Applying for government grants and incentives takes time and effort. Business owners need to know whether the potential payoff justifies the investment. The answer depends on the program type, the award amount relative to your effort, and your likelihood of qualifying.
Programs Worth Applying For (Almost Always)
Tax Credits
Tax credits are the highest-ROI government programs because they require minimal application effort relative to their value:
- WOTC: Pre-screening a new hire takes minutes. Credits are \$2,400 to \$9,600 per qualifying hire.
- Section 179: Requires only claiming the deduction on your tax return. The benefit is proportional to equipment spending.
- R&D Tax Credit: More documentation required, but credits can reach \$250,000/year. Guide.
Free Certifications
Certifications like HUB are free to apply for and provide ongoing procurement advantages. HUB guide.
Property Tax Abatements
If you are making a qualifying real estate investment, the application effort for a multi-year abatement is well worth the potential savings. Guide.
Programs Worth Applying For (If You Qualify)
- SBIR/STTR: Highly competitive but awards are significant (\$50K-\$1.5M). Worth applying if you are conducting qualifying research. SBIR guide.
- Skills Development Fund: Requires community college partnership but covers meaningful training costs. Guide.
- USDA programs: Well worth pursuing if you are rural or agricultural.
Programs That May Not Be Worth the Effort
- Very small competitive grants with extensive application requirements. If a \$2,000 grant requires a 20-page application, the ROI on your time may be negative.
- Programs you barely qualify for. If your eligibility is marginal, the time spent on a competitive application may be better spent on programs where you are a strong fit.
How to Evaluate ROI
- Estimate the award value. What is the likely amount you would receive?
- Estimate your time investment. How many hours will research, application, and reporting take?
- Assess your likelihood of success. How well do you match the program’s criteria?
- Compare to alternatives. Could the same time be better spent on other programs or on revenue-generating activities?
Find High-ROI Programs
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