Self-Employment Business Startup Toolkit V3.0

• DVR may provide funding for an approved business plan’s start-up costs in accordance with the Self-Employment Start-up Fee Schedule.
• DVR’s financial participation will be used to purchase initial start-up services and equipment identified in the approved business plan and must follow DVR’s purchasing policies.
• The business’s start-up cost excludes costs for training, assessments, and rehabilitation technology services. However, these costs can be identified in the business plan.
• A consumer must demonstrate that they have access to the working capital.
  • Working capital is defined as: Demonstration of funds available to cover costs of day-to-day operations of business and obligations (e.g., maintaining inventory, short term obligations and expenses, employee wages, etc.). It is the money needed to keep the business running until it generates enough revenue to pay for itself. This could be through cash, loans, grants, investors, etc. This does not include DVR funds, the owners draw, or depreciation amounts.
  • DVR calculates monthly working capital as the monthly average expenses over the first year of operations. This average calculation does not include DVR contributions for start-up.

    Note:
    Tier 1 requires 2 months of working capital
    Tier 2 requires 4 months of working capital
    Tier 3 requires 6 months of working capital

  • Prior to the DVR business plan review, the consumer must present documentation demonstrating that they have access to the required working capital. Working capital can be obtained through a credit card, a family member, a friend, or a loan. Demonstration must include a notarized letter, credit card line of credit or if a loan, include what the funds can be used for, the repayment schedule, and interest if applicable.
  • All consumers must have access to working capital regardless of their SSI/SSDI status.

If a consumer is interested in self-employment but had been provided self-employment start-up funds in any case that was closed in the last 5 years, consult with DVR director/designee.

Tier 1 total cost of business up to $6,000 paid by DVR

A Tier 1 business is intended for individuals that are interested in starting a very small business that is easy to get going and requires little investment from DVR. DVR intends that these businesses are open within 3-6 months after approval of the Business Plan.

Note: VRC must consult with a self-employment subject matter experts in your local WDA throughout the process. No paid business consultants are typically used for Tier 1 businesses. BAS and Feasibility Analysis are also not used in Tier 1 businesses.

The final determination on if the consumer has a feasible business and should proceed with the steps in the toolkit (determined in Step #3), would be determined by the local WDA Director or their designee.

Require Following:

• Background check (CCAP and DOJ)
• Credit Report with FICO score
  • If FICO score is below 639 and/or if they have no credit, and/or they can't pay their bills, provide financial literacy services, and proceed with development of a simplified business plan.
• Simplified Business Plan (typically 1-2 pages).
  • Business overview.
  • Resources.
  • Marketing Plan.
  • Business Financials.
• Documentation of 2 months of working capital prior to Director/designee review of Business Plan.
• Personal financial worksheet.

Tier 2 total cost of business $6,001 - $12,000 paid by DVR

A Tier 2 business is intended for individuals that are interested in starting a small business that typically requires a business consultant, and moderate effort to get going. DVR intends that these businesses are open within 6-12 months after approval of their Business Plan.

Require Following:

• Credit Report with FICO Score (FICO Score at 639 or above).
  Note: The credit score may be free, but if it is not, DVR can fund obtaining the score.
• Background check (Wisconsin Circuit Court Access (formerly CCAP and Department of Justice (DOJ))
• Employment Readiness Questionnaire (ERQ)
• Business Assessment Scale (BAS)
• Feasibility Study typically completed by a business consultant that would identify if a Marketing Plan were needed.
• Business Plan typically completed by a business consultant utilizing current technical specification.
• Documentation of 4 months of working capital at the time of Business Plan Review.

Tier 3 total cost of business $12,001 - $18,000 paid by DVR

A Tier 3 business is intended for individuals that are interested in starting a small business that requires business consultant, a comprehensive business plan, and may be required to consider funding outside of DVR. DVR intends that these businesses are open within 12-18 months after approval of their Business Plan.

Require Following:

• Credit Report with FICO Score (FICO Score at 639 or above).
  Note: The credit score may be free, but if it is not, DVR can fund obtaining the score.
• Background check (Wisconsin Circuit Court Access (formerly CCAP and Department of Justice (DOJ))
• Employment Readiness Questionnaire (ERQ)
• Business Assessment Scale (BAS)
• Feasibility Study typically completed by a business consultant that would identify if a Marketing Plan were needed.
• Business Plan typically completed by a business consultant utilizing current technical specification.
• Documentation of 6 months of working capital at the time of Business Plan Review.
• May require consideration of outside funding.

These fees are established in accordance with federal guidelines that permit an agency to establish fee limits for services designed to ensure a reasonable cost to the program for each service. If the service is provided as a direct payment to the individual, either a receipt or other appropriate documentation that the funds were used as intended is required.

Note: If the estimated total cost of the business exceeds $18,000 at the time of feasibility, consult with director/designee.

Note: Credit scoring models can help assess consumer credit risk scores. For example, a credit score of 640 is just below a "good" credit score, which is typically a score at or above 670 for FICO. A good credit score can help you qualify for a credit card or loan with a lower interest rate and better terms. A credit score of 640 is a measure of financial stability and an indicator of a consumer's ability to implement and maintain their business operation. Reviewing a DVR consumer's finances and knowledge of managing funds is part of determining readiness to manage the financial sides of business ownership.

Financial Solvency is a measure of a consumer's financial health. A consumer is financially solvent if they have the ability to meet their expenses with income earned through employment, retirement income, documented savings that is readily accessible, documented financial support from others inside or outside of the home, SSI/SSDI. and other financial supports including, but not limited to, FoodShare, rental assistance, and energy assistance.

This toolkit policy was developed for consumers, DVR staff, stakeholders and the public to understand the self-employment process.

Tip/Note : Reassure the consumer that they will be supported throughout the process. Any material provided to the consumer must be in an accessible format. After reviewing the toolkit with consumers, some consumers may no longer be interested in self-employment. This decision may occur at any step of the process. This decision is okay, as it is part of the informed choice process of the consumer.

Initial counseling discussion with the consumer on self-employment

• Explain that DVR has only one purpose – to provide VR services for individuals with disabilities so that such individuals may prepare for and engage in gainful employment (i.e., minimum wage or above for hours worked).
• Utilize Appendix 1 to facilitate discussion with the consumer on whether they have thought about the advantages and disadvantages of self-employment.
• Clarify that self-employment is not an employment goal for DVR purposes, just as working for someone else would not be written as an employment goal (e.g., full time employment working for a company).
  • Self-employment is a way to make money at an occupation or a means of practicing a skill (e.g., welding), or selling a product (e.g., insurance policies). (See Step 4, Development of the IPE for the Occupation.)
• Explain that DVR must ensure that the occupation and self-employment are appropriate, given the consumer’s strengths, limitations, abilities, concerns, capabilities, interests, priorities and informed choice.
• Discuss with the consumer if they require occupational training to reach their self- employment goal. If the consumer requires occupational training, consult with supervision to decide if they need to complete the training before moving ahead with the self- employment process.
• Explain that DVR staff utilize the Entrepreneurial Readiness Questionnaire for Tier 2 and 3 businesses. That the Business Assessment Scale is used by DVR to assist them in determining if the occupation and self-employment are appropriate for the consumer.
• Explain that the consumer's credit report with FICO Score, financial solvency (all monthly financial obligations are met with current income), criminal background, and other Information will be obtained for all tiers as part of this process and the impact these can have on DVR's ability to support the occupation and the occupation through self-employment.
• Explain that if a consumer is determined appropriate for the occupation then they will go through the appropriate tier process.
• Explain that DVR services and funding for self-employment are related only to the start-up costs of a business, not for future or ongoing costs related to the business. This is typically 6 months with individualized determinations based on the approved business plan and business financials. DVR does not provide working capital (i.e., cash). When a business plan is reviewed, the review committee will assess the business’s ability to cover ongoing expenses and for the business to be self-sustaining.
• Discuss DVR self-employment fee schedule and start-up working capital requirements as well as funding policies and procedures. Utilizing the tier fee schedule, discuss costs for self-employment cases: Regardless of the plan type, the services and costs of those services are dependent on what is necessary and appropriate for the individual consumer to achieve his/her IPE goal. For some cases, DVR may provide services that have a cost associated with them, and some cases will have services with no cost associated with them (e.g., guidance and counseling, information and referral, or paid for by other resources). DVR should spend no more or less on a case than what is necessary for the achievement of the IPE goal.
• Any request for funding or services that were not part of the original business plan must be done through the exception process. Any request for funding or services that had not been approved through the business plan review committee, requires an exception request.
• DVR requires a business plan for all three tiers. Planning does not end with the completion of a written plan – the process is continuous. The business owner must constantly evaluate how the business is doing versus what had been planned and modify the plan accordingly. Ongoing comparison of planned to actual results provides a terrific opportunity to continuously improve the business. Consultants and information and referral resources are available to assist with this using the Business Operations and Support Serivice.
• Discuss comparable benefits with the consumer. Define what they are, when they are considered, and what services are exempt from comparable benefits.
• If applicable, the DVR staff member should discuss with the consumer that DVR is not able to purchase real estate/property or new construction.
• Explain that all consumers need to make continual progress toward their goal within an agreed upon timeframe. Explain that set target dates can be changed if appropriate, but stress that end dates are necessary for successfully completing self-employment activities and that these should be reviewed regularly.
• For consumers who are already making a product or providing a service, DVR may be able to provide services and materials for short-term action oriented test marketing.
• If the consumer receives a Social Security Disability Insurance/Supplemental Security Income (SSI/SSDI) benefits share that they will be responsible for demonstrating the working capital requirement for the Fee Schedule Tier their business falls into. Discuss with the consumer how earnings may impact his/her benefits as well as work incentives that may be available to him/her, and if a referral for a benefits analysis is appropriate. SSA rules are complex for those going into self-employment and receiving disability benefits, a benefit analysis should be performed by a provider who is knowledgeable and comfortable on the rules for self-employment. The DVR staff member should ask the vendor their experience with self-employment before making a referral for this service.
  • Consumers receiving SSI and Medicaid should be made aware that if they decide to structure their business as a Limited Liability Company (LLC), S Corporation, or C Corporation, business assets may be considered as personal assets which could jeopardize their SSI or Medicaid benefits.
  • Consumers receiving benefits should be reminded that they are responsible for reporting any changes to their annual earnings or resources to the Social Security Administration. Failure to do so can result in over payment and subject to collections by SSA.
• If a consumer expresses an interest in starting a non-profit business the following should be discussed.
  DVR does not support non-profit businesses as self-employment because:
  • Non-profit businesses by definition do not generate a profit.
  • These businesses are typically overseen by a board of directors. They are not owned and controlled by the consumer; therefore the consumer is not "self-employed".

  However, this does not mean that a consumer cannot work for a non-profit. It would simply be an employment goal like any other in which they work for an employer. Working for a non-profit is not self-employment.

• If a consumer is interested in going into business with a non-DVR consumer partner, for DVR purposes the expectation is the consumer have at least 51% ownership (controlling interest) in the proposed business. Furthermore, DVR would provide assistance toward an approved business plan following the self-employment fee schedule, at the rate of ownership and the business partner would be expected to contribute their rate of ownership. If two consumers express an interest in starting a business together as partners, management should be consulted on how best to proceed.

After reviewing the information listed in Step 1, the DVR staff member should support the consumer to identify an employment outcome that is appropriate given the consumer’s strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice. These factors are known as the Great 8. Step 2 emphasizes occupational exploration along with the Great 8.

The DVR staff member can assist the consumer in identifying an appropriate occupational goal through a comprehensive assessment which could include: job shadows, internship/temporary work, functional capacity evaluation, auditing a class related to the occupation, etc.

If the DVR staff member is in agreement with the occupational goal chosen by the consumer and the consumer still wants to pursue self-employment, proceed to Step 3.

If the DVR staff member is not in agreement with the occupational goal chosen by the consumer, provide a denial letter including the rationale as to why the occupational goal is not being supported along with appeal rights.

Determining early on whether a consumer is a good candidate for self-employment in this occupation saves the consumer time and effort. Step 3 determines the readiness and appropriateness of the consumer to be self-employed in their chosen occupation.

Readiness and appropriateness of the consumer for self-employment consists of many factors including: attributes, disability factors, transferable skills, credit history, personal resources, family support, current debt and obligations, criminal history, etc.

DVR and the consumer should arrange appointments to review and complete the activities in this step.

The following items are required for all Tiers:

• CCAP Review (Wisconsin Circuit Court Access)
• Crime Information Bureau - Wisconsin Criminal Background Check
  • To complete the criminal background check, DVR staff must first obtain a signed release from the consumer. Once this is completed, DVR staff should follow the process for obtaining a Wisconsin Criminal Background Check (Internal Link, Staff Only).
• FICO Sore and Credit Report
  • Explain to the consumer how their FICO score (639 or above) and Credit Report will be used and the impact it can have on DVR's ability to assist the consumer with their occupational goal through self-employment.
  • Provide the consumer with the FICO Score Request document which outlines the process of how the consumer can obtain their FICO score.
  • DVR is able to assist the consumer with the costs of obtaining the FICO score as outlined in the FICO Score Request document.
• Completed Personal Finance Worksheet

Share with the consumer that there may be resources outside of DVR that may assist the consumer in pursuing their occupational goal through self-employment. A list of those resources are included in Appendix 10.

For consumers in Tier 1 that do not have a FICO score of 640 or above, if there are concerns with the background check, and/or personal financial worksheet, consult with director/designee on how to proceed.

If there are no concerns or issues for consumers in Tier 1 after reviewing all required materials, move to step #6.

The following items are required for Tiers 2 and 3

2. Entrepreneurial Readiness Questionnaire (Appendix 3):

This questionnaire is designed to help the consumer to think about and explain how their skills, abilities, and access to resources may lead them toward a successful self-employment outcome. The questionnaire will assess the consumers management experience, industry/technical experience, personal credit and financial solvency, commitment/desire/persistence, and family/community support.

The questionnaire should be completed by the consumer (with supports/assistance as needed) and upon completion, reviewed with the consumer and DVR staff member to determine if additional information is needed.

This information will then be used to complete the Business Assessment Scale.

3. Business Assessment Scale (BAS):

The BAS is a tool designed for the Wisconsin Vocational Rehabilitation to use as an early assessment as to the likelihood that a consumer will succeed in a small business enterprise. It evaluates five measurable attributes: management expertise and skills; technical skill/work experience; personal credit/financial solvency, commitment/desire/persistence, and family and community support.

The BAS is to be completed by 2 trained DVR staff and the consumer (See Appendix 4). DVR staff can access the BAS scoring tool (Staff Only, Internal Link) and share with the consumer. The rating tool (Staff Only, Internal Link) is for DVR staff only and should not be shared with the consumer or included in the DVR file.

The rationale and final weighted score for each of the five sections of the BAS must be entered by the one of the BAS raters as a case note in IRIS.

A total score of 61 to 100 is a Green Light and suggests that the individual possess the characteristics which contribute to a successful business operation in the proposed business. The consumer should be assisted with moving to the next step in the Self-Employment Toolkit. The designated BAS rater will send a Green Light Letter to the consumer.

A total score of 41 to 60 Yellow Light and suggests that the individual possess some of the characteristics which contribute to a successful business operation in the proposed business, but requires additional skill-building or planning. No additional self-employment services may be provided at this time. The BAS raters will send the consumer a Yellow Light Letter including appeal rights. All of the items indicated in the letter must be submitted to the VRC by the deadline and reviewed by the BAS raters who will approve or disapprove moving forward with self- employment.

A total score of 0 to 40 is a Red Light and suggests that the individual does not possess the characteristics which contribute to a successful business operation in the proposed business. The BAS raters will send the consumer a Red Light Letter including appeal rights. All discussion and support for self-employment should conclude. The consumer should be offered counseling and guidance to determine if they would like to pursue wage employment.

If the BAS score indicates that the consumer should not proceed with the self-employment process, an Exception Request may be requested.

• Where applicable, if a BAS Rater has additional insight as to why an Exception Request should be considered, they should recommend that to the DVR staff member.
• In consultation with management, other data (evaluations/assessments, the consumer’s skills, abilities, capabilities, etc., recommendations of a business consultant, and the DVR staff member’s observations and experience with the consumer) may also be considered when determining whether or not the consumer is a candidate for self-employment and an exception request could be considered.

Note: The VRC should add an IRIS case note related to their conversation with the consumer before and after the BAS meeting.

If the IPE goal has been determined appropriate and the consumer and VRC are in agreement with the occupation and pursuing self-employment, proceed with the feasibility study. The feasibility of the proposed business must be determined for consumer's whose business concept and start-up costs are in Tier 2 or 3. Depending on the outcome of the feasibility study which includes a start-up cost estimate, the consumer will be assigned to Tier 2 or Tier 3.

A feasibility study is an analysis of the viability of an idea. The idea should be specific to an occupational area. The feasibility study focuses on helping answer the essential question: Should we proceed with the proposed business idea? All activities of the study are directed toward helping the consumer and DVR answer this question.

A feasible business venture is one where the business service or product will generate adequate cash-flow and profits, withstand the risks it will encounter, remain viable in the long- term and meet the goals of the DVR Consumer.

Reasons to do a Feasibility Study:

A feasibility study is conducted in order to objectively uncover the strengths and weaknesses of a proposed business. It can help to identify and assess any opportunities and threats present in the proposed business along with the resources required for the start-up of the business and the prospects for success.

Conducting a feasibility analysis:

• Gives focus to the consumer.
• Narrows business alternatives.
• Identifies new opportunities through the investigative process.
• Identifies reasons not to proceed.
• Enhances the probability of success.
• Provides quality information for decision making.
• Provides documentation that the business venture was thoroughly investigated.
• Helps in securing funding from lending institutions and other financial sources, including the amount of working capital that may be required for the business.

Proposed Business Feasibility Recommendation:

The purpose of the feasibility study is to make a recommendation whether or not to proceed with the business idea. Once a proposed business is determined and agreed to be feasible there should be no further questioning throughout the self-employment process whether the business is feasible. This indicates the importance of a properly researched feasibility study that considers the consumer, the market and all viability factors.

Staff should consult with their Director/ to make the final decision regarding the outcome of the feasibility study to determine if additional training is needed and how much time it will take for the consumer to secure working capital.

Green Light on feasibility of business and 3 or fewer months of short term training is needed and anticipated working capital will likely be available within 3 months of the feasibility study being approved.

Yellow Light on feasibility of business or more than 3 months of short term training is needed and/or anticipated working capital will likely take more than 3 months to secure.

Red Light Review the feasibility findings with consumer and the business consultant. Address any questions/concerns. Inform consumer that DVR will not be able to provide additional self- employment services. DVR Staff will provide a denial letter and appeal rights. The consumer should be offered counseling and guidance to determine if they would like to pursue non-self employment services.

Next Steps Based on the Feasibility Recommendation and Consultation with the director:

Green Light Write IPE with business plan development services, needed training, and/or other assessments etc. Move to Step 6

Yellow Light Write IPE that addresses concerns in the feasibility study, includes training and related services, and includes responsibilities/steps to take related to securing working capital. If there is outstanding training needed, the decision to move forward happens at the local level. VRC should consult with Director/Designee or business consultant who wrote the feasibility study if there are questions. Move to Step 5

Red Light Discontinue discussions of self-employment. DVR Staff will provide a denial letter and appeal rights. The consumer should be offered counseling and guidance to determine if they would like to pursue non-self employment services.

Tip/Note: It is important to help the consumer understand that they will be required to provide formal documentation of working capital once the business plan has been finalized. The working capital may be secured from lending institutions, family, credit cards, and other financial sources. If necessary, refer the consumer for financial literacy services so they understand the importance of saving for the financial needs of their business. The estimated amount required for the working capital may assist the consumer in deciding if they have access to these types of resources to start their business.

Note: Yellow light Feasibility for Tiers 2 and 3

If the feasibility study results in a yellow light and/or consumer requires 3-12 months of training, or it's unlikely that they will have access to working capital within 3 months, then the IPE should be written to include necessary services with progress measures and responsibilities. The IPE will be written for the occupation, but business plan development services should not be included at this time.

After working through Steps 1 through 4, an appropriate employment goal was identified. The VRC informs the consumer that they can write an IPE for the occupation but, will not be including business planning services until the yellow light considerations have been addressed The DVR staff member must include a rationale of why this goal is appropriate, given the consumers strengths, resources, priorities, concerns, abilities, capabilities, interests and informed choice, should be documented following the Case Noting Style Guidance and Best Practice (Staff Only, Internal Link) in the IPE case note.

The IPE is written to ensure that skill acquisition and action items identified in the feasibility report are the primary focus, while allowing the consumer to continue to explore if they are suited for the occupation as well as self-employment.

It is important that the IPE list all of the services that are needed and known, at the time the IPE is developed, including:

• Services needed to address any functional limitations identified at the time of eligibility that are needed to engage in current IPE services.
• Services that are identified as a result of an assessment or the feasibility study.
• Services that address other barriers that come to light e.g., criminal background, prior bankruptcy, driver license issues, skill deficiencies, etc.
• Specific training (financial literacy training and/or consultation), work experiences, business classes, apprenticeships, informational interviews, etc. that will assist the consumer in achieving their employment outcome.

The IPE’s progress measures should be incremental with specific tasks identified and agreed upon deadlines. DVR staff must evaluate that the agreed upon action steps were completed prior to initiating the next step. See Initial IPE Example found in Appendix 7.

If yellow feasibility items have not been resolved, do not proceed with providing business plan development services. Consult with the BAS Committee to determine if extensions are warranted. If self-employment services are being denied, the DVR staff member must provide a letter with reasons for denial and appeal rights.

If the consumer has demonstrated their continued interest, completed all required outstanding feasibility items and action steps, the DVR staff member in consultation with their supervisor and/or designated local subject matter expert, will update the IPE. Include services that have been jointly identified and agreed upon with the consumer to reflect services necessary to develop a comprehensive business plan utilizing Step 6.

If the consumer has decided that they are no longer interested in self-employment and/or their employment goal, then the DVR staff member and consumer should address this and update the plan as needed.

Note: Applies for all Tiers

Discuss with the consumer the importance of developing a Business Plan:

The number one reason businesses fail is lack of planning! This includes poor management and being undercapitalized. Instead of making mistakes on paper, business owners too often make them with real money and real customers. That is why most funding institutions and agencies require business plans and refuse to fund business start-ups that cannot provide a well-developed plan.

Benefits of Planning:

• It requires that the business owner evaluate the entire business. Daily decision making often involves resolving a series of seemingly unrelated problems. Planning identifies the underlying reasons for recurring daily problems.
• The business plan contains written information that can be useful to employees, investors, creditors, and other interested parties. It is difficult to communicate an informal, unwritten business plan to others.
• The business world is becoming increasingly competitive. In order to survive, a small business owner must find a well-defined market niche. He or she cannot compete on price, and therefore must serve that market in a customer-oriented, cost-effective manner. Planning forces the entrepreneur to address these issues and enhances the likelihood of success.
• Small business products, services, and delivery systems are constantly changing. Change is a state of uncertainty, but it also presents opportunities to the prepared business owner. Planning is a systematic way to identify and capitalize on new opportunities.

Planning does not end with the completion of a written plan – the process is continuous. The business owner must constantly evaluate how the business is doing versus what had been planned and modify the plan accordingly. Ongoing comparison of planned to actual results provides a terrific opportunity to continuously improve the business.

If the consumer is in agreement with moving forward with Business Plan Development Services, amend the IPE to include Business Planning services and any other services that are necessary and appropriate for the consumer to reach their employment goal, including less than 3 months of training.

For consumers in Tier 1 the simplified business plan template must be completed and approved by the local Director/Designee.

For consumers in Tiers 2 and 3, a referral should be made to a business consultant for business plan development services following the Business Plan Technical Specifications. If a consumer chooses to develop their own comprehensive business plan, provide them with a copy of the Business Plan Technical Specifications and Business Plan Development Guide found in Appendix 5 to assist them in this process.

Tip/Note:
During the DVR staff member's 30 day contact, check in with the consumer to see if they are satisfied with how the Business Planning process is moving along. If the consumer is not satisfied with the business planning services being provided by the consultant, it is important to find out why the consumer is dissatisfied.

If the business plan indicates that the total start-up costs would place the person in a different tier, the VRC should consult with their Supervisor/Director to see if the assigned Tier should change or remain. Working capital requirement would change if the consumer was moved from Tier 2 to Tier 3. If consumers changes Tiers, they must go back and complete all required steps for that new Tier before proceeding with the toolkit.

This is also the point where comparable benefits (American Indian Vocational Rehabilitation (AIVR), Veterans Administration (VA), Wisconsin Women's Business Initiative Corporation (WWBIC).etc.) should be explored with the consumer. It is important to remember that DVR does not require exploration of comparable benefits for assessments and rehabilitation technology.

When identifying the equipment, tools, and supplies in the business plan, the consumer should develop a written list with reasons why the items are needed to present to the BPRC. Identify if specific equipment and tools are needed as an accommodation. The accommodation items should not be included in the amounts when looking at the DVR fee schedule. If there are questions on if a specific item(s) is rehabilitation technology or a piece of essential equipment for a business, management should be consulted. 34 CFR 361.5 says that assistive technology device means any item, piece of equipment, or product system, whether acquired commercially off the shelf, modified, or customized, that is used to increase, maintain, or improve the functional capabilities of an individual with a disability.

If the consumer is submitting the business to potential investors, if a requested item/service could potentially identify the consumer as a person with a disability, the VRC and the consumer should discuss whether or not to include it in the business plan.

Once the business plan is complete, following the Business Plan Technical Specifications, a review meeting must be held. At that meeting, the consumer is expected to present the business plan to his/her DVR staff member with the assistance of the business consultant. This meeting will allow for discussion regarding the report, answering any questions or concerns, identifying any areas needing further clarification, and next steps, if applicable. If a consumer has a service or product that they can demonstrate to the business plan review committee, they should be encouraged to provide a demonstration during the review meeting.

Tip/Note:
For consumers receiving SSI/SSDI and/or any other public benefits, a referral should be made to a benefits specialist at any point in the process for a self-employment benefits analysis to assist in explaining the advantages and benefits of achieving Substantial Gainful Activity (SGA), possible work incentives (e.g., Plan for Achieving Self Support (PASS), Property Essential for Self-Support (PESS), Impairment- Related Work Expenses (IRWE), Blind Work Expenses (BWE), and Unincurred Business Expenses) and the impact of self-employment on their benefits.

Working with a benefits specialist will assist consumers in making an informed choice on pursuing self-employment and if a consumer decides to proceed with self-employment, it will help them understand how Social Security evaluates work activity, available employment supports, and how to structure their business.

Consumers receiving SSI and Medicaid should be made aware that if they decide to structure their business as a Limited Liability Company (LLC), S Corporation, or C Corporation, business assets may be considered as personal assets which could jeopardize their SSI or Medicaid benefits. VRC needs to discuss the service of Work Incentive Benefits Analysis this point so the consumer is aware of how the income from their business may impact their benefits.

See Appendix 6 for the Roles of the Business Plan Review Committee (BPRC)

All Tier 2 and 3 business plans are submitted to the Director/designee and the local BPRC member prior to submission to the full BPRC. The Director/Designee and the local BPRC member will review and provide feedback to the VRC within 5 business days of receiving the plan. If needed, the DVR staff member will work with the consumer to address any recommendations.

With consent from the consumer, the DVR staff member must submit the business plan to the BPRC 14 days in advance of the committee meeting. This allows the committee members time to review, discuss and prepare questions for the consumer to answer. Any pictures or other relevant information (webpages, electronic portfolios, etc.) should be submitted to the BPRC at this time.

BPRC Lead in coordination with another member of the BPRC will request a Business Walk Through (Staff Only, Internal Link) visit of the potential business with DVR staff member (storefront, warehouse, workshop, etc.). If there is no physical location to visit, an on-site visit will not be required. The on-site visit is typically done before the BPRC meeting. The BPRC Lead Coordinator will work with the DVR staff member and business consultant to schedule a meeting for the consumer to present their proposed business plan within 14 business days of receiving the business plan. The consumer may invite an advocate and others they choose to attend the presentation. If the committee or consumer will not be able to meet within this time frame, a reasonable extension can be agreed to by all involved parties. The Director/designee should be invited to this meeting.

Within 5 business days of the review meeting (day of the review is day zero), the BPRC will send a summary letter of decision and as applicable and action items, to the VRC and consumer. The BPRC attaches the summary letter with next steps in IRIS. The letter will include a due date for any additional information/documentation requested. BPRC Lead sends a next steps email to the VRC and includes the Director/Designee.

Examples of possible action items:

• Documentation showing that the amount of working capital needed per the DVR fee schedule is accessible for the consumer to use when needed (ex. Bank statement, written letter of commitment from family member, and credit card statement showing available balance). If the working capital is a loan, the documentation needs to include what the funds can be used for, the repayment schedule, and interest if applicable.
• Locating and securing a consultant to assist the consumer in opening their business.
• Rechecking local ordinances affecting the business if changes have occurred.
• Ensure all necessary permits and licenses are completed and approved to operate the business.
• Updates and/or clarifications to the Business Plan.
• Verification of valid Driver's License.
• Proof of insurance before business opens.
• Letters of support from potential future customers.
• Explore option of PASS Plan.
• Provide updated price quotes for equipment, supplies, and services.

After the VRC and consumer receive the summary letter, the VRC should contact the consumer to review next steps. The VRC is responsible for monitoring the due date for the action items outlined in the summary letter. If there are extenuating circumstances, an extension request should be sent to the BPRC Lead before the due date. If the requested documents/information isn't submitted by the date indicated, the VRC then denies self- employment service and provides a denial letter and appeal rights.

The consumer's written response must be submitted to the VRC by the date indicated. The VRC will share all information compiled with the BPRC for further consideration. If additional information is still required, an additional feedback letter will be provided to make a final decision. If the additional information/documentation is submitted timely, the BPRC makes the final decision, approval or denial, and document this in IRIS by attaching the letter of determination. If the business plan is not approved, the BPRC lead will send a denial letter and appeal rights. If the consumer is not able to submit required information included in the summary letter by the due date, and no exception for additional time has been approved, the VRC should inform the consumer that DVR is not supporting self-employment as an occupation and provide the consumer with a denial letter and appeal rights.

Amend the IPE to include all agreed upon services and equipment from the approved Business Plan.

At this point in the process the all funding sources have been identified, funding has been secured if appropriate, items are being purchased as outlined in the business plan and IPE, and consumer is ready to open the business.

There can be a tendency during Step 8 for DVR staff to be less involved and feel more at ease since the consumer is working. However, this is a time where the DVR staff member and other DVR staff should be even more involved and actively engaged with the consumer to ensure things are going well in the business.

When identifying costs of equipment, tools, and supplies in the Business Plan the costs should be determined by obtaining three price comparisons for each item/service and averaging the price comparisons. When the business plan is approved and the open action items have been completed, purchasing will begin. Only items approved by the Business Plan Review Committee may be purchased. Use the Rate of Determination and Required Documentation guidance for purchasing process. If an item required for the business is already part of the DVR Program Policy Manual/Addendum B DVR Fee Schedule, utilize the fees established in the schedule.

DVR staff are encouraged to visit the business, connect with the consumer, continue to provide guidance and counseling and provide other supports as needed. This is a critical time for the consumer and the success of their business.

Business Operations Consulting and Support Services

If a consumer requires additional support to open their business, this service can be used to ensure that the business plan is being followed. Please see technical specifications for business operations, consultation, and support services as needed.

It is also important to remind the consumer of DVR’s requirements and expectations related to successful case closure. (See Step 9.)

After all necessary criteria have been met for the individual case, the case can be closed as successful.

To determine if the consumer can be closed as successfully rehabilitated after 90 days:

• The closure criteria is the same as it is for all rehabilitation closures (90 days of at least a gross minimum wage at the level agreed upon - full time, half time, etc.), stable on the job, etc. (See DVR Policy Manual.)
• For self-employment cases, the minimum wage is based on the projected adjusted gross income (AGI) of the business, where the consumer is sole owner. This is not necessarily the same as the consumer’s income as they may be reinvesting the money into the business, paying employees, and not drawing an actual income at that time.
• The consumer's business must have brought in the adjusted gross income for the number of hours per week worked that had been agreed upon in the IPE for three consecutive months.

Calculation: (number of hours a week the IPE states the consumer will work) x $7.25/hr (minimum wage) x 4.3 (# of weeks in a month) = AGI

Examples:

10 hr/wk x $7.25/hr x 4.3 = $311.75 /month
20 hr/wk x $7.25/hr x 4.3 = $623.5 /month
25 hr/wk x $7.25/hr x 4.3 = $779.38 /month

Adjusted gross income hours worked must be documented through:

• Consumer shares profit/loss statement, tax documentation, accounting records, etc. or
• The consumer provides DVR a brief letter/email stating that "... the monthly gross income figures from my business for September 20XX is …, October 20XX is …, and November 20XX is …". If there is a cost for providing this information, DVR can assist with these expenses as determined appropriate.
  • If consumer does not have financial documentation and a letter/email cannot be obtained from the consumer, the VRC can document a direct conversation with the consumer where the consumer shares their wage/hr based on gross income of the business and hours worked to calculate their wage.
  • If the business does not meet minimum wage for hours worked, consult and consider if an exception is appropriate before closing the case unsuccessfully.

Businesses are able to be closed achieving wages commensurate with others self-employed in similar occupations. If this happens consult with the Self-Employment Lead and your supervisor.

After all closure criteria have been met the case can be closed successfully.