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Posts Tagged ‘Entrepreneurship’

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The best resource to find grants, loans and financing for entrepreneurs is the federal government’s website http://www.business.gov. There, you will discover a wealth of resources for all kinds of small business owners, including:

• those just starting a business
• current entrepreneurs trying to grow their operations
• women
• minorities
• people with disabilities
• those in rural communities
• home-based business owners
• members of the military
• individuals seeking government contracts, and more

For Minority-Owned Businesses
For example, here is a link to the section of the website that offers help for minorities who are launching a business, or trying to expand one: www.business.gov/start/minority-owned.

For Women-Owned Businesses
Here is a link to the area within the site that lists dozens of programs specifically for women: www.business.gov/start/woman-owned/.

The U.S. Small Business Administration also has a list of Women’s Business Centers that can be a great resource. It’s a network of entrepreneurship centers found all around the country, where people can get in-person help and educational support to grow a business. Click here to find a local Women’s Business Center.

For Non-Profit Entrepreneurs
Additionally, here’s a link to information for non-profit entrepreneurs: http://www.business.gov/start/non-profits/.

In addition to traditional grants and loans, those starting a non-profit organization are eligible for benefits such as tax exemptions, government surplus, and discounted products and services from the government. Be aware that the majority of financing programs for entrepreneurs from the U.S. government involve loans. But there are many grants too. You have to do your homework and hunt around for what’s available.

Do Your Homework
Start by using the Loans and Grants Search Tool on the business.gov website. Find the search tool by clicking this link.  It will track down specific programs you may qualify for, based on your industry, your personal background, where you live, etc. Don’t forget to inquire about specific government programs that may be available in your own state, county and city as well. You can usually find these programs through your state’s Office of Minority and Women Business Assistance.

Does The SBA Offer Grants? Mostly No, But Sometimes Yes
According to the SBA’s website:

the “U.S. Small Business Administration does not offer grants to start or expand small businesses, though it does offer a wide variety of loan programs. While the 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.”

So does the SBA offer grants to small businesses or not? The short answer is: Not really, since grants only go to a limited group of entrepreneurs. To see if you qualify, visit this SBA link for more information on specific federal grant programs from a multitude of government agencies: www.sba.gov/services/financialassistance/grants/index.html.

If you really want to be an entrepreneur, and you truly need financing, you must be willing to take the time to explore any and all legal options available for raising capital. In addition to the business.gov and sba.gov websites, try exploring grant programs at: www.grants.gov and the U.S. Department of Commerce’s Minority Business Development Agency (www.mbda.gov), which offers resources on everything from financing opportunities to landing government contracts.

Good luck with your business!

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No, I don’t recommend taking $14,000 from your retirement accounts in order to pay off that business credit card. I would be wary of doing so for three reasons. First, you are medically retired, so you will not likely have any source of earned income for the rest of your life. Frankly, $90,000 is not a lot of retirement income to live on until death. You could live another 30 or 40 years. Also, if you sell some of those retirement assets, you’ll have to be capital gains taxes on them. Sure that’s just 15% (and possibly as low as 5% for people in the two lowest income tax brackets). But I want you to realize that your money will be taxed, meaning you may have to give over to Uncle Sam as much as $2,100 of the $14,000 you’re considering cashing in. Lastly, I’m not convinced that you can’t pay off this debt over time by making some adjustments to your budget. I know that $24,000 a year is not a lot to live on. But have you considered if you can cut any of your existing expenses (namely any luxuries you may be spending money on) and using that money instead to knock out the business credit card debt? I just don’t want you to tap into an already modest retirement nest egg and later regret not having that money to fall back on if times get even tougher or if you need the money for other purposes later in your retirement.

Congratulations on launching your business. The search for financing is a constant dilemma facing entrepreneurs. Read this article for some ideas.

http://askthemoneycoach.com/2009/03/best-place-to-find-grants-loans-and-financing-for-entrepreneurs/

Also, see this post on special resources for minority and women-owned businesses:

http://askthemoneycoach.com/2009/03/additional-help-for-minority-and-women-owned-businesses/

Congratulations to you and your business partner on the pending opening of a cosmetology school. I know you are looking for space to open your school and are working with limited funds. You mentioned finding a 3500-square foot space, but also said the roof has water spots and that the building would require a lot of work. I can’t tell you specifically want a fair price for a lease would be because I don’t have enough information about your situation. However, I can give you some pointers for how to make a smart decision about any space you lease. First, find out what the going market rate is for office space in the region you are considering.

Obviously, leasing space in, say, Manhattan, is more expensive than leasing space in Minneapolis. So a good working knowledge of the local commercial real estate market is critical. Also, find out the details of what is included in your lease. Does is just cover a monthly fee for the use of the space, or would the lease price also cover one or more other expenses.

In commercial real estate terms, you will hear people describe your lease as either a “net” lease or a “gross” lease. If it’s a net lease, that means you (as the tenant or the lessee) have to pay for things like utilities, or other costs. If it’s a gross lease, then all expenses are included in your base rental charge.

Another key term to know: will your landlord (the lessor), try to make your payments based on “percentage rent”? This refers to them charging you all or a portion of your rent/lease fee based on a preset formula that its tied to the amount of sales you generate in your business. If you have a lease that involves percentage rent, think long and hard if you’re willing to give up a certain percentage of your revenue in this way.

Lastly, to know if a lease price is fair, you must also factor in every single element of the lease. For instance, a lease that gives you free parking is more valuable than a lease that requires tenants to pay for parking. You should also know whether you would be responsible for certain other expenses related to maintaining or improving the “common areas” of a building in which you are a lessee.

Anytime you have a substantially reduced income, or an outright elimination of income, it means you have to completely overhaul your budget. A few tweaks, changes and minor pullbacks here and there just won’t do. You’ve indicated that your income is off by 50%. As a result, you must drastically slash your current or previous spending, and also think about creative ways to raise cash. Otherwise, you risk falling deeper into debt.

How to Overhaul Your Budget

Before you look at “extras,” and any “luxuries” you may be spending money on, start by examining the very basics: like your phones, housing and car. Often, the things that we think are “necessities” have to be sacrificed just temporarily when there is a major shift in income. Since you are a self-employed as a massage therapist, it may be the case, for example, that you have multiple phones. Perhaps a cell phone, a business phone and a personal home phone. If so, consider which one – or maybe even two – of those phones you can live without on a temporary basis until you restore your income. This is the kind of thinking that will help you figure out how to get through this economic rough patch. This advice is also applicable to anyone who:

•    Has been laid off recently, for a long time, or expects to be unemployed soon
•    Has seen a big decline in self-employment income
•    Has had has their hours on the job cut
•    Has had their hourly salary or regular pay slashed
•    Has found a new job that is substantially less than the income previously earned

Lifestyle Choices

Overhauling your budget also means making tough choices about your lifestyle. An example of a major lifestyle change might be considering where you live. Do you rent or own? Can you find cheaper housing, a less expensive neighborhood, or is bringing in a roommate an option? Also, what about the car you mentioned? You said you drive only when you must. Can you sell the car and use public transportation? If you have car payments, is getting a friend or relative to take over those car payments at all feasible? I recognize that these are big shifts. But sometimes you have to dig deep when things are far more challenging than the norm. That’s why I usually recommend these strategies for people who are extremely deep in debt, or for those who have had major reductions in their income.

Negotiating and Bartering

As you consider your options, don’t forget about one of the best budget-saving strategies of all: negotiating. Whenever you are about to buy something, ask for a discount. Ask for a discount for paying for goods and services, like medical care, in cash instead of with credit. Ask for a discount if you’re at a store and you’re buying two or three of an item, instead of just one. You can even ask for, and negotiate, to receive products and services free of charge – if you’re willing to exchange your time, talents and services as well. For instance, you said you are a massage therapist. I imagine this is a stressful period for accountants. Instead of paying a CPA to do your business tax returns, maybe you can offer to provide a one-hour massage or treatment to your accountant. The idea is to think creatively about how you can both exchange value – without exchanging dollars. That’s a win-win situation for both parties and one that will help you to more quickly bounce back from your economic slump.