Business Related Federal Grants for Women: A Classic Scam

One night you find you cannot sleep, so you sit in front of the television watching a classic movie from days gone by. During a commercial break you see an ad featuring a lanky, well-dressed man with hundreds of different colored question marks all over his clothing. During the course of the two-minute spot this man is telling you about all of the "free money" the federal government is just waiting to give away. He offers you a book and a DVD of "secret" information guaranteed to help you find the free money you're after. And his price? Just $49.95!

You've probably seen the commercials like this before, some even targeted specifically at women. Perhaps you've even seen similar promotions on websites ostensibly developed to support the unique needs of female business owners. If so, we sincerely hope you have not fallen victim to the claims made by these hucksters. The simple truth of the matter is that the federal government does not give grants of any kind to individuals, businesses, or any other entities that would benefit an exclusive group or individual. One look at the federal government's grant clearinghouse, Grants.gov, reveals the painful truth.

Classic Scams

Promotions like the ones described above are classic scams in every sense of the word. They start by preying on a specific need. In the case of female business owners and entrepreneurs, they rely on the fact that business funding is hard to come by. Then they tap into a common belief that the federal government exists to help minorities get ahead. Combining those two things, they then promise unsuspecting individuals free money without any strings attached. It almost sounds too good to be true. Guess what? It is.

One of the telltale signs that such an offer is a scam is the requirement for you to pay a fee. Such scams are usually one of two types. The first type is what I call the "money for nothing" scam. This is a scenario in which you pay a modest fee in order to receive some sort of information or assistance. In return the scam artists will send you a small packet of worthless information that doesn't help at all. Sometimes that information is simply a set of instructions about how you can turn around and scam others with the same scheme.

The other type of scam is something I call the "free information" scam. While the scam artists are screaming at the top of their lungs about all the free money available, what they are offering to provide you is information that is freely available through a multitude of resources. As an example, you may pay $50 for a book that allegedly contains information about how you can get government grants. Truth be known, most of that information is irrelevant. And even when it isn't, it's all information the huckster simply copied from a government website and pasted into the text of his book. All of the information provided through these sorts of scams you can find yourself - absolutely free of charge - with a couple of evenings of dedicated research.

Why These Scams Succeed

One of the most successful federal grant schemes in American history was referenced earlier in my description of the lanky man with the question marks on his clothing. While this individual shall remain unnamed, he has been pushing his products for the better part of 30 years -- and making lots of money doing it. Yet if he is indeed running a scam, why does he succeed year after year?

He succeeds because he plays into the natural human desire to want something for nothing. Let's face it; most of us prefer to take the easiest and most comfortable route. This is especially true in today's day and age when leisure and convenience have superseded virtually all of the traditional methods of doing things. Rather than actually cooking a meal, we throw something in the microwave. Instead of maintaining a healthy diet and exercising regularly, we prefer to control our weight by popping a pill. These scam artists play into the same tendencies in offering their products.

A Successful Business Takes Hard Work

It's true that female business owners are at somewhat of a disadvantage for a couple of reasons. But one thing all business owners have in common is the fact that their businesses will succeed only in proportion to the work and effort they put into them. If securing federal grants for women-owned businesses were that easy, every woman in America would start her own company. But that's not reality. You can create and develop a successful business if you so desire, but it requires hard work and diligence.

That diligence begins in the area of business funding. You will need to pound the pavement in search of bank loans, angel funding, private equity investment, and so forth. Yes, you will be able to find small business grants from time to time, but they won't be from the federal government and they won't provide 100% of your financing. In fact, you're most likely going to need multiple funding sources in order to get your business off the ground. There's nothing wrong with that either, by the way.

Talk with Other Business Owners

If you're a female entrepreneur looking to start or expand your business, forget all the advertising hype about federal grants. Instead, get together with some fellow business owners and pick their brains. They are the ones who will know where to find reliable funding sources. They are the ones who will be able to help you create a good business plan. They are the ones who will be straight up and honest with you, all without a business suit plastered with question marks.

Your business can be a success if you apply yourself correctly. Remember, if a deal sounds too good to be true it usually is. No matter how many times you hear hucksters proclaiming free government money is available, don't listen to them. The sooner you can learn that lesson the sooner you can get your business off the ground with real sources of funding that are legitimate.