How and where to get a grant for business development
When deciding how to organize your business, you may need external sources of funding. Getting money requires competent planning with detailed calculations. The state or investor will issue funds if the project meets their interests. The article describes how to draw up a business plan for receiving a grant - irrevocable material assistance.
Content of the article
A large number of domestic entrepreneurs do not receive financial assistance due to non-compliance with all requirements for obtaining a grant. Therefore, take all the prescriptions very seriously and carefully.
Also download a ready-made sample and learn how to correctly draw up a business plan for a grant.
Differences between the grant and other funding sources
Winning a grant is a great way to get money to start and expand a project. This is a gratuitous cash subsidy for an enterprise, organization or individual to carry out any kind of activity, for example, to start a business. This is the start-up capital, which is very important at the stage of the company foundation. Consider, a follow-up report on the use of money is required. You can also use other funding methods.
Other documents for project financing:
- Investment plan;
- Loan plan;
- Plan for the employment center.
Business areas for which grants have been allocated:
- service sector - 30%;
- manufacturing - 20%;
- trade - 12%.
We continue our series of articles on how to get a grant with the article: "Business plan for a grant: 12 common mistakes." Grant is a tasty morsel for any aspiring entrepreneur. This is free money that you can use at the start of the project, and most importantly, you do not need to return it.
However, there is one difficulty - to receive a grant, you need to win a competition in which business plans will compete. The better your business plan is prepared and developed, the more chances you have for success.
There are a few common mistakes that aspiring entrepreneurs make when preparing a business plan for a grant. Let's break them down:
This is the worst mistake many people make. A typical business plan for obtaining a grant will not work for one simple reason - it does not take into account the specifics of YOUR business. A business plan, for example, a hairdresser's, should be "tied" to your project to open a hairdressing salon. There should be:
- indication of the location of the hairdresser's (at least your city, better the exact address);
- analysis of clients from your city, or better from a specific area of the city;
- analysis of real competitors who will become your business neighbors in the future.
For the business plan of opening a hairdressing salon in the village of Korliki, Nizhnevartovsk region, Khanty-Mansi Autonomous Okrug, the capacity of the Russian hairdressing market is absolutely irrelevant. But at the same time, the presence of “domestic” craftsmen in this village is extremely important.
The description of the product (service) is the part of the business plan that is especially easy to download from the Internet. For example, if you open a workshop for the production of cakes, and 80% of the text of your business plan is devoted to the description of cakes, recipes, cooking techniques - such a business plan will not give all the necessary information to a potential investor. It will provide one-sided coverage of the business, but at the same time such important aspects of the business as sales, marketing, the financial block, which are of primary interest to the investor, will remain out of focus.
Usually such a mistake is made by production professionals (in the given example, probably a pastry chef) who are in love with their work. With all the importance of organizing the production process, it is necessary to understand that business is not only production, but also sales, finance, organizational work. All these aspects of the project should be reflected in a quality manner in the business plan.
The Grant Commission evaluating your business plan will definitely pay attention to the quality of all parts of the business plan. Therefore, focusing on only one of them at the expense of others is a low score on defense.
In this article you will receive an answer to the question: "How to draw up a successful business plan for a grant?" A successful business plan is a business plan that has more than 90% chances of receiving a grant.
In order to create a business plan, it is necessary to present its structure (which includes sections and parts), as well as the content of each section. More details about the typical structure of a business plan can be found in the article: "Business plan for a grant", as well as "Business plan for a grant: 12 common mistakes."
In this article you will find some practical advice on how to write a business plan more efficiently and easily.
How do I get started and complete a business plan? This is an urgent question for someone who is seriously puzzled by the problem of obtaining a grant. Before you start writing, you need to prepare. Otherwise, it will turn out like in the song: "I sing what I see." And in the business plan it will be: "I write what I have downloaded." And 100% plagiarism is very harmful in obtaining a grant.
The sequence of actions is as follows:
1) Deeply delve into the topic of the project from the side of theory. To do this, you need to read 10-20 articles on a given topic. This step will give you a superficial but broad understanding of the topic. For example, you are planning to start organizing holidays and celebrations. After reviewing the primary information on the Internet, you will understand:
- what are the holidays;
- what is needed to organize them;
- estimated costs of launching the project;
- main "pitfalls" when starting a project.
2) Learn the practical nuances. After reading the theory, you need to get acquainted with the practical nuances. For this, communication with people immersed in this topic is best suited. The best practice teacher is competitor analysis. You can do the following:
- write down all the organizations that organize holidays in your city;
- call several of them under the guise of a client;
- meet and chat.
In this case, it is not at all necessary to order, you can just talk to clarify the situation on the local market for yourself.
3) "Tie" the project to a specific situation. In a project, it is important not only to have a good understanding of the theory, but also to master the practical situation. In addition to competitors, suppliers and buyers can help in this matter. Before writing a business plan, you need to find at least 10-20 potential buyers, as well as 2-3 potential suppliers. In the example of a holiday agency, we will need to get acquainted with corporate customers of the holidays, as well as find at least 2-3 suppliers of various attributes to create a festive atmosphere.
Due to the low level of agricultural development since 2021 in Russia, novice farmers have been provided with grants in order to create new and modernize old farms. State aid is helping to transform subsidiary plots into farms. An important condition for obtaining them is the availability of a business plan for a grant in animal husbandry that can convince the commission that the applicant can manage the business and produce agricultural products, since he knows the economic conditions, has the appropriate education and sufficient work experience. Candidates are selected and competitions are held by the commissions of the Ministry of Agriculture on the ground.
The main document is the Decree of the Government of the Russian Federation No. 717 (14. 7. 012). This is a program for the period from 2021 to 2021. The essence is to support the development of farms, agricultural processing, logistics, insurance, infrastructure. The Ministry of Agriculture, the Russian Academy of Agricultural Sciences and the Rosselkhoznadzor were charged with monitoring the execution.
After receiving funds, the farmer must send to the Ministry:
- bank statements
- copies of documents confirming purchases and payment for work
- documents certifying registration of ownership of purchased or erected objects
- copies of receipts, payment orders and checks
In the absence of reporting, funds are returned to the state budget.
Where to start: requirements for an applicant
To receive state support under the Beginner Farmer program (up to 3 million rubles), the applicant needs:
- Russian citizenship and place of residence in the region where the farm is located
- higher (secondary specialized) education and work experience in agriculture from 3 years or at least 10 years of experience in farming without specialized education
- money (10% of the project cost)
- minimum land area owned
- recommendations from local authorities or cooperative
- product sales agreement
- business plan
A beginner businessman should not have debts in paying taxes and insurance premiums. The grant is provided once and is used for 2 years, the next 3 years you cannot stop farming. For every million rubles, you need to create 2 jobs.
After choosing the legal form, compliance with the requirements is checked, a business plan is developed for submission at the employment center, having with you:
- educational documents
- a statement confirming the existence of a subsidiary farm
- work book
How and where to get a business development grant
Opening or expanding a business in the context of the announced state support for small business has become easier today. However, there are nuances in obtaining funding. The article will consider the question "where to get the money", because there are various sources of financing for entrepreneurs.
What structures and for what amounts issue grants in the Russian Federation
What kind of financial support can an entrepreneur expect? First of all: a bank loan. But in the absence of collateral, banks rarely provide financing to start-up entrepreneurs. The main reason is associated with the low survival rate of new projects (only 3% of all new businesses) and, accordingly, the high risk of default on loan funds.
An entrepreneur can also find investors, but he will have to let them into the business: transfer a share of ownership of the company (reduce the amount of his possible dividends), as well as the ability to manage and participate in strategic meetings. If an investor issues a loan, then the interest rate is usually higher than the market. And in case of unfavorable development of the company, the entrepreneur will have to give away personal property as well.
Grants are subsidies that are provided to entrepreneurs both on a reimbursable and non-reimbursable basis. Even the repayment of some grants does not match the conditions offered by banks and investors.
Funding can be obtained from the following government agencies:
- Ministry of Economic Development of Russia. The ministry supports medium and large businesses by providing subsidies from the federal budget by region. Funds are distributed among the regions on a competitive basis and are allocated only when the region also sponsors entrepreneurs. Manufacturers of certain goods, including innovative ones, as well as companies with a craft or social orientation, can apply for a grant from the Ministry of Economic Development. The Ministry of Economic Development and Trade also promotes more than 20 events aimed at supporting business, including lending assistance funds, microcredit organizations, technology parks and business incubators. The maximum grant size depends on the region in which it is awarded. You can find out more about the financing of entrepreneurship by the Ministry of Economic Development on its official website.
- SME Corporation. This organization solves various tasks related to the development of entrepreneurship in Russia. The SME Corporation was established in 2021 for an indefinite period. She not only provides subsidies, but also organizes various events, and also provides mentoring opportunities for successful entrepreneurs. Financial support for one project from the corporation in 2021 is up to 50% of the total cost, but not more than 500 thousand rubles. You can find out more about financing from the SMP Corporation on its official website.
- Foundation for Assistance to Small Innovative Enterprises in Science and Technology. The Foundation is responsible for the development and support of small businesses in the scientific and technical sphere and provides assistance only to targeted projects. The amount of funding depends on the program you are eligible for. Learn more through the official website of the Foundation.
- Ministry of Agriculture of Russia. Supports agricultural entrepreneurs. The Ministry provides grants for the support and development of family livestock farms and farms. Read more on the Ministry's website. Some categories of entrepreneurs can apply for a grant of up to 3 million rubles.
There are other types of assistance: lowering the income tax rate, property tax (this provision was relevant until 2021), reducing rental payments. But in this article, such structures are not considered.
You can get a grant for a regional support program. You can learn more about the support program and conditions of participation on the regional portals of small and medium-sized businesses. For example, on the websites of the ministries of economic development of the desired region. Usually, the amount of a regional grant does not exceed 300 thousand rubles, however, it all depends on the region.
Note that in 2021, the government allocated about 9.6 billion rubles to support entrepreneurship in Russia, which is 2.1 billion more than in 2021. The amount of government grants for 2021 is still unknown.