TN 9 (07-00)
SI 00870.026 Business Plans
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:
The words, “Business Plan”
Name of business and owner's name
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:
What services or products will be offered?
What name will the business go by?
Where will the business be located?
Why was this business chosen?
What skills and experiences does the individual bring to this business?
What are the person's goals for this business?
What is the action plan to achieve these goals?
5. Marketing the business
a. Product and service description
This section should answer the following:
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:
Who is the customer?
How does the individual know?
Is the business involved in a fad or part of a trend?
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.
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:
How will the business deliver the product or service?
How will the product or service be priced? Based on what?
What advertising will the business do?
What marketing promotions will the business do?
This section should provide information about the operation, including the management, of the business.
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:
Who will do the work?
How many people will be involved?
What relationship, if any, do the people have to the individual owner?
Where will the work be done?
When will business begin making product or providing service?
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:
How will the business assure quality?
What is the industry standard? (Describe it.)
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.
This section should identify the people involved in running the business by providing answers to questions such as:
How will the business be managed day-to-day?
Who will be responsible for monthly financial records? Will an accountant be involved?
How will management change in the future?
How will the business records be maintained?
Will an attorney be involved?
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
This section should provide details regarding the expected costs for the business. It should provide answers to questions such as:
How much will the worker earn? Will production be timed and priced by unit or task completed per hour?
What equipment and supplies will the business need?
What resources does the business have available?
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
If a loan is to be sought, this section should provide information relative to the following:
How much money is the business looking to borrow from a third party? How will the money be used?
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, including a feasibility study for the business, can be included in the PASS.
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.