Supported Self-Employment Toolkit V2.0

Step 1 – Provide the Nine-Step Overview of Self-Employment with the Consumer / Guardian

• DVR staff member must review the following steps with the consumer to help them understand the process, how self-employment is defined and applied, the DVR fee schedule, and the DVR staff member's professional determination of the appropriateness of the occupation for the consumer.
  • Staff members should use the DVR Staff Self-Employment Guide and Job Aid (Staff Only, Internal Link) to assist them through each step. The DVR Staff Self-Employment Guide and Job Aid is a tool designed to assist DVR staff in ensuring critical discussions and self-employment checkpoints are being completed as the consumer progresses through the Self-Employment toolkit.
  • Staff members should use the DVR Self-Employment Staff Checklist to track the consumer's progress as they move through the toolkit. This can be found in IRIS under the employment tab.

Step 2 – Explore the Occupation, Career / Discovery Profile, and Develop the Business Planning Team

• A DVR staff member can assist the consumer in identifying an appropriate occupational goal through a Comprehensive Assessment (Staff Only, Internal Link) which could include job shadows, internship/temporary work, functional capacity evaluation, etc.
• Exploring the occupation must be prepared through a Career Profile or a Discovery Profile, and vocational guidance and counseling.
• The occupation must be agreed upon by the Vocational Rehabilitation Counselor (VRC) and consumer. If self-employment is pursued, a Business Planning Team must be assembled. The Business Planning Team will be a part of the entire process and includes the consumer as well as other entities.

Step 3 – Evaluate the Consumer and Business Planning Team for Self-Employment

• A VRC works with the Business Planning Team to explore self-employment. This consists of exploring many factors including personal traits, disability factors, transferable skills, credit history, personal resources, family support, current debt and obligations, criminal history, etc.
• Four items must be completed by the Business Planning Team, with technical assistance and guidance from the VRC to determine if the consumer is a candidate for self-employment in the agreed upon occupation:
  • Personal Finance Worksheet, recent within 90 days
  • Credit report with FICO score
  • Entrepreneur Readiness Questionnaire (Tiers 2 and 3 Only)
  • Passing score on the Business Assessment Scale (BAS) (Tiers 2 and 3 only)

Step 4 – Determine Feasibility of Proposed Business and Next Steps

• Identify the feasibility of the proposed business idea to assist the consumer and DVR in determining if DVR should proceed with the proposed business idea. For consumers in Tiers 2 and 3, a referral should be made to a business consultant for feasibility services following the feasibility technical specifications.

Step 5 – Develop the Individualized Plan for Employment (IPE) to Address Feasibility Action Items

• This IPE should be written for the occupation, focusing on skill development and completion of any required action items that were identified in the feasibility analysis.

Step 6 – Develop Business Plan and Amend the IPE to Include Business Plan Development Services

• If the Business Planning Team continues to be in support of self-employment after completing any action items from the feasibility analysis, the IPE should be amended to include business plan development services. For consumers in Tiers 2 and 3, a referral should be made to a business consultant for business plan development services following the business plan technical specifications.

Step 7 – Review Business Plan

• The business plan is presented to and reviewed by the Business Plan Review Committee (BPRC). The BPRC member taking notes will send a summary letter to the VRC and Director/Designee. After approval, the summary letter will be sent to the consumer based on their preferred communication method and attached in IRIS, DVR's case management system. The letter will include a due date for any additional information/documentation that is being required or will indicate that the business plan is approved or denied for implementation.

Step 8 – Open the Business

• In this step, the consumer works to open the business. While the consumer is working towards opening their business, they may seek input from a business consultant.

Step 9 – Successfully Close DVR Case

• Once employment and wage standards are met, the case should be closed successfully.

• DVR may provide funding for an approved business plan’s start-up costs in accordance with the Supported Self-Employment Start-up Fee Schedule.
• DVR’s financial participation will be used to purchase initial start-up services and equipment identified in the approved business plan and must follow DVR’s purchasing policies.
• The business' start-up cost excludes costs for training, assessments, and rehabilitation technology services. However, these costs can be identified in the business plan. Business related training should be provided after business plan approval.
• A consumer must demonstrate that they have access to the working capital.
  • Working capital is defined as: Demonstration of funds available to cover costs of day-to-day operations of business and obligations (e.g., maintaining inventory, short term obligations and expenses, employee wages, etc.). It is the money needed to keep the business running until it generates enough revenue to pay for itself. This could be through cash, loans, grants, investors, etc. This does not include DVR funds, the owners draw, or depreciation amounts.
  • DVR calculates monthly working capital as the monthly average expenses over the first year of operations. This average calculation does not include DVR contributions for start-ups.

    Note:
    Tier 1 requires two (2) months of working capital.
    Tier 2 requires four (4) months of working capital.
    Tier 3 requires six (6) months of working capital.

  • Prior to the DVR business plan review, the consumer must present documentation demonstrating that they have access to the required working capital. Working capital can be obtained through a credit card, a family member, a friend or a loan. Demonstration could include a notarized letter, credit card line of credit or if a loan, include what the funds can be used for, the repayment schedule and considerations, and interest, if applicable.
  • All consumers must have access to working capital regardless of their SSI/SSDI status.

If a consumer is interested in self-employment but has been provided with self-employment start-up funds in any case that was closed in the last five (5) years, consult with a DVR director/designee.

Tier 1 – Total cost of business (up to $6,000), paid by DVR

A Tier 1 business is intended for individuals that are interested in starting a very small business that is easy to establish and requires little investment from DVR. These businesses should open within three to six months after the Business Plan is approved.

Note: The VRC must consult with the local WDA self-employment contacts, and/or the statewide self-employment lead. No paid business consultants are typically used for Tier 1 businesses. BAS and Feasibility Analysis are also not used in Tier 1 businesses.

The final determination on whether the consumer has a feasible business and should proceed with the steps in the toolkit (Step #3), would be determined by the local WDA Director or their designee.

Tier 1 – Requires the following:

• Background check (CCAP and DOJ) from consumer and/or guardian.
• Credit report with FICO score from consumer and/or guardian. If the consumer does not have a credit score but has a legal guardian, the legal guardian's credit score will be used. If the consumer has a credit score and a legal guardian, both the consumer and legal guardian's credit score will be used. If the consumer has two guardians, consult with the self-employment lead on whose credit score will be used for vetting.
  • Note: The credit score may be free; if it is not, DVR can fund the cost to obtain the score.
  • If the FICO score is below 640, they have no credit, and/or they can't pay their bills, the consumer should receive financial literacy services, then proceed with development of a simplified business plan.
• Simplified Business Plan (typically 1-2 pages).
  • Business overview
  • Resources
  • Marketing Plan
  • Business Financials
• Documentation of two (2) months of working capital prior to Director/Designee review of Business Plan.
• Personal financial worksheet.

Tier 2 – Total cost of business ($6,001 to $12,000), paid by DVR

A Tier 2 business is intended for individuals that are interested in starting a small business that typically requires a business consultant, and moderate effort to get going. These businesses should open within six to 12 months after approval of their Business Plan.

Tier 2 – Requires the following:

• Credit report with a FICO score from the consumer and/or guardian. If the consumer does not have a credit score but has a legal guardian, the legal guardian's credit score will be used. If the consumer has a credit score and a legal guardian, both the consumer and legal guardian's credit score will be used.
  • Note: The credit score may be free; if it is not, DVR can fund the cost to obtain the score.
• Background check from the consumer and guardian (Wisconsin Circuit Court Access, formerly CCAP and Department of Justice (DOJ).
• Employment Readiness Questionnaire (ERQ) filled out by the entire Business Planning Team. One ERQ should be filled out cooperatively by the Business Planning Team. This should be completed in one joint meeting by the entire business planning team.
• Business Assessment Scale (BAS) rates the entire Business Planning Team as one collective entity.
• Feasibility study completed by a business consultant. This should include a potential marketing plan.
• Business Plan completed by a business consultant using current technical specifications.
• Documentation showing four (4) months of working capital at the time of Business Plan Review.

Tier 3 – Total cost of business ($12,001 to $18,000), paid by DVR

A Tier 3 business is intended for individuals that are interested in starting a small business that requires business consultant, a comprehensive business plan, and may be required to consider funding outside of DVR. These businesses should open within 12 to 18 months after Business Plan is approved.

Tier 3 – Requires the following:

• Credit report with a FICO score from consumer and/or guardian. If the consumer does not have a credit score but has a legal guardian, the legal guardian's credit score will be used. If the consumer has a credit score and a legal guardian, both the consumer and legal guardian's credit score will be used.
  • Note: The FICO score may be free; if it is not, DVR can fund the cost to obtain the score.
• Background check from the consumer and guardian (Wisconsin Circuit Court Access, formerly CCAP and Department of Justice (DOJ)).
• Employment Readiness Questionnaire (ERQ) filled out by the entire Business Planning Team. One ERQ should be filled out cooperatively by the Business Planning Team. This should be completed in one joint meeting by the entire Business Planning Team.
• Business Assessment Scale (BAS) rates the entire Business Planning Team as one collective entity.
• Feasibility study completed by a business consultant. This should include a potential marketing plan.
• Business Plan completed by a business consultant utilizing current technical specification.
• Documentation of 6 months of working capital at the time of Business Plan Review.
• May require consideration of outside funding.

Notes:

• If the estimated total cost of the business exceeds $18,000 at the time of feasibility, consult with Director/Designee.
• Credit scoring models can help assess consumer credit risk scores. For example, a FICO score of 640 is just below a "good" credit score, which is typically a score at or above 670 for FICO. A good credit score can help a consumer qualify for a credit card or loan with a lower interest rate and better terms. A credit score of 640 is a measure of financial stability and an indicator of a consumer's ability to implement and maintain their business operation. Reviewing a DVR consumer's finances and having knowledge of their financial management helps determine the consumer's readiness for owning and managing a business.
• Financial solvency is a measure of a consumer's financial health. A consumer is financially solvent if they can meet their expenses with income earned through employment, retirement income, documented savings that is readily accessible, documented financial support from others inside or outside of the home, SSI/SSDI, and other financial supports including, but not limited to, FoodShare, rental assistance, and energy assistance.

This toolkit was developed for consumers, DVR staff, stakeholders and the public to understand the supported self-employment process.

Note: Reassure the consumer that they will be supported throughout the process. Any material provided to the consumer must be in an accessible format. After reviewing the toolkit with consumers, some consumers may no longer be interested in self-employment. This decision may occur at any step of the process. This decision is okay, as it is part of the informed choice process of the consumer.

Initial counseling discussion with the consumer on self-employment

• Explain that DVR has only one purpose – to provide VR services for individuals with disabilities so that such individuals may prepare for and engage in gainful employment (i.e., minimum wage or above for hours worked).
• Use Appendix 1 to facilitate discussion with the consumer on whether they have thought about the advantages and disadvantages of self-employment.
• Explain that DVR must ensure that the occupation and self-employment are appropriate, given the consumer’s strengths, limitations, abilities, concerns, capabilities, interests, priorities and informed choice.
• Supported self-employment cases involve person-centered planning. This process emphasizes the practice of bringing together DVR staff, families, friends, supporters and others to help consumers explore their interests, guide them through the process, and assist them in successfully achieving their goal. The person(s) who agree to assist the consumer throughout this process come together as a team. This team is called the Business Planning Team.
• Explain that DVR staff use the Entrepreneur Readiness Questionnaire for Tiers 2 and 3 businesses. That the Business Assessment Scale is used by DVR to assist them in determining if the occupation and self-employment are appropriate for the consumer with the help of their Business Planning Team.
• Explain that the consumer and/or guardian's credit report with FICO Score, financial solvency (all monthly financial obligations are met with current income), criminal background, and other information will be obtained for all tiers as part of this process and the impact these can have on DVR's ability to support the occupation through self-employment.
• Explain that DVR services and funding for self-employment are related only to the start-up costs of a business, not for future or ongoing costs related to the business. This is typically six (6) months with individualized determinations based on the approved business plan and business financials. DVR does not provide working capital (e.g., cash). When a business plan is reviewed, the review committee will assess the business’s ability to cover ongoing expenses and for the business to be self-sustaining. Discuss DVR self-employment fee schedule and start-up working capital requirements as well as funding policies and procedures. Explain that if the occupational goal agreed on is a good match for the consumer, they will go through the appropriate tier process. Utilizing the tier fee schedule, discuss costs for self-employment cases; regardless of the plan type, the services and costs of those services are dependent on what is necessary and appropriate for the individual consumer to achieve his/her IPE goal. For some cases, DVR may provide services that have a cost associated with them, and some cases will have services with no cost associated with them (e.g., guidance and counseling, information and referral, or paid for by other resources). DVR should spend the necessary and appropriate amount of time to help the consumer achieve their IPE goal.
• DVR requires a business plan for all three tiers. DVR does not support hobby businesses.

  The following information may assist the BP Team in determining whether the proposed business is a hobby.

  The following information may assist the BP Team in determining whether the proposed business is a hobby.

  Hobby	Business
  No profit motive (typically loses money)	Hoping to make profit
  Net income consistently under $400/year	Net income of $400 or more/year
  No marketing efforts	Marketing efforts

• If applicable, the DVR staff member should discuss with the consumer that DVR is not able to purchase real estate/property or new construction.
• Explain that all consumers need to make continual progress toward their goal within an agreed timeframe. Explain that set target dates can be changed if appropriate, but stress that end dates are necessary for successfully completing self-employment activities and that these should be reviewed regularly.
• For consumers who are already making a product or providing a service, DVR may be able to provide services and materials for short-term action-oriented test marketing. Examples include a booth at farmers market, funding for travel to test the product, etc.
• The consumer will be responsible for demonstrating the working capital requirement for the fee schedule tier their business falls into, including SSI/SSDI recipients. Discuss how earnings may impact the consumer's benefits as well as work incentives that may be available to him/her, and if a referral for a benefits analysis is appropriate. SSA rules are complex for those who are going into self-employment and receiving disability benefits; a benefits analysis should be performed by a provider who is knowledgeable and comfortable on the rules for self-employment. The DVR staff member should ask the vendor about their experience with self-employment before making a referral for this service.
  • Consumers receiving SSI and Medicaid should be made aware that if they decide to structure their business as a Limited Liability Company (LLC), S Corporation, or a C Corporation, business assets may be considered as personal assets which could jeopardize their SSI or Medicaid benefits.
  • Consumers receiving benefits should be reminded that they are responsible for reporting any changes to their annual earnings or resources to the Social Security Administration. Failure to do so can result in over payment and subject to collections by SSA.
• DVR does not support non-profit businesses as self-employment. If a consumer expresses an interest in starting a non-profit business, the following should be discussed:
  • Non-profit businesses do not generate a profit.
  • These businesses are typically overseen by a board of directors. They are not owned and controlled by the consumer; therefore, the consumer is not "self-employed."

  However, this does not mean that a consumer cannot work for a non-profit. It would simply be an employment goal like any other in which they work for an employer. Working for a non-profit is not self-employment.

• If a consumer is interested in going into business with a non-DVR consumer partner, the consumer/guardian should have at least 51% ownership (controlling interest) in the proposed business. Furthermore, DVR would provide assistance toward an approved business plan following the self-employment fee schedule, at the rate of ownership and the business partner would be expected to contribute their rate of ownership. If two consumers express an interest in starting a business together as partners, management should be consulted on how best to proceed.
• Explain the expectations, roles, and requirements related to closing a case successfully. Discuss the process related to transitioning to long term supports.

After reviewing the information listed in Step 1, the DVR staff member should support the consumer to identify an employment outcome that is appropriate given the consumer’s strengths, resources, priorities, concerns, abilities, capabilities, interests, and informed choice. These factors are known as the "Great 8." Step 2 emphasizes occupational exploration along with the Great 8.

The DVR staff member will assist the consumer in identifying an appropriate occupational goal and will refer the consumer for a discovery or a career profile.

This Career Profile or Discovery report must be reviewed with DVR staff, the consumer, and their guardian if applicable. This will help both parties determine if the job goal is agreed on as well as if supported self-employment is the best way for the consumer to reach their job goal. Conduct a Work Incentive Benefits Analysis so the consumer is fully aware of how self-employment income could impact their benefits.

If the DVR staff member agrees with the occupational goal chosen by the consumer and the consumer still wants to pursue self-employment, develop the Business Planning Team.

If the DVR staff member is not in agreement with the occupational goal chosen by the consumer, the staff member shall provide a denial letter including the rationale as to why the occupational goal is not being supported, along with appeal rights.

Evaluate and Develop the Business Planning Team

A Business Planning Team is essential in assisting the consumer throughout the exploration, discovery and actions that lead to a successful and sustainable business enterprise (See Appendix 3). If a Business Planning Team has not yet been developed it should be done in partnership with DVR and the consumer at this time. The Business Planning Team will assist the consumer throughout the planning process.

The Business Planning Team must include the consumer, their legal guardian, the DVR counselor, and their County/Managed Care Organization (MCO) Case Manager or IRIS Consultant.

The Business Planning Team may include family, friends, and any other person(s) who knows the prospective entrepreneur well. When DVR and the consumer identify all members of the Business Planning Team, it should be delineated and documented what each Business Planning Team member role is. Family or friend support is unpaid, and the individual is committed to providing their services so long as the business is open and operating. If it is a paid position, it should be calculated in the business financials. Unpaid family or friend support would not be counted in the business financials.

A copy of Appendix 3 should be provided to potential Business Planning Team members for them to:

• Determine their interest in becoming a team member.
• Guide them throughout the planning process if they agree to become a member of the Business Planning Team.

Determining early on whether a consumer is a good candidate for supported self-employment in this occupation saves the consumer time and effort.

In Step 3, the VRC works with the Business Planning Team to explore self-employment. This consists of exploring many factors including personal traits, disability factors, transferable skills, credit history, personal resources, family support, current debt and obligations, criminal history, etc.

DVR and the consumer should arrange appointments to review and complete the activities in this step.

The following items are required for all Tiers:

• Personal Finance Worksheet completed by the consumer and guardian together.
• Working Capital Calculator, completed by the consumer and guardian together.
• Background check (CCAP and DOJ) from consumer and guardian separately.
• Credit Report with FICO score from consumer and/or guardian. If the consumer does not have a credit report with FICO score but has a legal guardian, the legal guardian's credit report with FICO score will be used. If the consumer has a credit report with FICO score and a legal guardian, both the consumer and legal guardian's credit report with FICO score will be used.
  • For Tier 1 consumers, if the FICO score is below 640, they have no credit and do not have a legal guardian, and/or they can't pay their bills, offer financial literacy services, and proceed with development of a simplified business plan.

  Share with the consumer that there may be resources outside of DVR to assist the consumer in pursuing their occupational goal through self-employment. A list of those resources is included in Appendix 10.

For consumers in Tier 1, if there are concerns with the background check, and/or personal financial worksheet, DVR staff should consult with a DVR Director/Designee on how to proceed.

If there are no concerns or issues for consumers in Tier 1 after reviewing all required materials, move to step #6.

The following items are required for Tiers 2 and 3

Entrepreneur Readiness Questionnaire:

This questionnaire This questionnaire is designed to help the Business Planning Team think about and explain how their skills, abilities, and access to resources may lead the consumer toward a successful self-employment outcome. The questionnaire will assess the consumer and Business Planning Team's management experience, industry/technical experience, personal credit and financial solvency, commitment/desire/persistence, and family/community support.

The questionnaire should be completed by the Business Planning Team collectively and upon completion, reviewed with the consumer and DVR staff member to determine if additional information is needed.

This information will then be used to complete the Business Assessment Scale.

Business Assessment Scale (BAS):

The BAS is a tool to assess the likelihood that the Business Planning Team will succeed in a small business enterprise. It evaluates five measurable attributes: management expertise and skills; technical skill/work experience; personal credit/financial solvency, commitment/desire/persistence, and family and community support.

The BAS is to be completed by two (2) trained DVR staff and the Business Planning Team (See Appendix 4). DVR staff can access the BAS scoring tool (Staff Only, Internal Link) and must share it with the Business Planning Team ahead of the review meeting. The BAS rating tool (Staff Only, Internal Link) is for DVR staff only and should not be shared with the Business Planning Team or included in the DVR file. The BAS scoring tool and the BAS rating are two separate documents. The rating tool is not shared to ensure fairness in scoring.

The rationale and final weighted score for each of the five sections of the BAS must be entered by one of the BAS raters as a case note in IRIS.

A total score of 61 to 100 is a "Green Light" and suggests that the Business Planning Team collectively possess the characteristics which contribute to successful business operation in the proposed business. The consumer should receive assistance moving to the next step in the Self-Employment Toolkit. The designated DVR staff member will send a Green Light letter to the consumer.

A total score of 41 to 60 is a "Yellow Light" and suggests that the Business Planning Team collectively possesses some of the characteristics which contribute to a successful business operation in the proposed business but requires additional skill-building or planning. No additional self-employment services may be provided at this time. The BAS raters will send the consumer a Yellow Light letter, including appeal rights. All the items indicated in the letter must be submitted to the VRC by the deadline and reviewed by the BAS raters who will approve or disapprove moving forward with self-employment.

A total score of 0 to 40 is a "Red Light" and suggests that the Business Planning Team collectively does not possess the characteristics which contribute to a successful business operation in the proposed business. The BAS raters will send the consumer a Red Light letter, including appeal rights. All discussion and support for self-employment should conclude. The consumer should be offered counseling and guidance to determine if they would like to pursue wage employment.

If the BAS score indicates that the Business Planning Team should not proceed with the self-employment process, an Exception Request may be requested.

• Where applicable, if a BAS Rater has additional insight as to why an Exception Request should be considered, they should recommend that to the DVR staff member.
• In consultation with management, other data (evaluations/assessments, the consumer’s skills, abilities, capabilities, etc., recommendations of a business consultant, and the DVR staff member’s observations and experience with the Business Planning Team) may also be considered when determining whether or not Business Planning Team is a candidate for self-employment, and an exception request could be considered.

Note: The VRC should add a case note in IRIS related to their conversation with the consumer, prior to the BAS meeting.

A feasibility analysis determines the viability of a business idea. The idea should be specific to an occupational area. The feasibility study focuses on helping answer the essential question: Should we proceed with the proposed business idea? All activities of the study are directed toward helping the consumer and DVR answer this question.

A feasible business venture is one where the business service or product will generate adequate cash flow and profits, withstand the risks it will encounter, remain viable in the long term and meet the goals of the DVR consumer.

If the Business Planning Team receives a Green or Yellow Light on the BAS, proceed with the feasibility study. The feasibility of the proposed business must be determined by the Business Planning Team whose business concept and start-up costs are in Tiers 2 or 3.

Reasons to Conduct a Feasibility Study:

A feasibility study is conducted to objectively uncover the strengths and weaknesses of the proposed business. It can help to identify and assess any opportunities and threats present in the proposed business along with the resources required for the start-up of the business and the prospects for success.

Conducting a feasibility analysis:

• Gives clarity to the consumer.
• Narrows business alternatives.
• Identifies new opportunities through the investigative process.
• Identifies reasons not to proceed.
• Enhances the probability of success.
• Provides quality information for decision making.
• Provides documentation that the business venture was thoroughly investigated.
• Helps in securing funding from lending institutions and other financial sources, including the amount of working capital that may be required for the business.

Proposed Business Feasibility Recommendation:

The purpose of the feasibility study is to make a recommendation on whether to proceed with the business idea. Once a proposed business is determined and agreed to be feasible, there should be no further questioning throughout the self-employment process whether the business is feasible. This indicates the importance of a properly researched feasibility study that considers the consumer, the market and all viability factors.

Staff should consult with their Director/Designee to make the final decision regarding the outcome of the feasibility study to determine if additional training is needed and how much time it will take for the consumer to secure working capital.

Green Light on feasibility of business and three (3) or fewer months of short-term training is needed, and anticipated working capital will likely be available within three (3) months of the feasibility study being approved.

If the Director/Designee and counselor uphold or assign a green light, the next steps are to write the IPE with business plan development services, needed training, and/or other assessments etc. Move to Step 6.

Yellow Light on feasibility of business or more than three (3) months of short-term training is needed, and/or anticipated working capital will likely take more than three (3) months to secure.

If the Director/Designee and counselor uphold or assign a yellow light, the next step is to write an IPE that addresses concerns in the feasibility study, includes training and related services, and includes responsibilities/steps to take related to securing working capital. If there is outstanding training needed, the decision to move forward occurs at the local level. Move to Step 5.

Red Light on feasibility of business: Review the feasibility findings with Business Planning Team and the business consultant. Address any questions/concerns.

If the Director/Designee and counselor uphold or assign a red light, inform the Business Planning Team that DVR will not be able to provide additional self-employment services. DVR Staff will provide a denial letter and appeal rights. The consumer should be offered counseling and guidance to determine if they would like to pursue non-self-employment services.

Note: It is important to help the consumer understand that they will be required to provide formal documentation of working capital once the business plan has been finalized. The working capital may be secured from lending institutions, family, credit cards, and other financial sources. If necessary, refer the consumer for financial literacy services so they understand the importance of saving for the financial needs of their business. The estimated amount required for the working capital may assist the consumer in deciding if they have access to these types of resources to start their business.

Note: Yellow Light Feasibility for Tiers 2 and 3

If the feasibility study results in a Yellow Light and/or the consumer requires 3 to 12 months of training, or it's unlikely that they will have access to working capital within three (3) months, then the IPE should be written to include necessary services with progress measures and responsibilities. The IPE will be written for the occupation, but business plan development services should not be included at this time.

After working through Steps 1 through 4, an appropriate employment goal should be identified. The VRC informs the Business Planning Team that they can write an IPE for the occupation but will not be including business planning services until the Yellow Light considerations have been addressed. The DVR staff member must include a rationale of why this goal is appropriate, given the consumers' strengths, resources, priorities, concerns, abilities, capabilities, interests and informed choice, should be documented following the Case Noting Style Guidance and Best Practice (Staff Only, Internal Link) in the IPE case notes.

The IPE is written to ensure that skill acquisition and action items identified in the feasibility report are the primary focus, while allowing the consumer to continue to explore if they are suited for the occupation as well as self-employment.

It is important that the IPE list all the services that are needed and known at the time the IPE is developed, including:

• Services needed to address any functional limitations identified at the time of eligibility that are needed to engage in current IPE services.
• Services that are identified because of an assessment or the feasibility study.
• Services that address other barriers that come to light (e.g., criminal background, prior bankruptcy, driver license issues, skill deficiencies, etc.).
• Specific training (e.g., financial training and/or consultation), work experiences, business classes, apprenticeships, informational interviews, etc., that will assist the consumer in achieving their employment outcome.

The IPE’s progress measures should be incremental with specific tasks identified and agreed upon deadlines. DVR staff must evaluate that the agreed upon action steps were completed prior to initiating the next step. See Initial IPE example found in Appendix 7.

If yellow feasibility items have not been resolved, do not proceed with providing business plan development services. Consult with the Director/Designee to determine if extensions are warranted. If self-employment services are being denied, the DVR staff member must provide a letter with reasons for denial and appeal rights.

If yellow feasibility items have been resolved, the DVR staff member in consultation with their Director/Designee, will update the IPE. Include services that have been jointly identified and agreed upon with the Business Planning Team to reflect services necessary to develop a comprehensive business plan, applying Step 6.

If the Business Planning Team has decided that they are no longer interested in self-employment and/or their employment goal, then the DVR staff member and consumer should address this, and update the plan as needed.

Discuss with the consumer the importance of developing a Business Plan:

The number one reason businesses fail is lack of planning! This includes poor management and being undercapitalized. Instead of making mistakes on paper, business owners too often make mistakes with real money and real customers. That is why most funding institutions and agencies require business plans and refuse to fund business start-ups that cannot provide a well-developed plan.

Benefits of planning:

• Requires that the Business Planning Team evaluate the entire business. Daily decision making often involves resolving a series of seemingly unrelated problems. Planning identifies the underlying reasons for recurring daily problems.
• The business world is becoming increasingly competitive. To survive, a small business owner must find a well-defined market niche. He or she cannot compete solely on price and therefore must serve that market in a customer-oriented, cost-effective manner. Planning forces the Business Planning Team to address these issues and enhances the likelihood of success.
• Small business products, services, and delivery systems are constantly changing. Change is a state of uncertainty, but it also presents opportunities to the prepared business owner. Planning is a systematic way to identify and capitalize on new opportunities.

Planning does not end with the completion of a written plan – the process is continuous. The Business Planning Team must constantly evaluate how the business is doing versus what has been planned, and modify the plan accordingly. Ongoing comparison of planned to actual results provides a terrific opportunity to continuously improve the business.

If the Business Planning Team agrees with moving forward with Business Plan Development Services, amend the IPE to include Business Planning services and any other services that are necessary and appropriate for the consumer to reach their employment goal, including less than three (3) months of training.

For consumers in Tier 1 the simplified business plan template must be completed and approved by the local Director/Designee.

For consumers in Tiers 2 and 3, a referral should be made to a business consultant for business plan development services following the Business Plan Technical Specifications. If the Business Planning Team chooses to develop their own comprehensive business plan, provide them with a copy of the Business Plan Technical Specifications and Business Plan Development Guide.

Notes:

• During the DVR staff member's 30-day contract, check in with the consumer to see if they are satisfied with how the Business Planning process is moving along. If the consumer is not satisfied with the business planning services provided by the consultant, it is important to find out why the consumer is dissatisfied.
• If the business plan indicates that the total start-up costs would place the person in a different tier, the VRC should consult with their Director/Designee to see if the assigned tier should change or remain. Working capital requirement would change if the consumer was moved from Tier 2 to Tier 3. If consumers change tiers, they must go back and complete all required steps for that new tier before proceeding with the toolkit.

This is also the point where comparable benefits should be explored with the consumer (e.g., American Indian Vocational Rehabilitation (AIVR), Veterans Administration (VA), Wisconsin Women's Business Initiative Corporation (WWBIC), etc.). It is important to remember that DVR does not require exploration of comparable benefits for assessments and rehabilitation technology.

When identifying the equipment, tools, and supplies in the business plan, the consumer should develop a written list with reasons why the items are needed to present to the BPRC. Identify if specific equipment and tools are needed as an accommodation. The accommodation items should not be included in the amounts when looking at the DVR fee schedule. If there are questions, such as whether specific item(s) are rehabilitation technology (Staff Only, Internal Link) or a piece of essential equipment for a business, management should be consulted.

The Operations and Management section of the business plan should identify both the short-term and long-term supports the consumer will need to be successful at customized self-employment and who will provide those supports.

In the Financial section of the business plan, include any work incentives that will be used to support the business (e.g. Plan for Achieving Self-Support (PASS), Property Essential for Self-Support (PESS), Un-Incurred Business Expenses, Unpaid Help, and Impairment Related Work Expense (IRWE)).

Make sure that a benefits analysis has been completed by this step or follow up with a consumer's former benefits specialist to review self-employment and how it may impact their benefits. Working with a benefits specialist will assist consumers in making an informed choice about self-employment. It will help them understand how Social Security evaluates work activity, available employment supports, and how to structure their business.

Once the business plan is complete, following the Business Plan Technical Specifications, a review meeting must be held. At that meeting, the Business Planning Team is expected to present the business plan to the VRC with the assistance of the business consultant. This meeting will allow for discussion regarding the report, answer any questions or concerns, identify any areas needing further clarification, and next steps, if applicable.

See Appendix 6 for the Roles of the Business Plan Review Committee (BPRC)

Tier 1 consumers should submit their simplified business plan to their local WDA director for review, approval or denial. If the Director/Designee approves the business plan, the VRC and Business Planning Team should amend the IPE to include the approved startup costs. If the Director/Designee denies the business plan, the VRC will send a denial letter, including the consumer's appeal rights.

All Tiers 2 and 3 business plans are submitted to the Director/Designee and the local BPRC member, prior to submitting it to the full BPRC. The Director/Designee and the local BPRC member will review and provide feedback to the VRC within five (5) business days of receiving the plan. If needed, the DVR staff member will work with the consumer to address any recommendations.

With consent from the Business Planning Team, the VRC must submit the business plan to the BPRC fourteen (14) days in advance of the committee meeting. This allows the Committee Members time to review, discuss and prepare questions for the consumer to answer. Any pictures or other relevant information (e.g., web pages, electronic portfolios, etc.) should be submitted to the BPRC at this time.

The VRC will request an on-site visit to the potential business with their local BPRC member and/or their Director/Designee. If there is no physical location to visit (e.g., storefront, warehouse, workshop, etc.), an on-site visit will not be required. The on-site visit is typically done before the BPRC meeting. The BPRC Lead Coordinator will work with the VRC and Business Planning Team to schedule a meeting for the consumer to present their proposed business plan within fourteen (14) business days of receiving the business plan. The consumer may invite an advocate and others they choose to attend the presentation. If the committee or consumer will not be able to meet within this time frame, a reasonable extension can be agreed on by all parties involved. The Director/Designee should be invited to this meeting.

Within five (5) business days of the review meeting (day of the review is day zero), the BPRC will send a summary letter of decision and action items, as applicable, to the VRC and consumer. The BPRC attaches the summary letter with next steps in IRIS. The letter will include a due date for any additional information/documentation requested. BPRC Lead sends a next steps email to the VRC and includes the Director/Designee.

Examples of possible action items:

• Documentation showing the amount of working capital needed per the DVR fee schedule, ensuring it is accessible for the consumer to use when needed (e.g., bank statement, written letter of commitment from family member(s), and credit card statement showing available balance). If the working capital is a loan, the documentation needs to include what the funds can be used for, the repayment schedule, and interest, if applicable.
• Locate and secure a consultant to assist the consumer in opening their business.
• Recheck local ordinances affecting the business if changes have occurred.
• Ensure all necessary permits and licenses are completed and approved to operate the business.
• Provide updates and/or clarifications to the Business Plan.
• Verify valid driver's license.
• Verify proof of insurance (prior to business opening).
• Gather letters of support from potential future customers.
• Explore option of PASS Plan.
• Provide updated price quotes for equipment, supplies, and services.

After the VRC and Business Planning Team receive the summary letter, the VRC should contact the Business Planning Team to review next steps. The VRC is responsible for monitoring the due date for the action items outlined in the summary letter. If there are extenuating circumstances, an extension request should be sent to the BPRC Lead before the due date. If the requested documents/information isn't submitted by the date indicated, the VRC then denies self-employment service and provides a denial letter, along with appeal rights.

If additional information is still required, an additional feedback letter will be provided to make a final decision. If the additional information/documentation is submitted timely, the BPRC makes the final decision to approve or deny; document this in IRIS by attaching the letter of determination. If the business plan is not approved, the BPRC lead will send a denial letter and appeal rights. If the Business Planning Team cannot submit required information included in the summary letter by the due date, and no exception for additional time has been approved, the VRC should inform the consumer that DVR is not approving supported self-employment as an occupation and provide the consumer with a denial letter along with appeal rights.

Amend the IPE to include all agreed-upon services and equipment from the approved Business Plan.

At this point in the process, all funding sources have been identified, funding has been secured if appropriate, items are being purchased as outlined in the business plan and IPE, and the Business Planning Team is ready to open the business.

There can be a tendency during Step 8 for the VRC to be less involved and feel more at ease since the consumer is working. However, this is a time when the DVR staff members should be even more involved and actively engaged with the consumer to ensure things are going well in the business.

When identifying costs of equipment, tools, and supplies in the Business Plan, the costs should be determined by obtaining three price comparisons for each item/service and averaging the price comparisons. When the business plan is approved and the open action items have been completed, purchasing will begin. Only items approved by the Business Plan Review Committee may be purchased. Use the Rate of Determination and Required Documentation guidance for purchasing process. If an item required for the business is already part of the DVR Program Policy Manual/Addendum B DVR Fee Schedule, reference the fees established in the schedule.

DVR staff are encouraged to visit the business, connect with the consumer, continue to provide guidance and counseling and provide other supports as needed. This is a critical time for the consumer and the success of their business.

Note: The transition to long-term care or natural supports occurs in Step 9. Communication from the Business Planning Team should be documented and include an agreement for business operations support – including payment, timing, and intended outcomes for the business owner. Conduct a meeting with all members of the Business Planning Team (especially the consumer’s long-term care case manager) to discuss the business owner's goals, business income, and process for transition. If long-term care is necessary, document their commitment – including the number of hours of support, type of support and how much the support will be, and any budget amendments or Resource Allocations Decision (RAD) processes that need to be made. The Business Planning Team can choose to meet remotely or over the phone.

Business Operations Consulting and Support Services

If a consumer requires additional support to open their business, this service can be used to ensure that the business plan is being followed. Please see the technical specifications for business operations, consultation, and support services as needed.

It is also important to remind the consumer of DVR’s requirements and expectations related to successful case closure.

After all necessary criteria have been met for the individual case, the case can be closed as successful.

To determine if the consumer can be closed as successfully rehabilitated after 180 days:

• The closure criteria is the same as it is for all rehabilitation closures (180 days of at least a gross minimum wage at the level agreed upon (e.g., full-time or part-time), stability on the job, etc. (See DVR Policy Manual)
• For self-employment cases, the minimum wage is based on the projected adjusted gross income (AGI) of the business, where the consumer is sole owner. This is not necessarily the same as the consumer’s income as they may be reinvesting the money into the business, paying employees, and not drawing an actual income at that time.
• The consumer's business must have earned the adjusted gross income for the number of hours per week worked that had been agreed upon in the IPE for three (3) consecutive months.

Calculation: (number of hours per week the IPE states the consumer will work) x $7.25/hr. (minimum wage) x 4.3 (# of weeks in a month) = AGI

Examples:

10 hr./wk x $7.25/hr x 4.3 = $311.75 /month
20 hr./wk x $7.25/hr x 4.3 = $623.5 /month
25 hr./wk x $7.25/hr x 4.3 = $779.38 /month

Adjusted gross income hours worked must be documented and provided by the consumer through:

• Profit/loss statement, tax documentation, accounting records, etc. or
• A brief letter/email stating that "... the monthly gross income figures from my business for September 20XX is …, October 20XX is …, and November 20XX is …". If there is a cost for providing this information, DVR can assist with these expenses as determined appropriate.
  • If the consumer does not have financial documentation and a letter/email cannot be obtained from the consumer, the VRC can document a direct conversation with the consumer where the consumer shares their wage/hr. based on gross income of the business and hours worked to calculate their wage.
  • If the business does not meet minimum wage for hours worked, consult and consider if an exception is appropriate before closing the case unsuccessfully.

Self-employment cases can be closed by achieving wages commensurate with others self-employed in similar occupations. If this happens, consult with the Self-Employment Lead and your supervisor.

This is the step to transition the consumer from DVR support to long-term or natural support. Prior to closing the case, make sure that all necessary supports have been identified and are in place for the consumer to continue operating their business after DVR closes their case. Include the Business Planning Team in this conversation and ensure they understand their continued role in the business.

After all closure criteria have been met, the case can be closed successfully.