Find Grant Funding Now! E-Book

Sarah Beth Aubrey

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Serie: Wiley Nonprofit Authority
• Sprache: Englisch

Seitenzahl: 323

Veröffentlichungsjahr: 2013

Beschreibung

A practical, proven system for finding, applying for, and winning grants for your small business This year alone, there is at least $350 million worth of grant money available for small businesses. But plenty of small businesses will miss out on that money because they either don't know it's there or don't know how to get it. Written by a consultant who helps individuals, local governments, and nonprofits find and receive grant money, Find Grant Funding Now! provides proven, step-by-step guidance on applying for and win the grant money they need to succeed. Utilizing the simple five-step process that the author successfully uses for her own clients, this is virtually the only book on the market dedicated to helping small businesses get grants. It features a wealth of valuable resources and even a customized Grant Readiness Assessment Tool that helps entrepreneurs and small business owners make sure they're fully prepared before they file the paperwork. * Includes a proven and effective Five-Step Prosperity Process for finding and landing grants * Features sample forms, checklists, budgets, merit reviews, 30- and 60-day grant project management plans, and more * Written by the founder of a full-service funding firm that helps entrepreneurs, communities, universities, trade associations, and cooperatives obtain grant funds from governments and foundations If you need cash to start or expand your small business, Find Grant Funding Now! offers a practical system that gets real results.

Leseprobe

Contents

Cover

Title Page

Copyright

Dedication

Preface

Acknowledgments

About the Author

Part One: Navigating the Grant and Funding Landscape

Chapter One: Why Grants Now?

Why Grant Funding is Hot

Regulations, Rules, and Red Tape

Perspectives on Prosperity

Chapter Two: The Five Steps to Navigating the Grant Process

New Ventures, Entrepreneurial Needs

Overview of the Five-Step Process

Perspectives on Prosperity

Chapter Three: What is a Grant?

Bringing Structure to the Grant Process

The Elements of a Grant

What Grants are Not

Perspectives on Prosperity

Chapter Four: Is There Really Money Out There?

Matching Your Project with the GFOs

Government Grants

Foundation and Nonprofit Grants

Trade Associations

Perspectives on Prosperity

Part Two: Strategies for Grant Success

Chapter Five: Finding the Money

Effective Searching

Determining Eligibility and Feasibility (Step 3)

Decoding Federal Grant Announcements

Perspectives on Prosperity

Chapter Six: Is There a Grant for That?

Types of Work you can Fund with Grants

What Does Technical Assistance Mean?

What's Trending Now?

The Real Impact: How Grant Dollars Meet a Need

Non-Money Reasons to Ask for Money

Should Grants be Used Only When You Need the Money?

Other Values of Grants

Perspectives on Prosperity

Chapter Seven: The High Stakes of Winning or Losing Grants

Strategic Considerations Before Applying

When to Partner on an Application

Do Special Certifications Matter?

Perspectives on Prosperity

Chapter Eight: Creating a Project Team

The Project Team

Importance of a Solid Team

Selecting a Project Manager

Should I Hire a Grant Writer?

Assembling the Team: Roles to Fill

Allocating Your Time

Preparing the Application

Reviewing the Application

Perspectives on Prosperity

Part Three: Application, Award, Afterward

Chapter Nine: Putting the Package Together

Grant Application Basics

Narratives

Forms and Signatures

Budget and Justification

Supporting Documentation

Addendums

Financials

Matching Funds Documentation

Identification and Registration Numbers

Perspectives on Prosperity

Chapter Ten: Scoring Your Application

Evaluating a Grant Proposal

Scoring Points

Grant Submission

Perspectives on Prosperity

Chapter Eleven: Surviving the Wait

Honing Your Patience

My Application is Turned in—Now What?

What to do While You Wait

The Responses

The Grant Agreement

Other Questions to Ask

Transitioning From Applicant to Awardee

Conclusion: Grant Writing Secrets

Perspectives on Prosperity

Appendix A: Project Evaluation Tool

Appendix B: Grant Planning Tool

Index

Cover design: Wiley

Cover image: © iStockphoto.com/belchonock

Copyright © 2014 by Sarah Beth Aubrey. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Aubrey, Sarah Beth.

Find grant funding now! : the five-step prosperity process for entrepreneurs and business / Sarah Beth Aubrey.

pages cm. — (Wiley nonprofit authority)

Includes index.

ISBN 978-1-118-71048-7 (hardback); ISBN 978-1-118-71040-1 (ebk); ISBN 978-1-118-71041-8 (ebk)

1. New business enterprises—Finance. 2. Small business—Finance. 3. Grants-in-aid. I. Title.

HG4027.6.A93 2014

658.15′224—dc23

2013030214

This book is for Cary as we enter the New Era. ILU

Preface

Grants are never free. No matter the source, the kind of funding we'll be talking about in this book is never without a cost. When approaching grant funding always consider the most useful purpose for that money. Here's a mantra to keep in mind: Grants are a privilege, not a right.

No matter where the grant money originates, be it from federal sources or a charitable foundation, endeavor to use grants responsibly, with regard to how they might best be invested, and with as much leverage from other sources as possible. Now, let's uncover the truth about the grant industry and grant writing. First, I'll start with a fact:

Most likely, your grant writing efforts will fail.

That seems a harsh way to begin, doesn't it? I won't apologize for the truth, though. Reading basic how-to books about grant writing will not win a grant. Hiring a grant writer to prepare your application will not win a grant. Studying endless examples of perfect grant narratives and poring over evocative statements of need will not guarantee one cent of grant money. If you simply approach grants in the typical how-to way, you'll probably just fail. But, there is a path to success with grants.

Do you visualize your success? Do you put thought into the direction in which your business is going? If so, you're a strategizer, and you'll need that approach to winning grants. Grant success is not just about the application process; it begins long before that. It begins with solid planning and, yes, visualizing time. Grants fail because of a lack of strategic intent and no clear direction. Application forms, narrative writing, and gathering documentation are all just going through the motions of grant writing, but without real planning they don't alone yield cash.

This is a strategic book, not a how-to book. It's strategy-heavy and tactics-light. Today, the consulting industry works to sell outcomes, not services and deliverables. My practice in the area of finding funding works the same way. Grant seekers are not interested in the tactics involved to assemble reams of paper. They are seeking money. There are other relevant outcomes besides money from using grants, and I'll share those, too, because I think you'll appreciate considering additional benefits. Ultimately, though, grants should be used as part of a financial plan. With that in mind, I focus on providing you the pieces of the big picture that I believe most grant writing books and course overlook.

It's the Strategy, Not the How-To

In his recent book, The Charge: Activating the 10 Human Drives That Make You Feel Alive, author and productivity consultant Brendon Burchard talks about motivation. He says that in this abundant world where many of our needs are fulfilled we subsequently spend much time, energy, and money seeking our wants. Burchard also comments that we tend to be less happy now than we've been in recent decades. One of his arguments is that people lack a strategy that works to seek and find that happiness and success they so desperately want. He writes:

[A]ny lack of charge you feel in your life is only the result of a colossal failure in strategy. Only the failure to strategically control the contents of your consciousness keeps you from feeling the consistent internal charge of being fully alive, engaged, connected, and fulfilled.1

This book is a strategy book. Because of that, you might consider it required reading in advance of all the other titles you may subsequently read that tell you exactly how to write a grant, but nothing about why and when to use grants. You already know that to get what you want you must be better than the competition. This applies to grants as well; you must “get it” way more than the other people seeking cash from the same well.

Find Grant Funding Now! draws on my personal experience and is designed to serve other entrepreneurs. I'm offering you a real grant writer's guide, not an academic's soliloquy of hypothetical theories. This book goes beyond simple tips to craft flawless narratives and bulletproof budgets to show you why some proposals get funded and others do not.

I find money for entrepreneurs, small-business people, and communities. Primarily, I endeavor to secure grants, a large portion of them federal, though grants from individual states and private foundations also enter my radar screen. While I do have a handful of “grant certifications” and have taken some courses, I am self-taught. My academic degree is in communications, and I spent my early career freelance-writing for trade journals as well as working on market research and feasibility study reports. That training lent itself nicely to grant preparation since clear presentation of ideas is paramount to successful grant proposals. However, you'll see that winning grants has very little to do with exceptional writing skills and more to do with project management and especially the choices you make before applying—the most important choice of all is whether to apply or pass the opportunity by. Good news: You are already inclined to understand the value in creating a niche and replicating that tactic or product, filling a market need, and finding a way to come up with a better strategy. You understand that going through the motions is a mediocre life and a mediocre business strategy. These traits will serve you well if you choose to consider using grants for business, personal projects, and community projects that you support. But, the grant funding world is different and confusing for the uninitiated. Even if you hire someone to help, that may not offer you the pre-work you need to understand how grant funding takes a unique approach. Frankly, you've got to do better than just hiring a $40/hour consultant from an association's website listing. You, not the contractor, should develop a basic understanding about the industry that will enable you to assemble the right team to build the application after you've determined only the best grant programs to tackle. I want you to go after only your most-likely-to-win grants, leaving the rest to shotgun-approach people who apparently would rather work a lot than work smart.

My point in sharing what I know in this book is that I am an entrepreneur, too. I enjoy seeing an unfilled market niche and going after it. I love the thrill of a new opportunity and supporting sound projects that need money to implement. I know that regular individuals and businesses can use grants. You can teach yourself how to write and prepare them or you can hire a grant professional; either way, you're much better off knowing some really good tips and you'll gain them here. So, to help you work smart, take a look at the following features.

This Book's Organization

As an entrepreneur, I always direct my business destiny. Even though I contract experts in areas where I need support, I never simply turn everything over and walk away. If I have a need, there's a reason and I stay engaged to ensure my need is properly met. As a grant funding consultant, prospects sometimes contact my office in the hopes of employing someone to do the opposite—they want to believe that since they hired a grant writer, the next correspondence we'll have is when they receive a check. It's just not true. Winning grants is a strategic effort. If you hired a firm to come in and do a strategic planning session for your company, you would expect to be involved. The same goes for grant funding. You, the applicant, must take an active role. If you approach grant funding as a strategic initiative, and not simply “someone else's job” to get you the money, your chances for success are strong.

If you don't hire a grant professional, you need the strategy and the how-to. This book accomplishes both. I advocate getting grant educated to get grant funded. However, if you don't plan to make grant preparing your career, you don't have time or interest in lengthy descriptions of how to write the perfect narrative. That is not contained within these pages; Find Grant Funding Now! is a grab-and-go kind of guide—it's ready to use. Navigating the grant funding marketplace is a big adventure, but I've broken it out into manageable sections. Here are some resources that keep the book's tempo quick and the content you need convenient.

My grant consulting practice is built around the premise of employing a process that has been honed over time by the grit of failures and buffed and polished by the shine of successes. I've built the Five-Step Prosperity Process that we'll call upon in every chapter.

Five-Step Prosperity Process:

1. Project

2. Peruse

3. Ponder

4. Prepare

5. Patience

Each step directs the flow of conversation. The book is organized by chapters, but uses this process in each chapter. Here's a general breakdown of the flow of the book:

Part One covers Chapters 1 through 4 and centers around the topic of navigating the federal agency funding process. Chapter 1explores the why, that is, why grants and why now. We'll look at the size of the grant funding marketplace and give you the idea of what is out there for the asking. In Chapter 2, I delve into my process and cover each of the action steps in detail. Refer back to this chapter if you need help connecting the steps to your actions and why. If you want to really understand the meaning of the word grant, read Chapter 3. This section dissects my definition of the word and presents examples of other financial vehicles that seem like grants but are not. In Chapter 4, we look at the funders. This chapter is a solid discussion of what's out there and who's got the money—read and reread!

In Part Two, Chapters 5 through 8 are all about the strategic aspects of grant funding. In Chapter 5, I explain how to find the money and search for it efficiently. We cover a lot of ground here, including how to determine feasibility and eligibility as well as how to read a grant announcement. In Chapter 6, I work through things you can fund with grants and projects you typically cannot. Chapter 7 gets into the implications of accepting grant funds and strategic considerations all applicants should bear in mind before they sign the grant agreement. Assembling a solid project team wins grant applications when you have a great group. I cover this component, including my top tips for selecting a project manager, in Chapter 8.

Finally, Part Three is about the packaging and waiting game. I reserved this section for last because much of this base material can be found in other works. This is my unique take on these topics, but “How to write a grant” is an oft-written-about topic. Still, you've come this far; grab some ideas from me that fit the rest of the system from Chapters 9 through 12. In Chapter 9, we work through the components of most grant applications. In Chapter 10, I teach you how to score your application, even if the grant agency doesn't provide a score sheet. Chapter 11 is all about survival—surviving the wait for an answer—and Chapter 12 is a final word on my top tips for the best application you can make; flip to it right now and get ten grant writing secrets you can implement today!

In addition to the five-step process, I've included other tools for developing your grant strategy. Two assessments appear in the appendix:

1. Take the Project Evaluation first; you may want to take this very early in the reading of this book and again as you gain more knowledge.

2. The Grant Planning Tool is a document I use with my own prospects and clients to help them determine where they are in the readiness to pursue funding successfully.

Both of these are available for download at our special website for readers, www.findgrantfundingnow.com. This site also includes links to the full Prosperity Consulting website where readers can gain access to many more free tools and other companion products, including:

A signup page to receive e-mail updates with grant writing tipsMethods to participate in the exclusive grant questions forum for networking with other entrepreneurs and get answers straight from the authorAccess to special program and course discounts

The website complements this text and will change regularly to keep readers up-to-date on the latest additions for tips and grant ideas. The forum allows networking between entrepreneurs looking for many of the same answers and helps develop relationships that can lead to successful project implementation.

Consulting practices are characterized by a series of regular conversations around the consultant's topic of expertise. Like most executives, I discuss similar challenges and opportunities with the bulk of my clientele. Rather than looking at that as mundane, the entrepreneur in me sees an opportunity in the patterns that naturally emerge. Indeed, one reason I wrote this book is to share my ideas on these oft-repeated questions with a broad audience. So, I've organized each chapter by conversations, many of them taken exactly from the fabric of my day job. During those conversations, at the top of each chapter, I pose questions I often hear and throughout the chapter I provide my answers. It's like a one-on-one grant strategy session you can refer back to anytime.

Special Elements

Entrepreneurs use tools and like implementation. I understand that. So, I created this book to be informative but also practical. Besides the assessments I mentioned in the previous section, you'll find the following peppered throughout the book to help strengthen your ability to take the concepts you read here and apply them immediately.

Grants Guru Glossary: My topic can be a tad technical. Rather than hiding the glossary at the end (who has time to flip to the glossary while reading?), I pull the word or phrase from the text and define it right there. This feature is called the Grants Guru Glossary, so pay attention; it's a word or phrase you need to know.Jump Ahead: I am a skimmer. I'm easily bored; I especially like to see what's up ahead. Knowing fellow entrepreneurs often have the same tendencies, I have provided something I call jump-aheads in each chapter. I employ these features when I'm covering an issue that naturally leads to questions about a related topic. The jump-aheads will direct you to the chapter where more on a particular topic can be read. I don't want you to feel tied to reading everything A to Z in order to benefit. I've ordered the book to follow the course I believe works best—but you're an entrepreneur! You know your business; review the topics in the order I present them or jump ahead as desired.Perspectives on Prosperity: You'll find this section, Perspectives on Prosperity, at the conclusion of each chapter. Given that the word prosperity is part of my business name, I collect prosperity statements and phrases and enjoy analyzing them. These quotes are about the process of learning. Entrepreneurship is anybody's game right now. It's not just for the young and ambitious or the mature and experienced. It's about life choices. Savvy entrepreneurs are lifelong learners who know that investigating something new, or even something old with a new spin, is worth doing if it means an opportunity for the business.Website: Visit www.findgrantfundingnow.com to download the grant planning and evaluation tools found in this book's appendix, as well as to sign up to receive e-mail updates with grant writing tips and comment in the forum. Buyers of this book who visit the site can also find special program access and course discounts.

This book will help you make sound judgments about grant funding. The decision to not spend time and money applying is worth a fortune, so read on to gain insights about when and where grants are effectively used, hot areas for funding right now, and how to determine when grants really don't fit at all.

Note

1. Brendan Burchard, The Charge: Activating the 10 Human Drives That Make You Feel Alive (London: Simon & Schuster, 2012), iii.

Acknowledgments

Books are creations requiring multiple layers of involvement including important collaborators beyond the author alone. Most readers would assume this, and all authors certainly know it. Friends, family, employees, and other significant people in an author's tightly knit community live that involvement with the author during the process—they share the enthusiasm, the frustration, the time commitment, the missed commitments, the over-commitments, and in general, the positives and negatives of taking a book from concept to shelf. In light of this, I certainly have my share of those to thank.

In the summer of 2012, I the made decision to write a book about my experiences as a grant consultant. I felt the need to help entrepreneurs understand what was involved in achieving grant funding and I wanted to let them know what I saw as an industry largely unexplored by small-business owners. Initially, I planned to package an e-book or maybe build out a larger nonfiction work and self-publish. I had gone so far as to contact a few digital printers and was close to signing with one when I attended the NSA (National Speaker's Association) National Convention in July. On a last-minute whim I ventured into a benefit seminar prior to the general conference opening. The focus of this event was around different publishing options for speakers/consultants. Considering that timely, I settled in. One of the panelists was literary agent Jeff Herman, owner of the Jeff Herman Agency. I was acquainted with Jeff's work, though he didn't know me. Way back in 2005, I had purchased his signature book, Jeff Herman's Guide to Book Publishers, Editors, and Literary Agents, and used it to educate myself about the publishing world. Upon reading it then, I decided that in fact I didn't need an agent and I went on to sell my first two titles, one to Storey Publishing and one to Howell Bookhouse, on my own. Those books continue to sell, but I knew I was ready for more with the message I had to offer with the “grant business book” I'd been plotting. So, I met Jeff and left with encouragement after he requested a proposal on my book. Ultimately, I signed Jeff as my agent and he wowed me with the volume of inquiries I received following his shopping around of my proposal and the speed with which we found the right publisher. He deserves my thanks for the opportunity to work with Wiley on what is now Find Grant Funding Now!: The Five-Step Prosperity Process for Entrepreneurs and Business.

I also wish to offer thanks to the NSA. What a powerhouse organization! I'm so fortunate to be a member and to become acquainted with the amazing professionals I meet at every event. Keep up the good work—especially the networking opportunities that abound from your conferences. Had it not been for NSA, I wouldn't have met Jeff Herman. Interestingly, following the National Convention where my book went from idea to pitch, at my very next NSA live event I was signing my agreement to work with Wiley, which was fortuitous.

Speaking of Wiley, I'd like to thank my acquisitions editor, Susan McDermott, and my original content development editor, Jennifer MacDonald, also deserves a world of thanks. She's been so helpful teaching me a few new tricks about preparing the manuscript and making me a better author with her suggestions to tighten the content and smooth the flow of my ideas to the page—great work!

My office staff is small, consisting primarily of contractors and short-term professionals who work project-by-project. Still, I have my “regulars.” Oh, thank you to these stalwart friends! It is very difficult to take time off from your client commitments to write a book, as my team can now attest. Thank you so very much to Erin Smith Robinson for her gracious acceptance of my wayward ways during this writing period.

As is my tradition, I also like to give a shout-out to a member of my immediate family. The acknowledgments section is as good a place as any. So, Tom Potter, this time the nod goes to you! Tom is my youngest sibling and the only fellow entrepreneur among the five of us kids. Tom, I wish you all the best in your business-building pursuits and much happiness in life as you enjoy the satisfaction of working for yourself. I'm proud of you.

The final thank-you for this work goes to my husband, Cary Aubrey. While I would thank him anyway for putting up with my general absence the last three months as I've worked through this book, he deserves a very unique acknowledgment for this book in particular. I owe this book entirely to C. A. He convinced me to start the grant writing business. He is also my biggest proponent and motivator when I've been afraid of failure.

In a performance-based business, it's win or lose, so the pressure to please is a daily fact of life. Sometimes it gets the best of me, and when that happens, Cary makes sure I brush it off and get back to work. He is also very supportive of my work, though it's been at a cost to his free time. More times than I can count, he has made me dinner and carried it to my office when I'm working late. He's filled my car with gas when I'm running late and he's never complained when I've made us a day late for a trip we were planning because I had a grant submission deadline. Cary has made more photocopies, stuffed more envelopes, and made more 8 P.M. FedEx drop-offs than anyone I know, including me. All these things have been done on Sundays or late at night, and, of course, he doesn't get paid. Cary, you are the best and your patience is exceptional. A person once told me that if you want to fly, you need a ground crew. Cary, thank you for being my crew chief. I love you!

About the Author

Sarah Aubrey is a thought leader in the world of grant funding strategy and acquisition, particularly for entrepreneurs. Raised on a farm in East Central Illinois, she has been developing freelance businesses since she could write. From her home office in an old, two-story farmhouse she has won over 500 grants in 38 states and Puerto Rico; funding has yielded $55 million. Recently named to the Indianapolis Business Journal 's “Forty Under 40,” this National Speakers Association member brings a serial entrepreneur's take on keynoting with a country girl's practical, encouraging messaging style. As the owner of Prosperity Consulting, LLC, a Certified Women's Business Enterprise, she hosts grant training courses four times each year, speaks at industry events, and and consults with businesses and communities about the strategy behind find, winning, and using grant funding.

Her previous two books focused on her experiences in developing niche small-farm and local food initiatives. Starting and Running Your Own Small Farm Business was released in January 2008. Her second book, released in late 2009 by Howell Book House, is titled The Profitable Hobby Farm.

If you want exact steps for grant writing, visit www.prosperityconsultingsba.com and join the free monthly newsletter or gain weekly tips by signing up for the MidWeek Motivation blog.

Part One

Navigating the Grant and Funding Landscape

Chapter One

Why Grants Now ?

You've never considered using grants and didn't even know they were open to businesses. You've always heard they were a lot of red tape. Why bother with grant funding now ?

“So, how much grant money is really out there?”

“Is the grant industry even worth my time?”

“What do grant agencies really fund, anyway? I thought every grant went to academics and ‘save the blah, blah, blah ’ whatever foundation…”

“Do you really think we ought to use grants? Whose money is it, anyway?”

“I'm not sure how to describe what I want to do, but I know I'll need money—is there a grant for that?”

A great many of my initial conversations with anyone I meet begin with the inevitable opener, “So, what do you do?” Actually, I love answering this question. Questions about grant funding are the reason my business exists. The process of working though questions and answers like those above is what got me started consulting about grants (I'll explain more in a few chapters), and now I employ a certain set of questions to help people find money, as you'll see in my self-assessment tools found later in the book. Because grant seeking is a highly subjective business, it's also a very relational business where I need to learn as much as I can about the project and goals. When a new client retains me, the process often goes the same with the questions and answers. I ask a lot of questions before we ever talk about building a grant application.

The longer I worked in the industry, the more questions I had about the reasons behind interest in grant funding. I began to wonder: Why grants, why now? What makes this topic interesting? While not a new phenomenon, grant funding as a means of the overall financial strategy is gaining in popularity and acceptance in the private sector. Where it was once believed that the pool of funds was solely reserved for academia and nonprofit work, businesses, small and large, established and emerging, are looking into both creating grant programs to support their causes and using grant money to complete work. What is going on to make an old standby—grant writing—suddenly like a new trend? Why grants now?

Why Grant Funding is Hot

That's an easy question to begin with, though it's a matter of opinion. Every time I give a speech about grant funding in the private sector, I like to lead with three questions:

1. How many audience members have ever wanted to start their own business or work for themselves as a freelancer?

2. How many have ever considered using some alternative kind of funding besides a bank loan?

3. How many who said yes to number one have ever considered using grant dollars?

The results are always similar in my little qualitative market research poll. Everyone in the room, be it a group of 6 or 600, will say yes to #1. This group includes quite a few people who will later admit that they will never actually become an entrepreneur, just that they love the notion of it. As for #2, about half of the room says yes to considering funding besides the traditional financing industry—and this number is growing rapidly. For #3, rarely do I have audience members tell me they've used or considered grants, even if they wanted other ideas for finding funds.

People of all backgrounds are right now exceptionally curious, hungry, and largely seeking to do more on their own. People today are rather willing to go it alone; many are starting businesses or are thinking about it as a someday goal. According to the Ewing Marion Kaufmann Foundation, a foundation that is devoted to entrepreneurship, approximately 540,000 new businesses are created each month of every year, even (especially) during the recent recession.1 What are the reasons for this boom? Economists using labor and wage statistics could mount a case that this movement toward DIY (do-it-yourself) is economic. Some would suggest we've reached our capacity for doing jobs of rote and desire deeply to express our pent-up creativity. No matter—DIY approaches are hugely popular in everything from making your own wedding decorations to funding a business. Investment in the DIY movement, particularly in social media, is strong. Consider the exploding popularity of social sharing site, www.pinterest.com. Its members create pages and share them just as a means to adorn a public place with their personalized pins, that is, images of anything that interests them. This site encourages not just crafting, creating, and collecting, but sharing and conversing about how to make or build those items that interest the person who pins it and fellow members who see it or even re-pin the item, thereby expressing their interest. At present, all this pinning isn't amounting to exceptional profits—at least not as of this writing. “Pinterest is part of a group of startups that offer twists on Internet networking among various groups. They typically have little discernible profit or revenue, but have landed some outsized investments from venture capitalists,” reports Sarah McBride in an article in the February 20, 2013 issue of Reuters. The article also reports that the valuation of the market is presently worth $2.5 billion with more dollars flowing toward the Internet startups of the do-it-yourself set, such as Pinterest.2

If the market isn't yet large, why does it matter? I believe it shows a trend in the way small businesses are emerging. Sure, some new entrepreneurs start a business almost as a last resort when the corporate world fails them—that's the hungry part of my earlier comment.

Others are curious to see how easy it might be to begin a company today given that operating online has both a low initial investment and theoretically an instant marketplace. I'm not sure what is in store for the DIY world of business, but it appears that the ability to leap from idea to launch is happening much quicker today.

Like anything too casual, though, are new entrepreneurs serious enough? Are they leaping out just as easily as hopping in? That's a possibility, too. The Small Business Administration (SBA) reports that an estimated 552,600 new employer firms opened for business in 2009, and 660,900 firms closed.3 Businesses without employees, called non-employer firms by SBA and often referred to as solopreneurs on the street, are opening and closing much more often. SBA says they turn over nearly three times as often as those companies with a payroll.

It is a positive thing to see small businesses opening, but why are so many closing and, worse yet, filing for bankruptcy? Take a look at SBA's open, close, and bankruptcy chart in Table 1.1 as an illustration of the trend. Items with an ‘e’ behind them represent best estimates as of the date the data was published.

Table 1.1 Starts and Closures of Employer Firms, 2005–2009

Source: U.S. Small Business Administration (www.sba.gov), April 17, 2013.

Startup owners know there is potential to fail or just fade away. Facts reported by the U.S. Department of Commerce, Census Bureau, Business Dynamics Statistics, U.S. Dept. of Labor, and Bureau of Labor Statistics seem to endorse the notion of exploring unique financing alternatives. According to the SBA's website: “Seven out of 10 new employer firms survive at least 2 years, half at least 5 years, a third at least 10 years, and a quarter stay in business 15 years or more.”4

What's happening to entrepreneurs early in the businesses? Do they run out of motivation, or money? If it's money, and it's always about money at some point, here's the quandary: Financing availability from traditional sources can be tough. Not everyone qualifies for a traditional bank loan, and frankly, not everyone wants one. Part of the culture of distrust breeding the growth in general of DIY includes concerns of uncertainty about the financial services industry. Regularly, startup owners come to me for grant funding and yet have no desire to take out a bank loan. Reasons to avoid the lending marketplace are varied, but some I've heard include fears of being tied down to a repayment schedule if the business experiences rough patches, a general feeling of skepticism that their lender will be there for them or remain stable, and even an internal philosophy toward avoidance of debt. Younger people often say their interest in grants comes from the age-old story of not wanting to end up like their parents. I'm not talking about “staying cool” and not becoming fuddy-duddies or wearing black knee-socks with white walking shoes, either.

Generations X and Y want freedom to self-direct their lives; they don't want to be on the hamster-wheel of debt that they've watched generations before tie themselves to, working in something they hate because they need the money.

Attitudes about employment are shifting, too. Generations X and especially Y resist the 8-to-5 grind and demand flexible schedules far more than any previous generation ever deemed conceivable. Many of them believe entrepreneurship is the answer. But does it work out?

The SBA does appear to claim the trend toward business failures is improving and optimism is the new tone. In a recent article entitled “Small Business Trends, Small Business, Big Impact,” the agency comments that “while corporate America has been downsizing, the rate of small business startups has grown, and the rate for small business failures has declined.”5

Whether you view the proverbial glass as half empty or half full, statistically speaking, entrepreneurs only have a 50/50 chance of making it to a five-year anniversary.

Let's say you don't get a loan, but instead find investors—that doesn't guarantee longevity, either. Adding more money at startup does not appear to be the answer for business health, either. Even those companies backed by a source beyond self-funding are unprotected from closure during the early years. The numbers are startling. In September 2012, the Wall Street Journal reported that the National Venture Capital Association estimates that between 25 and 30 percent of venture-backed businesses still fail.6

Clearly, all entrepreneurs need creative financing—especially now as a wave of corporate dropouts, early retirees, and unemployed recent college grads surges toward selfdirected business.