The legal definition of small business differs from country to country and from industry to industry and thus can vary by circumstance. In US, a business having five hundred employees or lesser than that qualifies as a small business whereas for European Union, a business which has fifty or lesser than that employees in it can qualify as a small business.
Small businesses can be started at a low cost and also as a part-time where you can continue with a regular job till the time you settle down/expand your business. Thanks to internet revolution, it has become easier to start your business on a small scale than what it was before the revolution kicked in.
Nowadays, more and more people are opting for small business because our generation loves to take our share of risks and reap the rewards of their efforts. In addition to it, it gives them the luxury of having the ownership of it i.e. they don’t have to report to a supervisor or manager and it allows them to have the flexibility and freedom to make their own decisions within the economic and other environmental factors.
But like every good thing in life, there is downside of starting your own venture on a small scale and even brilliant ideas fail because of under capitalization. As a thumb rule, anyone who wants to start his or her own venture should opt for one only if he has sum of money at least equal to the projected revenue for the first year of business (excluding personal expenses). In addition to this, owners of small business have to make sure that in order to break even, the business should reach a level where the contribution margin equals their fixed costs and in order to do so, most of them start with under pricing their products in order to maximize their sales. And this is where proper planning is required to sustain and to expand the business.
To ensure that there is enough capital by your side, you can opt for your startup, which are:
With so many small businesses around you, everyone unique and brilliant in their own way, getting a slice of government funding pie might be the most confusing thing you could have come in terms to. Moreover, the process of applying for one requires ticking endless boxes and it might leave you as lost as once Alice was in the wonderland she landed at unknowingly.
However, government grant for small business and startups is not as confusing or tedious as it sounds to be. Government can lend its financial support to small businesses and start up at a national and regional level, mostly in form of
Government grants is non-payable, i.e. you don’t have to pay any of the money you are awarded or any interest on it and you are not giving away equity in your business or control over decision making in return of the grant from government to small business.
In simpler words, a government Small business grant is a financial award given by the government to an eligible grantee and it does not need any kind of financial assistance such as loan or loan guarantee, revenue sharing or an interest rate subsidy and since most of the government grants for small business are funded by the tax revenue, they have quite stringent compliance policies and reporting measure to ensure that every penny granted is well-spent. Having said it, small business government grants are highly competitive and notoriously hard to come through and in case you don’t know where to look for one, you might never get it.
Smaller businesses government grants are available throughout UK i.e. from all the four countries i.e. from the UK government, the Scottish Parliament, the Welsh Assembly and the Northern Ireland Assembly and each of them have their own set of criteria for applying.
Fortunately or unfortunately, everything in life has its plus and minus side and government grants are no exception to this rule.
Advantages of Government Grants for Small Businesses:
Disadvantages of Government Small Businesses Grants:
If you want to get the grant without going back and forth with the paperwork, you need to do your research well in advance and check for the eligibility criteria, such as:
There are various types of grant/funding which a small business can explore to ensure that it has enough capital at its side at any given point of time, such as:
Regional Growth Fund (RGF): Regional Growth Fund money is available through RGF Programmes, which in turn are schemes run by local or national organizations that have been allocated certain amount of RGF cash to offer grants to eligible businesses. As per the current statistics, approx £1.6 billion grant money has been allocated to 20,400 small as well as medium businesses. However, one has to fulfill certain eligibility criteria before they apply for RGF, such as:
Start Up Loans: Start Up Loan is available to the businesses who are either yet to launch or have been trading for lesser than 12 months and while the average loan size is approx £6,000, the final loan amount is decided based on your business type and its need. While applying for start-up loans, one should be ready with a business plan.
You can apply for the start up loans in case you are buying an already existing business, even if it has been trading for more than 2 years, provided you don’t own its ownership. Main idea behind start up loans initiative by the government is to finance the initial costs involved in starting and developing a business and thus it cannot be used for activities like debt repayment, investment opportunities that do not form part of an ongoing business.
However, there are certain types of businesses which are not eligible f or start-up loans, such as:
Every grant will have different business requirements but there are certain things which are required while you apply for one, such as:
While it’s quite competitive to get a government grant, there are certain areas where chances of getting one are slightly higher than the others, such as:
Examples of Regional and National Small Business Grants:
While there are a lot of grants, both on regional and national level grant schemes, few are listed here:
Small Business Grants National List: Seed Enterprise Investment Scheme (SEIS), Enterprise Investment Scheme (EIS), R&D Tax Credits, Innovate UK Smart Grants, Patent Box Relief etc.
Small Business Grants Regional List: AVDC Business Grant, Fermanagh Enterprise Limited, Business Growth Leeds, FIFE Investment Funds etc.
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