Self-employment is a desirable PASS goal for many individuals for a variety of reasons. An individual can schedule their own hours and work around the limitations of their impairments. If an individual is considering a self-employment goal, the PASS Specialist must discuss with the individual why self-employment is preferred over working for an employer in the chosen field. A self-employment goal will most likely require additional time, dedication, and effort on the part of the individual. A self-employment goal has limitations, both financial and circumstantial, that will not work for everyone. Ongoing family and community support will be key in determining the success of the business. An individual with a self-employment goal should seek out the expertise of a third party that is familiar with the chosen field. In many instances, Vocational Rehabilitation Services may assist individuals in establishing a business and paying for some start-up expenses. An individual may want to seek out the assistance of a Work Incentive Planning and Assistance (WIPA) agency or a benefits planner.

Self-employment can be extremely demanding for a person. For this reason, we require both the SSA-545 (Plan for Achieving Self Support) and a detailed business plan for self-employment goals. Starting a business requires the ability to plan, coordinate, communicate, raise funds, and manage. Developing a business plan allows the individual to address these issues early in the process of staring of business.

The plan should address how and when the business will generate enough income to meet the applicable criteria in SI 00870.006.

1. 1. 

   The plan should, at minimum include the following items.

   1. a. 

      Title page

      The business plan should start with a title page that provides the words “Business Plan,” the name of the business and the owner’s name, the owner’s address and telephone number.

   2. b. 

      Table of contents

      The business plan should include a table of contents listing the various parts of the plan. The individual should number the pages of the plan.

   3. c. 

      Description of the business

      This part should describe the business and answer the following questions:

      • •

        What products or services does the business sell?

      • •

        What is the business name?

      • •

        Where will the business be located?

      • •

        Why did the individual choose this type of business?

      • •

        What skills, experience, education, and training does the individual bring to the business?

      • •

        What are the individual’s goals for the business?

      • •

        What is the action plan to achieve these goals?

   4. d. 

      Marketing the business

      Product and service description

      • •

        What is the product or services?

      • •

        What is the demand for this product or service within the individual’s geographic area?

      Description of the market

      • •

        Who is the customer?

      • •

        How does the individual recognize potential customers?

      • •

        Is the business involved in a fad or a trend?

      • •

        How does the individual expect the market to grow or change over the next few years?

      This section can include any market research studies by industry experts or research the individual has done.

   5. e. 

      Competition

      • •

        Who is the competition?

      • •

        What are their strengths and weaknesses?

      • •

        How do the individual’s prices and quality compare to the competition?

      • •

        What advantages does the individual have over the competition?

   6. f. 

      Selling Strategy

      • •

        How will the business deliver the product or service?

      • •

        How will the business price the product or service? How did the individual derive the price?

      • •

        What is the advertising or marketing plan?

   7. g. 

      Organization

      The individual should include information about the operation, including the management, of the business.

   8. h. 

      Production

      • •

        Who will do the work?

      • •

        How many does the business employ?

      • •

        What relationship, if any, do the employees have with the owner?

      • •

        Where will the work take place?

      • •

        When will the business begin making the product or providing the service?

      • •

        What is the expected rate of production or frequency of service?

   9. i. 

      Quality Control

      • •

        How will the business assure quality?

      • •

        Describe the industry standard for quality in the business.

      • •

        How will the business be competitive if it cannot meet or exceed the industry standard?

   10. j. 

       Legal Structure

       • •

         What is the business structure; i.e. sole proprietorship, partnership, or incorporation?

       • •

         Does the individual own the business with anyone else?

       • •

         Are there any permits or licenses needed to operate the business?

   11. k. 

       Management

       • •

         How will the individual manage the business on a daily basis?

       • •

         Who will be responsible for financial records? Will the business require a certified accountant or attorney?

       • •

         Will the business management change in the future?

       • •

         What system will the individual use to manage the records?

       • •

         Does the individual have a mentor or knowledgeable individual in the field to offer advice?

   12. l. 

       Other issues

       • •

         Are there any other issues that need addressing?

       • •

         Does the business require insurance? If so, what type and how much coverage is required.

   13. m. 

       Financial Plan

       Costs

       • •

         How much will the individual earn?

       • •

         What equipment or supplies does the business need to run?

       • •

         What resources does the individual already own?

       • •

         How will be business be financed?

       Cash flow projections

       This section should include monthly projections. These projections should include the individual’s “best guess,” considering “high side” and “low side” numbers.

       Operating budget

       • •

         This section should include a monthly budget for the first year.

       • •

         This section should also include profit and cost estimates for the duration of the PASS plan and at least one year beyond its expected completion.

   14. n. 

       Supporting material

       • •

         This section should include any documentation to support the prior content of the business plan.

       • •

         This section can include such items as brochures, business cards, summaries of market research studies, and references for the individual.

   15. o. 

       Business loans

       If the individual is applying for a loan, the section should provide the following information:

       • •

         How much money is the individual borrowing from a third party?

       • •

         How will the individual use the funds from the loan?

       • •

         Does the individual have credit problems? If so, how will these problems be resolved?

   NOTE: If there have been any prior agreements or discussions regarding loans with the third party, the individual should submit documentation.

2. 2. 

   Evaluating the business plan

   An individual should not delay submitting a PASS application because the business plan is not yet written or complete. The PASS Cadre can approve the initial expense of developing or evaluating a business plan. The Cadre will review the PASS after a three-month period to evaluate the business plan.

   Do not deny a PASS because the business plan does not cover the required elements. If the individual is willing to work to amend the business plan, provide assistance or direction as needed. If appropriate, refer the individual to a third party who can help 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 Vocational Rehabilitation Agencies, local chambers of commerce, local banks, and appropriate staff at local colleges and universities.

An individual can submit a PASS plan for a self-employment goal to help cover start-up expenses only. An individual’s PASS plan should not extend beyond the start-up period. Once the start-up period has ended, the individual has purchased the items included in their plan, and the individual has met the initial milestones, the plan must be bringing in sufficient profit to support on-going business expenses.

The PASS Cadre will consider the following when making a decision on a PASS for self-employment:

• •

  Does the individual have their Ticket assigned to an Employment Network (EN) or are they working with Vocational Rehabilitation Services (obtain the Individual Employment Plan, IEP, if so).

• •

  What additional capital does the individual have besides PASS funds? Do they have investors, a small business loan, or VR financial support?

• •

  Does the individual have outstanding debt that would prohibit further investments in the business, or encumber the ability to cover living expenses?

• •

  What additional supports does the individual have in place for their business? Do they have a partner or family support?

• •

  Are all start-up expenses listed in the plan and will PASS funds be able to cover everything?

• •

  Does the individual require specialized training or additional education? Is this training included in the steps (Part C) of the plan?

• •

  Has the individual had a prior PASS? If so, did they follow through with milestones and accounting provisions?

• •

  Does the individual have profit and loss statement? Does it show that the business will make a net profit after the start-up period? Is the profit enough to replace their Title II benefits or significantly decrease their dependence on SSI per SI 00870.006A.5.

• •

  Does the individual have a representative payee? Does the payee understand the requirements of the plan? For reporting responsibilities refer to SI 00870.023C.10.a.

If the PASS Specialist cannot approve the plan for self-employment, we should re-contact the individual to inquire if they want to amend the goal to work in the chosen field for an employer. For more information, see SI 00870.025A.3. for modification of a PASS.

If the PASS plan is approvable, post the net earnings from self-employment to the iSEI screen and exclude the PASS/business account as a resource on the RFIA screen in MSSICS. Add remarks to both screens and on the SSR as appropriate.

The Cadre will complete a progress review within six months of the approval to ensure that the individual is following the plan and meeting the milestones.

The PASS Cadre will complete a progress review each year within the first quarter, to obtain the tax return from the prior year per SI 00870.025.