Uncovering the truth behind  the free money myth

It is not uncommon for potential business owners to call or visit the SBA asking for grants or free money to start their businesses. In many cases, you have likely read or heard the “free money myth” and how trouble-free it is to get your share, either from a late night infomercial or from an obscure publication.  In most cases, the information is incorrect and misleading. In other cases, it’s close to a scam, so be leery of anyone who asks for money up front to get additional information that leads to free money.

SBA and most other funding organizations across the nation do not provide grants or “free money” for starting or developing a small business.  Although there are certain types of grants available, these are generally specialized grants targeted towards specific groups, organizations, or activities.

The grants that SBA does provide are generally awarded to existing organizations to provide specific technical assistance to small business owners.  These grants may be targeted to nonprofits or educational institutions.  For example, SBA has funded grants and contracts to help small businesses develop and maintain a drug-free workplace.  These awards went to nonprofit organizations and SBA Small Business Development Centers (SBDCs) who demonstrated the ability to assist in this effort. SBA also facilitates the SBIR program, in which federal agencies award research and development grants to high-technology small businesses.

So in short — the federal government does not give grants for starting or expanding small businesses.  But on the flip side, the government does provide free help in planning how to start or improve your business, and in securing low-interest SBA-backed small business loans. Some states do offer small business grants to individuals. You should check with the local economic development agency in your state to see if grants are provided.

So what can I get for free?

There is plenty. Each of these freebies will go a long way in helping to get your business off the ground.  SBA offers an abundance of:

-Free small business advice

-Free help with writing your business plan, and

-Free access to online business training and courses

The SBA serves small business owners across the country through its various programs and services, designed especially for small businesses.  SBA has district offices in every state and territory, as well as a network of resource partners (like SCORE and SBDCs) to help business owners access SBA’s programs and services, including loan guarantees, federal contracting opportunities, training, counseling and more.

In addition, SBA’s online small business training offers more than 30 free training courses, workshops, electronic tools, podcasts and video content to assists business owners and entrepreneurs.

Three new categories have been added, Veteran-Owned Business Award, Innovation Award and a Small Manufacturer Award. Contenders have until October 7 to complete their applications.

KINGSPORT, Tenn. – On August 12, the Kingsport Office of Small Business Development & Entrepreneurship (KOSBE) began accepting applications and nominations for its Annual KOSBE Awards from KOSBE clients, Kingsport Chamber members and non-members alike.

This year there are ten categories of competition. There will be one award for the Young Entrepreneur Award (under age 40), one award for the New Business Award (in operation for at least 12 months but not more than 36 months), one award for the Business Excellence Award Under 10 Employees, one award for the Business Excellence Award 10 Employees and Up, one award for the Minority Business Enterprise Award, one award for the Woman-Owned Business Award and one Impact Award for an outstanding individual and small business advocate nominated by a business who is entering the contest in any one of the contest categories.

In addition to the preceding seven categories, we have added one award for the Innovation Award, one award for the Small Manufacturer Award and one award for the Veteran-Owned Business Award.

Selections will be made based on self-reported past financial performance (tax returns/financial statements are not required), growth in number of employees, business staying power and history, story of success, overcoming adversity, community involvement, marketing creatively and presented strategies for growth.

The competition is open only to legal residents of the United States who are at least 18 years of age at the time of entry, or legally established small business entities carrying on business for tax purposes in the City of Kingsport and/or Sullivan County. Entrants must hold an ownership stake in the business that is the subject of his/her entry. The business profiled in any submitted entry must consist of no more than 150 employees and the 2010 reported revenue of the business must not exceed $10 million USD.

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“Black Business Month is the right time to remember that minorities will become the majority of the U.S. population by 2045. Because of sheer demographics, minority businesses will need to deliver the value that American corporations expect — at every level of the supply chain. Right now they do not,” Lowry said.

“Outdated policies on the part of business and government ignore the problem, and in some cases make it worse: They focus on grants to minority businesses of non-essential and low-value work, and they do not provide sufficient working capital or expertise to help minority businesses successfully scale up. Instead, a successful program should correct shortcomings in basic education, access to capital, business management skills, and access to mainstream supply chain opportunities.”

Minority Business Success explains that modern competition pits a corporation’s supply chain against rivals’ supply chains, so developing supplier excellence is a management and strategic imperative. If large companies do not step up efforts to develop sophisticated minority-owned businesses, inexorable demographic shifts will, sooner or later, undermine quality and options when it comes to supply chain choices. Therefore, supplier diversity, at nearly every level, needs to be a strategic priority at just about every large company.

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1. Requirements for a Minority Owned Business

A minority-owned business must be at least 51 percent owned by minority individuals or, in the case of a publicly owned business, at least 51 percent stock-owned by one or more minority individuals. Minority group members must control the management and daily operations of the company.

2. Who is Consider to be a Minority?

According to the U.S. Government, minorities are defined as U.S. citizens who are Asian, Black, Hispanic and Native American. Asian minorities come from India, Pakistan, Bangladesh, Japan, China, the Philippines, Indonesia, Taiwan, Vietnam, Cambodia, Thailand, Micronesia, Fiji, or any of the surrounding areas.

3. How to obtain a Minority Business Enterprises (MBE) Certification

The National Minority Supplier Development Council (NMSDC) provides Minority Business Enterprise (MBE) certification through local or regional agencies. There is nonrefundable application fee and an annual fee, once certification is obtained.  Find an NMSDC Regional Council for your area.

4. What is needed to Obtain Government Contracts?

To do business with the federal government, a business must be certified under the 8(a) Business Development Program, registered in the Central Contractor Registration (CCR) database, and have completed the Small Business Supplemental Page. The CCR is a single point of vendor registration and central to the federal procurement process. Read the CCR Registration Policy. For state or local contracts, the minority business owner must consult with each individual entity for specific contract requirements.

Minority Stats

According to the U.S. Small Business Administration, Minorities own more than 4.1 million firms. They generate nearly $700 billion in annual revenue and employ over 7 million people.