Wisely using grant money to start your first company

LaKlusekLaKlusek subscriber Posts: 2 Member
The town I'm living in sometimes holds grant programmes for starting your first business - I never qualified cause I was still in college but now that I've graduated, I can benefit from such a programme.

Now I don't know how (and if) it works in other countries but where I live, the tldr version is that you get ~$7000 which you can use for pretty much anything apart from taxes (which are a mandatory of cost of ~$150 a month here) and buying cars. Oh, and also you cannot use more than 20% of the money for any land/property/estate if your business needs one. The only requirement is that the company is operational for at least 12 months (which equals 12 months of paying this $150 tax) and you can't work anywhere during that time.

So since starting my business has been a dream of mine for a long, long time now, I wanted to apply cause it's always better to start with a free 7 grand than with nothing. However, I'm really stuck with regard to what kind of company would be a good fit for a first timer and the best use of that money. When thinking about it, I decided that the best way to go about it would be:

  1.  the company should be something I wouldn't be able to do without the money upfront; thus, even though I'm a CS major, starting a company with making software or games being the primary focus doesn't sound like a good idea because a) I can do that without any additional money if I want to do it solo and $7k is too little to get other people on board anyway and b) even though I have a few video game pet projects, making them something market-ready (not to mention marketing or monetization plans) would be at least additional few months - months with no income and the taxes eating me up, mind you
  2.  it would be good if the company started generating some kind of revenue (albeit small) ASAP so that I don't have to empty my credit cards or beg Family, Friends and Fools for money to spend on taxes. I'm not talking about "I'm rich" money, just enough so that the taxes aren't a nightmare and I can kind-of sustain myself on it without a job (which I'm not allowed to do during that time). I can't use the money from the grant directly towards taxes but I can use anything generated from that money however I wish.

Do you have any suggestions as to what might be a good business to start with this kind of money to get your feet wet and get a feel for this world? The only thing that came to my mind was selling something online, like electronics for example - this certainly involves the need for money and I wouldn't be able to do it without it AND if you set a right price, the items will sell quickly, allowing you to have money to pay taxes with and reinvest in something. The problem with that is that it's not really a sustainable plan with all the competition out there and while it would turn into money pretty fast so that you can reinvest in anything, there wouldn't be too much to reinvest in cause as soon as I would start trying to actually make a profit and not just "sell things fast" to have money available, the competition would offer better prices 100% of the time.

Any tips, suggestions and ideas would be very, very welcome :)

Comments

  • LaKlusekLaKlusek subscriber Posts: 2 Member
    No ideas or opinions on the matter? :(
  • Ryan O'BlenessRyan O'Bleness Birmingham, Mich. administrator Posts: 1,055 Site Admin
    Hello, @LaKlusek

    First of all, I think that hoping to generate revenue as soon as the business starts is an ambitious thought. While cases vary, businesses generally take two to three years to turn a profit, though that is dependent upon how much startup capital you have -- in your case it sounds like it would be $7,000. So I'm not exactly sure for your specific case. 

    It sounds like you're a computer science major, correct? Perhaps your business should provide services in the IT/development realm, or whatever your specific skill set can specialize in. It also sounds like you develop video games, which certainly your skills from that would be useful for a service. 

    Just some thoughts! 

    Best, 
    Ryan O'Bleness
    Community Manager
    StartupNation, LLC
Sign In or Register to comment.