Start Up Business Grants

Questions to Consider

Sometimes a grant is available for purchasing assets like commercial vehicles or a computer. Or it might be for marketing materials, such as brochures or a web site.

However, it's important to take care, because going for this type of financing for home based businesses can sometimes be a distraction.

Let's say, for example, that you can apply for a grant to buy a delivery van.

Here are some key questions:

How important is the van to your business?

Would you consider buying that van if there was no grant and if you had to finance it entirely from your own savings?

Can you afford the running costs of the van?

Also, if the grant doesn't cover the whole cost of the vehicle, can you afford the rest of the purchase cost?

I'd look at the van purchase from a cash flow viewpoint. Is owning the van likely to add to your bank balance or reduce it? Then look at the other option: what would happen to your bank balance if you didn't buy the van? (Remember that you may have to pay someone else to make deliveries.)

Which option is better for your cash flow? If the van makes you worse off, the grant could be costing you money even though it seems to be free.

The same questions apply. How important is this web site? Would you get one if you had to pay for it? Can you afford any costs not covered by the finance?

Generally speaking, I suggest a low cost strategy for a new work at home business.

If a grant can help you keep your costs down, that's great. But if you end up spending more, increasing your costs just because it seems like you might be getting some free money, that can be an expensive mistake.