Categorized | Grants


Shoestring Venture: The Startup Bible (1st Edition)Grants are special kinds of financing and so require their own separate section in this book. A grant is “free money” given to you by a granting organization, usually a governmental or non-profit organization, to help you off to a good start on your business. These grants typically are not very large and more often than not require a protracted, involved, and complex application procedure. Not all grants come in the form of money. Some grants are really subsidies. For instance, municipalities frequently own property which they lease to for-profit businesses on leasing terms substantially lower than that of surrounding privately-owned property. These are treated as subsidies and often require the same complex application process as a direct grant.

There are no direct grants to small businesses available from the federal government. Many state development agencies offer direct small business grants to help and encourage entrepreneurs and small businesses. So the first place to look for grants is your own home state.

The process of finding and applying for grants is very time-consuming. Often, grants are highly restrictive—usually for medicine, education, rural businesses, or minority-owned businesses—so you may not qualify.

On the other hand, if you have just the right business or product, government grants can be extraordinarily generous. As a case in point, I was involved in financial consulting for a start-up that intended to use recycled materials. While the virgin material cost a pretty penny, the recycled material was double the cost. When we ran financials for recycling the materials ourselves, we figured out we could do so for about 15% of the cost of recycled material on the market. We also found generous state grants that would end up paying half the cost of setting up a small recycling plant. These grants allowed us to raise around $1 million in capital to build the plant, produce the recycled material, and manufacture our product at a competitive price.

Products or services involving environmental issues, water conversation, or alternative energy may find staggeringly generous resources available through grants. But if you have the next great Bratz doll, the grant spigot isn’t where you go to finance your business.


I have written more grant proposals than I care to remember. They come with thousands of instructions and inclusions and niggling details the grants committee want to see. And I’ve seen dozens of people ignore these rules and then wonder why they lose. Believe it or not, all these instructions have been pored over by committees, and the granting authority takes them very seriously. In preparing a grant application, your primary goal is to follow the instructions as closely as humanly possible and answer every question with as much detail as possible. So if you’re thinking of blowing off a section or a question, well, you’re blowing off the grant is what you’re doing.

2.3.1. The Catalog of Federal Domestic Assistance – An online database of all federal programs available to states and other local governments for funding grants, including small business grants. Go here first to find grants right for your business. The site gives you all the information you need to contact the correct agency and get applications.

2.3.2. Grants.gov – Set up by the Department of Heath and Human Services, is the most complete resource for understanding how federal grants work, where they are, and how to apply for them. The site also allows you to apply straight through the site for many grants and even track those applications.

2.3.3. The Amber Foundation: Grants for Women-Owned Businesses – Begun in 1998, The Amber Foundation provides small ($500) grants to women-owned start-up businesses. The grants are intended to get the business off the ground by providing basic equipment for a business Web site.

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