Government giveaways for entrepreneurs - governmental resources available to the small businessperson - includes related article on how to apply for government money - column - Tutorial

Home Office Computing, March, 1992 by Matthew Lesko

Typical American belief: Don't ever use the government for anything. It's inefficient, wasteful, nothing works right, and it's run by crooked politicians and lazy bureaucrats. The only people who get anything from the government are lowlifes like Charles Keating or welfare cheats.

If you subscribe to this cynical belief, and shy away from the government as a result, you'll be missing out don the world's largest and best source of money, help, information, and expertise for expanding a business.

Most big-time American entrepereneurs owe their success to the fact that they learned to use the government.

One of the first things Lee Iacocca did when he took over Chrysler was to go to Washington and get a $1.2 billion loan to turn the automobile company around. Donald Trump's entire real estate empire was built on government programs for buying and improving property.

HOW DO YOU GET

GOVERNMENT

MONEY?

You don't have to take a congressperson or senator to lunch to get money from the government. According to my calculations (based on Federal Procurement Data and the Catalog of Domestic Assistance), more than 500,000 businesses will get money this year from the government in the form of loans, grants, loan guarantees, and contracts. Very few of these businesses will be run by big shots like Lee Iacocca or Donald Trump. Instead, they'll be headed by people you might know, such as

* Suzanne Schwartz of Louisville, Kentucky, who got a low-interest loan of $4,000 from the state to expand a craft business in her home;

* Bret Stern, of New York City, who borrowed $211,000 from the federal government to work on his invention;

* Deborah Jeffreys Hurley of Columbia, Maryland, who received a $30,00 government loan to start her own video-production company, and then got another $25,000 in government contracts.

Getting the facts about government money programs is easy. The Catalog of Federal Domestic Assistance, updated twice a year by the U.S. Government Printing Office ($38; [202] 783-3238; also available in most libraries), describes every federal money program in detail. Your state's Economic Development Office will give you information about state loans. In addition, every state has at least one office set up to show small businesses how to get government contracts. These Small Business Development Centers can advise you on everything from getting loans to incorporating, all for free.

FREE INFORMATION

The government has something even more important than the money it distributes every year. Someone can give you $1 million to start or expand your business, but if you don't know how to spend it wisely, you'll be out of business quickly. Information is the key to success.

The United States government has some of the best information in the world. Big companies know that and use it to their advantage. All the Fortune 500 companies make billion-dollar decisions based on information they get for free from the government.

For years I acted as a marketing consultant to large companies that were buying and selling smaller companies. Procter & Gamble called me when it wanted to start a chain of pasta stores. After making a few calls, I discovered Bill Janis, an expert at the U.S. Department of Commerce; he was wonderful. He has been studying pasta for 10 years, and he inundated me with free market studies, reports, and special papers. He also told me who was making money in the business and who wasn't.

I compiled all these materials and put my name on them. That's perfectly legal; information published by the government isn't copyrighted.

When Citicorp wanted to know where rich people live in the United States, I went to the IRS, the Bureau of the Census, and the Federal Reserve Board, collected all the relevant information, and sold it to Citicorp for a pretty penny.

I would love to say that all this is easy. In truth, it'll take you more than a single telephone call to get a $100,000 check. That can happen, and it has happened to a few, but it is most unlikely. It will probably take you weeks or even months to find out if you can get any money. And if you don't get any this year, you may have to reapply next year. But just think--if you'd started last year, you might have the money by now.

The odds of getting government money are different for every program. There are more than 19 money programs for business, many from the SBA. Some of their programs, such as the Small Business Innovative Research grants (from the SBA's Office of Innovation Research and Technology) are very hard to get, and only about 15 percent of the people who apply get the money. In other programs, such as SBA loan guarantees, more than 50 percent of the people who apply get the money.

BE NICE TO BUREAUCRATS

American schools don't train people how to take advantage of our information society. We teach people how to spend money and hire services--not how to treat bureaucrats. But we should start learning how to treat them, because they seem to have a lot of what we need to succeed. You can call a bureaucrat and get