Arizona State Policies & Resources
Arizona Department of Economic Security
Arizona Rehabilitation Services Administration (RSA)
Vocational Rehabilitation Program (VR)
Policy Summary on Self Employment:
The Vocational Rehabilitation Program within the Arizona Department of Economic Security supports individuals wanting to pursue an employment outcome in a self-employment work setting that is consistent with the individual’s strengths, resources, priorities, concerns, abilities capabilities and informed choice. This support is available for individuals wanting to start a new business or expand their existing business.
To be eligible for this support the individual must be willing to invest his/her own time and assets into the venture, and explore other funding sources such family, friends, Social Security Work Incentives or a Plan to Achieve Self-Support (PASS). Unless the individual meets the financial need criteria, they are expected to contribute 10% of the costs related to the business. Additionally, prior to using a Small Business Consultant Service Provider, other community resources must be explored such as the Small Business Administration or SCORE. When an individual has no prior business experience or has insufficient knowledge in business operations, they must complete business training covering financial, managerial, marketing, and personal aspects of business operations. They are also required to complete career exploration activities, labor market surveys and informational interviews to gather information about the proposed business idea. They then submit a Proposed Business Concept Overview to be approved prior to moving forward.
To be considered for support the individual must own or operate at least 51% of the business, the business must be operated as a for-profit entity and be located in the United States. There are several instances in which VR cannot fund the operation including those considered a hobby, high-risk, controversial or those which are illegal. Additionally, VR cannot fund salaries, or purchase vehicles, real estate or construction/modifications or buy business supplies that include tobacco, firearms or alcoholic beverages.
VR support can be used for necessary additional training, technical assistance and business consultation services, and business startup expenses. Allowable business startup costs include customary equipment and tools used in similar businesses, initial inventory (products, material and supplies), initial office supplies, accounting and marketing services, and office equipment/furniture/fixtures.
Once the Proposal Business Concept Overview is approved, the individual’s initial Individualized Plan For Employment (IPE) is updated to a Self-Employment IPE. The Self-Employment IPE outlines the objectives to be achieved and the services needed. Depending on the individual, these might include completing any needed post-secondary/vocational training or comprehensive business training, developing the Business Plan, and technical assistance and business plan consultation services with a
Small Business Consultation Service Provider or a comparable service elsewhere.
The Business Plan must include an executive summary, a business description, a marketing plan, an operations plan, and a financial plan that includes personal assets/liabilities, detailed financial estimates, funding summary/startup costs, projected income statement, and other funding sources.
For ventures with Business Plans requesting VR support up to $5000.00 the Plan is submitted to the VR Program Supervisor. For Business Plans requesting VR support from $5000.01-$18,000.00 the Plan is submitted to the Self-Employment Review Committee. The Plan can be approved, conditionally approved, or denied.
Once the Business Plan is approved, the Self-Employment IPE is amended with new objectives outlining details for starting the business, purchasing items, goods and services as indicated in the Business Plan and financial outcomes to be achieved within 12 months.
To determine a successful closure for a Self-Employment IPE, the following criteria are used: the business is stable and needs no further services, the financial outcomes as outlined in the Business Plan have been met, or the financial outcomes are at a level of income that earns minimum wage. This can be determined as early as six months and not later than 24 months.
While there is no mention of supported self-employment in the policy, it does state that VR funds cannot be used for ongoing or long-term support of a self-employment business venture.