If you are looking to open a business of your very own, you are not alone. Every year more and more people make the decision to stop working to make other people rich and to start their own businesses. For most of them, having the start-up capital that is needed is harder than one might think.
As a consultant, I often come across people who need help with applying for small business grants (SBG’s). SBG’s are usually a hot topic with new business people with a small amount of money and little access to other capital. We have all seen the many media claims about "Free Government Grant for Small Business." It seems all too easy to get these days.
Of course, if it were really that easy, all you would have to do is find a government small business grant to apply for, apply and before you knew it you would have the money to grow your business.
Most U.S. government departments, like the Department of Commerce, do not provide any grants for help in starting a small business. Grant programs are available through state programs and other groups as well. The grant programs are often awarded to people in fields such as medicine or education, and they all have specific eligibility criteria. The process of finding a SBG program to apply for and reviewing the requirements to getting is very time consuming. After conducting a two-week search for a medical publisher, I found the requirements to be very specific and difficult to meet. Eligibility can be based on your location, and your business’ sales revenue to the application date, years in business, sex, race, and even for the purpose of funding. If your business sets out on a SBG seeking mission, there are some questions that you will have to answer which are:
1. Do you have the time and the resources available so that you can search for a small business grant program and apply for it?
2. Can you afford to hire a consultant if you are unsure of how to do it, or can you learn the grant application process by yourself?
3. Does your business need the money right now for expansion or can you wait up to a year?
4. If you do decide to ask for a grant, will it hurt your business because it will be taking away time from selling and marketing?
If you want to take a look at the SBG's available, the best place to start is the Catalog of Federal Domestic Assistance (CFDA). The CFDA lists thousands of grants from all government agencies for free. Many business grants will be geared towards minority business development or rural business opportunity grants. Do not overlook the other assistance programs available such as equipment and training.
If you do find a SBG program that is available for your business, you will need to be ready to go through a lengthy, approval process. With today’s funding cutbacks and the high amount of competition you will want to be prepared for it by following these quick tips.
Small Business Grant Tips:
Provide the grant company with all of your complete and accurate information in the application. An incomplete application will likely not make the review process or it can add delay your grant form getting approved.
Get to know your grant officer and their constraints, budget and concerns with approving your grant.
Stand out among the crowd with a well-prepared business plan if required. You will have to demonstrate your understanding of the business. Show how the money will bring the benefit the government agency wants.
Bring in outside experts or consultants to help you if you need it. An accountant or consultant can add credibility to your application process.
Keep in touch with the company offering the grant. Make regular contact with the grant office in a professional, but non-intrusive manner.
The task of locating and applying for a SBG is not for the people who are not willing to go through hell. Take an honest look at alternative sources first, such as loans, personal credit lines, friends and family.
If you find that you are willing to go through the steps that will be needed in order for you to get your grant, then this series of articles will be your comprehensive guide to making it happen. In my next blog on fund development, I will identify the various government agencies that give SBG's and the specific reasons for which they are awarded.