Step 6: Funding your Dream
Many people with TBI need expensive supports to live their lives and develop businesses. The publicly financed system of supports for people who acquire their disabilities as adults often falls short of meeting their needs for case management, independent living services, and vocational rehabilitation. In our experience helping people with Traumatic Brain Injury start their own businesses, public funds are rarely available. When they are available, the rigorous requirements for business plans, vocational plans, and readiness training may frustrate the individual. Consequently, we have encouraged individuals to use personal resources to finance their small business idea or alternative sources for goods and services for their business start-up.
Funding for small businesses is available from numerous sources. The Social Security Administration (SSA) provides work incentives, such as Plans for Achieving Self Support (PASS) that can provide cash for business development and operations. A PASS leverages individual Social Security payments for use in pursuing a career goal, and is one of the few financial options providing actual operating cash to businesses. Although the development and approval process can be cumbersome, PASS remains a critical complement to other financial resources.
Family support is traditional in small business and should be cultivated whenever possible. Family involvement takes the form of loans and cash gifts, transportation, assistance with production, networking, housing the operations, bookkeeping, et al.
Many microloan programs exist nationwide for those who can qualify for and afford the payments. The disability services system also provides numerous opportunities for financing that do not load the individual down with debt. The PASS Plan from SSA is certainly a critical ingredient for anyone qualifying.
The following three exercises will help you assess your financial resources and research other financing sources.
Personal Credit Affordability
INTRODUCTION: Financial planners suggest that no more than 15% to 20% of your net pay should go toward credit payments (interest and principal).
To calculate a safe credit debt level, first determine the expenses for your basic needs; subtract this cost from your takehome pay (net wages); the result is your discretionary or spendable income, of which no more than 20% should be used on credit payments.
MONTHLY NET PAY:
MONTHLY BASIC NEEDS:
- Mortgage/Rent: $
- Utilities: $
- Food: $
- Clothing: $
- Transportation: $
- Child Care: $
- Medical: $
- Total Basic Needs Expenses: $
- Discretionary Income Pay minus Basic Needs Expense: $
- Reasonable Credit Debt
Multiply Discretionary Income by 20% (.20): $____________
Personal Financial Statement
ASSETS
- Cash on Hand (Checking Accounts) $
- Cash (Savings Accounts) $
- Certificates of Deposit $
- Accounts Receivable $ Securities (Stocks, Bonds) $
- Life Insurance (Cash Value) $
- Other Current Assets $
- Total Current Assets $
- Real Estate - Market Value $
- Vehicles - Market Value $
- Boats, RV’s, Tractors, etc $
- IRAs /Retirement Holdings $
- Household Property $
- Other Personal Property (Artwork, Coins, Jewelry, etc.) $
- Other Assets (Please Itemize): $
- Total Non-Current Assets $
- Total Assets $ (Current + Non-Current)
LIABILITIES
- Personal & Household Expenses (Bills) $
- Credit Card Debt $
- Short-Term Installment Loans $
- Accounts Payable $
- Taxes Due $
- Other Loans (e.g., college) Due $
- Other Current Liabilities $
- Total Current Liabilities $
- Mortgage/Other Real Estate Debt $
- Other Non-Current Liabilities $
- Total Non-Current Liabilities $
- Total Liabilities $ (Current + Non-Current)
ASSETS - LIABILITIES = NET WORTH $
Small Business Research & Resources
Instructions: Determining business feasibility has as much to do with knowing the market and the resources available to you as knowing the product or service. Answering the following questions will help you design your business plan, refine your marketing approach, discover possible customers and suppliers, unearth resources, and prevent you from missing a critical regulation or opportunity.
- What is your industry sector (i.e., is this clothing retail, tourism, violin repair?):
- Is there a professional trade association for your business? Is there a local chapter? Is there a Chamber of Commerce committee focused on this sector? Are there trade journals or newsletters you can read? Do they offer training, certification, or technical consultation? List phone numbers, contact names, web site addresses below:
- Are there government publications available on your specific business? Check www.sba.gov and www.onlinewbc.org to locate federal, state, and local resources. List publications and other materials you find below:
- Is there a local Small Business Incubator? What’s the director’s name and phone number? What services do they offer? Is an Incubator appropriate for your business? Make an appointment for a meeting and a tour and list the time and resources available below:
- Is there a local Small Business Development Center (SBDC); a local Women’s Business Center (WBC); a Tribal Business Information Center (TBIC)? Find out the directors’ names, make appointments and meet with them to discover their resources. The resources you found are:
- Are there local civic groups you can join to make contact with potential customers, suppliers, or mentors? List what you found along with contact names and numbers:
- Is there a local Vocational Rehabilitation office? Is there a local One-Stop office? Get their phone numbers and make appointments to meet with them about small business and disability support. List the contact names and numbers you found:
- Call the local Social Security office or Benefits Planner. Make an appointment to discuss the use of SSA Work Incentives for financing a small business. List the contact names and numbers you found:
- Identify suppliers of the materials or services you need for your business. These people not only provide products to you, they understand the business sector. Who seems most appropriate to talk with? What questions will you ask? List this information and the contact names and numbers you found:
- Are there marketing or trade representatives for your product/service (these are people who create distribution channels and sell your products/services for a fee)? Do they understand your particular business niche? Can they help? What are their cost and sales projections? List this information and the contact names and numbers you found:
- What are the recent and future growth projections for your industry sector? Who can help you determine this? Write down the information you found:
- Are there other businesses like yours nearby or operating in the same market area? Who are they? Can you visit them; talk to the owners? Talk to or identify their customers? Write down what you discovered:
- How well are the above businesses doing financially? Do the owners have advice to share; what is it? How do they find customers? Who are their suppliers?
- What do the customers of the above businesses think of the product or service? How can you best approach them (onthe- street interview, phone or written survey, observing them buying or using the product/service)? Are they looking for higher quality, lower cost, more variety in this product/service? Is there enough business left for you? Write down what you found out and what you think:
- Is this going to be a long term company or are you planning to capitalize on a specific, time-sensitive market niche (cigar bars, pet rocks)?
- Is your business seasonal in nature? How do other seasonal businesses do locally? Can you capitalize on changing seasons in other geographic locations (e.g., can you sell swimming trunks over the internet during the winter to buyers in the Southern Hemisphere)? Can you adapt your product or services to changing seasons (e.g., ski resorts rent mountain bikes in the summer)? List your ideas here:
- Will your business be especially dependent upon ups and downs of the local or regional economy? Have the local business Smooth Moves 47 experts predicted economic cycles you should be aware of? List the issues and how you plan to deal with them:
- What are the licensing, environmental, zoning, and other government regulations for your business? Check with the Secretary of State, the SBDC, et al., and your local city/county government. List what you find out below:
- Are there tax issues you need to investigate? Check with the local SBDC, your accountant if you have one, the State Department of Revenue or Taxation (especially in state with sales taxes) and the IRS and list what you find out below:
- What did you find out that surprised you? What else now seems critical to know as you develop your business? List what else you need to find out below: