Kamau's Business Blog Page - The World's 1st Black and Minority Business Blog!
Tuesday, December 28, 2004
Financing Program for Small Businesses that are Technology Innovators
The Small Business Innovation Research (SBIR) Program and Small Business Technology Transfer Program (STTR) are highly competitive programs that encourages small businesses to explore their technological potential and provides the incentive to profit from its commercialization. Each year, federal departments and agencies are required to reserve a portion of their research and development funds to award to small businesses. SBIR and STTR funds the critical start-up and development stages and it encourages the commercialization of the technology, product or service.SBIR targets the entrepreneurial sector because that is where most innovation and innovators thrive. However, the risk and expense of conducting serious R&D efforts are often beyond the means of many small businesses. By reserving a specific percentage of federal R&D funds for small business, SBIR protects the small business and enables it to compete on the same level as larger businesses. SBIR funds the critical startup and development stages and it encourages the commercialization of the technology, product, or service, which, in turn, stimulates the U.S. economy.
Since its enactment in 1982, as part of the Small Business Innovation Development Act, SBIR has helped thousands of small businesses to compete for federal research and development awards. Their contributions have enhanced the nation's defense, protected our environment, advanced health care, and improved our ability to manage information and manipulate data.
STTR is an important new small business program that expands funding opportunities in the federal innovation research and development arena. Central to the program is expansion of 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.
Following submission of proposals, agencies make SBIR and STTR awards based on small business qualification, degree of innovation, technical merit, and future market potential. Small businesses that receive awards or grants then begin a three-phase program.
Phase I is the startup phase. Awards of up to $100,000 for approximately 6 months support exploration of the technical merit or feasibility of an idea or technology.
Phase II awards of up to $750,000, for as many as 2 years, expand Phase I results. During this time, the R&D work is performed and the developer evaluates commercialization potential. Only Phase I award winners are considered for Phase II.
Phase III is the period during which Phase II innovation moves from the laboratory into the marketplace. No SBIR funds support this phase. The small business must find funding in the private sector or other non-SBIR federal agency funding.
Small businesses must meet certain eligibility criteria to participate in the SBIR program.
1) American-owned and independently operated
2) For-profit
3) Principal researcher employed by business
4) Company size limited to 500 employees
To learn more about how to apply and about the various agencies involved, contact the Office of Technology, U.S. Small Business Administration, 409 Third Street, SW - Washington, DC 20416; (202) 205-6450; or visit the SBA website at: SBIR .
NY Times Online Article is Encouraging for Black Entrepreneurs looking to Obtain Money for their Businesses!
Please read the following New York Times article on some positive community and non-profit organizations looking to finance promising Black Businesses.
Small Business: New Help for the Black Entrepreneur
December 23, 2004 By ELIZABETH OLSON
At first blush, the figures are bleak. African-Americans account for 12 percent of the nation's population, but own only 4 percent of the small businesses. And the revenues of their businesses are on average less than one-tenth those of nonminority companies, according to the Census Bureau.
Other statistics, however, suggest that black Americans are more caught up in the entrepreneurial spirit than those numbers suggest, and even that they feel the entrepreneurial impulse more keenly than other ethnic groups.
According to federal government figures, the number of African-American businesses grew 26 percent in the 1990's, almost four times the growth rate for all small businesses in that period. A Small Business Administration study released last month showed that African-American self-employment increased 37 percent over the last quarter-century, far outpacing the 15 percent growth rate for Hispanics and 10 percent for whites.
While many African-Americans go into business, government indicators show that they often struggle not only because of low revenues but also because the smallness of their companies - they often employ only themselves - hinders growth potential.
What holds them back is usually lack of access to capital. African-Americans often do not have personal wealth to use or borrow against, and lack a network of contacts to help them overcome the hurdles of getting a business off the ground.
Those are gaps that a new coalition of business leaders, government agencies and philanthropic and community groups say they are determined to help close. The coalition - led by the Ewing Marion Kauffman Foundation, a group in Kansas City, Mo., dedicated to fostering entrepreneurship, and the National Urban League - plans to set up one-stop shops, initially in five cities, to offer an array of services, from financial assistance to mentoring, to help minorities meet the challenges of expanding their businesses.
The organization, called the Urban Entrepreneur Partnership, said its centers would provide one location where entrepreneurs could receive training in how to plan and set up a business and get coaching and mentoring help, advice on formulating a business plan, technical expertise, assistance in landing contracts, access to bank loans and venture capital, and regular evaluations of their businesses.
Ideally, the program, which will start April 1, will aim at companies that have the potential to lift their revenues by $25 million to $100 million a year, thereby creating more jobs, and wealth, in urban areas. Rather than concentrating on a specific type of business, the coalition plans to recruit companies with promising prospects and give them the tools they need to prosper. To Read the rest of the article: Click Here
Subject: 2005 MBE Business Plan (Grant) Competition
Do you have a great idea for a new product or service? Are you looking for money to start, expand, or grow your business? Virginia Housing and Community Development Corporation's 2005 MBE Capital Call initiative is opening doors to capital and credit for Minority and Women-owned Business Enterprises (MWBEs).The 2005 MBE Business Plan Competition seeks to identify Minority Business Enterprises (MBEs) for funding, strategic partnerships, and technical assistance awards, while introducing capital and credit providers to viable business opportunities with MBEs.
The Competition provides prospective entrepreneurs and minority business owners the opportunity to secure funding for their business. Registrants will have the opportunity to:
1) compete for up to $25,000 in Equity Grants, Equity-Match Grants, and Technical Assistance awards (companies located in Virginia only);
2) compete for the opportunity to formally present the business plan for funding to private investors, private equity (venture capital) firms, and small business lenders; and
3) distribute their Executive Summary to private investors, private equity (venture capital) firms, and small business lenders for additional consideration for funding and strategic partnerships.
The Competition is open to MWBEs nationwide, except where prohibited by law. To enter your company, you must register by February 28, 2005. To register, download the registration package at:
MBE Business Plan Competition
This business grant competition information is courtesy of Wayne Hicks, CEO Hicks Enterprises. He is also the President of the National BDPA and President, Cincinnati Business Incubator http://www.elecvillage.com (877) 255-2684. The Black Data Processing Association is a great organization to join for Black Internet entrepreneurs. Join: BDPA
