Syndication09 Oct 2010 - 12:11:22 am
I Love Free MoneyThe late-night TV infomercial is so alluring: "Come to our seminar and locate out how you may get your federal government grant to begin a little enterprise!" a breathless announcer intones. "Just $300." A smiling entrepreneur assures in a taped testimonial: "I got $40,000 for my modest business!"
The bright, red words: "http://www.makefreecash.org/!" fill the screen. It's an old story, and 1 that makes small-business consultants, counselors, and advice columnists (this 1 included) cringe. Whenever such ads run, we brace ourselves for calls and e-mail from business owners and would-be business owners who can't wait to get their hands on that totally free authorities income - which doesn't exist. Why are folks who supposedly need to be hard-headed, no-nonsense enterprise types so gullible? This is really a subject the Smart Answers column has addressed before, but I periodically revisit it. That's simply because these aren't harmless hoaxes. Seminar sellers and ebook hucksters routinely con men and women into shelling out hundreds of dollars to hear lectures or buy directories that contain data readily readily available (yes, genuinely for free!) in any public library or on the internet.
"I've been working in small-business improvement for 16 years, and this urban legend never goes away," sighs John Rooney, a professor in the Lloyd Greif Center for Entrepreneurial Studies with the University of Southern California. "Interest and calls peak when some new ebook or ad kicks in."
"BRIGHTEST TECH MINDS." Widespread sense and the most basic awareness of enterprise principles should tell entrepreneurs that no 1 besides Mom and Dad (maybe) will give you no-strings income to begin a for-profit organization. "If the govt was within the position of providing all with the funds totally free to individuals who commence their own companies, we wouldn't last extended," says Mike Stamler, a spokesman for the U.S. Smaller Enterprise Administration in Washington, D.C. "Not to mention that the American people today would by no means stand for the government setting individuals up in company at no price, and all at taxpayer risk."
Yet, the myth persists. Like most con artists, the free-money hucksters take a grain of truth and distort it. You will find a few highly particular grants for tiny enterprises. A look at the details shows the cash is hardly free of charge. It comes with a host of restrictions and quid pro quos. For instance, some local agencies give modest grants to companies that locate in poor areas and guarantee jobs to people in an underemployed community, says Phil Borden, director with the Women's Enterprise Advancement Corp., a Lengthy Beach (Calif.) nonprofit enterprise assistance center.
You'll find also some incredibly restrictive, difficult-to-obtain grants given to modest companies to study new technologies for the authorities. "There is something known as the Small Company Innovative Study (SBIR) program that gives business owners up to $100,000 to research an thought that's considered promising and up to $1 million to create products from it, if the research pans out," Borden explains. "The dilemma is, the promising ideas have to do with things like how you can capture a satellite in orbit and repair it. The men and women who compete with intricate, detailed proposals for these grants are experts in engineering and science and have the brightest technology minds within the country. The notion that this kind of funds is obtainable to folks off the street is really a joke."
Ready VICTIMS. Still, the free-money hucksters come across ready victims simply because people want to believe there's a way around the difficult work of raising capital. "So quite a few people today say they heard it from a friend or saw it on TV. Of course, they've in no way in fact met anybody who got any no cost cash. It becomes like the Holy Grail of tiny company, and lots of entrepreneurs get caught up in this thought that it's out there," Rooney says.
The true believers are amazingly persistent. "About six or eight years ago, there was a scam like this that produced a run of calls," says the SBA's Stamler. "The huckster with the heart of it implied that these grants were there, but the federal government didn't desire to let everybody know about them," Stamler recalls. "He told men and women not to take 'no' for an answer when they known as us."
Rooney says he once ordered a "free-money" guide advertised on television.The author claimed each and every entrepreneur was entitled to a govt grant. Rooney received a directory of farmer's subsidies, Housing & Urban Development programs, and government-loan applications.
What about those testimonials from happy entrepreneurs? Listen closely, Stamler says. They usually say they "got" so much government dollars for their smaller enterprise - they don't say how. Most of those featured business owners have gotten small-business loans, he says. The SBA guaranteed more than $16 billion in loans during fiscal 1999 through its three major financing programs.
LEGITIMATE SOURCES. The irony is that in this boom time for small company, there are quite a few sources of loans or equity financing for startups. "Money's not that difficult to get from friends and family if you've got a actually good thought," says Rooney. "I've seen college students raise millions with their dot.com ideas. Why waste your time with the snake-oil salesmen when you could be talking to professionals who know what they're doing?" After all, it is not as though the average startup needs several millions to get off the ground.
As Jim Weidman, spokesman for the National Federation of Independent Company points out: "Most new companies are started with a incredibly tiny amount of cash, around $5,000. So folks come up with it out of their personal savings or borrowing from their relatives, unless they are buying an ongoing enterprise or starting a enterprise that needs plenty of initial funding for inventory, working capital, or buying or leasing a building."
The bright, red words: "http://www.makefreecash.org/!" fill the screen. It's an old story, and 1 that makes small-business consultants, counselors, and advice columnists (this 1 included) cringe. Whenever such ads run, we brace ourselves for calls and e-mail from business owners and would-be business owners who can't wait to get their hands on that totally free authorities income - which doesn't exist. Why are folks who supposedly need to be hard-headed, no-nonsense enterprise types so gullible? This is really a subject the Smart Answers column has addressed before, but I periodically revisit it. That's simply because these aren't harmless hoaxes. Seminar sellers and ebook hucksters routinely con men and women into shelling out hundreds of dollars to hear lectures or buy directories that contain data readily readily available (yes, genuinely for free!) in any public library or on the internet.
"I've been working in small-business improvement for 16 years, and this urban legend never goes away," sighs John Rooney, a professor in the Lloyd Greif Center for Entrepreneurial Studies with the University of Southern California. "Interest and calls peak when some new ebook or ad kicks in."
"BRIGHTEST TECH MINDS." Widespread sense and the most basic awareness of enterprise principles should tell entrepreneurs that no 1 besides Mom and Dad (maybe) will give you no-strings income to begin a for-profit organization. "If the govt was within the position of providing all with the funds totally free to individuals who commence their own companies, we wouldn't last extended," says Mike Stamler, a spokesman for the U.S. Smaller Enterprise Administration in Washington, D.C. "Not to mention that the American people today would by no means stand for the government setting individuals up in company at no price, and all at taxpayer risk."
Yet, the myth persists. Like most con artists, the free-money hucksters take a grain of truth and distort it. You will find a few highly particular grants for tiny enterprises. A look at the details shows the cash is hardly free of charge. It comes with a host of restrictions and quid pro quos. For instance, some local agencies give modest grants to companies that locate in poor areas and guarantee jobs to people in an underemployed community, says Phil Borden, director with the Women's Enterprise Advancement Corp., a Lengthy Beach (Calif.) nonprofit enterprise assistance center.
You'll find also some incredibly restrictive, difficult-to-obtain grants given to modest companies to study new technologies for the authorities. "There is something known as the Small Company Innovative Study (SBIR) program that gives business owners up to $100,000 to research an thought that's considered promising and up to $1 million to create products from it, if the research pans out," Borden explains. "The dilemma is, the promising ideas have to do with things like how you can capture a satellite in orbit and repair it. The men and women who compete with intricate, detailed proposals for these grants are experts in engineering and science and have the brightest technology minds within the country. The notion that this kind of funds is obtainable to folks off the street is really a joke."
Ready VICTIMS. Still, the free-money hucksters come across ready victims simply because people want to believe there's a way around the difficult work of raising capital. "So quite a few people today say they heard it from a friend or saw it on TV. Of course, they've in no way in fact met anybody who got any no cost cash. It becomes like the Holy Grail of tiny company, and lots of entrepreneurs get caught up in this thought that it's out there," Rooney says.
The true believers are amazingly persistent. "About six or eight years ago, there was a scam like this that produced a run of calls," says the SBA's Stamler. "The huckster with the heart of it implied that these grants were there, but the federal government didn't desire to let everybody know about them," Stamler recalls. "He told men and women not to take 'no' for an answer when they known as us."
Rooney says he once ordered a "free-money" guide advertised on television.The author claimed each and every entrepreneur was entitled to a govt grant. Rooney received a directory of farmer's subsidies, Housing & Urban Development programs, and government-loan applications.
What about those testimonials from happy entrepreneurs? Listen closely, Stamler says. They usually say they "got" so much government dollars for their smaller enterprise - they don't say how. Most of those featured business owners have gotten small-business loans, he says. The SBA guaranteed more than $16 billion in loans during fiscal 1999 through its three major financing programs.
LEGITIMATE SOURCES. The irony is that in this boom time for small company, there are quite a few sources of loans or equity financing for startups. "Money's not that difficult to get from friends and family if you've got a actually good thought," says Rooney. "I've seen college students raise millions with their dot.com ideas. Why waste your time with the snake-oil salesmen when you could be talking to professionals who know what they're doing?" After all, it is not as though the average startup needs several millions to get off the ground.
As Jim Weidman, spokesman for the National Federation of Independent Company points out: "Most new companies are started with a incredibly tiny amount of cash, around $5,000. So folks come up with it out of their personal savings or borrowing from their relatives, unless they are buying an ongoing enterprise or starting a enterprise that needs plenty of initial funding for inventory, working capital, or buying or leasing a building."
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