Manufacturing is a key part of the Federal Government’s investment strategy to help build Australia’s competitive strength, and support our economic recovery and growth over the next five years.
We recently invited guest panellists Michael Sharpe, National Director of Industry at AMGC, and Chris Bridges-Taylor, Executive Director of B&R Enclosures, to join BDO Partners, Ryan Pollett and Nicola Purser, for a discussion about the Modern Manufacturing Strategy. In this webinar, the panel discussed the practical tips and advice they have for small to medium manufacturers looking to pursue current grant opportunities available to manufacturers in Australia.
The Modern Manufacturing Strategy at a glance
The Modern Manufacturing Strategy was launched by the Australian Government at the 2020 Federal Budget. In a nutshell, it’s a $1.5 billion investment from the government to support Australia’s competitive strength and strategic national priorities in short- and long-term initiatives across the next five years.
The strategy has been broken into three elements: the Modern Manufacturing Initiative (MMI), the Supply Chain Resilience Initiative (SCRI), and the Manufacturing Modernisation Fund (MMF) – it’s this third area that’s getting the most attention at the moment because round two applications are now open.
The MMF has a $50 million pool, with approximately 150 manufacturing organisations expected to receive funds in this round. We’ve provided some guidance on the strong eligibility criteria and documentation, and it’s worth noting the applications close on 21 January.
The Modern Manufacturing Initiative on the other hand, is the $1.3 billion flagship program and is expected to be launched later in the first half of 2021. Access to the $107.2 million Supply Chain Resilience Initiative will start from 1 July 2021.
All is not lost for manufacturers that miss out
Manufacturers shouldn’t be disheartened if they are ineligible or not successful in this process. Remember the MMF is really only a small pool of the overall strategy. So what should you do if you aren’t successful in this round?
There are other opportunities available if you don’t meet all the eligibility criteria, and it’s worth thinking laterally about the types of opportunities available. There are more federal opportunities – including the MMI and SCRI mentioned - as well as state-based options.
You might also fall into some alternative categories of grants. For example you could look at:
Practical tips for obtaining funding
Whether you are applying for the MMF, or another grant in the future, these four practical tips should help you to maximise your chance of a successful outcome.
1. Do your homework and get strategic
Understand what the government’s objective is for the program, and how your organisation or project fits in to that. If you can clearly demonstrate how your initiative is meeting the program’s purpose – by say, creating Australian jobs, driving economic growth, or transforming local manufacturing – you’ll be presenting a strong application.
You could look to external parties to either strengthen your application or broaden your opportunity. Are there industry groups you might be able to talk to for greater insights, or to tap into the nuances of the program? Or is there a university that might partner with you for research purposes?
2. The devil is in the detail
If you were looking to obtain private funding, you’d put a lot of effort into your pitch and preparation. The process of applying for grants should be no different. Putting in a solid effort will give you your best chance of a successful outcome. Even down to the little things like language - avoid using internal jargon from your business, and match the language used in industry publications.
Make sure you’re clear on the deadline, and give yourself plenty of time. Take note of whether the deadline is in your time zone, or you need to adjust. And remember you won’t be the only one submitting an application, so try to avoid a last minute submission in case there’s system errors or overload, causing unnecessary stress.
3. Stay true to yourself
Grant writers are experts in their fields and can add clear value to the process, but you’re the expert in your business. They’ll never know the project as well as you do, so even with the expertise of an external grant writer, you should own your application.
It’s also crucial that your proposed activities align with your business strategy. As Chris Bridges-Taylor points out, “grants can sometimes seem like ‘easy money’, which can be detrimental to good business decision making if it takes you on a path you perhaps aren’t ready or set up for. Staying true to your business objectives and strategic vision can save you a lot of money in the long term, because it stops you from chasing the wrong rabbit”.
Having a solid business case for the project and the role it plays in your long term strategic plan can also show the government how the initiative will help to meet their objectives. Think about exactly what the funding would do for your business – could it fast track the project, or will it mean you can invest in purchasing better quality equipment? Make sure to translate that back to outcomes that address the government’s objectives.
4. If at first you don’t succeed… try, try again
All of our panellists agreed that an unsuccessful grant application shouldn’t be the end of your efforts. There’s two main reasons for this. First, the grant application processors will start to get familiar with your business and what you’re trying to achieve with each application. Second, you can use the knowledge you gained through the process and any feedback you receive to refine your pitch. As Michael Sharpe said, “it’s the old life story: the more you try, the more you'll learn. You’ll also get more efficient in the process as well. Take the opportunity to upskill through the process of applying for government grants, it will be beneficial in the long term because there’s a lot of opportunities coming through”.
So if you’re unsuccessful, and the project is aligned to your strategic direction, don’t give up on grant applications. Refine your process, ask for feedback, and look at what you might do differently next time. It’s worth doing a review sooner rather than later, while it’s still fresh in everyone’s mind.
A successful outcome is only the beginning
Remember that receiving the funds is only the first step. By receiving the grant, you’ve made a promise to an external party that you now need to deliver on. As Nicola Purser points out, “most grant programs have requirements around the acquittal process, making sure that you are achieving your milestones. Some grants even provide the funding on a milestone basis”.
It’s important to be clear on what you need to deliver and when to make sure you remain compliant with the expectations that come with the grant. Maintaining dialogue with the government, along with strong internal tracking of resources (matching effort) and overheads, should help you to manage the governance required, and might even improve your systems or processes in the meantime.
Here to help
We know this can be a complex and challenging process. We have experts who can help to guide you through the process - reach out and find out how our BDO experts can help.
Are you missing out on government incentives?
BDO Partner, Research & Development, Travis Maddox, will be presenting at our upcoming Financial Reporting and Accounting Standards webinar on Wednesday 27 January. Travis will be talking with BDO’s National Leader of IFRS Advisory, Aletta Boshoff, about the current Government grants and research & development incentives, and the common missed opportunities we see.