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Top 5 Myths Preventing Businesses From Applying For Start-Up Cash

I’m a bit of a nerd when it comes to applying to business subsidies, so I always ask other entrepreneurs about their strategies for snagging this kind of funding. Surprisingly, many entrepreneurs don’t even try to apply for subsidies! Free money for your business seems like a pretty appealing offer to me, but many start-ups have limiting beliefs that prevent them from even trying. 
 
As someone who sat at the decision table for hundreds of small business subsidy applications in my former job, I’d like to dispel some common myths for you:
 

Myth 1: You Need To Be An Established Business

Nope, not true! You don’t need to have made any sales or have formal financial statements prepared by an accountant. I had neither and was still able to get over $120K in start-up funding. That said, you do need to be a registered business and you should have some reasonable financial projections. Registering your business can be done online in a few minutes, and is fairly inexpensive (usually under $50). You can register your business federally or provincially (or both), but I recommend registering your business with your province because most provincial subsidy programs will ask for your provincial registration number. Federal subsidy programs are generally fine with receiving only your provincial number.
 

Myth 2: There’s Too Much Competition

Hmmm, that depends! If you’re starting a glamping business, you might be located in a rural area with very few innovative new start-up businesses. If that’s the case, then your business project won’t have much competition for local subsidies, and your business will appear novel and interesting when compared to other more traditional businesses applying for the same funding programs. Even if you apply to regional or provincial subsidies, they may have set aside a certain proportion of their funds for your particular area, so your chances are decent. The story will be different if you’re in an established tourist area that already has a lot of overnight accommodations and glamping options. But, the Canadian market isn’t overly saturated with glamping yet, so I think the prospects are good. Don’t count yourself out before trying!

Myth 3: It’s Cheating

No, it’s not. There are good reasons why governments want to encourage small businesses. According to this report, small businesses create more than half of all jobs in Canada and generate nearly 40% of our GDP.  Plus, new businesses have positive downstream effects on the community. Just think about what a new glamping business can bring: Your clients will visit other local tourism destinations, eat at restaurants and shop – thus supporting lots of other businesses and jobs. Plus, your suppliers, cleaner, groundskeeper, etc. are likely to be locals. Just one small business can bring great downstream effects, so receiving start-up funds is not cheating. Rather, it’s propelling your business forward so you can create positive momentum in your community. 
 

Myth 4: There’s no such thing as free

Well, this is kinda true, but probably not in the way that you think. Unless you apply for a loan or a repayable contribution, you don’t need to repay subsidies. So, they really are free in that sense. Personally, I make sure to only apply to subsidies that are direct contributions (i.e. like a grant) because that’s where I see the highest benefit for my business. But, here’s the catch: Most subsidy programs limit their max contribution to 50% of your costs, so you’ll need a plan to cover the remaining 50%. This is the “not free” part. You’ll either need to have your own savings, a loan, or some other arrangement to cover the rest. And, if you’re thinking: “Oh, I’ll just apply to another subsidy for the other half”, then let me save you some time by telling you up front that there are usually rules against that. But, keep your eyes open, as there are occasionally super special subsidy programs that will cover more than 50% of your costs. This is especially true if you meet a certain profile, like your business is located in an economically depressed area, you’re under 40, a woman, or meet other relevant criteria. 
 

Myth 5: It’s Too Hard / Complicated

That’s not always the case. In my experience, subsidy programs managed by Community Futures and county-level economic development offices are generally user-friendly and not too complicated to apply for. If you want to dip your toe in and try, this is a good place to start. Sometimes, all you need is to complete a basic form, and voila! I shared some tips about engaging with these organizations HERE, so check that out before starting. Regional, provincial and federal programs tend to be more complicated to apply to and require some advance planning. But, once you have all of the key elements in hand, it becomes easier to apply to these. The rest of this subsidy series will provide actionable advice on how to prepare a stellar application, so stay tuned. 
 
I hope this myth-busting encourages you to take the plunge and start looking into subsidies for your glamping business. Let me know if I’ve missed any big myths, or if you have any questions. 
 
 
Liked this article? Read the rest of my Subsidy Series.

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