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Accessing Government Funding

by Sharon Monahan, President
The Business Guide Inc.


More Assessment Criteria

As promised I will conclude my examination of the assessment criteria in this month's installment.

Government officials also examine your proposal in terms of its R.O.I. (i.e. return on investment). More and more, departments and agencies are viewing their financial contributions towards proposed ventures as investments and indeed they are. They are investments in the economy. Officials divide the proposed number of jobs to be created into the requested contribution. If the cost per job is too high, they won't invest, as it is not cost effective. The proposal is said to have a poor R.O.I.

There is no magic number above which a department or agency won't go in terms of a cost per job but you should try to keep it below $10-$15,000. Higher paying jobs, which require greater skill levels and jobs within certain sectors of the economy are generally considered a better investment.

Another way in which your proposal is assessed is whether or not it is operating in a priority sector. Every few years provincial and federal governments identify certain sectors of the economy as growth sectors. Examples of two existing ones are technology and the environment. If your business is operating in a growth sector, you stand a much better chance of being approved. If it is not, then try to somehow relate your proposal to one of these sectors. For example your business may not be directly involved in the Technology sector but the jobs you will be creating in your company may be for IT professionals. Therefore you could argue that your proposal should receive priority.

The final assessment criterion I will examine is partnerships. No department or agency wants to be the sole funding source of your initiative. The more people that form part of the financial equation the better. If you approach a department and you already have some financial assistance secured from a financial institution, this lends credence to your proposal. If you already have support from another department or agency and a bank, that's even better. You should also be investing some equity yourself. It shows that you are willing to share some of the risk and that you are committed to the venture. Few things are less appealing than a proposal that relies solely on government financing.

Next installment I'll examine the environment in which economic development departments and agencies are operating in and how this affects the application process. Stay tuned.

If you have a question or comment on anything contained in one of my articles, just send me an email @ [email protected] I'd love to know if you find the information beneficial.

1999 by Sharon Monahan. All rights reserved.


The Business Guide Inc.

Sharon Monahan is President of "The Business Guide Inc.", a consulting firm specializing in government financial assistance programs and developers of "The Business Guide To Government Programs", a website and CD-ROM and publication on Canadian government financial assistance programs. For more information, check out her company's website at www.businessguide.nfnet.com.



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