Create an impression
Presenting a professional application is important when looking for funding from State bodies A sloppy application will not necessarily preclude you from obtaining funding but it will have to be completed again
THE ECONOMY IS teetering on the brink of collapse but the coffers are not completely empty. There is money available to help those who want to start a new business or to develop an existing one. This can be in the form of grants for specific purposes, such as to buy equipment, or financial backing or mentoring to help strengthen an entrepreneur's management skills. To maximise the chances of a grant application being successful, owner-managers should identify the need within their business first. Then they should make sure to apply to the right organisation.
Those who hand out grants are interested only in applicants whose proposals are a good fit with the organisation's priorities.
So, for example, the local enterprise boards and Enterprise Ireland assist start-ups but the expectations of the two organisations are very different. Typically, the City and County Enterprise Boards assist small projects including part-time businesses.
Enterprise Ireland prefers to work with those who commit to their business full-time. It focuses on firms that demonstrate high potential in the areas of earnings, employment and exports. Its Cord grant, for example, will pay up to €30,000 to a start-up.
Choosing the most appropriate organisation from the outset also matters because receiving assistance from one body may preclude a firm from receiving help from another.
It is also worth checking whether the chosen funding organisation will let you have two bites of the cherry at the same time. Your firm may wish to receive grant aid as well as availing of a mentoring programme, if it is on offer.
Most businesses need help on more than one front so pick the organisation that comes closest to giving you all that you need.
Having made the decision, put time into preparing the application. One rule of thumb when applying for funding is to spend as much time working to generate €15,000 in grant funding as you would to generate €15,000 in sales.
At one time, grant application forms were cumbersome and there was a lengthy wait between application and approval. Big efforts have been made to streamline the process and deliver quick decisions.
"Those applying for Cord funding fill out a single, very straightforward form running to less than three pages," says Martin Corry, senior development officer with Enterprise Ireland and co-ordinator of the Cord funding initiative.
"We get about 2,500 general enquiries about funding per year so we have a standardised application form and a template to help.
"The template includes clear guidelines on what Enterprise Ireland is looking for in an application including evidence of a strong management team, the ability of the business to develop into overseas markets and a proposition that is based on a technological advantage or on a pioneering or innovative idea."
When applying for State funding, attention to detail and thoroughness is key, says Darren Daly, a partner at legal and business advisers, Byrne Wallace. "Companies should strive to ensure that the first impression is of competency and professionalism, he says. "A sloppy application will not necessarily preclude a company from obtaining funding but it will most likely be returned to be completed again. This can affect the agency's view of the professionalism of the individuals and the company itself."
For those already in business, development assistance may be more relevant than grant aid. This includes programmes such as the business-expansion scheme, equity investment by venture or seed capital funds and the Innovation Vouchers initiative run by Enterprise Ireland.
Innovation Vouchers, for example, provide companies with €5,000 to spend solving a development problem. Those who have used them say they involve minimal red tape around the application process.
"Innovation vouchers are a great way to access significant expertise," says Tom Flanagan, head of commercialisation at Dublin Institute of Technology Hothouse. "We have worked with many entrepreneurs in our Venture programme to put them in touch with researchers and academics who can add value to their business in the form of technical assistance and business intelligence."
Top tips for success with grant applications
* Do the research to find out which State body best meets your needs
* Read the information and application criteria carefully and make sure that you are eligible
* Take care to follow the application guidelines to the letter
* Print out a copy of the application form and do a dry run, practising filling it in
* Proofread it carefully. Then print out a fresh form and fill it in carefully
* Check how many copies of an application are needed
* Assemble all the necessary accompanying documentation making sure you have everything
* Present your application well - put it in a smart folder
* If there is a deadline, submit yours well in advance of the date
* Make sure your business plan is thorough, upbeat and convincing
CASE STUDY: SEYMOURS FINE FOODS
PHILIP O’CONNOR is a business and legal studies graduate who likes the finer things in life. He cut his teeth in the commercial world as a marketing executive with Mercedes-Benz before setting up Seymours Fine Foods to produce luxury handmade biscuits.
O’Connor spent 2006 and most of 2007 test marketing his product before approaching his local enterprise board in Cork for support to set up a production unit.
O’Connor got a capital grant from West Cork Enterprise Board to furnish and fit out the unit.
“This allowed me to set up the baking side of things with a commercial oven, a cold room and a packaging line,” he says. He found a suitable premises in Bandon and the unit went into production in April 2008 with two products: shortbread and cranberry almond biscuits.
It now has six products. Seymours Fine Foods employs three people and supplies gourmet stores and outlets that stock artisan products. It exports to Germany and France too.
“I found the enterprise board very receptive to my idea not least because I was able to show the potential for the business from my extensive test marketing,” he says. “I prepared a very detailed business plan and they went through it with a fine-tooth comb. They asked a lot of questions so it was by no means a walkover. But I actually found this very helpful. It really makes you focus.
“The form-filling part of it is quite detailed and almost like a miniature business plan in itself. I know some people would prefer if there were no paperwork but I found it makes you address the hard facts and look critically at what you are about to do.”
O’Connor visited the enterprise board a few times for advice. “The whole process takes quite a lot of time,” he says. “For example, if you are costing machinery, you have to get three or four quotes on everything. You need to remember to keep good records and receipts during the whole start-up process.”
OConnor had estimated his start-up costs at €140,000 and the enterprise board came up with 50 per cent, of which 33 per cent is a loan that has to be repaid within three years. O’Connor got a bridging loan to buy machinery while waiting for the funding to come through. “It ended up running longer than I had anticipated and cost me a lot in interest,” he says. “I was also on the receiving end of constant calls from the bank even though I had grant approval. I would advise people to be aware of this and to think about how they are going to cover the gap.”
OConnor says that while market conditions are difficult here, having the cushion of export sales has helped. Costs have gone up, orders are down and people are really pushing the credit terms, he says. It has been really good to have the German business. An order from there for the new year will help keep us busy during the quiet months of January and February. The way I see it, it takes time to build a luxury brand and we are here for the long haul.”
Since Philip O’Connor set up his luxury biscuit company in 2006, the economy has taken a tumble but a grant from his local enterprise board to buy machinery helped him to get the business going