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Day care operator looking for grants
Dear Small Biz
Adviser:
I'm thinking about opening up my home
day care. Are there any types of grants to start my business?
Juanita
Dear Juanita:
Over the last few years, I have received more than 100 inquiries
from people who want to purchase or start day care centers. The
questions usually are too brief or lack sufficient substance to
respond with a column. While your question also is brief, you bring
up a highly discussed, debated and controversial subject: grants.
Before addressing grants, let me discuss the groundwork
you must do before beginning your search for capital, whether in
the form of grants or loans.
Any financier will want assurance that you can successfully
operate your proposed venture. A first step in convincing a capital
source of your abilities is to demonstrate a thorough understanding
of the industry.
I direct your attention to some
online sources regarding starting and operating a day care center:
- Daycare.com
is a clearinghouse of information for center operators and parents
alike. On the right side of the home page is a series of topics
to which you want to pay close attention. Most are related to
operational and daily issues. However, pay close attention to
the subject of insurance. It is an expense you simply cannot avoid.
Without protection from liability, your facility could face serious
financial loss and even closure.
- Redleaf
National Institute is an offshoot of the previous Web site.
Here you can find many resources, including sample contracts,
policy documents, reference books and information on advertising,
bookkeeping, taxes and training.
- America Taking Action provides a directory
of seven national, six state and 15 local child-care associations.
- The National
Network for Child Care is a federally sponsored program directly
affiliated with what appears to be a very prestigious accreditation
program through the National
Association for the Education of Young Children.
- Naturally, I am certain you are aware there must
be state regulations and accreditation standards to be met. Click
on the Web
site directory offered by Global Computing, and then work
your way to the site that addresses these issues for your location.
Business planning essential
Armed with the information you've gathered on the day care
sector, you then must develop
a business plan for your proposed center. Yes, even government
and private grant sources are now demanding business plan documents.
Let me offer a personal example. The planning department
of a nearby city recently contracted my firm to develop a business
plan for a community development corporation. This CDC is soliciting
a combination of grants and loans to finance an economic development
initiative in an economically
depressed zone of that city. The planner clearly stated the
CDC must demonstrate a plan for becoming a self-sufficient, nonprofit
agency.
Over the last 10 to 15 years, government agencies
issuing grants are demanding that these nonprofits demonstrate
the ability to become self-sufficient, relying less and less on
the grant sources with the passage of time. In other words, they
are telling applicants "don't constantly depend on us to fund
your operating needs".
I mention the nonprofit conditions because that is
the legal business structure you will likely have to choose if opting
for grants instead of loans to finance your venture. The specific
status you want to seek is detailed in Internal
Revenue Service code section 501(c)3. In the overwhelming number
of cases, foundations, corporations and government agencies require
a candidate have 501(c)3 status to receive funding consideration.
So learn as much as you can about your industry, write
the business plan and legally establish your nonprofit corporation.
Then you can begin the grant application process by searching the
Childcare.net
Resource Centre (scroll halfway down the page for U.S. listings).
I wish you well.
-- Posted: Aug. 8, 2002
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