Your business needs funding, and grants can be a great, no-strings-attached way to fund growth and scale your impact.
But as a small business owner, your time is valuable. So valuable, in fact, that it might not always make sense to apply for a grant.
So how do you determine if a particular grant application is worth your limited time?
One answer is a simple cost-benefit analysis. This process helps you understand what you’re getting out of a transaction in return for the time and resources you’re putting in.
It’s a pretty simple equation, which means that even someone who hates math can run the numbers and make an informed decision in just a few minutes.
Let’s get started!
Step One: Establish Your Cost Per Hour
How much is one hour of your time worth? It’s a subjective question that only you can answer.
For the purposes of this example, let’s say your time is worth $100 per hour.
Step Two: Determine How Long the Application Will Take
Not all grant applications are equal. A typical Hello Alice grant application can be completed in less than an hour. Some government grants, on the other hand, might require paperwork and documentation that takes you many hours to complete.
For our example, let’s say an application will take you 10 hours to complete from start to finish.
Step Three: Do the Math
To determine the cost of the application, you just need to multiply the hourly cost of your time by the number of hours it will take to complete the application.
[Cost Per Hour] x [Hours for Application] = Cost of Application
In our example, if your time is worth $100 per hour and the application takes 10 hours, the ultimate “cost” will be $1,000.
To be clear, we say “cost” in quotes because grants typically do not charge fees or require payment. The $1,000 figure is simply the opportunity cost of devoting your time to the grant application as opposed to other business activities!
Step Four: Assess the Benefit
This part is easy. Is the grant amount more than the cost? If the answer is yes, then you should probably submit an application!
Looking at our example, the cost of the application is $1,000. That means if the potential grant award is more than $1,000, the benefits outweigh the costs. It’s worth your time to apply!
That Said: Consider ALL the Benefits
With cost-benefit analysis, the benefit is often cash — but not always.
It’s important to understand that receiving a check is only one positive outcome of the grant process. Submitting an application gives you an opportunity to dive into your business model and reflect on your strategy. Even if you are not selected, you might be able to repurpose some of your application responses as marketing materials or email content, for example.
To get a sense of all the benefits, we polled small business owners on what they stand to gain from submitting a grant application. These were some of your responses:
- “Funding for my dream”
- “Access to possibility”
It’s hard to assign numerical values to feelings like hope and confidence, but no small business can operate without them! Submitting an application opens the door to recognition, exposure, and possibilities that can be worth as much as any check.
At the end of the day, you need to ask yourself one question: Do you need money to attain your business goals? If yes, you should probably submit that application!
We can’t wait to read it.
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