While that may sound cruel, let’s look at that answer in relation to the aforementioned assumptions.
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Most government (and private) grants are for non-profit businesses and social causes. Your attempt to make yourself rich by starting yet another restaurant may seem like a noble cause to you, but the average taxpayer is reluctant to see his hard-earned tax dollars fueling your entrepreneurial scheme — especially when you have a high likelihood of failure. Your 2-5 low paying jobs created is just not enough incentive to merit a gift of “free money.” If you can bring hundreds of high paying jobs or weapons technology to the table, you might get somebody’s attention.
Start-up businesses have a huge potential of failure. There is an inherit risk to starting a business – it’s a gamble. One you will probably lose. Think about when you go to the local casino. Your intention is to beat the odds (which are stacked against you from the start). When was the last time you saw a government representative at the front door offering to pay your slot machine expenditures for the evening? If you don’t have enough faith in your idea to invest significant equity in your venture, how can you expect someone else to? Also keep in mind, that cold and unforgiving slot machine does not care about your gender, race, creed or other demographic category. All people have the same chance to gamble and start a business. The government will give certain demographics set-asides for diversity spending on contracts – but your business needs to already be in a position to fulfill contracts before you even attempt to bid on them. Don’t confuse diversity spending with grants.
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Starting a business can cost a large amount of money – an amount most of us cannot afford. At this point, many entrepreneurs think two alternatives – lending or grants. Sadly, the lending climate for small business has not opened up as much as hoped, following the 2008 mortgage industry debacle. Also, many would-be owners find their bad personal credit or bankruptcy has destroyed their ability to secure lending. Many see grants as a “workaround,” but they are not for the simple reason — these grants don’t exist. If you want to start and run a successful business, you HAVE to have some “skin in the game.” Face it, if it was possible to start a business with somebody else’s money (and avoid any personal risk) — wouldn’t we all give it a try?
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HAVE A QUESTION?
This monthly column aims to help small-business owners navigate the resources available to them. Have a question about starting or managing a business? Email questions to laura@hamilton-ohio.com for possible inclusion in an upcoming column.
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