Tips On How To Get A Minority Small Business Grant
Minorities in the United States often have significantly less opportunities for education and employment. For this reason, a number of organizations provide support to entrepreneurs who belong to minority groups, and some of this support comes in the form of small business grants. They do so with the hope that successful businesses run by minorities will help to create a paradigm of success and growth for those groups.
Possible Funding Sources
Federal Government Grants
Contrary to what a number of “gurus” may say in order to sell their books or services, the U.S. federal government does not categorically give grants simply to help start or develop a business, whether that business is run by a minority or not. While grants are available, the federal government extends those grants for very specific purposes, and grant seekers must abide by the strict requirements specific to that grant. Some of these grants apply specifically to women and/or minorities, but the exact requirements and stipulations of each grant usually go above and beyond just that. For instance, a particular grant program may extend funds to small businesses owned by women or minorities – but only if it employs women and/or minorities in engineering or scientific work. The specific grant programs that are available frequently change. To search for federal grants available for your specific business, visit Grants.gov. However, realize that most such grants, rather than going toward individual entrepreneurs, tend to go toward non-profit organizations and educational institutions.
State And Local Government Grants
While very few federal grants are available to individuals – minority or not – state and local governments frequently offer financial support for minority-owned small businesses. Again, these programs usually have specific requirements beyond the fact that they must be owned by minorities. For instance, a requirement may be that the business must operate in an area populated predominantly by minorities. To search for such grant opportunities, consult your local chamber of commerce.
Private Organization Grants
In addition to government agencies, private organizations also provide grants for minority small businesses. Minority entrepreneurs may find small business grants that apply to them by visiting FoundationCenter.org, which hosts a database of private organizations that offer funding for various types of projects.
Tips For Success
Writing A Business Plan
Whether you intend to apply for a grant from a public or private entity, whenever people are handing out free money, there will be plenty of competition for that money. For that reason, the party issuing the grant is not simply going to give you a grant because you are an aspiring entrepreneur who happens to belong to an ethnic minority. Donors put money toward minority small businesses because they want to see successful minority small businesses. A grant will not lead to success if your business idea is not a good one or if you do not know how to run a business. Therefore, before applying for a grant, you must first prepare a complete and professional-looking business plan. For instructions on how to write an effective business plan, visit SCORE.org. There, you will find an entire section dedicated to business planning. Another valuable resource for business planning is the Small Business Administration.
When writing your business plan, give specific information about your business’s structure and operations and the market in which you intend to operate in order to show that you are a capable professional with a successful idea. While writing this plan, include a section on community involvement that shows how your business will improve opportunities for minorities, either by providing important services to them at a reasonable price or by employing them. (For more advice on writing a successful business plan, see 8 Helpful Tips For Making A Strategic Business Plan.)
Writing A Grant Proposal
A grant proposal is a document that someone writes for the purpose of obtaining a grant. Such proposals are usually necessary, regardless of whether the donor is a government agency or a private entity. This proposal stands as the donor’s main method of distinguishing you from the other candidates. It will include some of the same information as your business plan. However, while the business plan focuses on the business’s plan and ability to succeed, the grant proposal focuses more on the altruistic aspect of the project. In the proposal, you must show three basic things:
- Need. You must show that your small business is underfunded and that it would benefit significantly from a grant. For instance, if you come from an economically underprivileged background, make this evident in the grant proposal.
- Organization. You must show how your small business will run and how the funds will be used. This section will contain a significant amount of information from the business plan.
- Effect. You must show that your business’s success will make the world a better place. Specifically, show that it will improve the situation for people of minority ethnicities. This should expand on the community involvement section of your business plan.
For some guidance on how to successfully write a grant proposal, please visit the United Nations link below, which contains a list of educational resources.
Crowdfunding is a relatively new phenomenon that is becoming an alternative method of raising business capital. For no up-front cost, minority entrepreneurs can appeal to people through Internet crowdfunding platforms for help financing any number of projects – including a business. Showing that yours is a minority small business may increase your ability to raise capital in this way. However, while money raised through crowdfunding is not a loan, it is not exactly a grant either. For instance, successful crowdfunding campaigns for businesses often elicit funds in exchange for the product to be created.
Putting It Together
In seeking a grant for your minority small business, you may apply to both public and private grant programs. You may also seek funding from other sources, such as through crowdfunding platforms. Instead of only going in one direction, try to use your resources to take advantage of all of the funding options available. This will help you to get the best possible funding for your small business.