Winning an enterprise award can be a turning point for small businesses.
It provides you with the recognition that you will need to open up further opportunities and a cash injection that can lead to further growth. It’s an exciting time.
However, there can be many options on how to spend your money or in-kind support that it is easy to lose focus and/or miss the opportunity.
To maximise the return on an award win, you should not only use the funds strategically, but also leverage other benefits coming with it. This can include getting the ‘stamp of approval’ that comes with an award, or feedback from experts, networking with potential investors and partners.
You could get the funding, credibility and publicity to seek out even larger grants, paving the way for future growth. This is often called match funding.
When is the right time for match funding?
Of course, every business would welcome some free cash at any stage.
To be more strategic, you should channel the resources into a specific project that would be critical for your future growth, not just covering short-term needs. This includes prototyping, building infrastructure or testing a partnership. It will help you stay focused and measure success.
For example, we combined award money with our own funds to match a government grant. It helped us complete construction of a one-hectare pilot farm near Berbera, Somaliland.
How does it work?
There are many organisations that offer these kinds of grants and the concept is simple: you put up a certain percentage of the total funding and the partner organisation puts up the rest. As with all grants, the criteria and rules vary widely. It is important that you apply to the award that is right for you.
The percentage of funding required from you also varies. In the case of our government grant, they provided 45 per cent of the funding.
“It is important that you apply to the award that is right for you”
What do you need?
Donor organisations require businesses to put forward capital because they are looking for those that are commercially viable and sustainable in the long-term, and just need a springboard moment to grow.
It is important to demonstrate your commercial potential. In my experience, you should have at least £50,000 spare to use as collateral. While there are funds that accept considerably less than this, £50,000 – combined with the grant – is often the threshold above which the money starts to have a proper impact.
Looking beyond funding
An award win does not just provide collateral to attract additional funding. The application process gives you a great chance to learn to sell yourself effectively and hone your pitching skills. By the time you apply for further funding, you will be able to tell a powerful story.
Since not all assessors of award entries are necessarily experts in your industry, previous awards make your idea more credible.
In sum, do not take your awards for granted and treat them as if they were a loan from a bank. Think about the purpose, timeline and opportunities to attract additional funding, invest in future growth and build your capacity.
Charlie Paton is founder and director of Seawater Greenhouse.