Supported Self-Employment at Challenge Industries
By Steve Lawrence, Coordinator of Supported Self-Employment at Challenge Industries, Ithaca, NY
The Supported Self-Employment program was launched at Challenge Industries in Ithaca, New York, in September of 2000. In the ensuing two years, many individuals who have chosen to participate in our program have stepped outside the boundaries of their traditional vocational rehabilitation experience and launched their own small businesses. Along the way, we have created a “toolbox,” if you will, that we open regularly to help our program participants choose a self-employment venture, be diligent in their efforts to make it a reality, and nurture and shape it to meet their needs. We hope this handbook provides some insight into some of these tools and how best to utilize them. Of course, we welcome any suggestions you might have, as we are continually seeking ways to sharpen our tools. These suggestions are meant to take the reader “off the beaten path;” after all, there are many books and articles explaining the ABCs of traditional small business management. Given that the field of Supported Self-Employment is relatively new, we are excited to do our part to contribute to its growth and refinement.
First, a little history: Several years ago, Ceil B., a service recipient who was disabled in an automobile accident, decided to pursue her lifelong dream of self-employment. Ceil believed that there was a need for a centralized source for products designed for people with disabilities, and she called her new business “Higher Ground.” She envisioned a catalog through which customers could purchase books, tapes, assistive devices, and other products designed to make living with a disability less inconvenient. She utilized her impressive research skills (honed during her collegiate days prior to her disabling injury), drew from many resources, and wrote a thorough and meticulous business plan.
Ceil’s business plan was solid enough to secure funding through VESID (New York State’s Vocational and Educational Services for Individuals with Disabilities), and the Higher Ground catalog was taken from concept to reality. The finished product was a professional-looking, glossy publication. The products featured were affordable and of a high quality. The future seemed bright.
Like many rookie entrepreneurs, Ceil then expected the phone to ring off the hook, the credit card authorization unit to be humming “round the clock,” and her bank account to reach meteoric heights. None of these things happened.
After the conceptualization, formulation, and implementation of
her business, Ceil met with Judi H., a member of Challenge’s
Community Relations and Development staff. Judi, herself a recipient
of mental health services, is by any measure a dynamo. Rather
than wait for her ship to come in, Judi will sprint to the end
of the pier, dive into the water, and swim furiously out to meet
it. As Ceil’s business floundered, and her frustration mounted,
Judi saw an opportunity to deliver better service in the future.
Judi realized that had Ceil been connected to any of Challenge’s
existing programs, she would have received ongoing supports and
follow along services, and her business would have had a much
better chance of succeeding. After all, in the world of vocational
rehabilitation, the job placement is but one stepping stone on
the path to fulfillment. Once a job is secured, or a business
is established, the real work begins.
Judi researched the availability of support services for individuals
choosing to add self-employment to their menu of vocational options,
and found that such programs were rare. The Rural Institute at
the University of Montana had done some ground-breaking work,
and Cary Griffin, the Institute’s Director of Special Projects,
has been quoted as saying, “People with disabilities are
as qualified as any to take their rightful place in free market
enterprise, regardless of IQ score, mood swings, or ability to
walk.”
With oversight and encouragement from Shawn Galbreath, who was at that time Challenge’s Director of Development and Community Relations, Judi wrote a grant proposal so that Challenge might add a Supported Self-Employment program to its lineup of services. Ten proposals were sent out, resulting in two responses. After the grant proposal was revised and refined, Challenge was informed that the Joseph P. Kennedy Jr. Foundation would fund the program on a three-year, Development Project basis. Certain program criteria would be agreed upon, the Foundation would send in a consultant to assess the agency’s progress in meeting the criteria, and funds would be made available on a year-to-year basis upon successful compliance with said criteria.
Since the implementation of the program, we have seen many success stories. At this point, none of the businesses founded have evolved into full-time, self-supporting ventures, but program participants have been very pleased with the opportunities now available. Our business owners have been given a chance to be included in the community, to choose work they love, and to schedule their work around their lives.
Here are some suggestions relating to various components of a Supported Self-Employment program:
Intake
It has been our experience that while the intake process can be intimidating, it need not be. The simple act of adjusting one’s terminology can make a big difference in determining a potential program participant’s comfort level. For example, some vocational counselors and Employment Specialists have brought a new participant in for an initial information session, and have asked, “So, tell us why you want to start and run your own business?” On other occasions, the question has been phrased this way: “So, what can you tell me about your hobby, or your passion, and would you like to learn how we might be able to help you make some money while doing what you love to do?”
Obviously, these are two very different approaches. For many of the individuals we have served, the idea of starting and managing a business is terrifying. They have heard ominous statistics such as, “Three out of every four businesses fail within a year,” or “It takes a master jack-of-all-trades to write a business plan, a marketing plan, a bookkeeping plan, understand pricing and insurance, and manage all the aspects of a business.” Anyone who approaches a self-employment venture with such an outlook will understandably tread cautiously, and may well expect to fail. It should be made very clear at the outset that “Supported Self-Employment” means just that. Support is provided wherever and whenever necessary to help piece together the puzzle.
When we were in the process of establishing the Supported Self-Employment program here at Challenge, a considerable amount of outreach was undertaken to publicize the program and to recruit mentors. During these outreach presentations, it was not uncommon to hear a comment such as this: “Running a business is a very complex endeavor. How can a person with a developmental disability or a mental illness be expected to do what is necessary to manage a self-employment venture?” Interestingly, when presentations were given to service groups consisting primarily of business owners (such as Rotary or Kiwanis), the perspective was different. These individuals were aware that few people can “do it all,” and recalled that while they themselves might have been competent at accounting, they were clueless in regard to marketing. Or, perhaps they were highly skilled in the area of advertising, but could barely balance their own checkbook, never mind manage the books for a business.
When discussing possible self-employment ventures, it is advisable to frame the conversation in familiar language. Focus more on the aspects of the endeavor the potential entrepreneur is comfortable with, and assure her or him that supports will be put in place to help address the areas that might be more challenging. Ask questions that remind the individual that he or she does indeed have some of the pieces of the puzzle already in place. Assure the person that there are many resources available, many in your community, others at the click of a mouse. Empower the individual to focus on his ability rather than his disability. And remember, a negative attitude is the biggest disability.
Publicity
Self-employed individuals would be wise to heed this piece of advice: “Do not spend one dime on advertising until you have exhausted all sources of free publicity.” Many new entrepreneurs are timid about seeking free publicity, and a slight attitude adjustment can serve them well. Many of these shy individuals are under the impression that a newspaper editor, radio talk show host, television producer, or other media figure is doing them a favor by providing exposure. In this day and age of 200 channels, satellite radio, and vast reservoirs of internet news, the fact is that many in the media are scrambling for material. Remind entrepreneurs that there is so much time and space to fill that he or she might be doing them a big favor by giving them something new, local, and relevant to cover. View it as a win-win situation. The media gets something to inform, entertain, and enlighten their audience and the business owner gets the publicity he or she needs.
Patience is indeed a virtue in this case. While an editor may not have room to write a story about your venture this week, she might be grateful for the opportunity to fill a gaping space next week. The local radio talk show host might be booked until next month, but when the time comes, he is relieved to be able to avoid yet another interview with an over-exposed guest who has been on the show ten times in the past year.
Encourage those you support to work through their shyness, to the greatest degree possible. Remind them that if they are not convinced that their product or service can truly help their potential customers, perhaps they should reconsider their decision to go into business. Convey to them something along the lines of, “If these people will indeed benefit from their efforts, then you owe it to them and to yourself to get the word out.”
Mentors
A mentor is a person who can, by sharing his or her expertise, assist you in understanding and implementing various business essentials. For example, some individuals may have wonderful people skills, and may be willing and able to do their own marketing, but their bookkeeping skills may be insufficient. Others may be very competent in managing their money, but be very uncomfortable in handling publicity. Remember, it is the rare person who is competent in all aspects of business management, and “Supported Self-Employment” is thus named for a reason. It is the duty of the support staff to identify the “weak spots” and help the potential business owner “fill in the blanks.” While it is often tempting to perform some tasks for a business owner, encouraging the greatest possible degree of independence will serve her better over the long run.
When seeking out mentors, keep in mind the strategy employed in the Publicity section. While acknowledging that you may be required to pay some mentors, refrain from doing so until you have searched for volunteers. Many service groups like Rotary or Kiwanis have within their ranks retired business owners who would be happy to mentor an aspiring entrepreneur. Being retired, many of these individuals find themselves missing the days when they were active in the business world, and they welcome a chance to “get back into the game.” Perhaps they have ten hours to spare each week, perhaps they have an hour a month. Maybe they would like to accompany a new business owner to her booth at the Farmers’ Market every day for an entire season, or maybe they can spare two hours to help set up a functional bookkeeping system. These individuals spent many years accumulating skills and knowledge, and it would be a shame to let such valuable resources go to waste.
Colleges and trade schools are also likely to bear fruit in the search for mentors. Many curriculums require Field Work study, and these students benefit greatly from the opportunity to help individuals with disabilities start and operate a small business.
We at Challenge have been very fortunate in that we are in close proximity to two colleges, and by extension, to many motivated and qualified mentors. In one instance, a program participant expressed a desire to become a personal fitness trainer for other disabled individuals, but he lacked the necessary credentials. We were able to locate an Ithaca College undergraduate student studying Therapeutic Recreation, and set up an arrangement whereby she was assigned to help oversee the fitness program operated by our program participant. She received Field Work credit and valuable experience, the entrepreneur realized his long held ambition, and the class members received some useful wellness information.
Another mentoring agreement has paid dividends in the area of business plan writing. A team of students from Cornell University’s M.B.A. program has taken on as their senior project the development of a business plan module. The BizPal is designed to assist support staff in their efforts to create viable business plans, and is designed to be replicable and therefore useful to other Supported Self-Employment programs or projects. (The BizPal is available to other Supported Self-Employment programs by writing to: Supported Self-Employment—Challenge Industries—402 E. State Street—Ithaca, N.Y. 14850.)
In the search for mentors, it is beneficial to keep in mind that not every match is a good one. Just because a student needs Field Work credit does not necessarily make him or her a good mentor. Personalities do not always mesh, and trying to “fit a square peg into a round hole” will likely be counterproductive for everyone. Don’t be afraid to look around until you find a mentor who has the right combination of motivation, ability, and attitude. Through diligent recruiting and careful “matchmaking,” it is possible to set up mentoring partnerships that will benefit all parties.
Individual Development Accounts (IDAs)
We have been extremely fortunate in that the funding for Supported Self-Employment includes matching funds for Individual Development Accounts. When an IDA is opened by a program participant, he or she is then able to deposit as little as ten dollars per month, or as much as fifty dollars per month. These deposits are then matched on a 2:1 basis, so that ten dollars becomes thirty, twenty becomes sixty, and so on. The purpose of an IDA is to accelerate the process of saving for small business expenditures. There are rules built in to prevent misuse, for example, lump sum deposits are not allowed (participants may deposit between $10.00 and $50.00 per month), and if withdrawals are made for purposes not related to the business, the matching funds are forfeited.
In addition to the necessary funds, it is important to find a financial partner capable of administering the IDAs. In Ithaca, we have the good fortune to partner with the Alternative Federal Credit Union (AFCU), an institution nationally recognized for its work with under-served populations. AFCU also administers IDAs for educational and housing purposes, and has been helpful in assisting our program participants with a wide array of financial matters.
To illustrate an IDA can be utilized to jump-start a business, I will share the story of Cari, the owner of “Cari’s Creations.” Cari has been an artist for most of her 28 years, and her drawings of dinosaurs and unicorns are colorful and fanciful. After matching Cari up with an art mentor, her drawings were refined to the point where she created a batch of holiday cards, and sold hundreds.
Cari decided that she could create more appealing artwork if she had regular access to a computer, and set about the task of saving to purchase one. She opened her IDA, diligently deposited forty to fifty dollars per month, and when her balance reached $250, applied for the 2:1 match. A check for $250, made out to the computer vendor, was withdrawn from Cari’s account, and another check for $500 was withdrawn from the matching funds account. Given that the money was never actually in Cari’s account, it created no complications in regard to her Social Security benefits. Cari was able, with the $750, to purchase a Compaq computer, a monitor, and a printer. She then saved for and purchased a scanner. Her artwork has improved immensely.
IDAs are extremely valuable tools, and if matching funds can be procured, and competent fund administration can be arranged, a small business owner’s financial goals can be reached much sooner than would be otherwise possible.
Thus far, Supported Self-Employment has assisted in the development and operation of the following businesses:
- Glassical Creations—Stained glass clocks, window hangings, garden stones, night-lights, jewelry boxes, and mirrors.
- Gerry’s Beadwork—Beaded necklaces and bracelets
- RJM Images—Photographs, note cards, and custom photographic services.
- Cari’s Creations—Greeting cards, day planners, and various art work.
- ArtPoem—Computer generated greeting cards.
- Nancy’s Fancys—Handmade purses and vests.
- Can-Do Fitness—Wellness instruction to individuals with disabilities.
- Johanna’s Dog Walking and Pet Sitting Service—Self explanatory
These businesses have operated on a part-time basis, as most of the business owners do not wish to undertake the task of full-time business operations.
As vocational rehabilitation agencies add Supported Self-Employment to their list of services, they will likely find that several factors must come into play before a business can be successful.
Foremost, of course, is the simple fact that a business idea must be a viable one–regardless of who will be “in the driver’s seat.” A thorough business plan–such as the plans written with the help of BizPal–can help to ascertain whether a particular idea has merit. Considerable “front end” research will assure that a business proceeds at a reasonable pace.
It is also important to ascertain whether the motivation to try self-employment is internal or external. If a program participant is truly motivated, the plan has a chance to succeed, but if the motivation comes primarily from support staff, friends, or family, success is far less likely.
Business Plans
It seems appropriate at this point to cover in more detail the importance of a solid business plan. Lenders tend to see business ideas in terms of risk and return. Let’s envision a potential business owner standing on the bank of a swiftly flowing river, and let’s call that bank “Risk.” She is peering across to the other bank, which we shall call “Return.” Of course, she wants to get to the other side, but there are a number of stepping-stones which must be put in place before she can do so. These stepping-stones are called:
- Legal Structure,
- Description of Business,
- Location,
- Management,
- Personnel,
- Pricing,
- Product Design,
- Market Entry Timing,
- Industry Trends,
- Projected Income Statement,
- Projected Cash Flow Statement,
- Breakeven Analysis, and
- Loan Fund Dispersal Statement.
As each of these stepping-stones is researched, developed, and put in place, the distance separating “Risk” and “Return” narrows. Lenders begin to see the viability of the idea. More importantly, the potential business owner gains insight into the complexities of starting and operating a small business.
Whether a vocational rehabilitation agency obtains funding to set up its own Supported Self-Employment program, or chooses to offer self-employment as an option for a particular service recipient, it is my hope that some of the suggestions in this article are found to be helpful. In our experience, it has been extremely fulfilling to assist individuals with disabilities in their efforts to participate in the “American Dream” by starting their own small businesses. In addition, the presence of our program participants in community-based locations such as the Ithaca Farmers’ Market has elevated our profile and resulted in favorable community relations. It is therefore safe to say that by establishing and operating the Supported Self-Employment program, Challenge Industries has created the proverbial “win-win” situation.
Contact Information
Steve Lawrence Coordinator of Supported Self-EmploymentChallenge Industries
402 E. State Street
Ithaca, N.Y. 14850
(607) 272-8990
stevel@aboutchallenge.org