Where your future begins

Self-Employment

Status: Archived

Approved Date: June 28, 2023

Checklists

VR Specialist Checklist- New Business Start Up

  • Provide general information to client who expresses interest in Self –Employment. The following information must be shared so the client has an overview of the Self-Employment process, and to assist them in making an informed choice.
  • Refer to Benefits Orientation Chapter, as applicable, to ensure client is provided this team service to use information to make an informed choice about self-employment.
  • Review job readiness factors, address any issues, ensure stability prior to referring to self-employment specialist.
  • Discuss Advantages and Disadvantages of Self Employment Form
  • Complete Green and Red Flags for Self-Employment Form
  • Explain VR must ensure the occupation & self-employment are based on client strengths, limitations, abilities, informed choice and labor market demand.
  • Explain the local VR Self Employment Specialist will assign the Self-Employment questionnaire to explore the business idea, the client’s disability, possible work accommodations, and financial history. 
  • Explain the client’s FICO Score, Credit Report and other budget information will be obtained. Client's credit score is NOT used to eliminate the referral to self-employment feasibility.
  • Explain any criminal background information will be discussed. 
  • Explain assessments to evaluate aptitude in bookkeeping and business skills may be done. 
  • Document these discussions as a Team Service of Career Planning in QE2. 
  • General discussion with client of what self employment is and how the process works with Nebraska VR.  Discussion of the services we provide as part of the self employment process (feasibility/viability study, assistance with development of business plan, potential training assistance as appropriate, labor market information, assistance with identifying best funding options for start up costs, etc.)

VR Self-Employment Specialist Checklist- New Business Start Up

  • The Self-Employment Questionnaire and Personal Finances Worksheet is completed by the client unless, due to disability, assistance is needed.
  • Obtain FICO Score (www.creditkarma.com) and Credit Report (www.Annualcreditreport.com). 
  • The client and the local VR Self-Employment Specialist reviews Self-Employment Questionnaire and financial information (FICO score, credit report, and Personal Finances Worksheet, and tax returns, if applicable). Can client afford self-employment at this time?
  • Review and discuss Advantages & Disadvantages worksheet as well as the Green and Red Flags worksheet  
  • Discussion is held regarding any training/education requirements for business, if needed.  If there are training needs, these should potentially be explored and discussed with Self Employment Team.  Long term training should be completed prior to referring to self employment process (an IPE goal for competitive employment in the field can be written).  However, there should also be discussion with client of appropriateness of starting a business in a field where they have little or no experience, and perhaps the better option would be first gaining experience and reputation in the field prior to opening their own business.
  • The disability is explored with a focus on accommodations needed for client to be self-employed.
  • Refer the client to the Vocational Evaluator to assess aptitude for bookkeeping and business skills.  The current evaluations strongly recommended for assessment are the following eSkill Assessments—VR Self Employment and VR Accounting and Boookkeeping.  You may also request they complete the eSkill Standard Tax Accounting (this one is only required if client plans to do their own taxes)  If these assessments are unavailable, please confer with the Self-Employment Team for alternative assessments.  It should also be noted the evaluator SHOULD NOT be making determinations of whether Self-Employment is feasible for the client, based on the results of these assessments.  If the specialist makes the decision not to complete these assessments, a justification as to why needs to be documented in the task notes.  Self-Employment Team reviews justifications during the referral process.  
  • Discuss criminal history and if applicable request background check.
  • If client and Specialist agree to proceed with requesting a Feasibility Assessment, a referral to Statewide Self-Employment Coordinator is needed. Email Questionnaire, Finances Worksheets, FICO score, Credit Report, Vocational Evaluation and the criminal background check, if applicable.
  • Review case with Self Employment Team.  If all concur, VR Self-Employment Specialist refers client for a Feasibility Assessment.  If the decision is made to not move forward, or more information is needed, next steps will be discussed with the Self Employment Team on an individualized basis. Client will be provided with information and decision, as well as possible next steps, in order to ensure informed choice.

Feasibility and Business Plan Development:

  • Authorize Assessment Support:  Self Employment Consultation and specify it is to complete a Feasibility Assessment.  Authorize a maximum of 20 hours at the hourly rate to the vendor along with mileage in excess of 25 miles, if necessary. 
  • Coordinate meeting with the client, the Business Consultant and the VR Self-Employment Team to discuss Feasibility Assessment.  
  • If the Feasibility Assessment is negative, discuss other options.  Ensure client is aware of all their available options to ensure informed choice.
  • If client decides not to pursue or there are issues to consider before pursuing self-employment, the VR Self-Employment Specialist will refer the client back to originating Specialist.
  • If Feasibility Assessment is positive and agreement with all parties (Self Employment Team, Self Employment Specialist, Client) is made to move forward, Business Plan Development can begin.
  • Authorize for Assessment Support:  Business Plan Development.  This is generally a team service (if a community service is to be authorized, this must be approved by the Self Employment Team prior to authorization).  
  • Refer to ATP at start of Business Plan development if client needs accommodations.
  • Business Plan Development begins.  This should be an interactive process between the Self-Employment Specialist, the Statewide Self-Employment Coordinator, and the client.  Outside resources for building the business plan are also encouraged, such as the Nebraska Business Development Council and REAP.  
  • Business Plan Development should include the exploration of funding options for Small Business Start Up Costs.
  • Business Plan is completed and approved by the Self-Employment Team. 

Business Plan Implementation

  • Develops Individualized Plan for Employment.
  • Authorizes IPE Service:  Business Plan Implementation/Revision.  This is a team service.
  • The Self-Employment Specialist has a minimum of weekly contact during the period of Business Plan Implementation, which will be documented in QE2.
  • The Self-Employment Specialist will problem solve with the client any barriers encountered.  The Self-Employment Team can be utilized for assistance with this, when appropriate. 
  • Ensures, in conjunction with the Statewide Self-Employment Coordinator, any training or supports needed are implemented.
  • The Self-Employment Specialist will coordinate with the client and Benefits provider, if appropriate, and continue to provide benefits planning support throughout the implementation of the business plan.
  • Authorizes for Business start-up costs, if any are determined the responsibility of Nebraska VR within the business plan. Authorize under Planned Service: Small Business Start Up Expenses.
  • Ensure all receipts for self-employment start-up funds are sent to Statewide Self-Employment Coordinator and a copy also maintained in the client's case file. 

Business Monitoring/Case Closure

  • The Self-Employment Specialist is responsible for a minimum of monthly communication with the business owner during business monitoring.  These meetings can be in conjunction with the Statewide Self-Employment Coordinator.  
  • Responsible for performing case closure procedure, having conversations with client regarding case closure, and ensuring client is agreeable.
  • If appropriate, refer to Vested Interest Chapter for guidelines regarding items purchased for clients, and be sure to explain the process for tracking these items after case closure.  
  • VR Self-Employment Specialist must have a conversation with client prior to closure, informing them of our RSA guidelines to follow up with client six months after case closure and obtain written documentation of current financial status of business, and 12 months after closure to determine they still own the business.  

Reminders:

  • A Feasibility Assessment is required if client moves ahead with business idea.
  • If the business idea is feasible, a Business Plan is developed.  The client's needs are determined and funding sources identified.
  • Non-SSI/SSDI recipients - VR provides needed self-employment start-up expenses, not covered by other sources such as personal finances and loans, up to $6000.
  • SSI/SSDI recipients - VR provides needed self-employment start-up expenses at the amount determined in the business plan. Client contribution or exploring financial assistance such as loans is not required.  SSI/SSDI recipients are still expected to explore comparable benefits such as grants.
  • VR cannot purchase real estate or do new construction. 
  • VR does not support non-profit businesses.
  • A client must own at least 51% of business for start up or expansion services.

Statewide Self-Employment Coordinator Checklist- New Business Start Up

The following supports and services are provided to assist a client in making an informed choice and to implement a Self-Employment Plan.
 

Feasibility and Business Plan Development:

  • Reviews information gathered by local VR Self-Employment Specialist.
  • Sets up a meeting with Self-Employment Team and VR Self-Employment Specialist 
  • If VR does not support a Feasibility Assessment, case is referred back to Statewide Self-Employment Coordinator to coordinate a meeting with VR Self-Employment Specialist and the client.
  • If Self-Employment Team supports feasibility assessment, send Self-Employment Packet to Business Consultant with required authorization.
  • Works with client, VR Self-Employment Specialist, and other providers (Benefits Planner for self-employment, ATP) to facilitate feasibility of self-employment goal.
  • Sets up meeting with all appropriate parties to determine next step once feasibility is completed.
  • If feasibility is positive, moves forward with Business Plan. 
  • If not feasible, refers back to original referring VR Specialist
  • The Statewide Self-Employment Coordinator works with the client, the VR Self-Employment Specialist, and outside resources (when determined appropriate) to assist client in developing their business plan.
  • Assistive technology services (disability related expenses), training costs, external self-employment consultant and Business Plan Development are all part of the Business Plan Implementation.  They are not considered small business start-up items and are not included in the funding limit in Rule 72 for small business start-up expenses. 

Business Plan Implementation 

  • The Statewide Self-Employment Coordinator sets up a meeting with all involved parties to review the completed Business Plan.
  • Supports the client and monitors progress during the implementation process.
  • Refers and advocates for the client to other business funding sources, as appropriate.
  • Coordinates with the VR Self-Employment Specialist regarding any ATP accommodations.
  • Ensures, in conjunction with the VR Self-Employment Specialist, any training or supports needed are implemented.
  • Coordinates with the VR Marketing Team to ensure the new business is marketed to appropriate customers.
  • All receipts using VR start-up funds will be obtained from the local VR Offices.
  • Document Team Service for all of the above services as they occur 

Business Monitoring

  • Follows up with the business owner to provide assistance, to address problems, and to ensure the new business is progressing as planned.
  • Has a minimum of monthly communication/meetings with business owner.  These communications/meetings can be in conjunction with the Self-Employment Specialist.  
  • Client reports the monthly business income.
  • Monitors the Target Net Monthly Income Goal.
  • The monthly contact is recorded in the file along with the copy of the financial reports.
  • The Statewide Self-Employment Coordinator keeps VR Self-Employment Specialist informed of progress.
  • Coordinates with VR Self-Employment Specialist to determine when client is ready for VR successful closure.

Supported Self Employment

All criteria are the same for supported self-employment and for non-supported self-employment. 

If the individual has an authorized representative, ensure the representative supports the idea and is provided with information as the individual moves through the process.  The authorized representative should be invited to attend all meetings. 

 

VR Specialist Checklist

  • Work with client and family to select a provider.  Refer to Supported Employment chapter for assistance with this process.
  • Provide general information to client who expresses interest in Self –Employment. The following information must be shared so the client has an overview of the Self-Employment process, and to assist them in making an informed choice.
  • Refer to Benefits Orientation Chapter, as applicable, to ensure client is provided this team service to use information to make an informed choice about self-employment.
  • Review job readiness factors, address any issues, ensure stability prior to referring to self-employment specialist.
  • Discuss Advantages and Disadvantages of Self Employment Form
  • Complete Green and Red Flags for Self-Employment Form
  • Explain VR must ensure the occupation & self-employment are based on client strengths, limitations, abilities, informed choice and labor market demand.
  • Explain the local VR Self Employment Specialist will assign the Self-Employment questionnaire to explore the business idea, the client’s disability, possible work accommodations, and financial history. 
  • Explain the client’s FICO Score, Credit Report and other budget information will be obtained. Client's credit score is NOT used to eliminate the referral to self-employment feasibility.
  • Explain any criminal background information will be discussed. 
  • Explain assessments to evaluate aptitude in bookkeeping and business skills may be done. 
  • Document these discussions as a Team Service of Career Planning in QE2. 

VR Self-Employment Specialist

  •  Provide In-depth Self-Employment Exploration.  Refer for Benefits Assessment.
  •  Additional career exploration may be used to assist the client in determining whether pursuing self-employment goal is right for them. (i.e. Interest tests)
  • Discuss the business idea.  Have the individual describe the business in their own words.
  • Discuss the type of help the client thinks they will need.
  • Ensure the Guardian (or representative), if applicable, is informed and consents to this exploration.  Guardian or rep should be invited to every meeting.
  • Ensure all paperwork is completed, including the Self-Employment Questionnaire, Financial history and credit history (Fico Score), Personal finances Worksheet.  (Client may not have financial history or FICO score.  If no credit history, submit without the scores.)
  • Submit all paperwork if client wishes to pursue feasibility study to Statewide Self-Employment Coordinator.
  • Follow all steps for authorization of Feasibility Assessment and Business Plan.
  • Business Plan completed and Business Owner ready to implement business plan.
  • IPE development, to include extended service plan.  
  • Refer for Benefits Analysis Services as applicable.  
  • Authorize for Business Start Up Costs.
  • Business Owner communicates regularly (minimum every thirty (30) days) with the Statewide Self-Employment Coordinator or VR Self-Employment Specialist.
  • Business producing income.
  • Supports are stable including bookkeeping and billing.
  • Business reaches targeted net income goal.
  • If client is unable to reach net income goal but stabilizes at a lower income level for a minimum of three (3) months, a successful outcome may be considered.
  • All parties including DD Service Coordinator must agree on closure.
  • Long term support plan is in place.  Person transitions to their extended service plan.

Statewide Self-Employment Coordinator 

 Feasibility and Business Plan Development

  • The Statewide Self-Employment Coordinator ensures all meetings include the VR Self-Employment Specialist, along with the Authorized Representative, if applicable, and the Service Provider.
  • The Statewide Self-Employment Coordinator ensures accommodations are utilized by using Provider to assist with paperwork.
  • Notifies Business Consultant this is a Supported Self-Employment Client.
  • Reviews information gathered by local VR Self-Employment Specialist.
  • Sets up a meeting with Self-Employment Team and VR Self-Employment Specialist 
  • If VR does not support a Feasibility Assessment, case is referred back to Statewide Self-Employment Coordinator to coordinate a meeting with VR Self-Employment Specialist and the client.
  • If Self-Employment Team supports feasibility assessment, send Self-Employment Packet to Business Consultant with required authorization.
  • Works with client, VR Self-Employment Specialist, and other providers (Benefits Planner for self-employment, ATP) to facilitate feasibility of self-employment goal.
  • Sets up meeting with all appropriate parties to determine next step once feasibility is completed.
  • If feasibility is positive, moves forward with Business Plan. 
  • If not feasible, refers back to original referring VR Specialist
  • The Statewide Self-Employment Coordinator works with the client, the VR Self-Employment Specialist, and outside resources (when determined appropriate) to assist client in developing their business plan.
  • Assistive technology services (disability related expenses), training costs, external self-employment consultant and Business Plan Development are all part of the Business Plan Implementation.  They are not considered small business start-up items and are not included in the funding limit in Rule 72 for small business start-up expenses. 

 

Business Plan Implementation 

The Statewide Self-Employment Coordinator sets up a meeting with all involved parties to review the completed Business Plan.

  • Supports the client and monitors progress during the implementation process.
  • Refers and advocates for the client to other business funding sources, as appropriate.
  • Coordinates with the VR Self-Employment Specialist regarding any ATP accommodations.
  • Ensures, in conjunction with the VR Self-Employment Specialist, any training or supports needed are implemented.
  • Coordinates with the VR Marketing Team to ensure the new business is marketed to appropriate customers.
  • All receipts using VR start-up funds will be obtained from the local VR Offices.
  • Document Team Service for all of the above services as they occur.

Business Monitoring

  •  The Statewide Self-Employment Coordinator will contact the Business Owner and all of the Owner’s team including the Provider and the Authorized Representative when reviewing business progress.
  • Follows up with the business owner to provide assistance, to address problems, and to ensure the new business is progressing as planned.
  • Has a minimum of monthly communication/meetings with business owner.  These communications/meetings can be in conjunction with the Self-Employment Specialist.  
  • Client reports the monthly business income.
  • Monitors the Target Net Monthly Income Goal.
  • The monthly contact is recorded in the file along with the copy of the financial reports.
  • The Statewide Self-Employment Coordinator keeps VR Self-Employment Specialist informed of progress.
  • Coordinates with VR Self-Employment Specialist to determine when client is ready for VR successful closure.

Process

Self Employment Definition:

  • Generate excess cash flow from profitable operations by providing specific goods, products or billable services through at least 51% ownership of the business; earn income directly from one's own trade or profession.
  • Attain financial independence by maximizing earning capacity based on individual disability.

Other Definitions:

1.  VR Specialist- Counselor in the office with whom the case originates.  This person could be a bachelors or a masters level specialist.

2.  VR Self Employment Specialist- Counselor in the office who receives self employment referrals.

3.  VR Self Employment Program Specialist- Specialist who assists in Self Employment cases statewide.  This person is also the liaison between the field and the Self Employment Team, as well as the field and the person contracted to complete Feasibility and Business Planning.

4.  Professional Technical Assistance- any training required to start up or maintain a business. Examples include; accounting/Quickbooks, equipment operation, etc.  All professional technical assistance is funded as part of the start up costs and provided by non-contract vendors.

5.  Feasibility Study- Study completed to determine the viability of a self employment goal.  Job goal, functional limitations, supports, and labor market information are examples of things that are evaluated as part of this process.  A positive feasibility study is required in order to move forward with business planning.

6.  Self Employment Consultation- services provided by a contracted consultant to complete a feasibility assessment. 

7.  Business Plan Implementation/Revision- services provided ONLY by contracted consultant for capability statement, business plan revision and business expansion/stabilization.  

  • Capability Statement - statement required by businesses desiring to acquire federal contracts. Federal contractors are being required to submit a Capability Statement as part of the competitive screening process. 
  • Expansion/stabilization Report - clients already operating a business and in need of support in the growth or stabilization of the business.
  • Business Plan Revision - utilized when revision to a business plan are determined necessary and agreed upon by client and self employment team. 

 

Self-Employment Orientation and In-Depth Self-Employment Exploration and Discussion.

  1. Provide general information on the Self-Employment Process when a client expresses interest so a client can make an informed choice.  If client wishes to pursue Supported Self Employment all steps apply. (See: Checklist 1; Use the Self-Employment tools - Advantages & Disadvantages of Self-Employment and Green Flags/Red Flags {located in Forms & Tools.} )  (If client is requesting Supported Self Employment, use Supported Self Employment Checklist in conjunction with the others.)
  2. If the client wishes to pursue in-depth exploration of Self-Employment, refer her/him to the Self-Employment VR Specialist. 
  3. Document discussion results in QE 2 including the specific red flags and green flags identified.
  4. The client completes the Self Employment Questionnaire with or without assistance. Authorize to a DD provider of client's choice if client is choosing Supported Self Employment.  The VR Specialist and the client discuss and analyze the Questionnaire.  The purpose is to provide guidance and to address disability and vocational issues that impact the business idea.
  5. The VR Specialist refers the client to a VR evaluator to assess bookkeeping and business skills.  The current evals required for assessment are RAI Math, and the following Kenexas--Business Etiquette, Basic Office Skills (No Math) and Business Income Tax (this one is only required if they plan to do the business income taxes themselves).  If Kenexas are unavailable, please confer with the Self Employment Team for alternative assessments.  It should also be noted that the evaluator SHOULD NOT be making determiniations of the feasibility of Self Employment based on the results of the evaluations.
  6. If the client is a Social Security recipient, complete necessary releases and refer to VR Benefits Specialist for a general benefits orientation.
  7. The client completes the personal finance sheets.
  8. If the client and VR Self Employment Specialist agree to the next step of Feasibility Assessment, contact the Program Specialist for Self Employment to review the self employment packet.
  9. After review of the packet, the Program Specialist for Self Employment sets up a meeting to review all of the materials for feasibility with the Self Employment Team and the VR Specialist.
  10. Program Specialist for Self Employment completes a TASK entry in QE2 summarizing the basis for the decision of the above meeting.
  11. Self Employment Specialist refers for a Feasibility Assessment. The referral includes all the required information and the authorization for services including mileage over 25 miles.  Enter in QE 2 as Assessment Support-Self-Employment –Consultation (See provider information under forms & tools)
  12. If the client and VR Self Employment Specialist choose not to pursue self-employment at this time, refer the client back to the originating VR Specialist to explore other services. Task note basis of decision and why in QE-2.

Conduct the Feasibility Assessment

  1. The Business Consultant will conduct a Feasibility Assessment.  It will include: a determination if the business concept is feasible:  determination of sufficient demand for a product or service; determination if client possesses the technical, interpersonal and managerial skills to run a business and other information.  It will also include development of: a general market concept feasibility: a general market feasibility; a financial analysis and a SWOT (strengths, weaknesses, opportunities and threats) analysis. 
  2. Business Consultant sends copy of feasibility assessment and an invoice to the VR Self Employment Specialist and to the Program Specialist for Self-Employment.  
  3. The Program Specialist for Self-Employment coordinates a meeting with the Business Consultant, the VR Self Employment Specialist and the Client.  Preferably, the meeting is face-to- face.  If face-to-face meeting is not possible, set up video conferencing or another method of communication
  4. A meeting is required whether the Feasibility Assessment is positive or negative to review the results of the feasibility. 
  5. If the Feasibility Assessment is positive and everyone agrees, authorize to the Business Consultant for development of a business plan.  The Self-Employment Program Specialist  discusses next steps with the client. 
  6. If a decision is made for Business Plan development, the VR Self Employment Specialist meets with the client to provide options for selection of Benefits Planning vendor and a referral is then made for Benefits Planning and Analysis.
  7. Client will provide information to the Self-Employment Program Specialist and the Business Consultant in a timely manner.
  8. If the Feasibility Assessment is negative, discuss alternatives with the client and the VR Self Employment Specialist and refer back to originating VR Specialist.

Develop the Business Plan

  1. Business Consultant, Program Specialist for Self Employment, VR Self Employment Specialist and client will develop a business plan.   
  2. VR Self Employment Specialist authorizes for up to 18 hours for Business Plan Development and milage in excess of 25 miles.
  3. While Business Plan is being developed, the VR Self Employment Specialist refers to ATP if accommodations will be needed.  Reason for referral is marked Self-Employment Consultation.
  4. The Business Consultant submits the completed plan
  5. The Program Specialist coordinates a meeting with the Business Consultant, the client and the VR team and other providers as appropriate to ensure the following criteria are discussed during the meeting:
  • The business idea or concept is sound, based on an appraisal of similar ventures and their result.
  • 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.
  • 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.
  • 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.

       6. The VR Self-Employment Specialist develops the IPE if the above criteria are met and the client and VR agree to business plan. Both agree on a targeted net monthly income. 

       7.  VR Self-Employment Specialist agrees with the Business Plan.  VR responsibilities are specified on IPE.  Client responsibilities are outlined on the IPE including submitting recipts and the required monthly targeted income information with the VR Program Specialist. Move the client to services initiated-VR Services in QE 2.

       8.  VR Self-Employment Specialist authorizes the appropriate business start-up costs, skill training and/or disability related costs as described in the Business Plan and the ATP report if appropriate.  Submits to High Cost Fund if an individual item costs over $2000.

     9.  Upon completion of purchase of start-up items and the business is operating at the targeted monthly income, place the individual in Services Initiated-Employment follow-up milestone.

Business Plan Implementation

  1. The Self Employment Program Specialist will support the client and monitor the client’s progress during the implementation process.
  2. The Program Specialist will refer and advocate for the client to other business funding sources.
  3. The Program Specialist will problem solve with the client any barriers encountered.
  4. The Program Specialist will coordinate with the VR specialist any ATP accommodations.
  5. The Program Specialist will ensure any training or supports needed are implemented.
  6. The Program Specialist will coordinate with the client and Benefits Planner, if appropriate.
  7. The Program Specialist will coordinate with the VR marketing team to ensure the new business is marketed to appropriate customers.
  8. The Program Specialist has a minimum of weekly contact during this period.
  9. All of the above services will be documented in QE 2 as they occur.

 

Business Monitoring

  1. The Program Specialist follows up with Business owner to review business process to provide assistance, to address problems and to ensure the new business is progressing as planned.
  2. The Program Specialist has monthly communication with business owner.
  3. Client reports the monthly income business is producing.
  4. Monitors the Target Net Monthly Income Goal. This targeted income goal can be revised if agreed upon by the client, VR Specialist and Self Employment Program Specialist.
  5. The monthly contact is recorded in the file along with the copy of the financial reports.
  6. The Program Specialist notifies VR Specialist of progress.
  7. Document all progress in QE 2.

 

Successful Closure

  1. The client submits the monthly financial statement. When the client reaches the Target Net Monthly Income Goal, an outcome may be considered.
  2. If a client is unable to reach the Target Net Monthly Goal, but stabilizes at a lower income level for a minimum of 3 months, a successful outcome may be considered if the client is in aggrement.
  3. For reporting purposes in QE2 never exceed 40 hours for the number of hours the individual is working during the week.

Policy

Self Employment Definition:

  • Generate excess cash flow from profitable operations by providing specific goods, products or billable services through at least 51% ownership of the business; earn income directly from one's own trade or profession.
  • Attain financial independence by maximizing earning capacity based on individual disability.

IRS Guidelines to determine whether something is a business or hobby:

In order to make this determination, taxpayers should consider the following factors:

  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Does the taxpayer depend on income from the activity?
  • If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
  • Has the taxpayer changed methods of operation to improve profitability?
  • Does the taxpayer or his/her advisors have the knowledge needed to carry on the activity as a successful business?
  • Has the taxpayer made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?

The IRS presumes an activity is carried out for profit if it makes a profit during at least three of the last five tax years, including the current year.

Nebraska VR Self-Employment funds will not be used for the development of the following business models:

  • Multi-Level Marketing-Ponzi/Pyramid Schemes, door to door where you first purchase the product, then attempt to resell at a profit, etc.
  • Speculative ventures-Investment ventures, such as purchasing items, with the hope they will increase in value and can be resold for profit, stock market investments, etc.
  • Illegal or "under the table" business-Any illegal ventures or anything where you are not paying taxes on income earned
  • Real Estate-Purchasing of real estate for the purpose of flipping or renting.
  • Passive ownership (Business Investment-no active management)
  • Commission based sales
  • Hobbies (non-income producing)
  • Dealers of rare coins and stamps
  • Pornographic or illicit business
  • E-Bay/Online Buy/Sell/Trade or Resellers- Buying/acquiring random items and reselling them at a profit.
  • Serial plaintiffs (Litigation)
  • Gambling Activities
  • Churches and organizations promoting religious objectives
  • Non-profit or charitable organizations

 

The following planning, client and funding requirements are essential to achieving a successful self employment/small business venture.

Planning Requirements

  • Expert Consultation: Use expert technical consultation when a client is considering self-employment as a vocational option. Private consultants who have the required expertise and have a agreement with the agency provide technical consultation. The amount of consultation varies depending on the complexity of the venture.
  • Business Plan:  Clients 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 client with help from the consultant and submitted by the business consultant. The business plan must contain information presented in the Business Plan Outline.
  • 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.

Client Requirements

  • Maximize Potential: The intent of self employment is to maximize the individual’s potential based on disability and to become self-sufficient.
  • Own Business: The client must own or be the majority partner (51%) in the business. Non-profit organizations are not owned by the individual and therefore not supported by the agency.
  • Provide Financial Information: The individual must provide monthly financial information as requested by Nebraska VR Self-Employment Program Specialist .

Funding Requirements and Assistance

  •  Self Employment Consultation and Business Plan Implementation/Revision and other consultation services are used to conduct market analysis, develop business plans, and provide guidance to secure resources from sources other than the program for the establishment and operation of the small business enterprise.
  • Expansion of a business. The Program Director of Counseling must approve any request for expansion of an existing business. Approval will be based on whether expansion of the existing business is required to enable the recipient to earn a living wage.  A minimum of three years (3) years of the most recent business federal tax returns must be submitted as part of the approval process. If approved, the requirements below for new business start up expenses, expenses not allowed, and application of resources apply. If business is less than one (1) year old, it is considered a new business start-up.
  • Maintaining an Existing Business. Program financial assistance is available for assistive technology, adaptive devices, specialized equipment, and /or job site modifications which compensate for limitations resulting from a disability and to assist the individual to maintain their self employment.  Most recent full year of business tax returns must be submitted and reviewed to see if business viable.
  • New Business Start-up Expenses. Expenses related to starting a new business include the following and are limited to an establishment period not to exceed six (6) months.
    • Occupational licenses, franchise fees, and business permits including those required by any unit of state or local government.
    • Tools and equipment.
    • Stocks and supplies.
    • Operating costs such as rent, utilities, business liability insurance and advertising.
    • Vehicle acquisition.
    • Professional technical support (Quickbooks training, etc)

Program financial assistance cannot be used for:

  • Purchase of land or buildings; or
  • Construction, renovation, or remodeling of buildings or space to be used.

The recipient must first apply personal and/or family resources and all financing available through grants or loans to the required business start-up expenses.

  • Program assistance is available for the remaining business start-up expenses, up to the limit in Rule 72 ($6000). Examples of specific loans available to individuals with disabilities include:
    • Nebraska Alternative Financing Program (Administered by Easter Seals)
    • Nebraska Telework Loan Program (Administered by Easter Seals)
    • Small Business Administration  (SBA)
    • Rural Enterprise Assistance Project (REAP)
    • GROW Nebraska
    • Farm Service Agencies
    • US Department of Agriculture
    • Veteran's Administration

Exceptions

The Program Director of Counseling may grant exceptions to the limit on new business start up expenses after considering the following factors:

  • The availability of financing from the Nebraska Department of Economic Development, the Small Business Administration, programs administered United States Department of Agriculture, or other programs and entities experienced in the financing of start-up small businesses;
  • The reasons for the availability or non-availability of financing from the programs and entities listed above;
  • The limit for business start up expenses in Rule 72 along with other resources are insufficient to establish the small business enterprise; and,
  • The availability of other employment options consistent with the recipient’s unique strengths, resources, priorities, concerns, abilities, capabilities, and interests.

Other Considerations

  • Authorize agency funds for business start-up costs to vendors when possible since the state pays no state sales tax while the client would.
  • Assistive technology services (disability related expenses), self employment consultant and business services are all part of the business plan Implementation/Revision are not considered small  business start up items and are not included in the funding limit in Rule 72 for small business start up expenses. 

Background & Training Information

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 will 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.

  • Cover Sheet including; business name, owner name, business address, phone, email, website
  • Description of Business/Executive Summary: limit to 1 page, include:
    • General Business Description
    • Mission Statement/Business Philosophy
    • Goals/Objectives—including Target Net Monthly Income Goal (TNMIG)
    • Target Market
    • General Industry Description--business strength, competitive edge, reason it will succeed
    • Legal Form of Organization
  • Industry Background
    • Product, Services and Markets
    • Competition
    • Location of business
    • Operational Plan
    • Management and Organization
    • Marketing Plan
  • Financial Data
    • Sources and Uses of Funding Table—sources (business owner, Nebraska VR, loans, other), uses (equipment, inventory), etc.
    • Capital Equipment List—include short rationale of need for each item
    • Cash Flow Projections—2 years
    • Break-Even Analysis
    • Projected Profit and Loss\Balance Sheets—2 years
    • Owner Financial Information—Personal Financial Statement
    • Risk Mitigation/Contingency Plan
    • Accounting issues—how records will be kept and who will be responsible *Supporting Documentation
    • Written cost estimates for equipment, services, etc. for which Nebraska VR funds will be used, according to the following guidelines:

      $1,999.99 or less—1 estimate
      $2,000--$4,999.99—2 estimates
      $5,000 and up—3 estimates

    • Samples of Forms, agreements, business organization papers,
    • logos, etc.
    • Photos of products, business location, etc

Forms Associated to This Chapter


back to top