Do you want to apply for startup grants but don’t know how to write a proposal? If YES, here are 11 steps to writing a grant proposal for small business funding. Starting a business is not easy feat especially for people who are considered disadvantaged like Veterans, the disabled or people who are in minority.

For this reason, certain nonprofit organizations, agencies and foundations have been set up by government and even private individuals to provide these people grants to start their small businesses. If a new small business is struggling financially or if the business operates within a certain field, like agriculture or nonprofit charities, a grant may be the best way to obtain funding.

What is a Grant?

Grants are typically a donation of a set amount of money made by foundations, other businesses, government agencies or nonprofit organizations to companies or individuals that meet specific requirements and qualify for the grant.

Grants are given to businesses for free, so they are not to be paid back. This is one of the major or even the only lure of grants. A grant differs from small business loans in that loans must be paid back, typically with interest. Because they offer free money, grant giving organizations are usually quite strict in their requirements.

How Easy Is It to Access Grants?

The truth is that there is a lot of free money out there begging to be spent on businesses that are ready to advantage of it. That’s grant money. Several organizations, foundations, and government bodies provide grants for small businesses and nonprofit organizations. If you are looking for grant money for an existing or new business, you are more than likely to encounter difficulties finding grant funding, but it’s not impossible.

If anything makes grant funding similar to bank loans and equity funding (by investors and venture capitalists), that would be the fact that you need to write a proposal to get it. And as with proposals meant for lenders and equity funders, your proposal for a grant funding must be downright compelling. Even though the grant issuer isn’t taking any gains from your profits, they don’t want their funds to go down the drain.

So, you need to send a proposal to convince them that your idea or business is viable. This explains why such a proposal needs to include many of the elements in your business plan—the same elements that make your business plan compelling. While business plans and grant proposals serve nearly the same purpose, the two are different from each other.

What Do You Need to Access Small Business Grants?

Organizations that provide grants have a vision they want to use that grant to accomplish, so you need to find this vision, read through it, and tailor your grant application to align with it. Typically, you get one shot at a grant proposal, so you need to make the best out of it. You should know that businesses of different sizes and types have different kinds of grants and they are different organizations that offer these grants.

Projects relating to medicine, agriculture or research, will all qualify for separate grants. So the first step in applying for a grant is to determine which one is best for your business. In the united states, the new business will need to register with a federal grant program before they can apply for a grant.

You would need to obtain things like a DUNS number, and an employer identification number (EIN) should be included in your form before you can complete your grant registration. Once the business has been registered, the next step is to write a proposal for the grant and fill out the application form.

Herein then lies the problem, writing the grant proposal. It should be noted that many people have been deprived of grants because their proposal was never at par with what the organization’s needs. Even if you are the best person for the grant but you have a poorly written proposal, the only thing your proposal would see is the trash. This is why you need to take time when writing your proposal.

You will greatly increase your chances of getting grant funding for your business if you really know how to write a compelling business proposal for grant funding. Writing such a proposal isn’t as difficult as you think. Here are the steps involved in writing a winning proposal.

  • How to Write a Fundraising Proposal

11 Steps to Writing a Grant Proposal for Small Business Funding

Writing a grant proposal can be quite challenging for the small business owner as it is an art that takes time and practice to master. This is because grant writing is quite technical in its requirements, but that does not mean that it is the most difficult task in the world. Each grant is different in its requirements, but most of them ask for the same basic things. You only need to follow this general guideline and you are on your way to getting the perfect grant proposal.

Grant proposals are different from business plans, but include many of the same elements and serve nearly the same purpose. The grant proposal is usually divided into various parts; you need to be careful and as detailed as possible when writing each so your proposal does not appear shallow. Here is an outline you can use to write your small business grant proposal;

1. Know what the grant issuer wants

Before writing your business proposal for grant funding, you must bear in mind that your proposal must be tailored to each individual grant issuer that you seek grant funds from. So, you need to really understand the requirements of each grant issuer if you want your proposal approved for funding.

Find out the requirements of the grant issuer you are sending your proposal to. This will help you know what to include in your proposal and what not to include.

2. Your cover page

To start, you need to create a cover page for your proposal to make it look professional. Your cover page should include your company or Business Name, the date of submission, and the name and contact information of the company representative assigned to work with the grantor. This of course comes first but it is usually written or created at the end of the proposal.

3. Cover Letter

The cover letter introduces the business to the grant organization. It is the first part the grantor goes through so you need to describe your business clearly, but keep it short and preppy because your cover letter is not supposed to be lengthy. Here, you should let the organization know why your business is perfect for this grant and what you aim to accomplish with it.

Make sure to cater to the specific grant and not speak in generalities as if you are applying to every financing source in the United States. Use the cover letter to state the needs your organization serves, how you address these needs, and how your mission fits with the goals of the grantor. Include your contact information in the cover letter too.

Here are a few tips for writing a good cover letter;

  • Address your cover letter to an individual—making sure they are the correct person.
  • Limit your cover letter to one page with three or four paragraphs at most.
  • Include a statement of support from your board of directors.
  • Do not include a cover letter in federal or state grant applications, unless they specifically request one.

4. Table of Contents

This is where you outline the sub-heads of the various chapters and where they can be found. It makes it easy for the reviewer to jump to whatever section they wish with ease. It also displays some professionalism on your part. Again, funding organizations usually receive high volumes of grant proposals; the more reader-friendly your proposal is, the easier it is to fully understand your organization, its mission, and its needs. Place the table of contents immediately after your executive summary.

5. Compare your proposal to the funder’s requirements

Remember that each grant issuer is very specific in what they are looking for and will rarely deviate from their requirements. (The fact that there is a lot of money available doesn’t mean they will fund just anything).

So, you have to ensure that your proposal’s outline and summary really matches what they expect from you. Even if your business idea is brilliant and promising, the funder will never bend their rules to fund your business if your proposal doesn’t play by their rules.

6. Write the first draft

After having ensured that the content of your proposal matches the requirements of the grant issuer, start writing your first draft by expanding each point in your outline. This first draft doesn’t have to look good or perfect—it’s a draft and you can polish it later. You must emphasize the aspects of your business that the funder will like best (their requirements/guidelines will give you clues).

7. Executive Summary

The executive summary of a document summarizes the rest of it. In this document you should pinpoint the main reasons the grant is needed and how it will solve the problems of the granting organization. While you explain this, the amount of funding as well as information about the venture should also be listed.

Use this part of the document to convince the grantor that funding your business is the greatest idea ever. Describe how your organization and its mission match the philosophy and specialization of the grantor in the executive summary.

An executive summary is similar to a cover letter in many respects, but it is usually longer. Make certain that your summary clearly describes the contents of your grant proposal. If you manage to get their attention, they will continue reading the rest of the proposal. Here are Tips for writing an executive summary:

  • Identify your organization.
  • Include your mission statement.
  • Emphasize the key points of your grant proposal.
  • Clearly communicate the need for your business.
  • State the cost of the project and the amount you are requesting.
  • State the time period for the project.
  • State the results that are expected from your business.

8. Your Statement of Need/Problem Statement

In this section of the document, you have to provide in great detail the needs and problems that the business, project or venture is fulfilling and solving. Conduct research and show that you have done your homework. Answer key questions like, what is the scope of the problem? What will your business do that someone hasn’t or can’t easily do in the future? Show that you fill a void in the market and that you need the grant to do so.

Fully conveying the nature of the unmet or underserved needs that your organization can fulfill is vital to gaining funding. Also, adding hard statistics and quotes from people impacted by your organization add weight and credibility to the proposal. Be concise and to the point. Here are some tips for writing statement of needs;

  • Make sure your statement of need is well-written and reader-friendly.
  • Use quantitative data: statistical analysis, trends and expert views that support your argument.
  • Reference reputable research, literature and comparative data to support your argument.
  • Explain your time frame, and why securing funding is critical now

9. Project Description

The project description section is the main section of your grant proposal. This section is written best by separating different issues and ideas in separate sections. This will make it easier for you to write the section by focusing on one idea at a time, and make it easier on the reader as well since the section won’t be all scattered.

10. Objectives of your business

This section would contain the goals you aim to achieve with your business. You may not have to list anything in intense detail; just give the reviewer a highlight of the objectives of your business. The objectives section includes measurable aspirations of the venture such as achieving a hold of a certain percentage of the estimated market. Break down your objectives in a bulleted list so it is easier to read.

Tips for writing your proposal’s objectives:

  • Use quantifiable terms.
  • Identify who or what your objectives will serve.
  • Make sure your objectives are measurable and realistic.
  • Objectives should be consistent with your statement of need.

11. Methods/Project Management Plans/Timelines of the business

This section will show the reader how you intend to achieve your objectives. The methods, plans, and timeline of implementation for those methods and plans will also be shown. Visual timelines are best to show the reader exactly where everything fits into the scheme of things as well as when. This section shows the reader you not only have goals and objectives but that you also know how to achieve them using a detailed well thought out plan.

12. Number of staff you need

Many government grants will have stringent personnel requirements because they want you to create employment with the money that they are giving you in order to alleviate poverty and want. If the grant requires a certain number of personnel, make sure your personnel planning matches those requirements.

Also make sure that your objectives match personnel planning. Provide an overview of your organization’s top leadership, including its founder and board of directors. Include short professional biographies, focusing on the experience and resources each leader brings to the organization. Then you can write briefly on all the roles required to be filled in your business.

13. Your Financial Projections/budget

This is where you tell how you’ll use the money you receive. It should be within the amount you are asking for, be realistic and include only eligible expenses. Grant amounts are generally determined by the funding organization. Use the dollar amount anticipated and set up a budget for your project.

Make it detailed enough to satisfy anyone’s curiosity on the question of how the money will be spent, and make sure everything adds up. The financial section is your opportunity to convince the grant organization that you have a firm understanding of managing finances and budgeting your anticipated grant money.

Use realistic numbers in your budget, remembering to include all the costs that might be associated with your project. For example, if your project includes the need for printed marketing materials, you might need the services of a graphic artist and a professional printing company, as well as postage for mailing the materials.

Here are some tips for writing this section;

  • Make sure all figures are 100% accurate.
  • Specify direct costs—the expenses for which the requested grant funding will be used. Direct costs include personnel, fringe benefits, travel, equipment, and supplies.
  • Specify all sources of income and contributions, including volunteer services calculated at “market value.”
  • State all indirect costs and overhead associated with administrative expenses.

14. Polish your draft

After completing your draft, go through it carefully and polish it up. Edit sentences where necessary to make your ideas clear and concise. Read it aloud to yourself to hear how it flows. You will probably do a lot of rewriting here—and that’s okay.

Look for strong words to replace any weak ones. Eliminate fancy or difficult words for simpler ones. Correct all typographical, spelling, grammar, and style errors. And ensure that your completed proposal goes well in line with your original summary and outline.

15. Conclusion

Write the conclusion section, which should be about one paragraph to reiterate your request and need in just one sentence and explain how your non-profit will sustain the project when funding ends. Thank the foundation for the opportunity and include a final appeal for assistance.

In conclusion, grant awarding organizations usually prepare an application package that lists what they’re looking for in a grant proposal and you should do well to follow their guidelines. Typically a grant package will require specific information that must appear in the grant.

To effectively respond and create a grant proposal, it helps to follow the grant application requirements in order. Answer each question that is asked using the same “voice” as that found in the documents. Mirroring the verbiage in the document helps to let the organization providing the grant know that you understand the organization’s purpose.

8 Things to Avoid When Writing a Small Business Grant Proposal

a. Flowery language

If your grant proposal is too confusing or too difficult to understand, it may have less of a chance of being accepted. Focus on conveying information in a clear, concise way and avoid giving it a lot of embellishments. The proposal should first address what impact the business will have on the surrounding community. Identify what the business aims to do, and make an outline of projected goals the business intends to accomplish.

b. Editing and proofreading mistakes

A simple error can wreak havoc on your proposal and may even cost you the grant because there are lots of other people applying for the same grant as you are. Special attention should be paid when reviewing the content of the proposal. A misplaced period or misspelled word can mean the end of a proposal’s consideration.

c. Beware of misplaced priorities

When writing your proposal, make sure you tailor our content correctly to what was demanded for by the grant organization. Asides that, your business’ outline needs to be specific and provide information on every step of the plan for growth and development. For instance, if the proposal focuses more on the existing problem than the solution the business will provide, it may not pass muster.

d. Accounting fails

Budget and accounting are other things that may prevent your grant from sailing through. Make sure all the accounting work is presented accurately and in a way that makes logical sense. Review your budget to make sure it tallies with the kind of business you are proposing. Make sure that you do not overask or underask because doing each would not make you successful. Just stick with the reality.

e. Eliminate jargon

Every industry has its own jargon and businesses are no different. However, use of these jargons will not convince your reviewer that you are smart or you are the most qualified candidate to receive the grant. As such, it is best to eliminate all internally used acronyms and jargon. Tell your story simply, from your heart.

f. Not paying attention to details

Some foundations can be very choosy. They may demand that your grant proposal must have a certain page length, page margins, typeface, et al., be sure to follow these specifications. Even if these minor details do not seem important to you as an individual, you should know that the grant makers have their reason for making such specifications and as such, you should respect them else you run the risk of having your application tossed into the trash. Don’t go to all that work just to have your proposal rejected because of logistics.

g. Waiting too long

A common mistake new entrepreneur’s make is waiting until the last minute to write and submit the proposal. Aim to finish the first draft three or four days before the deadline. This will allow plenty of time for proofreading. When submitting, make sure the proposal and application adhere to all guidelines set by the grant provider.

h. Sending unnecessary attachments

Most grant makers will tell you exactly what to send. Sending a lot more attachments that was demanded of you will not increase our chances of winning the grant. Again, it’s important to follow the rules. Grant makers are reading a lot of proposals, and they may view extraneous materials as an annoyance.