3 Questions to Ask Yourself Before Applying for a Business Grant

Shortly after losing everything to a fire with my first company, I turned to pitching to and applying for grants to keep my business afloat. After doing some basic searches for grants related to my industry, I’d take a few hours per month to apply, a process that ultimately led me to win 22 of the 23 grants I went after and securing six figures in capital I didn’t have to pay back.

Any business that has between zero and $2 million in funding or revenue should consider applying for grants, especially before meeting with investors. Why? While working with investors means giving up equity in exchange for capital, grant money doesn’t need to be paid back. 

Applying for grants may seem time-consuming, but businesses that are at the idea stage or have up to $2 million in revenue or funding to date should take advantage of grant applications. It takes anywhere from one to three hours, on average, to apply for a grant less than $100,000 and anywhere from one to six months to find out whether you have received the grant.

The best part is that the questions for 95 percent of grant applications are similar in style and in format, so once you get to organizing your story, the problem, solution, go-to-market and more, you can almost copy and paste your answers for multiple opportunities, pending specific word and character limits.

I now coach founders in how to secure millions in grant money. Here are three questions I tell them to ask themselves before going for grant money.

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Does the Grant Make Sense for Your Business?

Not all grants are for all companies. For example, if you apply to the national FedEx grant competition, your company must be one that ships products because FedEx is a shipping company. This grant is a PR and marketing opportunity for FedEx (companies get a lot of media attention around their grants), so the company won’t want to promote a business that has no connection to shipping. 

Even if you think you’re familiar with an organization, spend an hour or so researching the particulars of its grant. Companies want to choose someone they can get behind, so understanding their motivations will be crucial. For example, if you’re applying for a grant promoting sustainability or climate change, but that is not part of your company ethos or you don’t plan to implement those kinds of initiatives, it wouldn’t be worth your time to apply. The grant selection process is supposed to be mutually beneficial; they are looking for you to make them look good and you are looking to them for credibility.

What Will You Do With the Money?

This is a question guaranteed to be asked in every application. The more detailed you can get about your use of funds, the more likely you are to impress them. 

Think about the impact of the allocation versus the sheer dollars going to random categories like marketing. If you were to spend a certain amount of dollars on specific marketing initiatives, what would that do for your business? If you used the grant for marketing, how exactly will that affect your revenue growth? If you use it to hire a new salesperson, how will that help you meet the company’s sales goals? If you spend it on a larger run of inventory, will it allow you to lower your costs? Get specific and quantify the impact.

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Is It Worth It to Apply?

If you find yourself overwhelmed by a grant application, think of the payoff in terms of an hourly rate. If you’re applying for a $5,000 grant and it takes you two hours to apply, that’s like making $2,500 an hour if you get the grant.

It might seem like a lot of work at the onset, but it is well worth the one or two hours it might take to work through each application. Here’s a tip most founders don’t think about: Make a document recording every question and every answer you’ve submitted. Many times, you can batch apply, meaning you go back to your grant Q&A depository and copy and paste answers you’ve already used.

Here’s something else to remember: Grants are not always awarded in the form of money. Some organizations offer in-kind services. Others include credits for marketing, legal, printing or other business services that don’t have a cash value, per se, but still help drive the winner forward. These resources can lead to mentorship, introductions, partnerships and new business opportunities. 

For me, the process of applying for the grants was even more valuable than the actual capital that came with winning. Taking the time to write about my business forced me to get organized, while the organizations that put forth grant opportunities would typically offer mentorship or a network to further support businesses who apply. 

When you’re mulling a grant application, remember that a little bit of effort can go a really long way. And who doesn’t love free money? Sure, it may take more time up front, but far less time and stress than fundraising and the best part is you’ll never have to pay your grant money back or give away equity to receive those funds.