Workforce Development

Manufacturing Money: Why manufacturers need grants but don’t pursue them

By Micki Vandeloo, president, Lakeview Consulting

Pretend you are sitting in your office. Someone knocks on the door, and when you open it, you see a person with a big smile on his face, holding a check for $10,000, made out to your company. You look at him, think for a second, and then slam the door in his face and walk back to your desk like nothing ever happened.

Would this ever happen to you? Amazingly enough, metaphorically, this same scenario has played out in countless manufacturing firms over the years. Opportunities exist for manufacturers to either save large amounts of money or to get grants and incentives for equipment purchases, training, or facilities expansion. However, many companies don’t pursue these opportunities. In some instances, they shut the door on a funding opportunity that is right in front of them.

Why does this happen? Would this same person turn down a donation to their favorite charity to help them grow? Why, then, would they not want to even apply for or find sources of such funds to help accelerate their company’s growth?

After 10 years of working in the manufacturing community helping manufacturers find and obtain grant funding, I have found that leaders who don’t pursue and obtain grants and incentives tend to fall into one of three camps: the “deer in the headlights” group, the “oh, I heard a story once” group, or the “conscious decision” group.

The “deer in the headlights” group


Based on my experience, approximately 70% of manufacturing leaders fall into this group. When I get in front of people from this group and start talking about grants and incentives and their availability, they look at me like a deer in the headlights. They get wide-eyed, shake their heads in disbelief, and often ask, “OK, but where do I even start?”

Virtually all leaders I know didn’t take a course in high school, technical school, or college on grants for manufacturers, and there have been very few opportunities for professional development in this area in the manufacturing world. 

In addition, the groups that fund manufacturing activities, including state economic development departments, are severely understaffed and can’t reach the majority of manufacturers in their state to let them know about funding opportunities. So, it is small wonder that most manufacturers don’t know about grants and incentives that could be available to them. 

The “oh, I heard a story once” group


About 10% of leaders are members of the “Oh, I heard a story once…” group. When I start talking to these people, they respond by telling me about a company they knew that lost grant funding or somehow was “wronged” by the agency providing funding. 

The fact is, grants are a contract. Under a contract, both parties have to perform to the terms of a contract for the contract to be executed successfully. If a company loses grant money, it likely did not meet the terms of the agreement. 

The “conscious decision” group


This is by far my favorite group. Unfortunately, only about 15% of manufacturing leaders are members. When I start explaining grants and incentives to these people, they will respond by telling me about the grants they have received or the funding opportunities they have been made aware of. For one reason or another, though, they have chosen not to pursue the opportunity. 

My firm did a grant and incentive research project for a very large, well-known and privately owned company. When we presented the results, the company’s leadership team said they would not be able to apply for tax credits because the company founder felt that, if the company didn’t pay its full taxes, someone more worthy in the community might lose money.   

These leaders have strong awareness of grant/incentive/cost-savings opportunities, but for one philosophical/moral/business reason or another, they have chosen not to pursue them.

The solution to all objections is the same – education. In all cases, if I can tell the “rest of the story” like Paul Harvey did back in the day, I can open their minds enough to leave the door open (maybe a crack) instead of shutting it. Or, they will then know enough to make a better-informed decision. To this end,  I have launched the Manufacturing Money Newsletter this week to deliver information and resources to manufacturers, right to their email inbox. Sign up today so you don’t leave money on the table due to lack of information!