Self-Employment

Many individuals with disabilities dream of owning their own business, and their dream can become a reality with proper planning. The purpose of this information is to assist the potential consumers to better understand the DOR process and our guidelines to become employed in a self-employment setting and have a successful business.

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Self-Employment Information

Self-Employment Setting
The concept of a "Self-Employment Setting" will allow the individual to choose a particular vocational goal/occupation such as graphic artist, barber, accountant, etc. as an employment outcome in a setting where the individual can work as self-employed instead of as an employee. An Individualized Plan for Employment (IPE) will then be developed and implemented as soon as the vocational goal and the services necessary to assist the individual achieve that goal are identified.

Self-Employment

  • Must involve sole proprietorship and control and responsibility for decisions affecting the conduct of the business by the individual.
  • Must enable the individual to meet ongoing living expenses and be intended to become a majority source of income for the individual.
  • Must comply with relevant state, federal and local laws and regulations (this eliminates illegal ventures).

Business Summary
As part of the IPE development, the individual prepares a summary of the organization and operation of the proposed business. This summary is one of the first components of a business plan, also called an Executive Summary.

This summary, together with other available information, will be used to assess whether the proposed self-employment setting is appropriate and to identify the nature and scope of vocational rehabilitation services to be provided in order to assist the individual to be employed in the self-employment setting.

If more detailed information is required for these purposes, the individual will need to prepare a Small Business Plan and the summary can serve as the starting point for developing a business plan.

Funding

  • Funding for self-employment must be subject to the provisions of DOR's regulations, including, but not limited to, consumer financial participation.
  • DOR is not to be considered the sole source for funding in starting a self-employment venture. However, principal funding may be obtained from other private or public resources.
  • Credit reports are necessary to identify areas that could prevent the individual from obtaining funding from outside sources for the proposed small business.
  • When funding resources are necessary for the ongoing operational expenses of the proposed business, the individual must decide, based on informed choice, whether to obtain funding through a loan, a PASS or other sources, or to seek employment in an alternative setting other than in a self-employment setting.
  • If funding is denied by a source outside DOR, the decision and the reasons for such decision must be considered in assessing whether the self-employment setting is appropriate.
  • While DOR may assist in the establishment of the proposed self-employment setting, the intent is to be self-sustaining. Therefore, DOR shall not be responsible for long-term, ongoing operational or expansion expenses related to maintaining the business.

Assessments and Assessment Tools

Assessment Tools
In addition to the comprehensive assessment conducted by the SVRC, there are other areas that must be assessed using various assessment tools, as necessary, such as:

  • Proposed Business Summary
  • The Industry Standards, found in the North American Industry Classification System (NAICS)
  • Proposed Business Plan
  • Credit Reports
  • Business Consultants' input
  • Small Business Administration Small Business Startup Kit
  • Service Corps of Retired Executives (SCORE)
  • Strong Interest Inventory
  • Career Assessment Inventory
  • Campbell Interest and Skill Survey
  • System of Interactive Guidance and Information
  • Career Occupational Preference System (COP System) Interest Inventory
  • Myers-Briggs Type Indicator

Types of Assessments
The four areas to be assessed, utilizing any or a combination of the above assessment tools, as may be appropriate, are:

  • Assessment of the Self-Employment Setting
  • Assessment of the Personal Attributes of the Individual
  • Assessment of the Proposed Business
  • Assessment of Necessary and Available Resources

Assessing the Self-Employment Setting
The proposed self-employment setting must be appropriate in order for DOR to support the individual's choice to work in a self-employment setting.

A self-employment setting is appropriate when:

  1. It is consistent with the individual's personal attributes, including the individual's strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice.
  2. The proposed business is likely to produce sufficient income, within a reasonable period after the individual begins operating the business, not to exceed 12 months, to:
    • Pay the necessary ongoing operating expenses of the business.
    • Provide income for the individual at or above minimum wage, but not less than the customary wage and benefit level received by individuals engaged in the same or similar self-employment.
  3. The individual is able to obtain all resources necessary to establish and operate the proposed small business, including any resources necessary to fund the ongoing operating expenses of the business and to support the individual's basic living expenses during the period until the small business produces the income specified in number 2 above.

In addition, the SVRC shall consider any existing information; the summary of the proposed small business; and, to the extent additional information is necessary, information obtained through assessments (including, if appropriate, development and review of a Small Business Plan).

Assessing the Personal Attributes of the Individual
The SVRC assesses the individual's potential for self-employment. The assessment should disclose the individual's strong and weak characteristics and highlight training or education to pursue.

To assess the personal attributes of the individual, the SVRC and the individual shall, as appropriate:

  • Conduct an exploration of the individual's personal skills and abilities that are necessary for success in a self-employment setting, including decision-making and planning skills, initiative and entrepreneurial abilities, organizational skills, interpersonal skills, ability to communicate, ability to follow through, and ability to work independently.
  • Review the individual's technical knowledge, experience and education that are necessary for success in a self-employment setting, including training or experience in areas necessary for the operation of the small business, such as marketing, office management, time management, inventory control, and bookkeeping.
  • Review the individual's financial history and credit record to assure the individual has appropriate money management skills, is able to obtain credit necessary for the proposed small business, and is able to protect assets of the business from claims of existing creditors.
  • The individual's participation in and completion of his or her responsibilities in the vocational rehabilitation process also needs to be considered in assessing whether working in a self-employment setting is consistent with the individual's personal attributes.

The assessment of the individual's skills, aptitudes and interests in relation to the proposed self-employment setting must include the use of, at least one of the following:

  • Self-assessment tests
  • Web resources such as those available through the Small Business Administration
  • Participation in self-employment workshops or seminars

For this purpose, DOR recommends utilizing one or a combination of the above assessment tools as appropriate.

To the extent that the assessment identifies that the eligible individual needs additional training or experience to be employed in the proposed self-employment setting, the SVRC and the individual shall consider whether vocational rehabilitation services can assist the individual to obtain the necessary training or experience. If such services are available, the IPE shall identify, or shall be amended to identify, such services.

If it is determined after assessment that working in the proposed self-employment setting is not consistent with the individual's personal attributes, including the individual's strengths, resources, priorities, concerns, abilities, capabilities, interests and informed choice, the SVRC and the individual shall discuss alternative employment settings, and the IPE shall be developed, or amended.

Assessing the Proposed Small Business
In assessing the feasibility of the proposed small business, the SVRC reviews the summary, together with other available information, to assess whether the proposed small business is appropriate and to identify the nature and scope of vocational rehabilitation services to be provided in order to assist the individual to be employed in the self-employment setting.

The summary must include the following:

  • Proposed services or products
  • Projected monthly income and expenses for the first 12 months of operation
  • Number of monthly hours the individual will work
  • Initial costs necessary to establish the proposed small business
  • Individual's resources
  • Market analysis and marketing strategy
  • Number of employees, if any

The summary will identify what the business idea is, the resources the individual brings to the proposed small business, what the individual will need as far as training and equipment, staffing needs, projected income and expenses and an estimate of the start-up costs. The summary will also assist in determining whether the proposed small business is simple or complex in nature.

If more detailed information is required in the assessment phase, the individual will need to prepare a Business Plan with the summary serving as the starting point for developing a business plan.

For this purpose, DOR recommends the following assessment tools:

  • North American Industry Classification System (NAICS)
    This tool is utilized to assess the income potential of the proposed small business and compare product sales and revenue in the same industry or sector as the proposed business. It also provides comparability in statistics about business activity across North America.
  • Business Plan
    It builds upon the summary, if necessary. It is reviewed by the SVRC, with the assistance of the Statewide Self-Employment Specialist, the District Self-Employment Liaison, and/or a Small Business Consultant, as appropriate, to assess whether the proposed small business is reasonably likely to provide sufficient income to meet the ongoing operating costs of the business and generate income for the individual, including review of the following criteria:
    • Will the proposed small business produce, market and/or distribute the products and services and generate the projected income. Is there a market for the products or services. Can the products or services be produced in the projected quantities. Is the proposed small business consistent with industry standards (i.e., prevailing income of comparable small businesses with the same industry).
    • Are the projected ongoing operating expenses necessary for the operation of the business, are they usual and customary for similar businesses and are they sufficient in amount to generate the projected products or services.
    • Is the income of the small business sufficient to pay for the projected ongoing operational expenses.
    • Is the small business subject to potential liability, risks or insurance requirements that will negatively affect the projected income.
    • Are the projected initial costs necessary and are they usual and customary for similar small businesses.
    • Have all the resources necessary to establish and operate the small business been identified, including funding sources for the ongoing operating expenses of the small business and the individual's basic living expenses.
    • Are there other factors that would affect the projected income or expenses associated with the small business, or the individual's ability to establish and operate the business.

    The Business Plan can also serve as a tool for the individual to pursue funding for expenditures other than start-up costs that may be necessary to establish, operate, manage or support the business.

  • Credit Reports
    To identify areas that could prevent the individual from obtaining funding from outside sources for the proposed small business.
  • Local Small Business Development Centers (SBDCs), the Service Corps of Retired Executives (SCORE), the Small Business Administration (SBA)
    and/or other similar resources found on:

    The above entities can assist in reviewing the summary and the development of a small business plan if necessary in order to assess the feasibility of the proposed small business.

  • Business Consultants
    who can review business plans and assess the feasibility of the proposed small business.

    If it is determined, after assessment of the proposed small business, that the self-employment setting is not appropriate because it will not generate sufficient income, the SVRC and the individual must discuss alternative employment settings, and the IPE must be developed or amended accordingly.

  • Assessing Necessary and Available Resources
    Utilizing the summary or the small business plan, if required, the SVCR and the individual must identify:
    • Resources that are necessary to establish and operate the proposed small business.
    • Sources from which necessary resources can be obtained, including from the individual or family members; use of comparable services and benefits; funding from grants, loans, loan guarantee programs, and economic development funds; or a Social Security Administration (SSA) Plan for Achieving Self Support (PASS).
    • Technical assistance to be provided to the individual to assist in applying for or obtaining funding from other sources.
    • When the resources will be obtained by the individual.

    If resources in addition to the initial costs provided by DOR are required to establish and operate the proposed small business, the individual is responsible for obtaining such resources, and must decide, based on informed choice, whether to obtain funding through a loan, a PASS or other sources, or to seek employment in an alternative setting.

    If funding for the operation of the proposed small business is denied by a source outside DOR, the SVRC must consider the decision and the reasons for such decision in assessing whether the self-employment setting is appropriate.

    If it is determined that the individual is unable to obtain resources necessary to establish and operate the small business, the SVRC and the individual shall discuss alternative employment settings and the IPE shall be developed, or amended.

    If you are interested in pursuing employment in a self-employment setting please contact your local DOR office to discuss.

Resources: Documents and Self-Employment Video

Self-Employment Links

Self-Employment Resources

 

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