Entrepreneurs often think of government funding when they need additional financing for their business. Usually it is the case that all other avenues of financing are not willing to put out the welcome mat, and simply turn a cold shoulder. So what else is an entrepreneur to do?
There must be something there, amongst that myriad programs trotted out in every annual budget. When no one else is willing to help or even listen, the government must certainly have a way to lend a helping hand.
Well there is good news and bad news.
The good news is that government and quasi-government sources are generally a good source of information resources. They do want you to succeed and grow, especially since it is hard to get that real financial support that you really need. So providing you with an unbiased and rich set of information resources on how to succeed, is excellent value in itself.
But when it comes to the money, there is some bad news. Things are not what you expect. In fact it is almost deceptive. The number of funding programs that exist seems to be inversely proportional to the number of applicants who actually meet the criteria of the program.
While it is understandable that there must be qualifying criteria for any source of funding, the government has a knack for setting things up, so it is narrower than what first meets the eye. It almost becomes a PR stunt; i.e. the more programs that they have to talk about, the better it makes them look. And the fewer companies that qualify, the easier it becomes to manage from a fiscal policy. Are you in the right geographic area? Are you in the right industry? Are you working on the right type of project? Are you the right size of company?
Relying on government funding reminds me of using that extended car warranty. When it finally comes time to use it, you suddenly find out: there is quite a long exclusion list that applies; a vehicle inspection that is needed; all the maintenance records need to be reviewed; there are restricted suppliers who can supply parts….
You get the idea. There are criteria. And then there is the process of applying that criteria, which just does not seem to favor you much at all.
Getting an exact match between you, your financial need, and the government programs is a muddied process at best. You may believe that you have found the answer to this onerous task when you come across those website selector tools. With a nice list of those who have received funding, they will assure you that they will rapidly line you up with all the programs that apply. Well if believe in magic, it might be worth a try.
The reality is that various government programs come and go. The criteria are very specific. To seize the opportunities, you need to have an alert system that triggers you to drill deeper and take action. It seems a natural extension that you would have your accountant keep tabs and advise you when something comes up. But it is often the case that your accountant may not have strong enough insights into key parts of your business, or the ability to recognize the government programs that are a fit. If that is the case, you are sure to miss out.
If you like to do things yourself, you must be sure to do the following:
-Review the government websites regularly
-Listen to the annual provincial and federal budgets
-Have a dialogue with several government agents (i.e. FedDev, IRAP, BDC et al)
-Regularly talk to colleagues who are in a similar business
The key is to be able to recognize and pursue programs that apply. And then to present your situation in the most favorable way, to match with the criteria that are used. Good programs where you can get real money tend to have a line-up form quickly, and not everyone will get funded.