Free money for growth – part two
Wednesday, July 23, 2008/
Funding your growth may seem daunting these days, but one perhaps overlooked source is the government sector. MIKE PRESTON and JAMES THOMSON uncover, state-by-state, all your ‘free-money’ opportunities
By Mike Preston and James Thomson
Here at SmartCompany we’ve been banging on about the need to continue to grow, even though economic conditions have taken a turn for the worse.
Easy to say – not so easy to afford.
With banks rationing credit and private investors nervous about parting with funds, finding the money for that new export push or R&D program is not easy.
But there is an answer to the funding drought – government assistance.
This week at SmartCompany we have are running a special two-part special on government assistance. For part one, which looked at Federal Government grants and contained advice on how a government grant can change your business, and how to apply for assistance, see here.
In part two, we look at state government grants and examine the costs involved and the obligations you’ll face.
There are many juicy free money opportunities out there, but before leaping in, business owners need to understand the cost and red tape that comes with the grants process.
The time required to prepare an application for government support can vary significantly, depending on the requirements of the scheme and the skills and experience of the business in preparing applications.
But business owners should expect to spend somewhere between three hours and three days getting an application ready, according to businesses and consultants with experience across various government schemes.
West Australian business Aquabiotics successfully applied for a Export Markets Development Grant. Managing director David Bennet says it took him about half a day to prepare the application.
“It wasn’t hard to get,” Bennett says. “It’s always daunting, but you’ve just got to work through it. I found I could knock it off in an afternoon, sometimes less.”
By contrast, Murray McDonald, managing director of Melbourne robotics business Floorbotics, says he worked on his application for the VISTECH program, which netted a multi-hundred thousand dollar grant, on and off over several months.
The process was complicated by the fact that the program is jointly run with the Israeli Government and the requirement that the application be made in concert with a partner Israeli business.
“Like any grants application, there were a few hurdles to get over, but if you practice good business planning the grants process shouldn’t be to difficult. It really comes down to producing a good business case,” McDonald says.
Ipswich tyre recycling business Chip Tyres recently won an $85,000 grant under the Queensland Government Innovation Start Up Scheme (ISUS). Chief executive David Mohr says getting the grant application together involved about 15 hours of work – and that was with a consultant doing the lion’s share of the work.
“We spent four sessions of two to three hours with the consultant to help him understand the company and where it is going,” Mohr says. “He took the lead in preparing the application and without his assistance I would never have been able to get the grant.”
And, like many grants, the work doesn’t end there. The ISUS program requires Mohr to provide ongoing reports on progress towards achieving set milestones and to substantiate money spent before funding is received.
Mohr says he will continue to use a consultant to help him meet comply with the ongoing requirements under the scheme.
“We’ll use him to keep the money trail and make sure the records are prepared the way they like to see them – there is a process to doing it; it’s not the sort of thing you can just get the secretary to do.”
While Mohr is working closely with a consultant, the extent of their involvement in an application – and the costs involved – can vary.
Paul Hodgson, a former Austrade employee who now helps firms to apply for grants through his Sustainnovation business, says he tries to take a light touch approach with clients.
“The best role for the consultant is to review the application, ask some tough questions and potentially manage the relationship with the provider,” he says. “If you’re just hiring someone to do the leg work it is better to go to a labour hire firm for that; it is expensive and not the best use of a consultant’s time.”
Others take a different approach. Katrina Gerhardt, business consultant with grant advisers Campbell Stewart, says that she will work closely with a firm from the point the decision is made to apply until the money comes in the door.
“We take on a lot of the admin burden. We will advise on the prospects of getting success and how to put an application together through to ensuring expenditure complies with scheme requirements and attending audits with them,” Gerhardt says.
Most consultants charge a small retainer and a success fee, with the standard being somewhere between 5% and 10% of the grant, while others prefer to work on an hourly fee. To generalise, it is probably not cost effective to hire a consultant for grants worth less than $10,000.
SmartCompany’s selection of grants from the state governments
Click on the name to link to more information.
- Who for? Victorian small businesses wanting to position themselves for growth. Participants have generally been trading for at least 12 months and are focused on export or import replacement.
- What for? Subsidises the cost of hiring a consultant or trainer to prepare a business development plan, strategic review or run workshops on business development topics such as business planning, finance, marketing or export.
- How much? Subsidies ranging from 50% to 75% of costs for the project up to a maximum of between $7500 and $15,000. Services can be provided to individual businesses or groups, with groups eligible for a greater share of funding.
- When does it close? Ongoing.
- We say: A good place to start for small businesses looking for a quick funding shot to help lift them to the next level. Substantial subsidies are available compared to similar programs in other states and applications can be lodged for support for a wide range of services.
- Who for? Victorian businesses that want to establish or grow their export business. Eligibility criteria depend on the particular program.
- What for? Subsidies expenses associated with growing export revenue including overseas trips to develop export opportunities and attend trade fairs, conducting market research, hire export consultants, preparing promotional material or preparing bids for international projects.
- How much? Grants can cover up to 50% of expenses, depending on the activity. Grants are generally capped at $10,000, but for some programs range up to a $200,000.
- When does it close? Ongoing.
- We say: The wide range of programs available means there is a grant available for just about every conceivable export activity. And with $11 million in funding from the Victorian Government there is plenty of money to go around.
Farm Business Improvement Program (FarmBis): Provides financial support to assist farmers, fishers and those involved in natural resource management to participate in learning activities to improve their management skills.
Koori Business Network: Programs and initiatives to assist indigenous communities and businesses turn their skills and expertise into sustainable economic businesses.
Regional Business Investment Ready Program: Services and advice to help regional small businesses attract investment.
Small Business Mentoring Service: Provides low cost mentoring services to Victorian small business owners.
Small Business Safety Program: Provides a three-hour assessment of your workplace by an independent external health and safety consultant.
Young People in Rural Industries Program: Delivers training to help young people develop skills, including business skills.
Continuous Improvement Workshops: Subsidies for the appointment of a consultant to help manufacturers improve process and performance.
Innovation Insights: Arranges for manufacturers to visit leaders in their industry to learn practical solutions to specific business problems.
Regional Innovation Clusters Program: Provides grants to help regional businesses to partner with education and research institutions to form local industry clusters.
STI Infrastructure Grants Program: Funding for the development of strategic infrastructure or business equipment.
VicStart: Funds private-sector programs to assist established and emerging innovators. Through programs such as [email protected], partners provide mentoring, advice, networking and training services to developing tech companies.
VISTECH: Subsidies joint R&D between Victorian and Israeli businesses with funding of up to $US500,000 per project, repayable at 3.5% per year.
Experience Counts: Funding to help businesses support older workers returning to work.
Enhancing Sustainability in New Investment: Provides participating companies with financial support up to $100,000 to make environmentally sustainable capital equipment.
Supply Chain Management: Grants to help businesses in a supply chain improve performance for mutual benefit. Financial assistance of 75% of costs up to $15,000 is available to eligible firms.
Farmers’ Markets Program: Funding of up to $20,000 available to help establish and operate farmer markets.
New South Wales:
- Who for? Businesses in regional NSW looking to expand into a new market segment or expand operation into another region.
- What for? Subsidises the appointment of a consultant to assist with the development of a marketing plan and the implementation of that plan. Services performed can include market research, web page construction or e-commerce services and promotion.
- How much? Participants receive dollar-for-dollar matched funding to a maximum $3000 for the development plan and up to $5000 to support the implementation of the plan.
- When does it close? Ongoing.
- We say: Seed funding to assist regional businesses, which often have less access to cash or investment, to research growth options and engage in marketing and other activities required to help ensure that expansion is successful.
- Who for? Groups of businesses, linked either by geography or industry, who want to remove barriers to co-operation or work together to pursue commercial opportunities. The program is particularly directed at small and medium sized businesses.
- What for? Funding for a wide variety of projects including feasibility and formation planning, industry skills enhancement, overcoming structural economic issues, market research, marketing and promotional activities or support for a facilitator to organise and manage the cluster.
- How much? Clusters may attract a one-off 75% subsidy of up to $10,000 during early stage development and matched (50%) financial support up to $10,000 for any one project. Funding is limited to a maximum of $20,000 per individual business cluster over any two-year period.
- When does it close? Ongoing.
- We say: Could be a source of substantial funding for the many small and medium sized businesses, particularly in technology and research-based sectors, that already work in de-facto clusters. The program’s particular focus on the SME sector – funded clusters must have a large SME component – is also a positive.
BioBusiness Program: Assists biotech firms with matched funding up to $75,000 to undertake enterprise improvement activities and develop management skills.
Stepping Up: Provides matched funding up to $1000 for 10 hours of small group workshops and seminars on topics such as cash flow management, pricing and costing, marketing, risk management, strategic planning and innovation planning.
Women in Business: Programs to help up-and-coming women business owners expand their businesses though mentoring and assistance in developing growth strategies.
Innovation Advisory Services: Provides businesses with innovations or inventions with services including access to self-assessment software, business advice and referral, low-cost technical/commercial assessment or innovation market review.
Payroll Tax Incentive Scheme: Provides substantial payroll tax rebates, up to $144,000 in early years, for businesses that set up and hire people in low-employment parts of NSW.
Regional Business Development Scheme: Offers financial and other assistance to businesses expanding in, or relocating to, regional NSW.
Hunter/Illawarra Advantage Fund: Provides financial assistance to businesses looking to establish or expand in these regions where they wouldn’t otherwise proceed without support.
Developing Regional Resources: Provides funding to help regional organisations, industry associations or alliances of regional firms investigate and pursue new business development opportunities.
New Export Opportunities: Provides financial assistance and services to SMEs to help develop or expand their access to export markets. Can involve hiring a consultant, trade missions or market visits.
- Who for? Queensland businesses with growth potential and looking to undertake projects that are highly innovative or that have the potential to transform their industry.
- What for? Just about any project associated with innovation, increasing productivity, export growth or building regional business – but not for planning activities, feasibility studies, individual product promotion, provision of working capital or routine operating costs.
- How much? Incentives of between $30,000 and $250,000, but businesses that receive grants are required to contribute at least an amount equal to the project.
- When does it close? Five funding rounds are conducted throughout year – the next one closes 8 August this year.
- We say: The Queensland Government talks about wanting to become the “smart state”, and with this program it puts its money where its mouth is. Big dollars, but the requirement to supply matched funding means it is more appropriate for more established businesses.
- Who for? Queensland companies working to develop innovative technologies that reduce consumption of fossil fuels and water or that reduce greenhouse gas emissions.
- What for? Funding support to offset the technical risks taken by businesses developing, adapting or proving new technologies or processes that achieve more sustainable production and use efficient energy and water. Grants only go to projects that are not independently capable of attracting commercial support.
- How much? Grants of up to $200,000 are available, awarded in two annual funding rounds.
- When does it close? The next funding round will open for applications in October 2008.
- We say: This scheme reflects the trend among both state and federal governments to direct business grants and assistance towards achieving environmental goals. The breadth of this scheme and large sums involved make it attractive, although competition for funding means a high level of innovation is required to attract support.
Indigenous business establishment program: Provides funding for identifying and supporting business opportunities, new products and services within Indigenous communities.
Partnerships Alliances Facilitation Program: Grants up to $100,000 support for applicants to put together funding proposals for submission to relevant Queensland, national or international funding schemes.
Building productivity: Supports the uptake of ICT solutions in established industry sectors.
i.lab Incubator: Commercial office space and business advisory services for technology start-up businesses.
New Exporter Development Program: Provides workshops, training and advice to businesses to help them develop or increase access to export markets.
Pay-roll Tax Rebates For Eligible Employees: Provides a tax rebate to employers to encourage the employment of unemployed youth.
Small Business Exceptional Circumstances: Funding of up to $100,000 to support small businesses that are struggling because they rely on farming enterprises in drought areas.
Small Business Mentoring Service: Subsidised mentoring service for business owners.
Domestic Co-operative Advertising Program: Helps co-ordinate advertising buying on behalf of tourism businesses to bring down costs.
Innovation Start-up Scheme: Financial assistance to help Queensland businesses take the early struggle out of commercialising new technology-based products and services – funding for this program is currently under review.
- Who for? West Australian firms in the process of commercialising a new product or service in the information and communications technology, biotechnology, marine, defence, and renewable energy sectors.
- What for? Participants receive a skills diagnosis followed by training in identified areas of need including strategic management, IP management, risk management and obtaining finance.
- How much? This primarily provides in-kind support in the form of training, but financial assistance is also available for travel to conferences, trade shows and other business purposes.
- When does it close? The next round of applications for the program will open soon.
- We say: An innovation focused program that is available to both start-ups and more established businesses. Support for travel is particularly valuable for businesses in Western Australia.
- Who for? The owner or employee of any West Australian small business with fewer than 20 staff.
- What for? Any form of training that will help improve the productivity of a small business including management skills, financial planning, OH&S, e-businesses, debt collection and more.
- How much? A grant of up to $200 with matching funding of $100 from the small business.
- When does it close? Ongoing.
- We say: This scheme may only provide a small amount of funding, but its flexibility and non-competitive structure make it a quick and accessible source of training support for small businesses.
Innovation to Market: Provides advice to business to help them assess the market prospects of research or ideas and provides funding to hire consultants to provide advice on how to take the idea to market.
Renewable remote power generation program: Provides rebates for business enterprises in off-grid areas of WA to install renewable energy power systems to replace diesel generation.
Regional industry assistance: Financial support for the development of competitive and sustainable industry, and facilitate industry attraction in regional Western Australia.
South West Regional Development Scheme: Grants up to $150,000 to back businesses or other organisations to carry out projects that will create jobs in and be of economic benefit to the south west of Western Australia.
Indigenous Economic Support Scheme: Assistance in the form of money or services to qualifying indigenous commercial enterprises including planning and development or business management training.
- Who for? The scheme assists companies with turnover of between $500,000 and $5 million to develop innovative products or services that will help foster job growth and economic activity in South Australia.
- What for? Financial support is provided to hire consultants to advise on obtaining grants, review businesses for investment readiness, develop business, marketing or commercialisation plans or provide mentoring.
- How much? Grants of up to $25,000 are provided.
- When does it close? Future funding for the program is currently being confirmed.
- We say: A decent level of funding is available for a wide range of projects and, unlike many others, matching funding from the business is not required.
- Who for? Business with turnover between $250,000 and $5 million based or expanding into Southern Adelaide.
- What for? Established to stimulate economic activity in Southern Adelaide in the wake of the closure of Mitsubishi’s Tonsley Park plant, the program is designed to help enterprises in the region to commercialise new technologies, develop new products or seize business opportunities.
- How much? Grants of between $100,000 and $500,000 are available for eligible projects, must involve a minimum capital spend $200,000 and new job creation in the Southern Adelaide region.
- When does it close? Currently accepting expressions of interest from eligible businesses.
- We say: Is more explicitly focused on job creation than most grants programs, but could present an attractive funding opportunity for businesses in the region or others considering expanding or relocating to the area.
Bio Innovation SA Grants: Grants of up to $250,000 to firms in the biotech sector assist with the development and commercialisation of biotech projects and to spur the growth of biotech start-ups.
Pay-roll tax trainee wage rebate scheme: Employers can claim a rebate of 80% of the pay-roll tax paid in respect of wages paid to eligible trainees and apprentices engaged in an approved contract of training.
Business owners coaching program: Coaching and information seminars to help business owners develop their management and business skills and hear first-hand from experienced, successful business owners.
Market Access Program: Assists small and new exporters to develop export capability, conduct market awareness campaigns and develop an export culture with grants up to $5000.
Business Travel: Funding for film, television and interactive digital media producers to travel to international and national markets. Grants up to $5000 available.
South Australian Young Entrepreneur Scheme: Provides budding entrepreneurs with access to mentoring, training, expert advice, assistance in developing a business plan and the opportunity to access a tailored business loan.
Indigenous Small Business Fund: Indigenous community-based organisations can claim grants of $5500 to $110,000 for business development projects. Some contribution to costs from the applicant is also required.
- Who for? Tasmanian businesses with turnover above $500,000 and businesses that have the capacity to export goods or services interstate or overseas, replace imports into Tasmania or are an integral part of the supply chain to export or import replacement businesses.
- What for? Helps meet the cost of hiring a consultant to provide advice on business planning and strategies and the implementation of projects in relation to production methods, marketing, supply chain initiatives, accessing market opportunities and environmental sustainability.
- How much? Grants up to $50,000 are available on a matched funding basis.
- When does it close? Ongoing.
- We say: Micro-business may not be eligible for the scheme, but it otherwise provides flexibility for businesses looking to take the leap to the next level. Given the relatively small size of the Tasmanian economy, it is no surprise the scheme focuses on helping businesses that are either export focused or that are unique within Tasmania.
- Who for? Tasmanian businesses with turnover of less than $5 million and a working prototype for a innovative product or service they want to take to market.
- What for? Financial assistance to help businesses commercialise innovative products, processes and services. Funding is available for anything associated with commercialisation except R&D, prototyping, business administration costs and debt financing.
- How much? Grants of up to $20,000 are available at the early stages, lifting to a maximum of $150,000 as projects get closer to commercialisation, on a dollar-for-dollar basis.
- When does it close? Ongoing.
- We say: A comprehensive support scheme that provides support throughout the commercialisation process. Note however that there are reasonably onerous post-grant reporting obligations that, if not complied with, can result in grants becoming repayable.
Young Farmers Interest Rebate Scheme: Provides an interest rebate on commercial loans to assist young farmers to enter the industry, expand an existing enterprise, or improve productivity.
Research Partnerships Program: Supports collaboration between Tasmanian-based enterprises and research institutes on a project basis. Grants of up to $100,000 are available on a dollar-for-dollar basis.
Springboard Accelerator: Access to shared business services and equipment, technology and support services, rental space and flexible leases to support and facilitate new and established Tasmanian businesses that are innovative, export focused and science and technology related.
Women in Business micro-credit program: Assists women on low incomes by providing business mentoring support and small interest-free loans up to $3000.
New Market Access Program: Provides grants to eligible Tasmanian organisations to assist business growth and develop new interstate markets. Eligible SMEs can claim up to $10,000 on a shared cost basis with payments made in arrears based on pre-approval.
Export Market Assistance Scheme: Assistance is available to eligible Tasmanian-based small and medium-sized enterprises for approved marketing activities related to developing new export markets.
Market Ready Commercialisation Program: A series of facilitated workshops that increase commercial success for Tasmanian innovators. The program provides successful applicants with 10 days of free professional assistance, valued in excess of $5000.
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