Technical Specifications: Self-Employment Services

This service is intended to provide the consumer the assistance they may need to identify a business concept and/or during the self-employment process that is not defined in the other technical specification categories outlined in this document.

This service could be used at any point in time to answer specific questions that are not required to be addressed in feasibility analysis or the business plan. The service is typically 2-4 hours. Also include timeframe: consider w/in 30 days of authorization. It is expected that DVR staff and consumer will define reason(s) for referral and expected deliverables. Reasons for referral and expected deliverables will be shared in writing in the comments section of purchase order for the consultant.

This service can be requested by the consumer or could be offered by the VRC or VRS after consultation with a subject matter expert (SME) and/or Director/Supervisor.

Once decision for service need is identified, DVR staff person will contact provider selected by consumer and discuss service needed and anticipated number of hours needed to complete the service. DVR will provide referral information that will include case summary, other relevant referral information and specific service need. DVR staff will attend meetings with consultant and consumer as necessary.

Examples of this service could include:

• Support/assistance to help the consumer identify a business concept,
• Assisting the consumer in applying for a loan or grant,
• Guiding the consumer in navigating local, state and/or federal regulations/laws,
• Providing assistance for a specific problem e.g., accounting issues, market access questions, legal questions, etc.
• Assistance in accessing technical services e.g., internet access, website development services, specific business software, etc.

Required Service Elements:

Provider will contact consumer within five business days of receiving authorization and referral for specific referral deliverables, meet with consumer (and DVR staff as appropriate) and complete specific service request identified within 30 business days.

Required Reporting Elements:

Written report must include:

• Date,
• Type of meeting,
• Method of contact,
• Description of interaction,
• Follow-up plan,
• Next steps
• Any relevant supporting documents.

The purpose of the Feasibility Analysis Report is to determine:

• If the consumer's proposed business idea is a viable business venture and
• If DVR should proceed with business plan development services.

The analysis should provide quality information to assist the consumer and DVR in making decisions about the proposed business idea. It is expected that the consumer is an active partner throughout this process.

A plan for completing the feasibility analysis should be developed between the consumer and the consultant utilizing the reporting requirements below. Any tasks/assignments that need to be completed by the consumer should include time frames needed for the additional research/analysis, expected completion date(s) to submit their findings and detailed next steps.

If there are substantial changes to the business idea itself, the scope of business, a change in the geographic location, or target market area, DVR should refer consumer for a new feasibility study.

Required Service Elements:

The business consultant and consumer will work to research, investigate, and analyze information needed to complete the feasibility analysis. The consumer, counselor, and business consultant should have points of contact during this process as planned and needed. A date should be established for the findings meeting. The business consultant will compile findings into a final Feasibility Analysis Report.

Required Reporting Elements:

The business consultant will submit a written Feasibility Analysis Report to DVR within 60 business days. If more time is needed, it should be agreed to by the consumer, counselor, and business consultant.

Each area, as appropriate, should identify the source of the information and include supporting documentation to substantiate any claims made. Additional information can be included as needed. If a specific bullet point is not addressed, provide an explanation of why it has been omitted in the report.

Business Description

• Description of service or product
• Overview of concept, background, and market industry

Operational Analysis

• The consumer’s qualifications/skills in the field and/or with business operations
• When appropriate, estimate the type of industry training the consumer may need for any skill deficiencies and/or the necessary skills that they should have to operate the business and approximate time to gain these skill(s)
• Start-up equipment/supplies needed.
• Licenses and/or permits needed and required insurance(s), if applicable
• Facilities
• Daily operation of business (hours of operation, who will complete tasks- bookkeeping, marketing, sales, etc. and percentage of the time spent performing the tasks during the hours of operation)
• If needed, include any paid employees/managerial staff that will be needed along with the justification that supports why the consumer or the business need these employees.
  • Include number of hours per week, per month, days of the week, tasks to be performed, etc.
• If needed, include any unpaid family/friends that will be needed, along with the justification that supports why the consumer, or the business need unpaid help.
  • Include letters of commitment from unpaid family/friends that include number of hours per week/month, days of the week, tasks to be performed and length of time they are committing to support the consumer.
• Phase-in schedule of business elements (accounting, space, etc.)
• Target market- demographics to include potential customers and any shared characteristics, such as age, income, lifestyle, and location.
• Using the most current market size information- now and future, value of market
• Using the most current information on market demand and value for service/product
  • Test market when possible
  • If applicable, describe what has already been done to test market the product or service.
  • Describe how the consumer will advertise and sell their goods/products.
• Local Competition- direct and indirect (include name, location, estimated annual revenues, market share performance/penetration)
• Market share estimates
• What does it take to succeed in industry or what makes competitors successful?
• Competitive advantage-how will the business fill the gap or is unique?
• How will business market itself during the first six months-include detail and costs?

Financial Analysis

• What is the adjusted gross income? Adjusted gross income, also known as (AGI), is defined as total income minus deductions, or "adjustments" to income that you are eligible to take. Gross income includes wages, dividends, capital gains, business, and retirement income as well as all other forms income. The prevailing wage for the industry should also be taken into consideration along with consumer’s hourly wage goal. The current minimum hourly wage must be met, unless there is documentation supporting that the industry does not meet the minimum wage standard.
• Start-up Costs (first 6 months)
• Anticipated working capital needed to cover monthly expenses averaged over first 12 months of operation.
• Recommended time frames for purchasing, acquiring, and utilizing items purchased for start-up.
• Forecast gross revenue.
• Cash flow needs
• Projected profit/loss for first five years
• Projected breakeven point.
• Identification of potential funding sources
• Identify how the consumer will track sales and expenditures and who will do it. For example, use of accounting software, accountant, or paid/unpaid staff, etc.

Business Mentorship Consideration

A business mentor offers advice, guidance, and support to help a start-up business owner run and improve their business. This is an individual who works with their mentees to develop and improve their business ideas and strategies. Mentors are usually accomplished and successful people, who provide their mentees with the advice and guidance they need to run and operate a successful business.

• Does the consultant recommend utilizing a volunteer/free mentor, include why or why not?
• If so, what are next steps and resources for consumer to secure a mentor?

Summary of Findings

• Potential barriers or items needing consideration for each section.
  • Including the ability of the consumer to meet DVR Self-Employment fee schedule requirements and the ability of the business to bring in equivalent of gross minimum wage for anticipated hours worked and method of verification.
• Indicator of Feasibility

  • Green Light - Research and findings suggest that the proposed business is feasible, why it is feasible and any recommendations. The feasibility of the business must also consider whether the consumer will require three or fewer months of training and that consumers in Tiers 2 or 3 will likely have the anticipated working capital within 3 months of the business plan being approved. The recommendation is to proceed with business plan development services.

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

  • Yellow Light - Research and finding suggest that the proposed business could be feasible. The feasibility of the business must also consider whether the consumer will require three months or more of training and that consumers in Tiers 2 or 3 will likely not have the anticipated working capital within 3 months of the business plan being reviewed. Provide overview of items supporting decision, list items needing further consideration before business would be feasible, and recommendations.

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

  • Red Light - Research and findings suggest the proposed business is not feasible. The feasibility of the business also considered that consumers in Tiers 2 or 3 require more than 3 months of training and/or the consumer would likely not have the anticipated working capital within 3 months of review of the approved business plan. Provide an overview of items supporting why the business is not feasible.

  Red Light - Review the feasibility findings with consumer and the business consultant. Address any questions/concerns. Inform consumer 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 wage employment.

• Additional Comments as needed.

The purpose of the Feasibility Analysis Findings Meeting is for the consumer, counselor, and business consultant to meet and review the findings of the Feasibility Analysis together. This meeting is required and will allow for discussion regarding the findings, answer any questions or concerns, and identify next steps as needed. Mode of meeting can be determined by consumer and team.

The meeting is mandatory (can be either in-person or virtual). The following points should be discussed at the findings meeting:

• Business idea
• Operational Analysis-How prepared is the individual to operate the business?
• Marketing Analysis
• Financial Analysis
• Information on similar businesses
• What methodology was used to conclude that the income from the business would meet DVR’s definition of successful case closure?
• Any further actions needed for the marketing plan.
• Mentorship considerations.

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 them 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.

1. The business plan is:
   • To identify the business's goals,
   • To provide quality information to assist the consumer and DVR in making decisions about the proposed business and
   • an action plan for the consumer to implement the business.

The business plan should be developed between the consumer and the consultant within 90 days. Any tasks/assignments needing to be completed by the consumer should include time frames needed for the additional research/analysis, expected completion date(s) to submit their findings and detailed next steps. Identification of previous information to be used and resources needed to complete the business plan should be identified.

Rational for extension must be documented in IRIS and include:

1. A description of the circumstances beyond the control of the consumer and/or DVR that created the need for an extension
2. Steps that will be taken to complete the process and timeline
3. Date by which the process will be completed
4. Consumer and DVR agreement with the extension.

Required Services:

Two service authorizations will be included in the purchase order:

1. Completion of a Business Plan
2. Attending and supporting the consumer at the Business Plan Review Committee Meeting.

The service is intended to be in two parts.

Required Service Elements:

1. Required service elements for the Business Plan:

   This service will include the development of the business plan by the consumer with guidance from the business consultant as outlined in the initial meeting report. The consumer is to be an active participant in its development, based on their skills and abilities. The previously developed and approved feasibility study must be used to complete the business plan.

   When the business plan is completed, the business consultant, consumer and counselor must meet either in person or virtually to review the plan to ensure that all the required information has been included and any questions have been addressed. If the business plan meets all the reporting elements, it will be forwarded to the business plan review committee. If the business plan does not, it will be sent back to the business consultant to make updates before payment will be made.

2. Required service elements for the Business Plan Review Committee Meeting:

   At the business plan review meeting, to the extent possible, the consumer should facilitate and lead the meeting with technical assistance from the business consultant. The consumer will be asked to present this plan to multiple audiences and should be able to explain the details contained in the plan. This meeting will allow for discussion regarding the report, answering of any questions or concerns, identifying any areas needing further clarification, and next steps to be identified, if applicable. As part of this meeting, the financial portions of the plan should be walked through to make sure that this portion of the business plan is understood by all parties.

   The service will be divided into 2 lines on the purchase order. The first line is for the business plan development and the review meeting with the counselor, consumer, and business consultant. The second line is for the meeting with the business plan review committee.

Required Reporting Elements:

1. The business plan should be completed and presented at the meeting with the business plan review committee within 90 days of the authorization of the service. If more time is needed, it should be agreed to by the consumer, counselor, and business consultant.

Rational for extension must be documented in IRIS and include:

1. A description of the circumstances beyond the control of the consumer and/or DVR that created the need for an extension
2. Steps that will be taken to complete the process and timeline
3. Date by which the process will be completed
4. Consumer and DVR agreement with the extension.

The following areas are to be addressed in the report. For each area, as appropriate, identify the source(s) of information used and include enough information to substantiate claims made. Additional information can be included as needed. If a specific bullet point is not addressed, provide an explanation of why in the report.

Title Page
The Executive Summary (brief summary of the entire business plan)
The Business Description

• The Business
• Business History
• Form of Ownership
• Ownership Interest
• Industry Trends
• Background Information About the Owner(s)

The Marketing Plan

• Products and Services
• The Target Market – demographics, location, and geography (please refer to feasibility study to build on what was already found-is it still relevant, has anything substantially changed, etc.?).
• Business Location
• Market share estimates
• Competitive advantage-how will the business fill the gap or is unique?
• Competition, including competitive advantage.
  • What does it take to succeed in the industry?
• Advertising and Promotional Strategies that will be used the first six months- include details and costs.
• Market size- now and future, value of market
• Market demand and value for service/product
• Test market when possible
  • What has already been done to test market product or service?
• Local Competition- direct and indirect (include name, location, estimated annual revenues, market share performance/penetration)

The Operations Plan

• Inputs
• Qualifications/ skills in field and/or business operations
  • Skill deficiencies and recommendations to address.
• Facilities
• Operating Costs
• Daily operation of business (hours of operation, mock-up a schedule of daily activities for the business, and identify who will complete what tasks)
• Licenses, Permits, Zoning, Insurance, Tax Number, Corporation Status
• Capital Equipment
  • When identifying the equipment, tools, and supplies in the business plan, the consumer should work with their counselor/specialist/AT provider to develop a written list to present to the BPRC to identify what equipment is needed as an accommodation. These items should not be included in the tier fee schedule amounts.
• Production Methods
• Management Methods
• Include any paid employees/managerial staff that will be needed along with the justification that supports why the consumer or the business need these employees.
  • Include number of hours per week, per month, days of the week, tasks to be performed, etc.
• Phase-in schedule of business elements (accounting, space, etc.)
• Outside services needed e.g. accounting, marketing, website support, remote front desk receptionist, etc.?

The Financial Plan

• Need for and Sources of Cash
• Equipment List and startup costs (first six months)
  • Why is item needed for initial start-up?
  • How has the necessary cost of each item been determined?
  • Provide cost comparisons per DVR Rate of Payment Fee Schedule.
• Recommended schedule for phases of purchasing/attainment of required start- up items
• Income Statement
• Break Even Analysis, including the adjusted gross income.
  • The Adjusted gross income, also known as (AGI), is defined as total income minus deductions, or "adjustments" to income that you are eligible to take. Gross income includes wages, dividends, capital gains, business, and retirement income as well as all other forms income.
• Cash Flow Statement
• Balance Sheet (or Personal Financial Statement)
• Projected profit/loss for first five years
• Projected breakeven point.
• Identification of potential funding sources
• Accounting plan including roles and responsibilities for operational use of plan.

Attachments

• Resume
• Other documents as needed, such as written quotes, letters of intent, proof of start-up funding, county population, certifications, license, permits, etc.

This service would only be used if the business consultant had correctly followed the business plan technical specifications and the consumer is not able to independently address the next steps outlined in the summary letter by the BPRC.:

• Has questions or concerns regarding the business plan or a portion of the business plan that requires the expertise of the business consultant to provide additional support and assistance.
• Is requesting more information to make a decision regarding the proposed business

The BPRC will provide a summary letter with action items that need to be addressed prior to making a final determination. The letter will include a statement that informs the consumer that they can complete the action items on their own or with the assistance of a business consultant.

Examples of when this service may be needed is:

• The start-up cost(s) have changed significantly since writing business plan.
• Sources of start-up funding has changed.
• Projections of profits need to be clarified.
• Other documents that support the business plan need to be gathered, such as legal agreements, resumes, mock-up schedules, etc.

The consumer and the VRC will discuss if business consulting services are needed to address the action items requested by the BPRC. If this service is needed, the DVR staff person will contact consultant selected by consumer and discuss service needed and anticipated number of hours needed to complete the service. DVR will provide referral information that will include case summary, other relevant referral information and specific services needed. DVR staff will attend meetings with consultant and consumer as necessary.

Service Elements

Provider will contact consumer within five business days, meet with consumer (and DVR staff as appropriate) and complete specific service(s) request identified within 30 business days.

Reporting Requirement

Written report must include:

• Date,
• Type of meeting,
• Method of contact,
• Description of interaction,
• Follow-up plan,
• Next steps, and
• Any relevant supporting documents.

These consulting services are to be used after the business plan has been approved. These services are designed to ensure that the marketing, operations, and financial portions of the business plan are transpiring as anticipated. This service requires at least monthly contact by the business consultant to assess progress in implementing the action steps in the business plan and addressing any roadblocks the consumer is encountering. This service would be intended for Tier 2 and 3, but in some instances, could be used for Tier 1, if necessary.

Focus of this service could include, but is not limited to:

• Problem solve if sales projections are not on track.
• Addressing if the market focus or pricing has changed and the individual needs to shift target market? Are sales tracking as anticipated?
• Assessing marketing strategies and making adjustment as necessary.
• Ensure accounting system is operational.
• Assessing if the service or product delivery has changed?
• When applicable, incorporate existing mentor into check-ins and meetings as appropriate. Refer the consumer to business mentors, as applicable, to address specific business acumen or other needs.
• Referral to agencies and business entities that can assist with business implementation.
• Reassess/monitor the business’:
  • Inventory,
  • Product placement,
  • Pricing structure,
  • Sales, marketing and public relation needs,
  • Customer needs/concerns,
  • Management strengths/deficits,
  • Investment needs,
  • Bookkeeping/record keeping processes,
  • Need for additional services and or other funding.

Service Elements

Provider will contact consumer within five business days of receiving the purchase order, meet with consumer (and DVR staff as appropriate). There is an expectation that the consult will meet at the consumer's business location, when applicable, as defined by DVR, consumer, and consultant.

Reporting Requirement

Written report must include:

• Date,
• Type of meeting,
• Method of contact,
• Description of interaction,
• Follow-up plan,
• Next steps,
• Any relevant supporting documents.
• DVR wage documentation