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Featured How to get a small business grant

Discussion in 'Financing Your Business' started by djbaxter, Aug 26, 2017.

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  1. djbaxter

    djbaxter Administrator Moderator Member

    GoDaddy offers advice on how and where to get a grant for your small business, and what to do after you get one.

    How to get a small business grant
    by Ty Kiisel, The Garage - GoDaddy
    August 24, 2017

    Jacob Hawkins and Edvin like this.
  2. normasbathandbody

    normasbathandbody Member

    Very Helpful Information.
    djbaxter likes this.
  3. Small to Feds

    Small to Feds MVP Member Top Contributor

    My experience in the U.S. with small business grants, associated grant proposals and similar efforts over the last decade as a counselor to small business has surfaced some very hard facts of life.

    Start-ups, entrepreneurs and new small businesses regularly seek information regarding small business grants. There are many misconceptions about the nature of such instruments, who qualifies for them and what constitutes a small business grant. The misunderstanding stems from advertising on the Internet and other media creating the impression that grants are readily available and that they are "Free Money".

    There is no such thing as “Free” small business government grant money. In many instances individuals seeking grants should be looking to direct government contracting.


    Small Business Government Grants

    Small Business government grants are a type of contract and involve performance of a statement of work for agencies that are in some socio-economic endeavor serving the public, such as health care, public information, communications, high technology, or similar undertakings. A small business entity receiving a grant from a government agency or a private company becomes an extension of the agency or company mission and obtains funding to enhance that mission while growing as an enterprise.

    Small Business Direct Contract

    Small business direct government contracting differs from grants in sheer numbers and regulatory control. Direct contracts are used by all agencies of the federal government to acquire supplies and services. Both for-profit and non-profit organizations compete in direct government contracting. A direct government contract has a very specific work scope, schedule, deliverable items, pricing and in many instances incremental funding. A grant has a more generic functional orientation to funding and may or may not include deliverable items.

    There are some programs, such as Mentor/Protege and Small Business Innovative Research (SBIR) that appear to be hybrids of grants and direct government contracting and are often mistaken for grant instruments. They are not grants and are governed under the Federal Acquisition Regulation (FAR) as direct government contracts.

    Guidance on registering to become eligible for both small business grants and direct contracts is at the following link:



    Non-Profit Organizations

    Most small business government grants go to non-profit organizations because of the nature of the work such entities do.

    A non-profit organization operates in much the same way that a for-profit company does except that the founder (s) work for a board of directors that pays them a salary and, upon registration with state and federal governments under IRS provision 501 3 (c) or a similar designation, the business pays no taxes.

    What would normally be considered profit in a for-profit company is re-invested back into a non-profit to further its work. Annual reports are required by the IRS to demonstrate the re-investment and maintain a tax-free status.

    Non-profit organizations are usually initiated to pursue a religious or socio-economic endeavor serving the public, such as churches, health care, public information, communications, high technology, or similar undertakings.

    No one owns a non-profit organization. A board of directors, a charter, articles of organization filed with the state and the IRS designation with the federal government establish it as a public entity. In the event it is discontinued, all proceeds and assets are distributed by the government for public use and no one individual benefits. A non-profit charter must include that provision.

    The following link at NOLO provides the chronological process between a state registration and the IRS in applying for non-profit registration and tax-exempt status:

    How to Form a Nonprofit Corporation: A 50 State Guide

    For-Profit Organizations

    A for-profit organization is founded by individuals specifically defined by name as owners in the articles of incorporation with the state and registered with the federal government for tax purposes. There are many different types of for-profit entities (S Corp, Sole Proprietorship, LLC, Partnership, etc.); each type has its own unique tax and operating characteristics.

    A for-profit organization exists for the specific purpose of providing a return on investment for the owners. All assets on the books of the company are the property of the company, and although certain types of corporations, such as a Limited Liability Company (LLC) reduce the risk and insulate the owners' private assets to some degree, in general what is invested by an owner in the firm is the property of the firm and subject to business risks and the laws governing such matters. In return the owner or stockholder is entitled to the return on his or her investment as an individual in the form of dividends, direct proceeds after costs or other forms of entitlement (conveying what is commonly known as profit).


    Small Business Grant Funding

    Small Business Government Grants have the effect of supplying lump sum funding to a non-profit organization for a specific period once the grant is awarded. In general the funding is used to further the stated mission of the business. However, the grant provider may reserve the right to receive reports on how the money was spent and may require deliverable items associated with performance of the work under the grant.

    Certain grants take the form of cooperative agreements, whereby the non-profit and the agency commit to supplying mutual funding amounts to a project. Under limited or special circumstances involving 0 profit, a for-profit entity may be eligible for such a cooperative agreement with the federal government.

    Web sites for researching federal grants as well as additional information on grants in general are at the following sites:

    Home | GRANTS.GOV Resources

    Small Business Direct Contract Funding

    Federal Government direct contracting regulations are at:
    Federal Acquisition Regulation (FAR) | Acquisition.GOV

    “Small to Feds”, the web site you are reading, was initiated to assist small businesses in understanding the above regulation and direct federal government contracting. Please see the table of contents in the left margin of this site for topics.

    As stated in the introduction above, both for-profit and non-profit entities compete for direct federal contracting. A non-profit entity will bid grants and direct contracts at 0 profit. The following links are suggested as an introduction to direct federal government contracting:




    This article has provided a brief (and admittedly general) overview of the difference between non-profit and for-profit business entities and the small business government grants and direct contracting available to each.

    Both small business government grants and direct government contracts are highly competitive. Selecting potential agency sources and submitting winning proposals are acquired skills. For assistance in writing grant and direct contract proposals please see the following links:


    When considering forming an enterprise, please assess in your business plan the potential of both types of entities in direct contracting or grant competitions. Go to the SBA web site that guides you through the business planning process. I suggest you follow the site presentation and note the factors to consider:

    The U.S. Small Business Administration |

    The following site contains samples of business plans:

    Look for examples in the above of both for-profit and non-profit organizations at the above link.

    Ask yourself some strategic questions, such as what competition you envision and what your marketing plan will be. Addressing these questions may take some research and that is all part of the process of putting in place your plan. It is your road map for the future.
    NexlevelBiz, Edvin and djbaxter like this.
  4. Edvin

    Edvin MVP Member Top Contributor

    Thanks for sharing Ken.

    head spinning.gif
    Now I know how others feel when they read my posting :)

    My business plan does not rely on government grants/contracts; but, I've added a section for further exploration. This post serves as a great spring-board.

    I would also like to share that reliance on grants/contracts can be detrimental to a business. During my research with franchisers, I noticed and asked why there was a high closing rate with one particular franchise. I was informed that many franchise owners relied on external contracts; thus, were unable to sustain themselves when contracts expired or or not renewed due to budget cuts.
    Last edited: Jan 10, 2018
    djbaxter likes this.
  5. Edvin

    Edvin MVP Member Top Contributor

    Q: Can you handle Grants even if you wanted? I can't handle the truth :confused:

    I vendor recently forwarded me a Request For Proposal (RFP) of a nearby school district.
    I intend to open in summer; but, this certainly motivated me to possibly accelerate my efforts.
    So, I did a little research on school district tutoring bids and reviewed the RFP.
    Incidentally, from above link I learned that we can subscribe to services like to get notifications on RFPs.

    In any-case, I reviewed the RFP and found that the school district is looking for help to service over 500 children with 4-to-1 teacher to student ratio to assist with math during school hours. That means that 500/4 = 125 educators; neven if I separate this over four hour period, I need to have over 30 instructors on-hand.

    Additionally, in the education/tutoring industry there is a shortage of math & science educators.
    One strategy that I was going to use for my recruitment effort is to lookup teachers on public records and directly contact them to see if they are interested for after school hours tutoring. This strategy will obviously not work; so, I would have to explore the conventional employment strategy.

    I don't know that if I could find and hire the needed educators in a short amount of time.
    Can a small business really scale-up with large grants? Maybe it is my ignorance talking, and I should really try and then deal with consequences if I fail!

    I can't help wonder about what other opportunities exist that have significant effect on success and growth of my business; and if I find them, how can I execute on them!

    What is the biggest business-scaling activity that you have observed with winning business contracts?
  6. Jacob Hawkins

    Jacob Hawkins Banned

    Yes i agree with djbaxter.
  7. djbaxter

    djbaxter Administrator Moderator Member

    I didn't offer an opinion. I just posted an excerpt from a GoDaddy article.

    Make sure you read the post by Small to Feds above at How to get a small business grant - he's the resident expert on government grants for small business.
    Small to Feds likes this.
  8. Small to Feds

    Small to Feds MVP Member Top Contributor

    The fastest and largest scaling up activity I have experienced in >U.S Government contracting has been in taking over incumbent work forces, where a long running service contract is re-competed and the winner puts the existing work force on their payroll. During the course of marketing to the federal government the small business will encounter opportunities involving potential for acquiring an incumbent work force as an element of winning a contract. The acquisition of existing personnel already performing on a service contract is a way to exponentially grow a small enterprise.

    The purpose of this article is to discuss the acquisition of an incumbent work force and effectively managing the associated potential and challenges. SMALL BUSINESS FEDERAL GOVERNMENT CONTRACTING ("Smalltofeds"): MANAGING INCUMBENT WORK FORCES IN GOVERNMENT SERVICE CONTRACTING
    Edvin likes this.
  9. annagreenang

    annagreenang Member

    Wow, you got some great knowledge about small business grants and thanks you (Ken) for sharing great tips about it
    djbaxter likes this.

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