State Policies

Arkansas State Policies

Arkansas Division of Workforce Services

Arkansas Rehabilitation Services (ARS)

Policy Summary on Self-Employment:

 Arkansas Rehabilitation Services (ARS) views self-employment or operating a small business as a way to achieve an appropriate employment outcome for eligible individuals.  Their role is to provide technical assistance and other consultative services and potential funding for approved ventures. ARS supports both new and existing businesses.

 ARS Counselors refers individuals interested in self-employment to the Rehabilitation Initial Diagnosis and Assessment for Clients (RIDAC) Unit for an assessment to determine if he/she is capable of operating a small business or being self-employed.  The assessment focuses on such things as the person’s interests, skills, aptitudes and personal qualities as related to self-employment to ensure that they have the basic skills necessary for managing a business. A positive outcome of this assessment is required to move the process forward.

 Additionally, individuals interested in self-employment are referred the Self-Employment/Small Business Consultant (Consultant). The Consultant makes recommendations regarding training the individual might need to be successful, provides referrals to other resources for assistance with the business plan and analysis, and helps identify financial resources.  Once completed, the Consultant summarizes the information and provides recommendations regarding the operation of the business.

 The individual then completes the Small Business Plan/Feasibility Statement that includes basic information about the feasibility of the concept, the market, and financial aspects of the venture. It may highlight training or business skill development needed and recommended by the Consultant. The individual may be referred to outside resources such as the Arkansas Small Business Development Center or other community economic development programs to assist with this process. If the business idea is determined feasible, the information gathered at this stage of the process provides data for the required comprehensive Business Plan.

 ARS uses a “Client Checklist for Self-Employment” which serves as a guide for developing the Business Plan.  The required Business Plan includes several sections including an Executive Summary, Industry/Business Analysis, Competition Analysis, Marketing Plan, Financial Plan and a description of the Management.  The “Checklist” also suggests additional Supporting Documents to make the Plan stronger. The Consultant reviews the Plan and provides a report to approve or deny.  If approved, the Counselor develops the Individual Plan for Employment (IPE).  If denied, the Consultant provides the reasons and works with the Counselor to consider other employment options.  An individual can only submit one Business Plan per fiscal year. If two Plans are denied, the individual cannot submit more.

 Depending on the financial request for ARS funding for start-up capitalization, the agency uses different levels of approval.  If the request is $2500.00 or less, the ARS Counselor, with the recommendation of the Consultant, can approve the Business Plan and funding request.  If the financial request exceeds $10,000.00 a review and approval by the internal Self-Employment Panel (Panel) is required.  If the feasibility of the business is in question, it might be reviewed by an outside entity.  Any recommendation by this outside entity is considered, but ARS makes the final determination regarding the feasibility of the business and financial support to be provided.

 ARS is not intended to be the sole funding source for the business venture. Individuals seeking self-employment are required to explore and potentially apply for funding from other sources.  Other sources might include family, microloans, commercial or consumer loans, grants or work incentives for beneficiaries of Social Security.

 Individuals are required to financially participate in the start-up capitalization of the venture as noted below:

 

Business Start-Up Capitalization

ARS Assistance

Client Participation

Level of Approval

Up to $10,000.

90%

10%

Consultant

$10,001.

90%

10%

Self-Employment Panel

 

Client participation toward the business capitalization requirement may include equipment or inventory.  The Consultant or Panel determines the value of the items and has final approval of those to be included.

 The case is followed by the Counselor and Consultant through post start-up and business stabilization. It is reviewed for closure within 90 days of operation and if the client, Counselor and Consultant agree, the case can be closed at this time.  However, to ensure stability, it is typically recommended that the case be closed after a minimum of six months and/or a maximum of one year.

 There are limits of what ARS can fund.  For example, the agency will not purchase real estate nor pay for buildings to be built.  Likewise, it cannot cover salaries or benefits or purchase inventory or business supplies that include tobacco, firearms or alcohol.

 There are also requirements to receive ARS funding.  For example, the business must be at least 51% owned and operated by the client, must be legal in Arkansas, reported to the appropriate state governmental agencies and be organized as a for-profit.

 There was no mention of Supported Self-Employment in the policy.

https://www.arcareereducation.org/docs/default-source/arkansas-rehabilitation-services/2021-ars-policy-and-procedure-manual-revisions.pdf?sfvrsn=76ae4016_2