First-time entrepreneurs often underestimate the amount of work that goes into a startup, and with that, they also fail to account for how much it can actually cost to get a business up and running.
That being said, there are more than a few government programs created specifically to help Americans make this leap, and they offer help in a number of different ways, ranging from funding to guidance classes, and tech support.
The resources a freshly-baked entrepreneur has at their disposal are practically endless, and with the help of incubators, accelerators, and the many government-subsidized grants and loans, even you can get your own business out on the market.
Each of these programs will come with its own perks and disadvantages, so you’ll want to study each of them carefully before picking the one you feel is the best fit for your business.
Grants and loans
To no one’s surprise, government grants and loans are among the most popular assistance options for entrepreneurs looking to get started with running a business, and they’re normally awarded to businesses that show promise or could potentially revolutionize a certain sector.
Another thing that usually allows a business to get funding is the ability to create job openings and a number of other economic benefits for the area in which it’s operating in.
These grants are often given away on a competitive basis, and you’ll be required to submit a detailed business plan outlining all of your goals for the coming year and what you’re planning to do with the company once it’s begun to grow.
The main difference between the two is that the grants are considered to be something like a gift to the entrepreneur, whereas loans have to be repaid in full, with interest, so make sure you know what you’re going into before taking out a loan.
Crowdfunding
While some may refer to it as panhandling, crowdfunding has been around for ages, and a number of flourishing businesses came from humble beginnings, with limited funding and support only from their closest friends and family.
Despite this, people saw that their idea was promising enough to contribute a small amount of money to it, and with enough dedication, these ideas quickly turned into a reality, providing goods and services to people all across the country.
Crowdfunding can either be on a voluntary basis, where the person donating money isn’t entitled to anything, and they’re merely doing it as a donation to the up-and-coming business, whereas other crowdfunding campaigns promise the donator a piece of equity in the company, making it a solid investment for anyone who’s skilled enough to discern whether the business shows promise or not.
Tax incentives
Other times, the government may not offer funding to a business, but rather, the opportunity to save it, and they do this by providing tax incentives for up-and-coming businesses just appearing on the market.
These incentives make tax season a lot less of a burden for startups, allowing the company to focus on growing and expanding instead.
Sometimes, a business is given access to a tax incentive if they consistently hire veterans or persons belonging to certain minority groups, and this helps them receive a tax credit of up to $9.6k per veteran hired for work.
However, some states may offer tax incentives independently of these federal ones, usually focusing on research and development expenses and capital investments a business may make in a designated area.
During tax season, the credits a business accumulates can be used to offset their state income or sales tax, which is becoming increasingly popular with startups looking to reduce the burden of taxes.
Incubators and Accelerators
While somewhat similar in their end goal, these two government assistance options provide some invaluable support to growing businesses, with each having its own designated purpose and application.
Incubators house businesses that are still in their early stages, providing them with office space, a mentor, and access to resources that they wouldn’t normally have access to, which can help small companies get a running start.
On the other hand, accelerators are considered to be programs for already established businesses that just need a little push to reach their growth projections.
Typically, a startup will provide additional funding, guidance, and resources to help a business move forward and expand, often focusing on very specific industries or areas that are in need of development.
Final word
Starting a business is a lot harder than it looks, and you’ll find yourself in a world of trouble if you’ve ventured into entrepreneurship unprepared.
From the immense amounts of funding it requires to the actual complexity of running one, businesses take a lot of work, but with the help of the federal and state governments, anyone can do it with a bit of dedication and elbow grease.
There are dozens of different government programs for small businesses out there, and it’s up to you to find the one that’s the best fit for your company.