless funds are forthcoming.
Government Funding Strategy #23 – Use this tip to inject passion and enthusiasm into your presentation.
While these might seem like intangibles, and the nature of the presentation may lead you to be nervous, try and convey the true fervour you feel for your business’ future. Make a list of three positive characteristics of your business and its growth — things that fire you up. Keep these touchstones in mind as you present, and you’ll be able to incorporate them in your presentation, while also demonstrating your zeal.
Government Funding Strategy #24 – Keep your presentation simple and straightforward
While you should have a well prepared business plan and the backup to support it, your actual presentation should be expressed in simple terms and cut to the heart of why you need the funding, what you’ll do with it, and how it will help you succeed.
Don’t put on a dog and pony show. Keep the presentation simple and have no more than three people involved in the actual presentation. Don’t overdo your support materials or presentation aids. A brief, succinct PowerPoint presentation can be more effective than a 10 minute video.
Don’t get bogged down in painting a detailed picture of your industry and your company, leaving a only couple of minutes to squeeze in your pitch. The background’s in your support material, and if the committee has broader questions, they’ll ask you.
For more tips on crafting a more powerful presentation, call 1-800-288-9691
Government Funding Strategy #25 – Follow these three tips to impress loan officers and government grantors
When dealing with any lender, including government funding agencies, you can make a great impression if you quickly, succinctly and in a positive manner answer their questions and objections.
Here are some winning tips:
- Anticipate every question
In addition to providing the actual answers, preparation gives you confidence, and that confidence comes across to the person considering giving you money. Include in your business plan, in the proposal, and have at-hand:
- How much money you need
- What the money will do for you
- Why it’s in their interest to fund your company
- How you’ll repay it and over what time frame
- What you’ll do if you don’t get the money
- Acknowledge risk
While you should be confident and project your confidence, you should also discuss risk. Otherwise the lender may assume you haven’t thought about it. Show how you’ve planned for risk and how you’d manage adverse situations; this way, you turn risks into positive actions.
- Answer objections and turn a no into a yes
If the lender questions an aspect of your business plan, or points out a weakness, don’t be defensive. Acknowledge the issue raised, empathize with his concern, and be prepared with information which will counter the objection. By having all the facts on hand, you can quickly clear up most objections.
Government Funding Strategy #26 – Get “top-secret” insight using these four powerful tips
- Search the Internet for sample proposals. Many sites offer sample business plans, grant proposals and other business documents.
- Ask the agency you’re applying to for successful applications or proposals. They may be willing to give these to you with names blacked out.
- Ask the agency for names of recent recipients, and contact them yourselves. Business people love to have a chance to help out non-competitive businesses.
- Keep an eye on the local media to track down other businesses that have received government financing, and approach them, too.
Government Funding Strategy #27 – Profit from the power of positive thinking.
Success is closer than you think. Believe you’re going to get the grant and there’s a lot better chance you will.
- Psyche yourself up. Read success stories, visualize your business future and imagine you’re already there. This way you’ll convey confidence in your dream
- Take a public speaking course. The skills you learn will come in just as handy in one-on-one meetings.
- If you’ve received investment or funding before, and the experience was successful, review the situation before the meeting, and let the potential funder know about it.
Government Funding Strategy #28 – Avoid these five common fund-killing mistakes
In the rush for the cash, business people often make silly mistakes. You’d be surprised at how many applications are tarnished by these funding faux pas. Avoid them and multiply your chances of getting that grant or loan.
Use a standard cover letter, which isn’t customized to the agency or the program. You’ve done your research. Show them that you know what they’re looking for from the moment they pick up your application or proposal.
Don’t contact the agency before you submit.
In addition to giving you key information which can make your application stand out, an initial contact launches a personal rapport with the person or people who will review your application.
Ignore the application guidelines and/or requirements.
While this should go without saying, all too often companies don’t make enough of an effort to give the agency what they’re looking for. When they’re looking at applications on a regular basis, those that don’t follow the “rules” will stand out — in a bad way.
Use bad grammar and sloppy layout.
While you might think it’s the substance that matters, the presentation can be just as important. If you haven’t taken the care to provide a polished presentation, the people reviewing your application will infer that you don’t think they’re worth the time. Have an outside person review your document before you submit it.
Assume they understand your business.
While you know your business inside-out, the people at the agency don’t. To help them see why you’re perfectly suited for their program, offer important information about your business and industry, and explain the relevance of the program to your business.
For more ideas on how you can prepare to meet with funders, call 1-800-288-9691
Government Funding Strategy #29 – Make your application a blockbuster
Tell a story that will demonstrate the benefits of the funding you seek and convince the funders. Treat it as if you were making a pitch to have it produced as a movie. Use real characters and convey the challenges with rich details.
A year ago, with our widget former operating into the wee hours, we could barely meet demand. Today, operating 24 hours a day, we are at risk of falling behind in orders and losing hard-won customers. Our lead hand, George Samson has a feel for the old X25, and he’s constantly babying it, watching for any signs of slowdown . He knows a breakdown would bring everything to a deadly standstill. But the new X150 would quadruple our production capability. While it would take up the same room on the shop floor as the X25, George could suddenly supply our entire monthly Widget Corp order in a single shift. Would he miss the old X25? “Hell no,” says George. “Bring on the X150.”
When we received our first order in January of 2021, Joanne answered our old one-line phone, took down the information on our aging computer, and five minutes later she’d walked across the room to grab the geegaw off the shelf and package it. Today, three workstations, three phones, and three increasingly active and increasingly claustrophobic order- takers occupy the floorspace where Joanne’s large, clean desk stood. Our merchandise and shipping department moved beyond our walls long ago, and are now outgrowing that space…
Go beyond the dry figures to make your situation come alive to the reader, and you’ll stand out from the pack.
Government Funding Strategy #30 – Win their hearts AND their minds
While you do need to supply hard numbers and solid budgets to satisfy your grant committee’s requirements for facts and figures, you also want to generate emotion and involve the reader. You want to tell a good story.
Do you have a great case history showing how your product or service has helped a customer succeed? Can you call on customers for testimonials or support?
Here’s an example of how a customer might back up your application:
Since I started buying from Reg Smith, I’ve been absolutely pleased with his ability to deliver what we need, when we need it. But our business is growing. And Reg — ever the honest supplier — has confided to me that he’s concerned he can’t keep up. I know he needs to make a serious investment in his production line to increase his capacity. I want to keep buying from Reg. And if he can boost his production capability, I will. I also know at least three other companies who would welcome a local supplier with that capability.
Government Funding Strategy #31 – Learn from your mistakes
You’re going to get rejected. Treat it as a learning experience. Most successful companies have faced rejection more than once. Recognize the value of all comments and questions, even critical ones. Even if you’ve been turned down, take the opportunity to get feedback.
Government Funding Strategy #32 – When you’ve got the elements in place re-use them.
If at first you don’t succeed, try again. You may find you’re not eligible for funding from a particular agency, but you may be able to simply adapt or repackage your existing proposal and apply to a different agency.
Government Funding Strategy #33 – Branch out.
When you find a program suitable for you, look for others. Don’t stop at the provincial program that offers funds for new entrepreneurs; look for comparable federal programs. And move laterally. The government works in mysterious ways, and a department that may seem to have no relation to your business may be the place to look. For example, you may think the Department of National Defence is funding summer militia training, but then discover it’s Human Resources and Skills Development Canada.
For more ideas on how to improve your chances at funding, call 1-800-288-9691
Government Funding Strategy #34 – Persistence pays off. Use these seven tips to build your grant-getting grit
If you’re lucky, you can get the funding and backing you need immediately. But if you’re prepared to stick it out for the long haul, you virtually guarantee yourself success. Follow these seven steps to success.
- Keep at them. While you might feel, having gone through the process of applying, that you’ve done your job and can knock off, don’t stop now! Maintain the momentum. Go after other agencies and programs while the tricks of the trade are fresh in your mind.
- Once you’ve gone through the work, you effectively have a template. It’s a lot easier to adjust your template proposal to meet the needs of different programs than it is to start from scratch. It increases your opportunities to apply and your chances at success.
- Plan to get funding for key stages. By setting up these mileposts, you give yourself tangible funding target dates.
- If you’re refused by a particular agency, don’t write them off. You’ve made your initial contact, and this is an opportunity to build a relationship that will pay off down the road. Ask for constructive criticism. Find out specifically why you were refused. With the insight you’ll get as to what the agency is looking for, use your relationship and name recognition to try again.
- That same tactic will give you new strategies to use when approaching other agencies.
- If you’ve been refused because you don’t specifically meet an agency’s requirements, look for partners who do meet the requirements and apply together.
- When you do succeed with a particular agency, maintain the relationship. Once you’ve had some funding, you have a better chance than ever of getting more. You can turn a small initial grant or loan into substantial financing down the road.
Government Funding Strategy #35 – Show them how you’ll grow, and get the cash
When you’re applying, make sure you emphasize the positive results of funding in terms of long-term success and more job opportunities in your community.
And when you do get the funding, make sure you keep in touch with the funding agency, and show how the funding helped you achieve success. This is what they want to hear, and when you need more money, you’re going to get it if you can establish past success.
Now that you have the 35 top secret government funding strategies that you can use for your small business, what will you do about it?
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