I bet that if you ask anyone that wants to build an empire, why they have not already started, the answer will be funding. Yes, if you are looking for funds to start your idea, be it low capital business ideas or that large million dollar invention, there are things you need to know about diverse financing strategies. Let us explore grants in this blog.
Free money as funds for your idea
There are so many ways to go about getting funds for your idea. However, for now, let us focus on what many term “free money”. I actually mean grants from government or private institutions. Mind you, the assumption that it is free money, so you strive to get it, is absolutely wrong. It is taxpayers money. Actually, if you have ever paid tax, it is your money. If you have never paid tax, the more reason you should have some respect and sincerity trying to access this kind of finance.
Funds are not to be lavished!
When I speak about grants, I do not refer to the corrupt system of obtaining government funds to lavish. That is pure crime and yes it is corrupt, no matter how you justify it by pointing at others doing the same. If that is what you are looking for, stop right here and leave our website. As simple as that! The kind of grants and preparation we will explore is for those who sincerely want to establish a sustainable idea. Obtaining grants requires an enormous amount of work. By the way, let me remind you that obtaining bank loans, investors investment or any other kind of funds might even require far more work.
Upsides and downsides of grants
In another content we will dive into the things you need to have ready before you start your grant scouting expedition. Here, let’s look at the downsides of grants as funds for your idea before you go sourcing for one;
- In order to get any kind of grants you have lots of work ahead. Writing applications and submitting them. It might even require that you must have already crafted some basic business plan beforehand.
- It is a 50:50 chance. You might get it or not. No guarantee that the grant gets approved. Which means the effort invested in applying for these funds might seem wasted.
- Many grants have their own administrative requirements which you might not qualify for. So you are automatically excluded. In future content in the Tribe app, we will breakdown and examine some of these requirements.
- If you get a grant, it might come with some prerequisites like what to spend and what not to spend. Where to spend the money and where not to spend it.
- Some amounts might be tied to the process of reporting. This is usually the case for many grants. Only after you send a report, then you get the next installment. So the paper work continues.
- Grant does not come often as a 100% financing option. Many grants only finance 50 – 80% at most. So you will need more funds. It might even be a criteria to show proof of the remaining part before you get the grant.
Many upsides to grants as funds for your idea.
In further financing content in our Joadre Tribe App, we will teach in depth about grants as part of financing. We are working towards interviewing some grant institutions both local and international. Our goal is to groom our Tribe members to increase their access to diverse kinds of financing or their ideas. Now, for every disadvantage, comes an opportunity. Let us explore these 11 advantages and how you can leverage on them;
- Writing grant applications helps you explore your idea in more depth. It might create new opportunities for you.
- Receiving a grant might open up a whole new kind of network for you which can also include the grant office and their partners.
- Even if grants do not cover the full finance, you might be allowed to calculate your time investment and convert it into monetary investment which becomes a proof for the rest of the financing. More in our finance content in the app.
- Even if you do not get a grant, you sure do have the write up to try at another grant opening.
- Your own identity or status might actually favour your access to a specific grant. sO rather than whining about you not meeting a criteria for a specific grant, focus on the ones that are accessible to you. Like grants for African women, grants for women, grants for students, grants for startups, grants for trans-continental partnerships and so on.
- When you get a grant, the process of reporting to get the next payment installment can be used as a tool of evaluating your progress.
- Many grants come with a support mechanism which can serve as a kind of incubator for your idea.
- Many grants are non-payback types which means you do not get to own anyone nor do you have to give out shares in your business.
- Grants do not come with interest. So you are on the safe side if you work diligently.
- Grant can become your starting capital if you invest them wisely. Many grants provide an opportunity to pay yourself within the project. So you might as well invest your salary if possible back into building your idea, if you do not depend on it. Whala, you just raised capital.
- Many grants can go up to a 3 year period which gives you more time to develop your idea.
There is so much to learn about raising funds for your idea. Scouting for grants is just one part. We would explore over 8 different funding strategies for you to start and grow your ideas within our new educational series on finance.
We have launched this series of educational content in our Joadre Tribe app. The app is a business tool in your pocket. Download on your smartphone from google play store and Apple store. Our tribe app is here to revolutionise the way we educate ourselves about business. Now SMEs can get world class access to know-how, data intelligence and trans-continental partnership opportunities. It is time to build and grow real sustainable business in Africa.
Thank you Tribe for this opportunity,