Accounting & Finance

Business Owner's Guide to Profit Planning

Owner's Guide to Profit Planning

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Steven Strauss: Federal Grant Funding

Question: I was wondering if there really is federal grant money available for my small business, and if so, where do I find it? It would be great if there was.

Answer: Let me ask you: In your experience, is there really such a thing as a free lunch? Right.

But actually, it is a qualified “right.”

If you think there is free government grant funds to start your business, you would be wrong. But that said, in special circumstances, there is grant money available. Typically, that money is awarded by a federal agency to a business that is doing something that furthers that agency’s public policy objective.
Example: In 2007 a company called TruTouch Technologies received grant money to assist in the development of its invention, a device that detects blood-alcohol levels by shining infrared light on the skin. The uninvasive test takes 60 seconds to get results as opposed to 20 minutes for a Breathalyzer.

The funding came from an IRS program that offered grants to businesses that demonstrated the potential to develop “new therapies to treat chronic conditions or unmet medical needs, reducing long‐term health care costs in the United States.” That was the public policy purpose. Said Dr. Trent Ridder, CTO of TruTouch, the grant “recognizes our commitment to reducing the devastating medical costs caused by alcohol related accidents and injuries.”

The company got almost a quarter million dollars in Round 1, and another $438,000 in Round 2; the second grant coming from the United States Army Medical Research and Materiel Command (USAMRMC).

The point of this story is two-fold:
1.    It shows that yes, there are some of those magic government grants out there that we all hear about. But hopefully, the story also illustrates that
2.    Such grants are very specific and often very technical in nature.

The fact is, while there is indeed some limited grant money available to business, it is not for individuals, not for startups, and also is very difficult to get. As the Grants.gov website says, “We have all seen them; late night infomercials, websites, and reference guides, advertising ‘millions in free money.’ Don’t believe the hype! Although there are many grants on Grants.gov, few of them are available to individuals and none of them are available for personal financial assistance.”

That said, if in fact you do think you might qualify for some of this R&D research grant money, then the place to go is the U.S. government’s Small Business Innovation Research (SBIR) program and its Small Business Technology Transfer (SBBR) programs. SBIR/STTR does in fact offer grants to companies that are involved in high-tech R&D. When looking for a federal grant, this is your best bet. For more information, go to SBIR.gov.

Beyond SBIR/STTR, there are some other, less technical grants available through other federal agencies. You can find them at
•    Grants.gov
•    The online Catalogue of Federal Domestic Assistance, and
•    FederalGrants.com. 

Additionally, you might consider conducting an online search for the terms “business grants” and the name of the federal agency that may need your goods or services.

All of that said, it is probably better to think of these sorts of opportunities as federal contracts as opposed to free grants. If you do that, then the answer is that yes, there is federal grant money available.

Today’s Tip: The prototypical small business will probably have a better chance of finding grant money on the state level. But even so, the same caveats apply: Grants are not given to individuals, or to new entrepreneurs to start new businesses. But money is available to entrepreneurs who can help their state promote economic activity or otherwise foster a valued social cause

The importance of community bankers to small business financing. Today at 10 a.m. on Business Next

Michael Rogers talks small business banking with Don Mann of the Community Bankers of Michigan. Also, entrepreneurial success stories from Don Sherman, Green Fundraiser Store; Angela Fisher, Ace Barter Exchange and Justin Jacobs, Comeplaydetroit.com. Listen today at 10 a.m., 3 p.m. and 8 p.m. on the Michigan Business Network. Listen to archived programs anytime at your convenience on your PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL

Registration open for May 3 “Michigan Celebrates Small Business”

Tickets for the May 3 Michigan Celebrates Small Business event are $95 per person (down from $135 last year) or a table of ten for $900. The evening includes a cocktail reception, a keynote speaker and the awards dinner at the Lansing Center in Lansing. To register online go to MichiganCelebrates.biz.

(Photo at left: SBAM President and CEO Rob Fowler congratulates Innovation Award winner Kyle Schwulst of ElectroJet at the 2010 Michigan Celebrates Small Business)

Michigan Celebrates Small Business is a cooperative effort of the Small Business Association of Michigan, Michigan Economic Development Corporation, the Michigan Small Business & Technology Development Center, the Edward Lowe Foundation, the U.S. Small Business Administration – Michigan and the Greater Lansing Business Monthly.

"Michigan Celebrates is an opportunity to tell the new story of Michigan -- a story of bright futures and exciting companies that are building Michigan's economy," says Penny Lewandowski, Director of Entrepreneurship and Development at the Edward Lowe Foundation. "This is the place to celebrate and acknowledge their success and to learn who and what is driving the state's momentum."  

Underwriters for this year’s Michigan Celebrates Small Business event are PNC, Michigan Economic Development Corporation, the Michigan Certified Development Corporation, Accident Fund Insurance Company of America, Varnum Law, Michigan Credit Union League, Comcast Business Class, Huntington Bank, DBI Office Interiors, Comcast Spotlight and Dynamic Edge Inc.

The new Michigan Celebrates underwriters brought onboard this year are Varnum LLP, Michigan Credit Union League, Huntington Bank and DBI Office Interiors

"Last year we attended the awards event for the first time and were so impressed by the accomplishments of the honorees that we decided to become a sponsor," says Scott Hill, Partner with Varnum law firm.  "We assist entrepreneurs and small businesses with their legal needs and understand the many challenges of growing a business.  Recognizing success honors the recipients and inspires us all."

PNC has been a supporter of Michigan Celebrates for the previous seven years.  “We’re honored to have been the primary sponsor of this prestigious event since its inception eight years ago,” says David Morrison, Southeast Michigan Business Banking Market Manager with PNC. “Michigan Celebrates Small Business is very important to PNC because it recognizes those companies and individuals that have taken the risks necessary to grow our economy. At PNC, we have a group of seasoned bankers that help those risk takers succeed.”

“Thanks to the generosity of this year’s underwriters, the MCSB organizers have been able to accomplish a longstanding goal to decrease the event’s ticket price,” says Jennifer Deamud, Associate State Director of the Michigan Small Business & Technology Development Center. “In a time of ever-growing prices, we are proud to change that trend. For the first time in seven years the ticket price will drop substantially to $95.”

The expectation with the decreased ticket price is more community members, such as Chambers, EDCs and small business owners will be able to attend to support the businesses in their community that are being awarded.

For more information about Michigan Celebrates Small Business contact Jennifer Deamud, Michigan Small Business & Technology Development Center at (616) 331-7480 or deamudj@gvsu.edu.

Trying to control costly small business insurance mandates, today on Business Next

Michael Rogers talks with Dave Jessup, SBAM's Director of Government Relations, about efforts to control costly small business insurance mandates. Plus, details on two outstanding upcoming events: the March 7 Google Get Your Business Online and the March 20 Economic Gardening panel. Listen today at 10 a.m., 3 p.m. and 8 p.m. on the Michigan Business Network. Listen to archived programs anytime at your convenience on your PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL.

Tell us what you think about small business insurance mandates. Leave a comment below!

Can't get a bank loan? Learn more about non-bank financing alternatives -- today at 10 a.m. on Business Next.

Non-bank financing alternatives for small businesses. Michael Rogers talks with Julius Talley of James Capital LLC in Kalamazoo.  Listen today at 10 a.m., 3 p.m. and 8 p.m. on the Michigan Business Network. Listen to archived programs anytime at your convenience on your PC or mobile device by going to the Business Next show page

Get Business Next audio seminars delivered three times a week automatically to your iPhone or other mobile device. Subscribe in iTunes using this URL.

What has been your experience with non-bank financing? Leave a comment below.
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