Resources » State Policies » Nebraska
Small Business/Self Employment Ventures
Rev. 1/8/2007
PURPOSE
The intent of this process is to assist individuals in making realistic decisions about the feasibility of their business idea, to develop a business plan and successfully implement their business.
POLICY
Planning Requirements
Expert Consultation. Use expert technical consultation when consumers are considering self-employment as a vocational option. Private consultants who have the required expertise and have a contract with the agency provide technical consultation. The amount of consultation varies depending on the complexity of the venture.
Business Plan. Consumers are required to develop and submit a written self-employment business plan. In most cases individuals will be working with the business consultant listed below. The business plan is developed by the consumer with help from the consultant and submitted by the business consultant. The business plan must contain information presented in the Business Plan Outline.
Land & Buildings Prohibited. Agency funds cannot be used to acquire land or buildings, or involve construction, renovation, or remodeling of buildings or space to be used by the new business.
Legitimate Employment Outcome. Self employment is an acceptable outcome within the federal definition of ‘employment outcome’ and is encouraged in federal regulations. This outcome is not restricted to only those situations when a person’s disability precludes competitive employment and it should not be considered only as a last resort.
Consumer Requirements
Maximize Potential. The intent of self-employment is to maximize the individual’s potential. Staff should not approve an IPE where the intent is otherwise.
Own Business. The client must own or be the majority partner in the business. Non-profit organizations are not owned by the individual and therefore not supported by the agency.
Provide Tax Forms. The individual must provide copies of tax forms when requested for the purpose of determining cost sharing as well as success of the business and VR self employment program.
Business Requirements
Maintain Business. Technical assistance and other services may be provided
to existing businesses to maintain the business. This would be comparable
to assisting a person to maintain a competitive job they hold in the community.
Expand Business. The agency does not typically support the expansion of existing
businesses. Any request for assistance to expand an existing business must
be approve by the Director of Counseling Services.
Limited Start-up Time. Agency funds for business start-up costs are limited
to the initial establishment period of the new business, not to exceed 6 months.
Monitoring Criteria. Self-employment cases must remain in “employment
follow-up” milestone for a minimum of one full tax year from the date
the case entered that milestone.
Funding Requirements
Funding Sources. In addition to cost sharing individuals are required to seek
and utilize all available sources for business start-up costs including personal
or family resources and commercial loans. Examples of specific loans available
to individuals with disabilities include:
Vocational Rehabilitation Equity Assistance Program (VREAP)
Nebraska Alternative Financing Program (Administered by Easter Seals)
Nebraska Telework Loan Program (Administered by Easter Seals)
Trickle Up Program (Administered by The Abilities Fund)
Citibank Women and Company (Administered by the Abilities Fund)
Funds To Vendors. Authorize agency funds for business start-up costs to vendors
when possible since the state pays no state sales tax but the consumer would.
Funding Cap. Agency funds for small business start-up are limited to the following
business start-up expenses up to a maximum of $5,000.
Occupational licenses, franchise fees, and business permits including those
required by any unit of state or local government for the operation of the
new business enterprise.
Tools and equipment that are essential to the initial operation of the new
business enterprise.
Stocks and supplies of items essential to the initial operation of the new
business enterprise.
Operating costs essential to the initial operation of the new business enterprise,
such as rent, utilities, business liability insurance, reserving a few months
wages for hired employee salaries and advertising.
Down payment, initial licensing, and initial insurance of a vehicle essential
to the initial operation of the new business enterprise.
Exceptions to Cap. Assistive technology services (disability related expenses),
technical assistance and skill training are not considered small business start
up items and are not included in the $5,000 cap. They may be funded separately
and may have funding limits established in Rule 72. Examples include:
Modification of a vehicle used in the business is an example of a disability
related expense.
Technical assistance would include use of a consultant including an accountant
or attorney to obtain information necessary during the feasibility study or
during the business plan development. The monitoring fee paid to the business
consultant is also considered to be technical assistance.
Skill training might be provided to an individual who needs to acquire accounting
principles to do bookkeeping for the business
Exceptions to the $5,000 funding cap must be granted by the Director of Counseling
services.
SERVICE DELIVERY PROCESS
1. 1. Explore options. When an individual expresses interest in self-employment
thoroughly explore other possible options so the consumer can make an informed
choice. This includes using the ‘Discover the Job that Works for You’ booklet.
2. 2. Refer to Abilities Fund Workshop. The Abilities Fund (described below)
offers free one day workshops (Exploring Entrepreneurship) across the state.
Although these are not mandatory for persons interested in self employment
they can be very useful when exploring options and are highly recommended.
Information about the workshops is available on The Abilities Fund Website
listed below. If a workshop is not scheduled in your area in a timeline that
works for an individual consider sending the person to one scheduled in another
area of the state. If no workshops appear to be reasonable contact Christine
Hess (the consultant listed below) to discuss before making a referral for
feasibility study. Refer by using the ‘Exploring Entrepreneurship Workshop’ referral
form.
3. 3. Refer to Easter Seals for benefits analysis if receiving SSDI/SSI. This
should be done as early as possible but no later than the date of referral
to the workshop or date of referral for feasibility study if skipping the workshop.
4. 4. Assess impact of impairment. Explore how the disability might affect
business planning or success. This requires a discussion about the venture
including the specific job duties the consumer must handle. Specific disability
related questions that must be answered are included on the referral form in
the next step.
5. 5. Refer to consultant for feasibility study. Refer the individual to The
Abilities Fund using the ‘Self Employment Assessment & Referral’ form
on the Abilities Fund web site (see web site & instructions below). Nebraska
Vocational Rehabilitation has a contractual agreement with The Abilities Fund
for self employment consultation. No individual case authorizations are necessary.
Before making a decision to use sources other than The Abilities Fund for consultation
contact the Director of Counseling at the State Office. The business consultant
is:
The Abilities Fund Web Site(can be found on VRIS also):
General Site: www.abilitiesfund.org (Click on Nebraska Self Employment Services) or
Specific Nebraska Self Employment site:
Program Manager: Christine Hess
Address: PO Box 394 Plattsmouth, NE 68048
Phone: 402.296.2146
Toll Free: 877.518.0802
Email: christinehess@abilitiesfund.org
Fax: 402.296.0265
Enter this assessment service in QUEST. The service is ‘assessment support – self
employment consultation.
6. 6. Consumer completes application. The consultant will send the consumer
an application form by mail or email to complete and return. Provide assistance
to the consumer as needed to access the site and complete the application.
7. 7. Face to face or telephone discussion. After reviewing the application
the Program Manager from The Abilities Fund will contact the consumer in person
or by phone to discuss the venture. After the discussion the program manager
will send the VR staff member a recommendation in writing (email or letter)
on whether to proceed with a feasibility assessment or not. Maintain this recommendation
in the case file.
8. 8. Feasibility assessment. At the start of the feasibility assessment the
program manager will send a standard outline of services provided during the
feasibility assessment to the VR staff member. At the completion of the feasibility
study the consultant will send a written report to the referring staff member.
In the report a recommendation is made on whether the idea appears feasible
or not. Maintain this report in the case file. If the recommendation is not
feasible the program manager should be included in relaying the recommendation
to the consumer.
9. 9. Business plan development. At the start of business plan development
the program manager will send a standard outline of services generally provided
and timelines to the VR staff member. When the business plan has been completed
the program manager will provide a written copy to the VR staff member and
arrange for a meeting with the VR staff member (and consumer as appropriate)
to review the plan and funding.
After this meeting the program manager will provide a written recommendation
to the VR staff member regarding funding and steps to implement the business.
The VR staff member must approve the plan and funding before the program manager
will proceed. Maintain a copy of the business plan and the written recommendation
in the case file.
10. 10. Review business plan. After receiving the business plan, assure that
it follows the outline described at the end of this chapter and determine that
the following are met:
a. a. The business idea or concept is sound, based on an appraisal of similar
ventures and their result.
b. b. There is a market for the goods or services to be provided by the business,
based on an appraisal of the market for the goods or services, market competition,
and the recipient’s market strategy.
c. c. The business venture is financially sound, based on an assessment of
initial start-up costs, credit and financing availability, and pro forma cash
flow and profit/loss statements.
d. d. The recipient will be able to manage and operate the business, based
on the consistency between the requirements of the business and the recipient’s
unique strengths, resources, priorities, concerns, abilities, capabilities,
and interests.
Maintain a copy of the business plan in the case file.
11. 11. Develop IPE. If the criteria in number eight above are met and VR staff
agree with the business plan, proceed with development of the IPE.
Enter this community service in QUEST. The service is ‘small business – technical
assistance’. Place the individual in VR Services milestone in QUEST.
12. 12. Authorize business costs. After approving the IPE, authorize the appropriate
business start-up cost, skill training or disability related costs as described
in the business plan.
13. 13. Monitoring. The Abilities Fund program manager will monitor the case
until the business is stable and the consumer is self-sufficient or moving
in that direction. A final report will be submitted to the VR staff member.
14. 14. Maintain open case one full tax year. Self employment cases must remain
in ‘employment follow-up’ milestone for a minimum of one full tax
year from the date the case entered that milestone. VR staff will monitor during
this time period with the exception of individuals receiving SSDI or SSI. SSDI
and SSI recipients are monitored by Easter Seals from the date they enter ‘employment
follow-up’ milestone. At a minimum, VR staff should contact the individual
once each 30 days during the first 12 months and once every 90 days after that.
Contact the Abilities Fund program manager for consultation if necessary during
this time.
NOTE: The one year monitoring is only required for individuals who are ‘new
business start-ups’. This would not include any case where VR services
were designed to help the person maintain a business already in existence such
as those typically referred by AgrAbility.
15. 15. Move to Employment Warranty
The case will be moved to EW monitoring if the business continues to operate
after one full tax year and the individual is satisfied. Ask the individual
for a copy of their Schedule F (for farmers/ranchers) or Schedule C (for all
other self employment businesses). Use line 11 in Schedule F or line 7 in Schedule
C to determine the amount of income recorded in QUEST.
For reporting purposes in QUEST never exceed 40 hours for the number of hours
the individual is working.
Business Plan Outline
Use the following outline to prepare a written business plan. The business
plan provides detail for the business start-up. It includes a chart showing
all start-up costs and the recommendation on how those should be met. Part
of that recommendation will indicate that assistive technology or disability
related costs are included and the amount of expected contribution by the agency
in the actual business start-up costs.
Business Name:
Description of business
Name of business
Organization of business
Industry background:
Product, services and markets
Competition
Location of business
Management
Marketing plan
Financial Data:
Sources and uses of funding
Capital equipment list
Cash flow projections
Break-even analysis
Projected profit and loss\Balance sheet
Borrower financial information
Risk mitigation
Contingency plan
Accounting issues
Supporting Documentation (24 months):
Pro forma cash flow projections
Projected profit/loss statements
Pro forma balance sheet
Detailed income projections
Detailed cost of goods sold projections
Detailed expense projections
Detailed labor projections
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