Iowa Vocational Rehabilitation Services & Department for the Blind1 Exploring Entrepreneurship Is Self-Employment Right For You?

1Iowa Vocational Rehabilitation Services & Department for the Blind

Exploring Entrepreneurship

Is Self-Employment Right For You?

Iowa Vocational Rehabilitation Services & Department for the Blind

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Before We Begin

Release and Exchange of Information

Housekeeping Issues

About the Partnerships


Introduction

It is available to active clients of Iowa Vocational Rehabilitation Services (IVRS) or Iowa Department for the Blind (IDB ) who are able to become self-sufficient establishing, maintaining, expanding or acquiring a small business.

This program for Self-Employment has been developed under an agreement between Iowa Vocational Rehabilitation Services and the Iowa Department for the Blind.


Iowa Vocational Rehabilitation Services is a state agency within the Department of Education.

IVRS has been serving individuals with disabilities since 1920.

Individuals served by IVRS are made eligible for employment-related services, including Self-Employment.

The ultimate goal of IVRS is to help individuals with disabilities become successfully employed.

WHAT IS IVRS?


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IVRS Mission and VisionIVRS Mission and VisionOur MissionOur Mission

We provide expert, individualized services to We provide expert, individualized services to Iowans with disabilities to achieve their Iowans with disabilities to achieve their

independence through successful employment independence through successful employment and economic support. and economic support.

Our VisionOur Vision To be a respected leader that delivers To be a respected leader that delivers

innovative services to better the lives of innovative services to better the lives of Iowans Iowans

with disabilities.with disabilities.

Iowa Vocational Rehabilitation Services & Department for the Blind 6

Roles and ResponsibilitiesRoles and ResponsibilitiesCLIENTCLIENT – must have an open file with IVRS/IDB and be eligible for – must have an open file with IVRS/IDB and be eligible for

services prior to pursuing IVRS Self-Employment Program services prior to pursuing IVRS Self-Employment Program services.services.

IVRS/IDB COUNSELORIVRS/IDB COUNSELOR – serves as the primary point of contact – serves as the primary point of contact for a client interested in IVRS Self-Employment Program for a client interested in IVRS Self-Employment Program services.services.

IVRS BUSINESS DEVELOPMENT SPECIALISTIVRS BUSINESS DEVELOPMENT SPECIALIST – provides – provides guidance to eligible clients throughout the business planning guidance to eligible clients throughout the business planning process.process.

IVRS/IDB SUPERVISORIVRS/IDB SUPERVISOR – may participate in meetings or make – may participate in meetings or make recommendations related to a client’s business proposal.recommendations related to a client’s business proposal.

IVRS/IDB ADMINISTRATIONIVRS/IDB ADMINISTRATION – helps ensure individuals in Self- – helps ensure individuals in Self-Employment are equipped to manage and operate successful Employment are equipped to manage and operate successful businesses that have long-term viability.businesses that have long-term viability.


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Self-Employment Stats

• New business developed every 10 seconds, 8,000 per day, 3 million a year!

• 60% fail the first three years, primarily because of under-capitalization.

• Many of the problems encountered usually involve funding a business niche, as well as determining the feasibility of an idea.

• U.S. Census data (2000) indicates self-employed individuals constituted 7% of the labor force for individuals between the ages of 16-65.

• People with disabilities are self-employed at a higher rate than those without; a rate of 12.2% vs. 7.8%.


IVRS Self-Employment ProgramMust be a client of IVRS or IDB.

Application available through your counselor.

Goal must be self-sufficiency, getting off benefits, and working at or above 80% of Substantial Gainful Activity (SGA).

Excess cash flow from profitable business operations is the intent.

Majority-owned (51% of business or more) by IVRS or IDB client.


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IVRS Self-Employment Program

FINANCIAL ASSISTANCEUp to $10,000 with: Dollar-for-dollar client match. Approved business plan. 1/3 distribution of grant (fund allotted in thirds). Agree to provide monthly financial statements. Follow-along for up to two years upon successful case closure

to ensure continued business viability and provide documentation regarding ISE program.

TECHNICAL ASSISTANCEUp to $10,000 for: Accounting. Legal Consultation. Other professional service fees.


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Initial Planning (three checklists you will review with your counselor)

Pre-Feasibility Application (provided by your counselor for you to complete and return)

Feasibility Assessment Business Planning Business Implementation Business Monitoring


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Overview: Where are we going?

Part One – The Life Of An Entrepreneur

Part Two – Identifying The Right Business Idea For You

Part Three – From Idea To Reality: Steps To Starting Your Business


PART 1: The Life Of An Entrepreneur

Reasons why people choose Self-Employment:

Flexibility to determine your work scheduleBe your own bossIncrease income / make moneyDo something enjoyable

Why are YOU considering self employment? What rewards will you gain as a small business

owner?

Entrepreneur: “A person who’s willing to accept and manage risk in order to establish a business.”


I want freedom from the 8-5 grind

Most entrepreneurs work more than 40 hours a week to be successful.

Expect to Live your business.

Many times, you will work when it is right for your customer.


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I want to be my own boss

A business owner has many bosses – they are called customers.

Are you self-motivated?

Do you manage yourself well?

Will you have to be a boss to someone?


I want to make a lot of money (fast)

Success does not happen overnight; it can take months before your business earns enough profit to pay you at all.

Most business owners need to keep putting their initial profits back into the business as it grows.

As you begin to work and make money, any benefit program you may be on will be affected. Discussion with a Benefits Planner will occur for individuals receiving Social Security.


I want to turn my hobby into a I want to turn my hobby into a businessbusiness

Producing a product is only a small part of the Producing a product is only a small part of the business.business.

You may end up needing to spend more time on You may end up needing to spend more time on sales than on creating the product.sales than on creating the product.

You need to have both passion and profitability You need to have both passion and profitability to run a business.to run a business.

Will you still enjoy your hobby when it is your Will you still enjoy your hobby when it is your business? business?

Producing a product is only a small part of the Producing a product is only a small part of the business.business.

You may end up needing to spend more time on You may end up needing to spend more time on sales than on creating the product.sales than on creating the product.

You need to have both passion and profitability You need to have both passion and profitability to run a business.to run a business.

Will you still enjoy your hobby when it is your Will you still enjoy your hobby when it is your business? business?


Two words: REWARD RISK

A business is a risk; you are investing your time, energy and resources into an activity with the goal of earning a reward.

There are no sure things in business; many successful entrepreneurs have failed at business before, primarily due to a lack of business planning.

What is a business?


Exercise: Discussion of risks

Career risk and rewards Family/friends risks and

rewardsPsychological risks and rewards

Financial risks and rewards


Career Risk – leaving a secure job with benefits needs to be weighed out. Also, if you’ve been unemployed for some time or been your own boss, it’s more difficult to return to traditional employment.

Family / Friend Risk – Talk to the people in your life about this decision and how the time commitment will affect them.

Psychological Risk – Understand that success does not happen overnight and that there may be setbacks along the way. Prepare yourself for the stress and worry that is common for entrepreneurs.

Financial Risk – Organize your finances, understand benefit implications and structure a business idea that matches the amount of money you can access and safely risk.


Ask your counselor to help you with benefits planning if you receive Social Security.

Determine your total income.

Create a spending plan and stick to it.

Identify your household monthly spending habits.

Find ways to save money to use for your business.

Set some realistic money goals to achieve with your business.


Credit and DebtCredit and Debt

Make a list of who you owe. Determine what your debt terms are

and what your repayment status is. Don’t ignore bills. Consider credit counseling. Obtain a copy of your credit report

and FICO score.

Almost all businesses need some form of credit. How solid your personal credit is will determine how much credit your

business can obtain.

2222Iowa Vocational Rehabilitation Services & DeparIowa Vocational Rehabilitation Services & Department for the Blindtment for the Blind

Exercise: The Self-Employed Exercise: The Self-Employed YOUYOU

What are your entrepreneurial What are your entrepreneurial characteristics?characteristics?

What roles will you play in your business?What roles will you play in your business?

Where will you need help?Where will you need help?

What will be a “typical” day in business?What will be a “typical” day in business?

What will be the biggest challenges and how What will be the biggest challenges and how will you overcome them?will you overcome them?

What are your goals?What are your goals?


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Are you willing to work hard?

Do the rewards outweigh the risks?

Can you prepare yourself financially for the uncertainty?

Are you emotionally prepared?

Are your goals realistic?

Review of Part 1


Part 2 – The Right Business Idea

The idea must make: Personal sense

Business sense Market sense

Financial senseOverall, the idea must make money

to achieve self-sufficiency!


Personal Sense

Do your personal finances allow you to pursue Self-Employment at this time?

What is your experience in the industry? Will you need more training or education? Does the idea accommodate any limitations

presented by your disability? What will you need help with to successfully

operate this business? What are the time commitments for this

business? How will this business affect your benefits?


Evaluate your skills to succeed with this idea: Product and service development Operations Sales Marketing Banking Accounting / Finance Taxes / Legal Issues / Insurance Human Resources Management

Personal Sense

Skills for Success


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Where do business ideas come from?

Most ideas come from a prior job, hobby, family/friends, personal experiences.

Brainstorm a number of ideas and narrow down the one that makes the most sense in all areas.


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What is going on in the industry? Is there money to be made with this business? Is this an appropriate and legal venture?


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Examples of ideas that IVRS/IDB cannot support:

Hobbies (non-income producing)

Speculative business ventures (multi-level marketing)

Franchise/real estate purchases

Vehicle purchases

Non-profit activities


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Are there enough customers willing to purchase your product / service?

How much competition is there?

What will be your advantage in the marketplace?


Financial SenseCan you access the capital needed to properly start, grow and sustain this business?

How long will it take to generate excess cash flow from profitable operations? (Difference between cash flow and profitability.)

Will this idea generate enough net income to meet your goals and achieve self-sufficiency?


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What do you think of your business idea?

Does it make sense in all areas?

What can you do to refine or change your idea so that

it does make sense?

Review of Part 2


Part 3 – From Idea to Reality:Steps to Starting Your Business

INITIAL PLANNING

Checklist 1 – Self-Employment Information

Checklist 2 – Disability Analysis Checklist 3 – Is Small Business Right

For You?

How the IVRS Self-Employment Process Works

Step 1


Part 3 – From Idea to Reality:Steps to Starting Your Business

PRE-FEASIBILITY APPLICATION

Description of Business Marketing Your Business Financial Counselor Justification

How the IVRS Self-Employment Process Works

Step 2


Determining Determining FeasibilityFeasibility

Evaluate to document that your business idea makes sense.

Parts of a Feasibility Assessment:

Personal Feasibility

Business Feasibility

Market Feasibility

Financial Feasibility

Step 3


PersonalPersonal Feasibility Feasibility

Is this an appropriate business for you to pursue?

Are you willing to aggressively seek self-sufficiency through business ownership?

Is your family prepared to accept the strain that comes with running your own business? Are you?

Step 3


BusinessBusiness Feasibility Feasibility

What are the regulations and requirements for this type of business?

Do you have the necessary skills to perform the work and run the business?

Is the chosen location adequate?

What factors need to be considered to make this business a reality?

Step 3


MarketMarket Feasibility Feasibility

What is going on in the industry?

Are there enough people willing to spend enough money for you to make a profit?

What is the existing and potential for competition?

What will be your sustainable, competitive advantage(s)?

Step 3


FinancialFinancial Feasibility Feasibility

How much money do you think it will take to start this business?

What will be the operating budget of this business?

What is the break-even point and is it realistically achievable?

Will the business generate excessive cash flow for profitable business operations?

Step 3


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What if my business idea What if my business idea

is not feasible?is not feasible?

Can you modify the idea?

Is there another Self-Employment opportunity that is appropriate?

Is Self-Employment your best option?


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Building from the information gathered in the Feasibility Assessment, you will create a document

that will include:

The Narrative (words) and The Financials (numbers)

1) The Narrative: Executive Summary, Business Description, Marketing, Operations, Management and Supporting Documents.

2) The Financials: Capital Request, Projections (Balance Sheet, Income Statement, Cash Flow) and Historical Records.

Step 4BusinessPlanning


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Your business plan will be scored using a 100-point system based on:



Makes you consider the entire process and evaluate the soundness of your idea.

Helps you analyze the market in order to develop a sustainable, competitive advantage.

Tells you how much money you need, when you will need it, how you’re going to get it, and how you are going to pay it back.

Leads you to an informed “Go” or “No Go” decision. Helps you develop the confidence you need to take the appropriate

action. Provides you with a “roadmap” – an operating tool – to help manage

your business by keeping you focused and on-track in order to maximize your chance of long-term success.



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Assessing the feasibility

of your business idea

PERSONAL

BUSINESS

MARKET

FINANCIAL

Review of Part 3


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NEXT STEPS

Discuss what you have learned in the Exploring Entrepreneurship training.

Determine if Self-Employment is an appropriate vocational goal.

Discuss where you are at within the Self-Employment process.

Contact Your IVRS/IDB Counselor


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GOOD LUCK!

Now is the time for any additional questions you may have.

Reminder: Complete the training evaluation form.


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We look forward to working with you

should you choose to explore Self-Employment.

Thank you for coming today !

Contact: Lee Ann Russo, Program SupervisorPhone: 319.290.4526Email: [email protected]