When I caught up with Jitesh Gohil yesterday afternoon, he sounded like a man who had had a busy day.
Gohil is the general manager of Sydney-based food manufacturer Crafty Chef, and that morning he had hosted Climate Change Minister Greg Combet, who toured the factory as part of the announcement of $8.1 million worth of grants to manufacturers to help them reduce their energy costs.
Crafty Chef was one of 13 grant recipients under the Federal Government’s Clean Technology investments program, a $1 billion initiative that will see 3,000 projects receive funding.
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With the start of the carbon tax now just weeks away, it was hardly surprising that Combet would find himself out in a frozen food factory in western Sydney, pumping up the tyres of the government.
But it was interesting to talk to Gohil about the project and the difference it was making to his business.
Crafty Chef makes and supplies frozen foods – from curry puffs to cottage pies – to the supermarket giants under the brands The Good Meal Company, Bella’s Kitchen and Simply Special.
His business is in growth mode, but he had a bottleneck – the size of his refrigeration systems.
Gohil was investigating an upgrade and managed to win some funding from the NSW Government (which matched Crafty Chef’s contribution dollar for dollar) to examine the best and most efficient technology to use.
From here, he was shepherded into the Federal Government’s new grants program. Crafty Chef received a grant for $499,999, but that wasn’t the end of the assistance.
The remaining funds for the $1.12 million upgrade project were financed by a government organisation called Low Carbon Australia, which has been set up with the specific mission of providing finance for energy reduction projects.
At a time when capital and credit is constrained, it’s hard to think of a better deal. Not only has Gohil received government funds for an important business growth initiative, but he even managed to get financing from a related government organisation.
So here’s my question to entrepreneurs: What are you waiting for?
To be clear, these clean tech investment grants are open specifically to manufacturers who will be hit hardest by rising energy costs that are a part of the introduction of the carbon tax.
And, as Gohil told me yesterday, there is a bit of work and distraction involved in the process of applying for a grant, even if the process of preparing a business case to win the grant was work he would always do before making such a big investment. Gohil strongly advocated getting the help of a consultant of some sort – even if this does bring extra costs; it reduces some of the distraction and headaches.
But these carbon grants aren’t the only bits of government money out there.
There are grants for research and development, grants to bring in skilled executives, grants for commercialisation, grants for export marketing. There are grants at federal, state and even local government levels. There are grants that are sector specific, and more general.
In an age where credit is hard to access, these grants could mean the difference between funding a growth initiative and not.
But how many business owners have a strong grasp of what grants are available in their sector?
And on the other side of the fence, do the government agencies who administer these grants do a good enough job of promoting them and encouraging take-up?
Both sides need to do a lot better. SMEs owe it to themselves to get in touch with their accountant or a grants specialist and find out whether there is a little slice of funding they can access.
And government agencies need to lift their game. Grant programs are simply not well enough publicised or explained. The word needs to spread much faster than it seems to.
As Gohil said himself, this is the first sizeable grant his company has received. “We like to keep our heads down,” he told me.
I doubt that will be his attitude in the future. Aside from cutting his energy costs by as much as 55% per kilo of production, this grant will change Crafty Chef’s business and allow it to pursue new growth opportunities.
Not something to be taken for granted, I would say.