As any small business owner knows, it can be tough going at the beginning. Giving birth to a great idea is one thing, seeing it past its first birthday can be quite another. So why do some businesses thrive while others don't?

The failure rate for new small businesses is high, with almost 75 per cent not making it past their fifth year. Lack of management and planning, together with a lack of finance and poor cash flow, are cited as two of the major reasons behind a new venture reluctantly closing its doors.

A third reason is failure to take advantage of assistance programs and grants designed to promote business development, innovation and education. Here are just a few of the more than 700 different grants available for Australian businesses.

Small Business Grant – NSW

The Small Business Grant is a key priority of the NSW Government and is designed to encourage small business owners who don't pay payroll tax to hire new employees and expand their horizons.

The Office of State Revenue (OSR) website, www.osr.nsw.gov.au provides excellent information on this incentive. It applies to those NSW businesses with an ABN, who pay no payroll tax liability during the 12 month employment period of a new person as of June 30 of the financial year. The payroll tax threshold for FY2016 is $750,000. In general terms, the business will receive a $2000 grant if:

·      A person is employed in a position which is a new job;

·      Employment began after 1 July 2015 and before 1 July 2019;

·      The number of full time equivalent (FTE) employees prior to creating this new position increases and is maintained over a 12 month period; and

·      The new worker performs their duties wholly or mainly in NSW.

Jobs Action Plan – NSW

Also outlined on the OSR website are incentives for businesses who are above the $750,000 threshold and who do pay payroll tax, such as the Jobs Action Plan. This has been extended to 30 June 2019 and is open to companies whose employee headcount at specified milestones since 1 July 2011 has increased.

The rebate has been increased recently, too, and is now $5,000 for each new person a business employs after 1 July 2013. A company should register the new roles as they are created, but the OSR has reportedly been exercising its discretion, permitting some business owners to pursue claims retrospectively. If allowed, this could represent a sizeable rebate in some cases, so it could well be a line of enquiry worth pursuing.

R&D Tax Incentive – National

This incentive is open only to companies conducting eligible research and development. It is not available to trusts, partnerships or sole traders. It aims to help reduce the cost and risk of undertaking such activities, something which many small businesses simply can't find the funds to support.

Companies with an aggregated turnover of less than $20M may receive a 45% refundable tax offset, while those above the $20M mark receive a 40% offset. To be able to claim, the business must have notional R&D deductions in an income year of at least $20,000.

As you'd expect, the R&D work needs to be recognised as an eligible activity to benefit from the incentive. Allowable activities fall into two broad categories:

·     Core R&D activities – where the business tries to create or do something that hasn't been done before and which requires experimentation; and

·      Supporting R&D activities – where the activities undertaken have a direct, close and immediate relationship to the core activities.

The great thing about this incentive is that it's open to businesses of all sizes and across all sectors, so small businesses are on an equal footing with large corporates, as long as they meet the criteria.

The Australian Government Business website www.business.gov.au offers an easy to understand "R&D Tax Incentive Snapshot" which gives a clear six-step overview of the scheme.

Go Solar – National

Although not strictly a grant, the recent 2015 Budget announcement of tax deductions for small businesses installing solar panels may also offer opportunities to free up funds. Companies with an annual turnover of under $2M can claim an immediate tax deduction on all purchases under $20,000 up until 30 June, 2017; an improvement on the prior need to spread deductions over several years. 

This change could be a positive move for many smaller entities, with good electricity rebates available and the added benefit of solar energy being better for the environment. As always, business owners need to do their homework and ensure they choose a reputable solar energy provider.  www.yourenergysavings.gov.au has further information on rebates available.

Seek Assistance

Sometimes, finding the time and energy to investigate the grants and programs available to your small business is in itself a problem. There's a very good chance you're eligible for a number of incentives, so it may be worthwhile investing in the services of a third party. The Pattens Group provides consultation services, identifying grants which may suit your circumstances and giving advice on how to apply. To date, they've secured funding of almost $600M for businesses of all sizes across Australia. Visit www.pattens.com to find out more.

Another avenue for some quick grant research is www.grantguru.com.au . This group has a long association with the grants industry and maintains a comprehensive business grants database designed to check your eligibility, evaluate your chances of success and calculate effort vs. reward.

For professional and up to the minute advice on small business assistance, contact the KDA Group on 02 4861 8383 and speak to one of our consultants.