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Exploring Entrepreneurship

Exploring Entrepreneurship. Is Self-Employment Right For You?. Before We Begin. Release and Exchange of Information Housekeeping Issues About the Partnerships . Introduction.

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Exploring Entrepreneurship

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

  2. Before We Begin Release and Exchange of Information Housekeeping Issues About the Partnerships Iowa Vocational Rehabilitation Services & Department for the Blind

  3. Introduction This program for Self-Employment has been developed under an agreement between Iowa Vocational Rehabilitation Services and the Iowa Department for the Blind. 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, expanding or acquiring a small business. Iowa Vocational Rehabilitation Services & Department for the Blind

  4. WHAT IS IVRS? • 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  5. IVRS Mission and Vision Our Mission • We provide expert, individualized services to Iowans with disabilities to achieve their independence through successful employment and economic support. Our Vision • To be a respected leader that delivers innovative services to better the lives of Iowans with disabilities. Iowa Vocational Rehabilitation Services & Department for the Blind

  6. Roles and Responsibilities CLIENT – must have an open file with IVRS/IDB and be eligible for services prior to pursuing IVRS Self-Employment Program services. IVRS/IDB COUNSELOR – serves as the primary point of contact for a client interested in IVRS Self-Employment Program services. IVRS BUSINESS DEVELOPMENT SPECIALIST – provides guidance to eligible clients throughout the business planning process. IVRS/IDB SUPERVISOR – may participate in meetings or make recommendations related to a client’s business proposal. IVRS/IDB ADMINISTRATION – helps ensure individuals in Self-Employment are equipped to manage and operate successful businesses that have long-term viability. Iowa Vocational Rehabilitation Services & Department for the Blind

  7. 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%. Iowa Vocational Rehabilitation Services & Department for the Blind

  8. IVRS Self-Employment Program • Must 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  9. IVRS Self-Employment Program FINANCIAL ASSISTANCE Up 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 ASSISTANCE Up to $10,000 for: • Accounting. • Legal Consultation. • Other professional service fees. Iowa Vocational Rehabilitation Services & Department for the Blind

  10. Initial Planning (three checklists you will review with your counselor) Application (provided by your counselor for you to complete and return) Business Plan Feasibility Study Business Implementation Business Follow-up Self-Employment Process Iowa Vocational Rehabilitation Services & Department for the Blind

  11. 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 Iowa Vocational Rehabilitation Services & Department for the Blind

  12. PART 1: The Life Of An Entrepreneur Entrepreneur: “A person who’s willing to accept and manage risk in order to establish a business.” Reasons why people choose Self-Employment: • Flexibility to determine your work schedule • Be your own boss • Increase income / make money • Do something enjoyable Why are YOU considering self employment? What rewards will you gain as a small business owner? Iowa Vocational Rehabilitation Services & Department for the Blind

  13. 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  14. 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  15. 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  16. I want to turn my hobby into a business • Producing a product is only a small part of the business. • You may end up needing to spend more time on sales than on creating the product. • You need to have both passion and profitability to run a business. • Will you still enjoy your hobby when it is your business? Iowa Vocational Rehabilitation Services & Department for the Blind

  17. 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  18. What are the Risks/Rewards? • Psychological risks and rewards • Career risk and rewards • Family/friends risks and rewards • Financial risks and rewards • Exercise: Discussion of risks Iowa Vocational Rehabilitation Services & Department for the Blind

  19. Mitigating Risks • 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  20. Organizing Your Personal Finances Iowa Vocational Rehabilitation Services & Department for the Blind

  21. Credit 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  22. Exercise: The Self-Employed YOU • What are your entrepreneurial characteristics? • What roles will you play in your business? • Where will you need help? • What will be a “typical” day in business? • What will be the biggest challenges and how will you overcome them? • What are your goals? Iowa Vocational Rehabilitation Services & Department for the Blind

  23. Review of Part 1 • 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  24. Part 2 – The Right Business Idea The idea must make:  Personal sense Business sense Market sense Financial sense Overall, the idea must make money to achieve self-sufficiency! Iowa Vocational Rehabilitation Services & Department for the Blind

  25. 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  26. Personal Sense Skills for Success 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 Iowa Vocational Rehabilitation Services & Department for the Blind

  27. Business Sense 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  28. What is going on in the industry? Is there money to be made with this business? Is this an appropriate and legal venture? Business Sense Iowa Vocational Rehabilitation Services & Department for the Blind

  29. Business Sense Examples of ideas that IVRS/IDB cannot support:  Hobbies (non-income producing)  Speculative business ventures (multi-level marketing)  Franchise/real estate purchases  Non-profit activities  Vehicle purchases Iowa Vocational Rehabilitation Services & Department for the Blind

  30. Are there enough customers willing to purchase your product / service? Market Sense How much competition is there? What will be your advantage in the marketplace? Iowa Vocational Rehabilitation Services & Department for the Blind

  31. Financial Sense • Can 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  32. 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 Iowa Vocational Rehabilitation Services & Department for the Blind

  33. Step 1 Part 3 – From Idea to Reality:Steps to Starting Your Business How the IVRS Self-Employment Process Works INITIAL PLANNING • Checklist 1 – Self-Employment Information • Checklist 2 – Disability Analysis • Checklist 3 – Is Small Business Right For You? Iowa Vocational Rehabilitation Services & Department for the Blind

  34. Part 3 – From Idea to Reality:Steps to Starting Your Business APPLICATION Description of Business Marketing Your Business Financial Step 2 How the IVRS Self-Employment Process Works Iowa Vocational Rehabilitation Services & Department for the Blind

  35. Determining Feasibility Step 3 Evaluate to document that your business idea makes sense. Parts of a Feasibility Assessment: • Personal Feasibility • Business Feasibility • Market Feasibility • Financial Feasibility Iowa Vocational Rehabilitation Services & Department for the Blind

  36. Personal Feasibility Step 3 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  37. Business Feasibility Step 3 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? Iowa Vocational Rehabilitation Services & Department for the Blind

  38. Market Feasibility Step 3 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)? Iowa Vocational Rehabilitation Services & Department for the Blind

  39. Financial Feasibility Step 3 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 excess cash flow from profitable business operations? Iowa Vocational Rehabilitation Services & Department for the Blind

  40. What if my business idea is not feasible? Can you modify the idea? Is there another Self-Employment opportunity that is appropriate? Is Self-Employment your best option? Iowa Vocational Rehabilitation Services & Department for the Blind

  41. Step 3 Business Planning The Business Plan Building from the information gathered in the Feasibility Assessment, you will create a document that will include: The Narrative (words) and The Financials (numbers) • The Narrative: Executive Summary, Business Description, Marketing, Operations, Management and Supporting Documents. • The Financials: Capital Request, Projections (Balance Sheet, Income Statement, Cash Flow) and Historical Records. Iowa Vocational Rehabilitation Services & Department for the Blind

  42. Your business plan will be scored using a 100-point system based on: Step 3 Business Planning The Business Plan Feasibility Market Plan Financial Plan Organizational Information Iowa Vocational Rehabilitation Services & Department for the Blind

  43. 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. Step 3 Business Planning Why write a business plan? Iowa Vocational Rehabilitation Services & Department for the Blind

  44. Assessing the feasibility of your idea  PERSONAL  BUSINESS  MARKET  FINANCIAL Planning your business Review of Part 3 Iowa Vocational Rehabilitation Services & Department for the Blind

  45. NEXT STEPS Contact Your IVRS/IDB Counselor • 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. Iowa Vocational Rehabilitation Services & Department for the Blind

  46. GOOD LUCK! Now is the time for any additional questions you may have.  Reminder: Complete the training evaluation form. Iowa Vocational Rehabilitation Services & Department for the Blind

  47. We look forward to working with you should you choose to explore Self-Employment. Thank you for coming today ! Contact: Lee Ann Russo, Program Supervisor Phone: 515.281.4144 Email: LeeAnn.Russo@iowa.gov Iowa Vocational Rehabilitation Services & Department for the Blind

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