Understanding Grants in Government Business

We often see confusion from businesses interested in selling to the government surrounding the concept of grants.  Small businesses in particular often have a misconception they can receive free money from the government just for opening their doors.  While a few grant programs aimed at businesses do exist, most funding sources are actually loan programs—not grants. 

The grants we’re interested in (and those important to companies selling to government) are those providing funds to a government customer, allowing them to buy the vendor’s product or service.  Many government agencies rely heavily on grants to support or augment their operating budgets.  They often have personnel on staff to create, submit and track the significant paperwork associated with grants. 

As a key source of revenue, contractor sales and marketing professionals must understand which grants are targeted by customers, how they work procedurally, key deadlines and critical grant parameters. 

Practical advice on grants:

A customer’s grant funding source can make or break a deal.

Grant requirements are very specific and can potentially derail a sale before it gets started.  For example, in the technology world, certain grants allow for agencies to purchase computer software, but prohibit them from leasing or subscribing to the same software.  A vendor with the “software as a service” model will struggle or be excluded in this situation.

New grant sources could mean “new money” for a buyer.

  Government buyers may be accustomed to dealing with grants for which they rely on apply and annually.  However, creative thinking and work by a vendor might also uncover non-traditional grant sources capable of funding a project not included in the budget.

Vendors may need to do more than simply uncover an alternative grant.

Grant writers within buying agencies are already swamped with work.  Suggestions these workers should manage yet another grant application may be met with resistance.  Vendors should instead consider developing a “grant template” for non-traditional funding sources.  With this approach, the vendor does much of the work required for completing a grant application.  While the vendor cannot submit the application itself, it can provide the template to the buying organization as a resource—easing the administrative burden and making it easier to buy.

Next time, we’ll look at another important government selling concept—the purchasing vehicle. 

All the best,

Lorin

Rick and Lorin help companies increase government sales and marketing effectiveness through their firm, Galain Solutions, LLC.  For a FREE report entitled “Five Sales Rules to Break when Selling to the Government” email [email protected] or visit www.galainsolutions.com.