SI00870026 THE SELF-EMPLOYMENT PASS
A. BACKGROUND -- NEED FOR A BUSINESS PLAN
Self-employment can be a way for people with disabilities to circumvent
some of the barriers they encounter when trying to work. Being
self-employed can be extremely demanding for the person and requires the
ability to plan, coordinate, communicate, raise funds and manage. Putting
together a business plan helps the person address these issues very early
in the process of starting a business.
B. POLICY -- BUSINESS PLAN REQUIRED
A PASS that has an occupational goal in self-employment must include a
detailed business plan that covers, at a minimum, the items shown on the
outline in C. below. If not explained elsewhere in the PASS application,
the business plan should address how and when enough income can be
generated for the individual by the business to meet the applicable
criteria in SI 00870.006A once the start-up period discussed in SI
00870.006B.4. is completed.
C. OUTLINE OF A BUSINESS PLAN
1. Overview of the Outline
The items at SI 00870.026C.2. - SI 00870.026C.7., follow an outline of a
business plan, and identify the kinds of information that, at a minimum,
a business plan must contain.
2. Title Page
The business plan should start with a title page. The title page should
provide the following:
o The words, "Business Plan"
o Name of business and owner's name
o Owner's address and telephone number
3. Table of Contents
The business plan should have a table of contents listing the various
parts of the plan. The pages should be numbered.
4. General description of business
This part of the business plan should describe the business the person is
interested in starting. It should answer the following questions:
o What services or products will be offered?
o What name will the business go by?
o Where will the business be located?
o Why was this business chosen?
o What skills and experiences does the individual bring to this
business?
o What are the person's goals for this business?
o What is the action plan to achieve these goals?
5. Marketing the Business
a. Product and Service Description
This section should answer the following:
o What is the product or service of the business?
o What demand is there for that product or service?
b. Description of Market
This section of the business plan should provide information about the
businesses or people who will be buying the goods or services produced by
the business. This section should provide answers to questions such as:
o Who is the customer?
o How does the individual know?
o Is the business involved in a fad or part of a trend?
o How does the individual expect the market to grow or change over
the next few years?
Additionally, the section should describe any market research studies by
industry experts or research the individual has done.
c. Competition
This section should list the business' competitors and identify their
strengths and weaknesses. It should compare prices, product quality,
etc., and explain the advantages the business will have over the
competitors.
d. Selling Strategy
This section of the plan should provide information as to how the
business will go about pricing and selling the goods or services. It
should provide information to questions such as the following:
o How will the business deliver the product or service?
o How will the product or service be priced? Based on what?
o What advertising will the business do?
o What marketing promotions will the business do?
6. Organization
This section should provide information about the operation, including
the management, of the business.
a. Production
This section should provide details concerning how the product will be
made or how the service will be performed. It also should clarify who
will make the product or perform the service by answering questions such
as:
o Who will do the work?
o How many people will be involved?
o What relationship, if any, do the people have to the individual
owner?
o Where will the work be done?
o When will business begin making product or providing service?
o What is expected rate of production or frequency of service?
b. Quality Control
This section should provide information regarding the process to ensure
the quality of the goods or services by providing answers to questions
such as:
o How will the business assure quality?
o What is the industry standard? (Describe it.)
o How will the business be competitive if it can't match or better
the industry standard?
c. Legal Structure
This section should provide the particulars about the legal form of the
business; i.e., whether it is to be a sole proprietorship, partnership,
or incorporation. It should identify whether more than one person owns
the business and include any agreements. It also should identify any
permits or licenses needed.
d. Management
This section should identify the people involved in running the business
by providing answers to questions such as:
o How will the business be managed day-to-day?
o Who will be responsible for monthly financial records? Will an
accountant be involved?
o How will management change in the future?
o How will the business records be maintained?
o Will an attorney be involved?
o Are there other people to turn to for good advice? Who are they
and what is their relationship to individual?
e. Other Issues
This section should include any other issues that are pertinent to the
business, such as the type and amount of insurance to be carried by the
business.
7. Financial Plan
a. Costs
This section should provide details regarding the expected costs for the
business. It should provide answers to questions such as:
o How much will the worker earn? Will production be timed and priced
by unit or task completed per hour?
o What equipment and supplies will the business need?
o What resources does the business have available?
o What financing will be needed for the business? See e. below if
the business plan is part of a request for a loan.
b. Cash Flow Projections
This section should include monthly projections. These projections should
include the individual's "best guess," giving "high side" and "low side"
numbers.
c. Operating Budget
This section should provide a monthly budget for the first year. It also
should include profit and cost estimates for the duration of the PASS and
at least a year beyond its expected completion.
d. Supporting material
This section should include any documentation to support the prior
statements made about the business. Although not all inclusive, it should
include such items as: brochures, business cards, summaries of market
research studies, and references from people who know the individual or
the business.
e. Purpose and Amount of Loan
o If a loan is to be sought, this section should provide information
relative to the following:
o How much money is the business looking to borrow from a third
party? How will the money be used?
o Does the individual have any credit problems? If yes, the problem
should be described and an explanation included as to how the
problem has been or will be resolved.
NOTE: If there have been any discussions with the third party, the PASS
should describe the outcome of the discussions.
D. PROCEDURE -- EVALUATING A BUSINESS PLAN
Do not deny a PASS because the business plan does not cover required
elements. If the individual is willing to work on the business plan,
provide assistance or direction as needed. For example, in some cases,
this may involve asking a few questions which the individual may know or
quickly determine. Remember, the costs associated with developing a
business plan may be included in the PASS. Treat the development of a
business plan in the same fashion as a VR Evaluation.
If appropriate, refer the individual to a third party who can help the
person develop a detailed business plan. Such sources include the U.S.
Small Business Administration and its sponsored organizations, the
Service Corps of Retired Executives (SCORE) and Small Business
Development Centers (SBDCs), State VR agencies, local chambers of
commerce, local banks, and appropriate staff at local colleges and
universities.
[Last Change: 09/00]