FAQS ABOUT SMALL BUSINESS

In their search for business-building information and resources, entrepreneurs ask us many interesting questions. We share some of these questions and answers in this FAQ section. 

I NEED A GRANT FOR MY BUSINESS. WHAT IS AVAILABLE?

Unfortunately, most grants are for nonprofit organizations, not small businesses. 
BE VERY CAREFUL of advertisements promoting “free money for your business.”

These ads can be very misleading, often suggesting that you can receive a list of many grant sources for a fee of a few hundred dollars.

Frequently this is a list of micro-loan programs - which you must repay - or grants for nonprofit agencies.

The government does offer a few very targeted grants to companies developing various technologies.

Small Business Innovative Research (SBIR)
The SBIR program began in 1982. Under this legislation, funds are made available to:
1. Stimulate technological innovation.
2. Partner with small businesses to meet federal research and development needs.
3. Encourage the participation of disadvantaged businesses and minority-owned firms in technological innovation.
4. Increase private sector commercialization derived from federal research and development funding.
The program offers small technology-based companies the opportunity to obtain seed capital for research and development early in the innovation process.

Small Business Technology Transfer (STTR)
The STTR program is an important new small business program that expands funding opportunities in the federal innovation research and development arena. It expands the public/private sector partnership to include the joint venture opportunities for small business and the nation's premier nonprofit research institutions. STTR's most important role is to foster the innovation necessary to meet the nation's scientific and technological challenges in the 21st century. 
You can learn more about SBIR and STTR grants at http://www.sba.gov/content/small-business-technology-transfer-program-sttr-0l

All of this information can usually be obtained free of charge. To find out more information on micro-loan programs, Small Business Investment Companies, grants for nonprofit organizations or technology-related grants please send us an email message.


WHAT IS THE DIFFERENCE BETWEEN A FOR-PROFIT BUSINESS AND A NONPROFIT ORGANIZATION?

There are several differences between nonprofit corporations and profit-driven corporations.

  1. Nonprofit corporations cannot operate for profit.
    This means
    • They cannot distribute corporate income to shareholders.
    • Funds acquired by nonprofit corporations must stay within the corporate accounts to pay for:
      • reasonable salaries
      • expenses and
      • the activities of the corporation
  2. In a nonprofit corporation
    • Income cannot personally benefit any individual, as it does in a profit-driven corporation.
    • Salaries are not considered personal benefits because they are necessary for operation of the corporation
    However, an excessive salary may cause a corporation to lose its nonprofit status.
  3. No one owns a nonprofit organization in the way that shareholders own a for-profit corporation. 

    The typical nonprofit organization is a corporation controlled by a board of directors. 

    The board of directors elects officers who conduct the day-to-day business operations of the organization.
  4. Many organizations qualify for nonprofit status under various definitions and can include everything from churches to sports leagues and public interest law firms.

WHAT DOES IT MEAN TO BE WBE OR MBE CERTIFIED?

A WBE is a Woman Business Enterprise and an MBE is a Minority Business Enterprise. To get the certification, a business must be 51% OWNED AND OPERATED by either a woman or an ethnic minority. A woman is not considered a minority when applying for MBE status, in this case minority means an ethnic minority such as Asian American, African American, Hispanic or Native American.

There are many organizations that will help small businesses with the process of getting certified as there is a fair amount of paperwork involved. The benefits of getting MBE or WBE certification is that then a business is qualified to bid on contracts where it stipulates that a certain percentage of business must go to women and minority owned firms.


HOW CAN I CERTIFY MY BUSINESS AS FEDERAL E.O.E. COMPLIANT?

There is no federal certification program as such, but the U.S. Department of Labor now requires that all the federal government's contractors and subcontractors comply with E.O.E. laws. They also provide information to businesses on what is required to be in compliance.

William Lopez, a Compliance Officer at the U.S. Department of Labor in the Office of Federal Contract Compliance Programs, helps contractors with compliance information. He is available to present seminars to small business owners on compiance issues - and there is no charge for this service.

The website is http://www.dol.gov/ofccp/index.htm.


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The Wall Street Journal has some very practical articles that address many frequently asked questions by entrepreneurs.