What You Should Know before Your Consider Applying for a Small Business Grant

A Home Business Article Contributed by Christopher Kyalo

What You Should Know before Your Consider Applying for a Small Business Grant

There is a lot of misleading information these days on the internet about small business grants. It's all very enticing stuff, but mostly untrue. It causes many home based entrepreneurs to waste valuable time and money chasing something that does not actually exist.

But even before considering whether the offers are for real or not, let us see if a serious small home based business really needs a grant.

Do You Really Need a Small Business Grant?

If you did survey of home based businesses to try and find out what their biggest need was, a huge percentage would say that what they required the most to boost their business was cash. However on closer examinations, you will find that a majority of the enterprises would be greatly harmed, rather than helped by an injection of cash. This is because the cash would postpone the discovery of the real problem within the business that causes it to run out of cash. In other words, running out of cash is only a symptom and not the real disease.

Some of the most common problems home based businesses face would include the following:

- Costs that are so high that they stifle the young business

- Lack of a proper marketing plan

- Pricing products or services too low

This means that injecting any cash into the home based businesses would not help because it would not solve the problem and would only serve in addressing the symptom. The result is that every cash injection would inevitably run out and drive the business deeper and deeper into debt. Even a free cash injection would keep the business open for longer and allow it to incur more debts.

Some of these problems are often diagnosed when a business applies for a loan, but sadly many times they go undetected until the home based business is forced to shut down.

Why Small Business Grants are Not Suitable for New Small Businesses

Grants usually have the right impact in research and development and not in new home based businesses. A grant to help develop certain promising technology being developed by a company makes a lot of sense and has for many years helped to bring useful new technology to the market quicker for the benefit of all.

This easily justifies the government using tax payers money to give business loans because many times the development of the technology being financed by a grant will benefit the tax payer. This is obviously something very difficult to justify in the case of a small home based business.

Why Home Businesses Have Never Needed Small Business Grants

Free money is the last thing that a new home based business would need. By its' very nature a home based business is designed as low cost model for generating income for the home based owner. This is the reason why the home where the business owner is already living is used as the premises for the business.

A conventional business would have much more need for a small business grant. Probably to pay bills and other costs that spiral as a result of the higher costs involved.

So an ideal home based business would need a good marketing system much more than it would need a free hand out in the form of a small business grant.