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 one's own trade or profession.
- Attain financial independence by maximizing earning capacity based on individual disability.
Nebraska VR Self-Employment funds will not be used for the development of the following business models:
- Multi-Level Marketing
- Speculative ventures
- Illegal or "under the table" business
- Real Estate
- 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 sellers
- 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.
- 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.
- 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
- Provide funding for technical assistance and other consultation services to conduct market analysis, to develop business plans, and guidance to secure resources from sources other than the program for the establishment and operation of the small business enterprise.
- Provide funding for expansion of a business. The 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 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.
- 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 assist the individual to maintain their self employment. Minimum of two years of business tax returns must be submitted and reviewed.
- 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 including, but not limited to, legal and accounting services.
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. 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
The 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 by the Under Secretary for Rural Development of the 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.
- 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), technical assistance and skill training 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. 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