Business Grants and Financing for Young People
The business world is always excited to see young people with an entrepreneurial vision getting involved in starting a new business or expanding an existing one. After all, young business owners are the future of the American economy, so helping to promote them is in all of our best interests. With that being the case, the biggest hindrance young people have in starting or expanding a business is lack of financial resources. But that doesn't mean funding is not available. It's simply a matter of looking in the right places.
The two most common resources for young people looking for business funding are small business grants and venture capital. In all likelihood the new business owner will not get all of his funding from a single source; usually, funding comes from a combination of resources, such as the previously mentioned grants and venture capital, as well as bank loans and contributions from friends and family members. For the purposes of this article we want to deal specifically with the issue of procuring grants.
In case you don't know, grants are essentially cash "gifts" from nonprofit groups, trade organizations, and other entities that are not looking for repayment or an ownership share. By contrast, a small business loan requires repayment and venture capital gives the investor an ownership share in the business. With grants there are usually no financial obligations between the business owner and the grant maker. That said, there are often requirements that dictate who is eligible for certain grants.Grants Specifically for Young People
Right off the bat we feel it necessary to tell you to forget about getting grant money from the federal government. Regardless of what you might hear in commercials or read on the Internet, the federal government simply does not provide grant money to individual businesses. At times they provide block grants to the individual states who may then turn around and offer that to their residents, but they don't make grants directly to individuals. Business grants for young people will have to come through other entities.
A good place to start looking for grant money is on the website of the Small Business Administration (SBA). Not only do they provide a searchable database of grant makers, they also provide a boatload of other helpful information that you'll find useful in starting or expanding your business. The SBA is one of the best online resources for both new and experienced entrepreneurs. If you can't find grant money using their search engine, you can do an online search of your own.
If you do search for grant money on your own you'll find that it tends to be available to all kinds of individual demographic groups including:
young entrepreneurs finishing up their education
low income individuals
minority groups
individuals involved in a specific trade
business owners living in a targeted developmental area
Getting a Head Start
Young people who know they want to start their own business while still in high school can get a head start by joining one of the business oriented clubs for youth, such as Junior Achievement. There are quite a few programs like this throughout the country; your high school guidance counselor should be able to give you some information about those in your local area. These types of organizations help teach business principles to high school students and give them practical, hands-on experience in running a business. Many of them include grant writing training and information as part of their programs.
College students who want to start a new business can also get a head start by looking for business incubators they can get involved with. Incubators are a great place to find mutual support from other like-minded business persons, information about your particular field of expertise, and of course, funding sources. Not only that, incubators are designed specifically to provide optimal conditions and opportunities to help new businesses be successful. If there's funding to be found, you'll most likely find it in a business incubator.
Securing Your Grant Money
Regardless of your age or the type of business you want to start, securing grant money works virtually the same way. You must write a grant proposal according to the directions you receive from the grant maker and submit it with any other required paperwork. The grant making organization reviews your proposal and determines the viability of your business plan. If it's something that interests them, they will award grants of varying sizes depending on their criteria and their cash availability.
Please understand that many grant making organizations work with limited funds which are only available at certain times during the year. This is because they are relying on contributions from other sources to provide the money. Therefore, one organization may only have grants available through April or May, and then have nothing else available until later in the year. What does this mean to you?
It means you should not be content applying for just one or two small business grants. You should apply for as many as are eligible for with the expectation that you'll only get a few positive responses. As a young person this is especially important because grant makers want to see that you're diligent and you don't easily give up. At the same time, you can also apply for venture capital in addition to grant money. The more sources you apply to for financing the more likely you will be to find what you need.
Writing Your Grant Proposal
Writing a good grant proposal may not necessarily guarantee you the funding you’re looking for, but it will increase your chances. Grant makers are looking for a sound business plan, reasonable goals, a good mission statement, and a certain amount of enthusiasm and intelligence among those seeking the grant. Trying to incorporate all of this in your grant proposal takes a little practice, to say the least. It's a skill that some people have naturally; for most however, learning to write a good grant proposal is the result of taking some classes and getting a lot of practice.
When you're writing your grant proposal keep in mind a couple of things: brevity and conciseness. In terms of brevity, think of your grant proposal in the same way as you would a job resume. There is a ton of competition for a limited amount of money which means grant makers must read a lot of proposals. If your proposal is ten pages long it's quite likely it will be put on the bottom of the stack and may never get looked at. Be as brief as you can while still being concise.
When we say concise, we mean that you should write clearly and to the point. A grant writer does not need lots of stories; he doesn't want to chase your thoughts around the veritable mulberry bush in order to figure out what you're talking about; and he's not interested in a sales pitch. Your grant proposal should be to the point, clear, and easily understood. Grant proposals that are the most concise while still being brief are the ones that stand the greatest chance of being successful.
If you're a young person getting ready to start a new business we wish you well. Get started now looking for your funding and above all else, never take "no" for an answer. If you are diligent, stubborn, and willing to do whatever it takes, there's no reason why your business idea cannot succeed.
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