State Policies

Pennsylvania State Policies

Pennsylvania Office of Vocational Rehabilitation (OVR)

Policy Summary on Self-Employment:

The Pennsylvania Office of Vocational Rehabilitation (OVR) recognizes that entrepreneurship may provide an opportunity to create jobs in regions of PA in which there are few, if any, other sources of gainful employment. It may also allow for more flexibility and control over the terms and conditions of work for the customer.

OVR may assist a customer in establishing a small business for the purpose of self-employment, so long as it is the most viable opportunity for the customer to achieve financial independence and will enable the person to meet both ordinary living expenses and ongoing business costs. If it is determined that the customer has the requisite qualifications and experience to succeed in operating a business, OVR may support the establishment of a small business.

OVR supports the following business structures: sole proprietorship; not-for-profit corporation; and limited liability company. If a not-for-profit is formed, the bylaws must restrict the board of directors to one member, the OVR customer. If an LLC is formed, the operating agreement must vest control of the company in the OVR customer. OVR does not support business expansion of an already established and successful business, or businesses which are considered hobbies.

Funding:

OVR can provide startup costs up to $10,000. OVR’s contribution may not exceed fifty percent of the legitimate small business startup costs. The customer is required to match any contribution for startup costs. The District Administrator (DA) may grant a waiver of the $10,000 standard contribution if additional funds are essential for the startup of the business. There are three categories that must be met for the waiver: items that fall under the list of allowable business expenses; items necessary for the development of the business plan; or use of OVR’s financial commitment to leverage loans or other funding.

Assessment

A comprehensive assessment is used to determine if self-employment would be an appropriate vocational goal for the customer. The VRC may use the OVR-201, Small Business Ownership as a Vocational Goal for OVR Customers form to assist in comprehensively assessing the customer’s potential for success in the pursuit of self-employment. The assessment is completed after the customer has expressed interest in a self-employment goal and prior to the development of a business plan/IPE amendment. OVR may also have the customer participate in assessments and courses offered by the Small Business Development Centers (SBDC), Service Core of Retired Executives (SCORE) or other training programs as part of the comprehensive assessment process. This is all recorded in the case record.

IPE

After the assessment phase, if it is decided that business ownership is a realistic and obtainable goal for the customer the customer and OVR counselor may develop a tentative goal of small

business ownership. The tentative IPE goal must include a timeframe for completion of the business plan, along with any service providers or community resources that may be assisting the customer with the business plan.

Business Plan

The business plan is the basis for seeking OVR support and is also used to request financial support from other entities. It is recommended that the customer write the business plan and use assistance from community resources, especially if the customer does not have experience writing a business plan. The plan includes a summary with objectives, an overview with product or service description, market analysis, sales and management strategies, marketing strategies, zoning/licensing requirements, taxation, insurance requirements, etc. A financial plan including funding sources other than OVR, a breakeven analysis, an income analysis, startup costs and balance sheets must also be included. The business plan should also identify who the customer will utilize for accounting and legal support. The VRC and customer may arrange to have the business plan reviewed by a professional experienced with small business development. This should be an individual other than the person assisting with the business plan preparation.

The business plan will be submitted to and reviewed by the District Office Small Business Committee. This committee is comprised of the VRC, the VRC supervisor and District Administrator (DA). The committee may also have the business plan reviewed by a third party.

A small business specialist located in OVR’s Central Office will be available to assist the local Small Business Committees throughout the entire process described in the policy.

After approval from the Small Business Committee, the VRC and customer may amend the IPE to include a finalized goal of self-employment. There is a list of allowable and non-allowable business start-up expenses found in the OVR policy.

Closure

The VRC must work with the eligible customer to obtain periodic progress reports which may include a profit and loss statement or other forms of reporting. Mutually agreed upon measurement for success will be identified in the IPE, in addition to closure criteria. There is a minimum 90-day successful employment period prior to closure. A longer placement period may be in order to help ensure the continued success of the customer’s business.

This policy does not include home-based self-employment or telecommuting.


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