Take it for granted

Government gives away millions each year in business assistance, the trick is finding it

Whether you're a start-up with two to five staff or a big-idea innovator looking at world domination, some form of government grant is probably aimed at you. The trick is to find it.

New Zealand Trade and Enterprise (NZTE) and Technology New Zealand (TNZ) are the two big players in government-funded assistance to business. Both acknowledge the array of mentoring schemes, incubators and grants available to small business is daunting.

"The feedback we have is, companies don't know what grants to apply for or when, and obviously we try and address that as much as we can," says NZTE spokesman Paul Higgins.

To help reduce the problem, the Government allocated $9.9 million in this year's budget to upgrade the biz.org.nz website. Both TNZ and NZTE are also promising to work more closely together, possibly setting up a joint agency where businesses can access services from both.

TNZ business manager Fraser Smith says the key message to businesses thinking about investing in expensive research and development is to contact TNZ first. ``Through schemes like Smartstart, they can examine the market opportunity to find out (if their idea) is as good as gut feel suggests.''
SME owners also need to realise that size really doesn't matter. "I think it can be quite intimidating, you see these press releases on companies that got half a million dollars and it probably doesn't jump out that, `hey, I'm a little SME, I'm doing something that's of value', and it's appropriate to come and talk to us," Smith says.

NZTE is the main distributor of grants to business but was criticised in an Audit Office report last year over followup checks on money allocated and how it assessed risk when awarding grants. NZTE chief executive Tim Gibson says the challenge the organisation faces is avoiding being "overly-bureaucratic", while still being accountable for taxpayer dollars.

One successful grant applicant is Dunedin craft kit maker Gondwana Creative Kits. Managing director Graeme Sykes obtained an Enterprise Development Grant of $3750, which funded half the cost of hiring a New York consultant who advised him on how best to target a craft market worth US$543 million a year. "The grant wasn't a lot but for a small business it was money we didn't have to spend," he says. NZTE also helped with a comprehensive marketing plan for the company.

Gondwana sells 20 different craft kits, for everything from hand-decorated mugs to chocolate mouldings and hand-made soaps, through bookstores and education toy stores in New Zealand. But the company could grow tenfold if it could build a customer base in the US, Sykes says.

One suggestion he has after going through the grant application process, is that money is awarded in one, bigger dollop for a series of projects the company wants to undertake, instead of a more piecemeal approach.

He also sees a need to improve turnaround times - it took more than six months to get an answer to a grant application.The time-lag can mean missing out on opportunities, such as airfare specials that make it possible to attend a trade show, he says.

Where the money goes:
In 2003/04, NZTE got $189.5 million from government, $142.4 million of it to fund services and $47 million for grants programmes. SMEs got $25.3 million of that: 250 Enterprise Development Grants, 232 Growth Services Fund grants and 90 Enterprise Development Fund grants. Thousands of companies were also funded for training courses on everything from exporting to management techniques.

TNZ approved 176 Technology for Business Growth projects last year, worth $32. 8 million. Of those, 24 got more than $400,000.

Of all TBG inquiries, 40 per cent resulted in investments, and of inquiries about Technology for Industry Fellowships, 80 per cent resulted in funding support. Grants from its Private Sector Research and Development fund, aimed at helping SMEs undertake R&D, were worth $10.9 million.