Chasing funds for your exciting new business venture? There are plenty of options out there – unfortunately grant funding is rarely one of them. But wait – shouldn’t the government be supporting startups? Absolutely! There is support available – just not through the grant funding channel. In some cases, if your new business is up and running and has demonstrated viability, you can apply for specialised funding like the Industry Capability Fund or Export Development Grants.
It all comes down to risk
In other words, Governments don’t want to invest in a business that may be ‘high risk’. The reality is, despite how amazing your new concept is, the odds of failing in the first year are around one in three. This means that, if a funding body is going to offer a business grant, it needs to be confident that there’s enough demand in the marketplace to make it viable. Hence, if there’s no financial return on the other side, no one wins – not the funder or the business.
As a new business, another barrier your length of trade. Most government grants require at least two years’ (sometimes three) of financials (often audited). This is another risk management mechanism to reduce the risk of your business failing and the funds invested being lost.
So where does that leave you? Well, now that your dream of a pot of grant gold is no longer a reality, let’s get down to business. You know you need funding to jump-start your venture but you don’t know how to get it. This can be a daunting task, so carefully consider your options. Decide if they align with your business goals and priorities. The good news is, there are a few avenues to choose from.
Alternatives to grant funding
- Venture Capital: investors who invest in start ups in return for equity;
- Angel Investors: groups who provide seed funding for start ups;
- Corporate Venture Funds: similar to venture capital funds but backed by a corporate entity;
- Debt Funding: immediate cash injection which does not dilute ownership over the business but does come with interest repayment costs;
- Equity Crowdfunding: allows individuals to invest small amounts of capital into businesses for small amounts of equity;
- Bootstrapping: starting your business with your own money and being strictly frugal throughout each stage of growth;
- Family and Friends: most common for new start ups but can put pressure on personal relationships;
- Crowdfunding: not as popular as it once was, but still an alternative to equity funding;
- Accelerator Funding – provides access to expert advice, mentoring, and networking opportunities.
Reaching out for help
So, where to from here? Well, your first port of call should be the free business advisory services that are available through the government. These are run by experts who know the who, what, where, and how of establishing a new business. If these guys can’t help you, they’ll definitely know who can. Here’s our list of helpful services relevant to Western Australian businesses:
- Small Business Development Corporation (SBDC)
- Business Local Program (regional business support, funded by SBDC)
- Innovation Cluster (funded by State and Federal Government)
- The Business Station (funded by the Federal Government as part of the ASBAS program)
- New Business Assistance with NEIS (a free program providing business mentoring and support)
- Startup WA (for an in-depth knowledge of the WA startup scene)
- Incubators/Accelerators (apply to join a class or cohort and access mentoring, training and events)
We also strongly recommend you join a few business groups (including your local chamber of commerce) to gain advice from those who’ve been there and done that. If you’re not in the South West, check out similar options for your particular region:
- Business South West Connect
- South West Business Women Connect
- Small Business Development Corporation’s Facebook group for business owners (‘I’m a Small Business Owner in Western Australia’)
- Co-working spaces (in the Busselton area, try The Good Egg, we love it)
Unless you’re on the verge of expanding into new markets or embarking on a large commercialisation project, your startup/small business is unlikely to get grant funding. However, there are lots of other funding options available to you and plenty of free services where you can access advice and guidance.
Beyond that, our team of professional consultants can offer you advice on business and funding strategies. If you need help nutting out a plan, be sure to contact us.