It takes money to make money. If you have a business, one potential source of money is a small business grant for minority businesses. Here’s what you need to know about the pros and cons of this resource.
Why A Small Business Grant For Minority Businesses Is Good
If you have a business you know that it takes money. One source of funds is a small business grant for minority businesses. Here are some reasons it might be worth pursuing:
- Free Money - The number one reason to consider a grant is that it’s basically free money that doesn’t need to be repaid. Also, depending on the grant, the amount of money can be substantial.
- Information Availability - No matter what you’re working on, there is information and resources available to help. You’ll find information about where, how, when, and who to get grants from, all of which you’ll need to know to.
- It Gets Easier - After you get one small business grant for minority businesses, you’re more likely to receive others. Once someone has found you worthy and given you money, other organizations will see you as a reliable candidate.
- Credibility - In addition to the money, getting a small business grant for minority businesses increases your visibility. Winning highly-valued grants can promote your business, your idea, and demonstrate the value of your work.
Why A Small Business Grant For Minority Businesses Is Bad
The reasons to compete for a small business grant for minority businesses are attractive but there are also downsides to this revenue source. Here are some of the cons to consider:
- Time - Your time is a hidden cost that the “free” money of grants does not consider. Applying for a grant requires a lot of research and paperwork. You’ll need to go through the many grants available to find the ones that fit with what you’re trying to do. Once you find a grant, you’ll need to craft a strong proposal. In addition to the application, you’ll be required to provide additional documentation, such as the demographics of your market, your product or service, and your reasons for applying. After the application process, it can take weeks or months to find out if you’ve been approved, which can be an issue if you need the funds sooner than later.
- Difficulty - There are strict rules and regulations and a lot of competition for the money that a small business grant for minority businesses provides. The process requires many hours of research, planning, and organizing. You’ll need to find the time to complete the application paperwork or hire a grant writer to do it. The application needs to show how you’ll use the funds, which may involve charts, graphs, budget numbers, market demographics, and projection sheets that will demonstrate your intentions. If a grant is large, businesses have been known to adjust their business plans, products, or services to meet eligibility requirements.
- Renewal - A small business grant for minority businesses is not always renewed. If this happens, you may lose funding or you may have to reapply for the grant. Once you’ve been approved for a grant, you may be subject to checks on the progress of your business as it relates to the grant. If this is the case, there will be monthly or quarterly “check-ins” where you will be required to provide proof of things such as marketing and advertising efforts, publicity with news media, and progress towards the goals of the grant.
- Strings - Although a small business grant for minority businesses is “free” money, it has restrictions and conditions. In the application, you’ll need to outline specifically how you will use the grant money (help your community, your state, benefit society at large, etc.), and then follow through on the plan if you are awarded the money. Some programs will have a contingency plan set up, which will mean extra work for you. For example, winning a grant may require the recipient to get matching funds or a loan to supplement the grant. This can take a lot of time and needs to be considered.
When all is said and done, the “free” money of a small business grant for minority businesses isn’t really free and you’ll need to decide if the benefits outweigh the costs. If you believe in what you’re doing, have the resources available to compete, and think you’re qualified for a grant, it might be worth the effort to try.
Resources:
Minority Business Development Agency
Federal Minority Business Grants
SBA Grants
Tags: small business grants
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