Three Keys For Small Manufacturers To Earn More Grant Money

We continue to see an encouraging stream of headlines about government money and investment in manufacturing. Great news, to be sure, but I’ve heard from more than a few small manufacturers struggling to cash in.

Some small shops are enthusiastic about what grant money would mean for their business and have made noble efforts to pursue. Yet far too many remain dumbfounded at how some of their peers seem to keep cleaning up, while they’ve become accustomed to rejection or hear about opportunities after it’s too late.

Same as landing any great job, scoring grant funding takes work beyond blindly filling out applications. Small manufacturers can win their fair share if they follow the right methodology.

With the help of Tom Lix, CEO and co-founder of Cleveland Whiskey, I’ve put together the below tips. Lix’s company has taken a proactive and purposeful approach to land more than a handful of grants and low-interest loans over the last decade. Here’s his story, and what you can do to follow in his footsteps.

1. Think Outside The Box—And Your Industry.

Lix calls Cleveland Whiskey “as much a technology company as we are a distillery.” They make whiskey using a special process that stimulates a reaction between wood and whiskey, allowing for dramatically accelerated research and flexible, creative product development. Not only has that process helped distinguish the company in the marketplace but thinking of themselves as a tech company has opened up a whole new world when it comes to grants.

The company’s first success came via $25,000 from Lorain County Community College. They got a “yes” on their second attempt, framing themselves as a tech company, and then went back the next year and asked for another round, running through the checklist of what they’d already accomplished with the previous year’s cash. That lead to another $100,000 in the form of a deferred payment, low interest loan.

Funding from North Coast Technologies and Cuyahoga County followed. Most recently, Lix’s team turned expansion to a new facility into more funding, earning a $50,000 Jobs Ohio grant and another $25,000 from the City of Cleveland.

“I’ve never been shy about looking for them and thinking about how we might fit,” Lix says “Sometimes you may need to talk to an adviser or even hire help, but it has paid for itself many times over.”

2. Focus On Relationships.

As Lix points out, it can be counterproductive to think of grants purely as “free money.” In fact, there may be costs associated with securing them, however minor in the grand scheme.

One of those costs comes in the form of the resources you’ll need to build relationships with all different types of funders. I find that federal grant dollars are often dispersed more or less on their merits—that is, the strength of the proposal companies make in their applications. Local philanthropy organizations, private institutions, and public-private partnerships are also merit-based. But here, relationships also matter. These groups need perhaps the biggest assurance that you will deliver because they answer to their funders and donors. So, you must not only prove the merits of your product and your company, but also your own credibility and trustworthiness.

This is particularly important for small manufacturers who haven’t yet broken through to receive their first grant. “Here’s your plan, here’s your proposal, but what do we know about you?” says Lix, summing up the overriding sentiment he’s faced when applying. “Can we believe you?” One important part of your relationship building turns out to be delivering on your promise. News travels fast. Showing yourself to be a trustworthy target for grant dollars builds your credibility and makes it more likely you’ll continue to be provided funding in the future.

There’s a reason that a singular “yes” from Lorain Community College begat a series of additional opportunities for Lix’s team. Suddenly, because of that strong relationship, other funders viewed Cleveland Whiskey as vetted and capable of delivering an economic return on investment.

3. Do What It Takes To Know What’s Available.

How many small manufacturers have experienced this scenario: Deep into your 23rd straight week of exhausting, engrossing work building your business, perhaps on your third coffee of the day, you wearily pull up LinkedIn to see a connection received a grant. You know in your core your company would’ve made a perfect candidate for a chunk of the available funds. Only one problem: you never knew the opportunity existed.

This happens a lot at the state, county, and city levels of government because these grants operate much more on a “first come first serve basis”– as long as a company is eligible. That’s how they make it fair. They’re not picking winners and losers and making judgments. If you get yourself in line, meet the criteria, and fill out the forms fast enough, you’re in the money. I’ve seen these grants snapped up in two hours or less.

Here, knowing what’s out there isn’t half the battle, it is the battle. This means you need to know lots of people across all levels of local government who will call you immediately when a new grant is coming up. Early on, Lix introduced himself to mentors at local nonprofits who helped him navigate this crowded and confusing process and implement a plan—“as opposed to just jumping in and saying, ‘Oh, gee, I heard of this grant, let me go for it,’” he says. “Because it’s about understanding what components are really important. It’s not just a paper transaction.” Leaning on mentors helped Lix crystallize a view of not only which grants were available, but which he should pursue and how to best engage his resources.

Bottom line: for small manufacturers, grant money doesn’t just float your way. That’s not so say opportunities aren’t plentiful if you know where to look. Take an intentional approach and thoughtfully pursue relationships, and you may soon be telling your own success stories like Cleveland Whiskey.