Business Grant & No Loan Funding
Module 3 - Business Model
A. Importance of a business model and business grants.
1. What is a business model
B. Grantmakers favor specific business models
C. Aligning your business model
Important of Your Business Model
To put your self in the best position to receive a small business grant, you must be well aware of your business model. More than half of the business grants awarded are granted to businesses who business model aligns with the grantmakers mission. So, in order to know if your business aligns with the mission of the granter, you will have to know what your business model is. In some cases you can alter or modify your business model to line up with the grant you are trying to apply for.
What is a Business Model and How to Create One
A business model is the method your company use to do business in order to sustain itself and to generate profits. Business models can also help the business understand who the business is serving, and in what industry it is experiencing challenges or difficulties that need to be overcome.
What makes an effective business model is developing the strengths that are required for a business to succeed, while eliminating weaknesses. There key issues related to a strong business model are locating customers of high value, providing customers exceptional value, and help deliver substantially high margins. You will avoid pitfalls with a good business model, which undermines businesses, such as challenges in delivering satisfaction to customers, difficulties holding the position of the business in the market, and trouble wining business grants for the growth of the business.
Acquiring Customers of High Value
This has nothing to do with affluent customers , but it certainly does mean that you need to acquire customers that meet specific requirements pertinent to your business and the cause of the grantmakers such as customers of a particular demographic being easy to find, are they willing to give your product or service a try, willingness to pay for your product or service, and are capable of sustaining the level of business needed for you to attain your goals overall.
Your customers may not necessarily be make up of mostly users of your merchandise or service. They could also include distributors, retailers, manufacturers or anyone else could be a potential customer you might sell your product or service. Some users of your goods/services or distributors may not fit the above criteria, you can still acquire customers of high value by forming alliances or partnerships with other businesses.
Providing Customers High Value
There are several strategies to creating high value for your customers which will result in your business attaining a competitive edge in the market. This could possibly include providing unique benefits and features that are beneficial to the customer, creating better outlets of distribution by means of retail or other channels, offering complete solutions to customers by forming coalitions with other business entities, utilizing efficient manufacturing methods or options in pricing to lower the price, and providing being able to deliver more customized options, a wider spectrum of products, and faster delivery.
With he increasing convenience of the internet as a channel of commerce and outsourcing has helped companies become increasingly willing to form creative partnerships that cater to the needs and desires of customers. In addition, this has lead to industries developing innovative strategies of doing business that involve technology and the Internet. While this does offer opportunities, it also means that you have to be increasingly creative and savvy to withstand and overcome the competition within your industry.
Delivering High Margin Products or Services
Be cautious when opting for cheaper manufacturing overseas, it may not always provide you higher margins as your competitors will find ways to match your costs. It always better to use improved manufacturing processes whenever possible or include features which that offer increased value, thereby allowing you to charge higher prices, this is extremely doable once you begin establishing your company's reputation.
You can use other strategies and attain highest possible margins, such as: using a more effective oer unique channel of distribution, demanding less effort in pushing sales or supporting sales, becoming a known brand in the industry of scaling your process of manufacturing, or providing more supplementary products or other revenue opportunities without increasing costing.
Business Grant Makers Favoring Business Models
At least 50% of grantmakers only give business grants to business models or specific industries they favor. It is best to determine if your business venture has the the model or falls into one of the industries that are looking to fund. There are 3 ways to identify the business model or industry the grantmaker wants to grant funding to.
Grantmakers Eligibility Requirements
One of the places you can find what the grantmaker favors is by reading the eligibility requirements. sometimes it is listed there, if your business does not meet what they are looking to fund, examine your business model and determine if there are any features or services you can add to your business to satisfy the model the grantmaker favors.
About Us Page
It's easy to notice that not all websites have an about me page, and the same applies to websites of business grants, reading through the about me page will give you a sense of the mission of the grantmaker, or at least will tell you wht industry the grantmaker provides grants to. Read the about me page to determine if your business venture matches up with the grantmakers mission.
Past Grant Winners
The best way to determine which type of business venture is favored by the grantmaker is to visit the profile and business websites the the entrepreneurs that have already received a business grant from the grantmaker. This information can be easily found on the grantmakers websites. Usually winners from the past few years are posted on their websites, take time to study the information of the past winners to see how your business model measure up to theirs.
Aligning Your Business Model
Most business venture may appear to not fit into the mission of most grantmakers, but there is no cause for concern, there are a few things you will be able to do to align your business with the grantmaker's mission. For instance:
An online instructor provides webinars on how to start a
business in Iowa, how to market your business on a tight budget,
and social media marketing for beginners.
Although, you do not have to be an existing business to apply for the Warren County Small Business Grant Contest, it does require for existing business owners to have at least 2 full-time employees and have a physical location established within Warren County.
In this case you weed need too add to employees to your business in order to meet the eligibility requirements to apply. You can simply add 2 employees, or you can add an unpaid internship position and 1 paid employee position, either way you will be in full compliance with the grant's requirement. Of course, once your receive the grant you have to years to implement your plan to establish a physical location, you can simple host seminars and workshops that supplement your online webinars.
Another easy approach to align your business so that it will be favored by grantmakers is to seek out business grants for women. If you were to hire a female to over see all aspects of your business operations, you are in fact, a women lead business, she does not necessarily have to own the business, as it is not required by all grant makers. Fast Pitch is one such business grant, providing $5,000 to startup businesses led by women.