Your Questions About Doing Business Online Government

Jere answers:

It is hard to find grants to start a business. Unlike the myths that some perpetuate, federal government and even private foundations hardly give grant money for a for-profit business. And yes, grants mean PAPERWORK – lots and lots of it, that is why a cottage industry of grant writers was born.

Nonetheless, you can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov – these are two sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support a for-profit venture.

Even if you buy books on “how to get grants” or list that supposedly has information on grants — all of them are mere rehash of what CFDA has, albeit packaged differently. But still the info is the same – hardly any grants for starting a for profit business.

Even SBA does NOT give out grants. From the SBA website http://www.sba.gov/expanding/grants.html…

“The U.S. Small Business Administration does not offer grants to start or expand small businesses, although it does offer a wide variety of loan programs. (See http://www.sba.gov/financing for more information) While SBA does offer some grant programs, these are generally designed to expand and enhance organizations that provide small business management, technical, or financial assistance. These grants generally support non-profit organizations, intermediary lending institutions, and state and local governments.”

Most of the federal grants are given to specific target groups with specific requirements (e.g. Minority business owners involved in transportation related contracts emanating from DOT – Grant#20.905 Disadvantaged Business Enterprises Short Term Lending Program

Grants are also often given to non profit groups or organizations involved in training or other similar activities (grant 59.043 Women’s Business Ownership Assistance that are given to those who will create women’s business center that will train women entrepreneurs

For private grants, you may want to check the Foundation Center’s Foundation Grants for Individuals Online. It’s a subscription based website ($9.95 per month) but their opening blurb only says that the database is ideal for “students, artists, academic researchers, libraries and financial aid offices.” Entrepreneurs are apparently not one of them, so I take it they also don’t have listings of private foundations who give grants to would-be entrepreneurs.

You stand a better chance in getting a low-cost loan from SBA rather than finding a grant to help start your business.

Jere answers:

Starting a business involves planning, making key financial decisions and completing a series of legal activities

Step 1: Writing a Business Plan
This written guide will help you map out how you will start and run your business successfully. Go to http://sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html or http://www.score.org/template_gallery.html for instructions on how to write a business plan and sample business plans.

Step 2: Get Business Assistance and Training
Take advantage of free training and counseling services, from preparing a business plan and securing financing, to expanding or relocating a business. Go to http://www.score.org/mentors and enter your zip code. On the next screen, you will get information on the nearest SCORE chapter. Call them and arrange for a free meeting with a volunteer SCORE mentor. They will guide you through the process and you can meet with them as many times as you need.

Step 3: Choose a Business Location
Get advice from a commercial real estate agent and a SCORE mentor on how to select a customer-friendly location and comply with zoning laws.

Step 4: Finance Your Business
Find government backed loans, venture capital and research grants to help you get started. Any bank will require a business plan that shows that you can pay back the loan. You should have a credit score of at least 700. You will personally have to put up 30% of the funds as no bank is going to assume all of the risk. If you cannot get a loan, look at peer to peer lending sites such as http://www.kickstarter.com/ and http://www.prosper.com/

Step 5: Determine the Legal Structure of Your Business
Decide which form of ownership is best for you: sole proprietorship, partnership, Limited Liability Company (LLC), corporation, S corporation, nonprofit or cooperative. If you decide to become an LLC, you can do it yourself by going to your states website and then to the Secretary of the State section. There you will find a downloadable form. Fill it out and mail it in, together with the filing fee and in about a week, you will be an LLC.

Step 6: Register a Business Name (“Doing Business As”)
Register your business name with your state government. Go to your states website and then to the Secretary of the State section.

Step 7: Get a Tax Identification Number
Learn which tax identification number you’ll need to obtain from the IRS and your state revenue agency. Http://www.irs.gov/businesses/small/article/0,,id=98350,00.html

Step 8: Register for State and Local Taxes
Register with your state to obtain a tax identification number, workers’ compensation, unemployment and disability insurance.

Step 9: Obtain Business Licenses and Permits
Get a list of federal, state and local licenses and permits required for your business. Your local Chamber of Commerce can help.

Step 10: Understand Employer Responsibilities
Learn the legal steps you need to take to hire employees. Http://www.irs.gov/businesses/small/article/0,,id=172179,00.html

Jere answers:

Because you are NOT going to government sites, but to SCAM websites

You can go to the Catalog of Federal Domestic Assistance (CFDA) http://www.cfda.gov and Grants.gov http://www.grants.gov – these are two FREE sites created by the federal government to provide transparency and information on grants. Browse through the listings and see if you can find any grant that would support your purposes.

Even if you buy books on “how to get grants” or list that supposedly has information on grants — all of them are mere rehash of what CFDA has, albeit packaged differently.

Note though that these grants generally support non-profit organizations, intermediary lending institutions, and state and local governments. Most of the federal grants are given to specific target groups with specific requirements (e.g. Minority business owners involved in transportation related contracts emanating from DOT – Grant#20.905 Disadvantaged Business Enterprises Short Term Lending Program. Individuals especially for personal purposes are not eligible for federal grants.

Grants are also often given to non profit groups or organizations involved in training or other similar activities (grant 59.043 Women’s Business Ownership Assistance that are given to those who will create women’s business center that will train women entrepreneurs

The government is NOT in the business of giving away free money for the sake of giving away money. Grants are free, but it means OBLIGATION. You will be obligated to do as the grant sets out to do. Grants have objectives, and your purpose must fit the objective of the grant.

For one, you have to write the grant application and the grant application is not a simple document – you have to explain how your purpose for applying for the grant fits well with the objectives set out by the grant. Grants have objectives, and the grant applications that best captures the grant’s objectives are approved.

There is a stringent review process through a committee composed of federal employees and selected experts in the field. You will compete with other applicants for the grant money, and this grant review committee will evaluate the merits of each proposal. Only those that they feel exemplifies the objective of the grant will be approved.

Jere answers:

For US based businesses, here’s what you need to do to start. Choose your business form (Partnership, LP, LLP,LLC, S Corp are most common for start-ups). Partnerships require partners, and therefore you need a partnership agreement to govern your relationship with your partners. (You can create a partnership without a partnership agreement, but that’s not advisable.) Partnerships often have a general partner who assumes the management and control (and overall liability) of the partnership and the other partners are limited partners (their liability is limited). Choose a state for your partnership (partnerships are state-regulated entities). At the website of your secretary of state’s office, you can register your partnership and separately reserve your business’s name. Most Sec of States this can all be done online. Depending on your business form, you may or may not have to file a copy of your partnership agreement or other business formation documents with the secretary of state. Pay the filing fees, and you are now a legally registered corporate entity.

For federal taxes, you need to obtain a TIN, or tax identification number, which you can do online. State and local taxing authorities have their own taxing regulations and procedures. Consult a local attorney.

Jere answers:

“THE NORTH: The economy.
Europeans first came to the North in the late 1600s because of the fur trade. The Hudson’s Bay Company controlled the northern lands and fur trade for 300 years. Some northern people, including many Aboriginal peoples, still earn money and obtain food through hunting, fishing and trapping. Mining, oil and gas are very important to the northern economy. Thousands of miners first came to the Yukon during the Gold Rush at the end of the 1800s. There are gold, lead, diamond and zinc mines in the territories today. Oil and gas deposits are being developed and people continue to explore for more of these valuable resources.
Inuit prints and soapstone carvings are sold throughout Canada and around the world. In the Yukon, the Northwest Territories and Nunavut, many Aboriginal people work in cooperative businesses to produce Aboriginal arts and crafts. Tourism is also a growing industry.
Economic development in the North is welcome, but it must be carefully managed so it does not threaten the fragile Arctic ecosystem and the traditional lifestyles of the northern people.”

This text is from “A look at Canada”, a study guide for new Canadian immigrants, written and distributed by the Canadian Government.