Having a great idea is only the very beginning of starting a small business. Once you’ve got an idea, you need to think about:

• Do I want to turn this idea into a small business?
• Am I a good person to make this idea a reality?
• Do I have the team of support I need to do it?

Many people and organizations say that if you have an idea, you should run out and develop a business plan. While a business plan is definitely important (we’ll talk about creating one later in this article), the first thing you should do is think about whether you are really the right person to start your own business. It’s important to understand that microenterprise (small business) is not a silver bullet for success, even though some people might say so.

The single most important factor in the success of your enterprise is whether self-employment is a good fit for you. Being self-employed means being responsible for absolutely everything related to your business. That means a lot of work, a lot of stress, and a lot of things you may have never had to worry about. The reality is that having your own business just isn’t for everyone. It takes a rare combination of qualities for a person to be able to take an idea, develop it as a business, and succeed with a profitable enterprise (make money).

Creating Your Team

If you think you want to go ahead and try to develop your idea into a full business plan, you need to create your team of support. While you will be the person who is ultimately responsible for all decisions, you must involve others so that you have a group of people who can advise and support your efforts. This is especially important for people with disabilities, because there are many more things to think about.

Here are some of the issues your team will help you figure out as you think about starting a business:

• What will happen to my public benefits, like Arizona Health Care Cost Containment System (AHCCCS) insurance, Supplemental Security Income (SSI), or Social Security Disability Insurance (SSDI)?
• How does the Arizona Rehabilitation Services Administration (AZRSA) look at my self-employment?
• As a person with a disability, are there additional resources available to me?
• How can I build, repair, or start credit history to help me qualify for a loan to start my business?

No businessperson can figure out the answers to all of their questions alone. The key is to build a team of advisors, an informal board of directors who can help you find answers, ideas, and solutions that can make your business a success.

Do you want to make your dream a reality?

If you have read the information so far and still want to start your own business, keep reading. The rest of this article will help you find opportunities and programs that help people with and without disabilities develop, strategize, and fund their small businesses.

Many organizations, individuals, and even software programs can help you write a business plan. However, a business plan is not something that you just write and never have to think about again; it should be reviewed frequently and changed when appropriate so that it can continue to be relevant for the development of your business over time. Here we’ll tell you about what sort of things your business plan should include and then give some advice on how you can find people who can help you make your plan.

What to Include in Your Business Plan

When you make a business plan, it has to cover many different things; this article will provide an overview of the main points. At the very least, your plan should include a detailed discussion of all the following:

1. Executive Summary: A brief explanation of your business, saying who you are, what you do, and why people should consider buying your products or paying for your services.
2. Business Description and Vision: A more detailed introduction to your business, including your mission statement (the product or service you provide and why it matters); company vision (how you hope to see your business grow); long-term business goals and objectives; and a brief history of the business.
3. Definition of the Market: Basic information about the industry you operate in and the customer needs you are fulfilling.
4. Description of Products and Services: Details about your products and services, with explanations of how they are competitive.
5. Organization and Management: How your business is organized, including its legal structure (for example: proprietorship, partnership, or corporation); the licenses or permits it needs to operate; and the key people or employees.
6. Marketing and Sales Strategy: Who your customers are; what the demand is for your products and services; and how your sales strategy, pricing, promotions, and product placement will operate.
7. Financial Management: Your estimated startup costs; how much money you have to invest and how much you need in loans; your balance sheet in 1 year (how much cash, business assets, and debt you expect your business to have); how much income and expenses you expect to have in 1 year; and how much profit or loss you expect your business to have in one year.

The executive summary only needs to be 1 or 2 paragraphs long. The other parts of the business plan should be as detailed as is necessary to complete them. For example, the business description and vision may be multiple pages, while organization and management could be just a couple of sentences if your business is very small and has no additional employees besides yourself.

Organizations That Help with Business Planning

There are many organizations that can help you develop your business plan. They may have classes, help you individually, provide you with business-planning software, or refer you to experts who can help. Here are some good places to start:

• Local Small Business Development Centers (SBDCs). The U.S. Small Business Administration (SBA) has created Small Business Development Centers throughout the country that provide management assistance to people who have or want to start small businesses.
• The Arizona Rehabilitation Services Administration (AZRSA). AZRSA offers assistance and services that can help you start a small business, including business coaching, help with savings programs, business coaching, and sometimes even funding for one-time capital expenses. To apply for services, call or visit a vocational rehabilitation office near you.
• Organizations that support microenterprise. Here are some more organizations that can help you start your small business:
  • The Service Corps of Retired Executives (SCORE) is a nonprofit that provides education, mentorship, counseling, tools, and workshops to help small businesses get started, grow, and achieve their goals.
  • The Women's Business Center (WBC) provides training, coaching, and technical assistance for small businesses whether it's with a business idea, the start-up phase, or an establised company.
  • The Job Accommodation Network (JAN) supports people with disabilities, their family members, and services providers with technical assistance, consulting, and mentoring services, including help with self-employment and small business plans, such as business planning referrals, financing strategies, marketing research, disability-specific programs, benefits planning, e-commerce, independent contracting, home-based business options, and small business initiatives for disabled veterans.
  • The Association for Enterprise Opportunity (AEO) can help you find out who is providing loans, business training, financial education, and other important services for small businesses in your state.

All of these organizations are experienced with helping potential entrepreneurs design business plans, but some of them have little, if any, disability experience. They may not know much about benefits like Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and the Arizona Health Care Cost Containment System (AHCCCS) and won’t know about resources or income limits these and other programs may have. They also may not know the tools, programs, or strategies that exist to help people with disabilities start their own businesses. We’ll talk about some of those disability-specific considerations later in this article.

Funding (also called capital) is a huge issue for anybody who tries to start up a business. Without it, you won’t have the money to get your business going. That’s why you need to make sure you can figure out how to raise money.

Here we’ll introduce how to get loans and find people who will give you money without making you repay them. On the next page, we’ll introduce a few different ways you can use to save up money to start your business and, if you get benefits, how you can make sure that saving money won’t cause you to lose the cash or health benefits you need.

Credit

Credit is money you borrow. For example, if you have a credit card, you are borrowing money whenever you use your card and paying it back when you pay the bill. Credit is extremely important for starting a business, because almost all businesses need loans to get started.

A good credit score will help you get loans or get inventory if your business needs them. Your credit score is a measurement of how well you pay your bills. If you don’t pay your bills on time, don’t make the minimum payments, or go over your credit limit, your credit score will go down. Your credit score is very important because it helps lenders and others decide if you are a “good risk.” If they are going to lend you money or provide you with inventory that you can sell, they want to be as certain as possible that you are going to make your payments.

The bottom line: You won’t be able to get a loan to start your business if you have a history of not paying your bills.

Improving Your Credit Score

If you have a low credit score, there are several ways to improve it. One is to get help from the organization helping you with your business plan to see if it can help you figure out why you have a bad credit score and what you can do about it. Another idea is to work with a local nonprofit credit repair specialist. If you open an Individual Development Account (IDA), as described later in this article, your IDA program may also help you solve your credit problems.

Fixing your credit can take time, but is a necessary step toward getting a loan for your business. Among other things, you will probably need to start paying your creditors on time, pay down high balances (the amounts you owe on your credit cards, and stop overusing your credit cards.

Note: Not all credit problems are caused because you haven’t paid your bills. Sometimes you may have a credit problem because there is a mistake in your credit report. If there is an error or a dispute related to your credit report, your lender or a credit repair specialist will be able to help you.

Getting Loans

Even when the economy is strong, it is hard to get loans from banks or credit unions to start a small business. Since 2007, when the U.S. economy went into recession, it has been even harder to get loans. Banks will usually only lend to a business if the business already has at least 2 years of financial data and a very good credit score. If you are just now starting a business, you will probably not meet these standards, since you haven’t yet been in business for 2 years. However, you do have a few other options we’ll explain here:

• Peer-to-peer lending
• Microcredit
• Arizona Technology Access Program Loans

Peer-to-Peer Lending

Prosper.com and LendingClub.com are websites designed to:

1. Let persons and small businesses that need money apply for loans
2. Let persons who have money lend it so that they can make more money in interest than they would if they had left their money in the bank

This is called “peer-to-peer lending” because it is persons making loans to other persons, instead of a bank giving you a loan. Since we’re talking about starting a small business, we’re going to focus on how you can apply for loans.

With these websites, you must first agree to let them check your credit, and you must tell them how much debt (money you owe) and income you have. The website then gives you a letter grade, based on how risky they think it would be to lend to you. The amount of interest you will have to pay on your loan will depend on your letter grade.

Once your letter grade and interest rate have been decided, people who wish to lend will decide whether to loan you part of the money you want to borrow. No one person will lend you the entire amount — they will limit their risk by funding only part of the loan. In the end, you will be borrowing the money from dozens of people, rather than from a bank or a single person. You must agree to repay your loan according to a strict repayment schedule and the website will keep track of your repayments and make sure the lenders all get their money back with interest.

Microcredit

Microcredit loans are generally smaller than normal business loans that you could get from a bank. Usually, microcredit loans are for $10,000 or less (they can range from being less than $1,000 to as high as $50,000). Most microcredit is provided by nonprofit organizations that specialize in giving loans to people with low income. It is generally easier to qualify for these loans than it is for loans from a bank, meaning you may be able to get some money to start your business even if you’ve been rejected elsewhere. An additional benefit of microcredit programs is that they may also offer training that can help you learn how to operate your business and manage your money better.

Here are several of the nonprofit microfinance organizations that help Arizonans get loans to start their businesses:

• The Arizona Microcredit Initiative (AMI)
• Préstamos in Phoenix
• The Neighborhood Economic Development Corporation (NEDCO) in Mesa
• Project PPEP in Tucson

Arizona Technology Access Program Loans

The Arizona Technology Access Program offers 2 types of loans:

1. Arizona Loans for Assistive Technology (AzLAT) loans. AzLAT loans are for the purchase of assistive technology devices and services for work, recreation, education and independent living.
2. Self-Employment for Entrepreneurs with Disabilities (SEED) loans. SEED loans reduce barriers to employment for individuals with disabilities by providing affordable loans to buy assistive technology, computers, and other business-related equipment to help Arizonans with disabilities start or expand home-based self-employment.

To learn more about these loans, click here or call 1-800-477-9921 (toll-free) or 602-776-4670 or 602-728-9536 (TTY).

Finding People who will Give You Money

If you think finding a loan can be hard, imagine trying to find people who will just give you money and never make you pay it back! While this may sound impossible, here we’ll actually look at a few options:

• The Arizona Rehabilitation Services Administration (AZRSA)
• Crowdsourcing websites
• Friends and Family

The Arizona Rehabilitation Services Administration (AZRSA)

The Arizona Rehabilitation Services Administration (AZRSA) may help you with the startup costs of a small business. To take advantage of this, you must meet the eligibility criteria for Vocational Rehabilitation services and must, with the help of AZRSA, develop a business plan which requires approval by the AZRSA. This is limited to startup costs, may not cover the entire expenses needed, and cannot be used to help with ongoing or recurring financial support.

Note: Your chance of getting this type of funding can depend on your business idea, your Vocational Rehabilitation counselor, and the office where you get services. It is not always available.

Crowdfunding Websites

As we discussed with peer-to-peer lending, there is a new way to find money on the Internet by convincing other people that you have a good idea that is worth funding. While you have to repay the loans provided through peer-to-peer lending, there are other websites that can let you raise money without ever having to repay it. In this way, the money you get is totally free!

The key to getting money with these websites is that you have to have a great idea for a business and convince other people that your dream deserves to come true. They will be giving money out of pure generosity — they won’t get their money back. They are only providing it because they think your idea is good. So, your job is to convince them that you have a great idea and that you are capable of making it a reality.

Kickstarter is the best known of these websites. With it, you can say how much money you need and if you get enough donations to match the amount you requested, you’ll get the money. If you don’t get enough people to offer donations to match what you requested, you won’t get anything. For an example of a disability-related movie project that raised more than $14,000 on Kickstarter, click here.

IndieGogo is another crowdsourcing website. It works a little differently than Kickstarter, because you may be able to keep most of the money you raise even if you don’t match the amount you originally requested. For example, a woman with a learning disability raised more than $1,100 on IndieGogo to purchase sewing equipment she needed to make clothing.

Friends and Family

You’ve probably already thought of friends and family, and it may not be a possibility to get them to lend you or give you money. That said, if you have a great idea for a business and they know you can succeed, you may be able to get them to help. Friends and family are the people who trust you and know you best, which is one of the reasons they may be willing to help you get your business started, even when banks or other programs don’t work for you.

On this page, we’ll talk about how you can save up money to start your business instead of getting a business loan. If you get public benefits, like Supplemental Security Income (SSI), that have resource limits, we’ll also explain how you can save up more money than the resource limits would usually allow. That means you can save money without having to worry about losing your cash or health benefits.

Saving Money

The most common cash benefits that people with disabilities get are Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI). There is no resources limit for SSDI, so saving up money to start your business will not have a negative impact on your SSDI benefits.

However, if you get SSI benefits, you may worry that if you save up more money than SSI’s resources limit ($2,000; $3,000 if you’re married), you’ll lose your benefits. Fortunately, there are a few good strategies that can let you meet your savings goal for your business without losing your SSI benefits. You can:

• Save money in a federally funded Individual Development Account (IDA)
• Save money in a Plan to Achieve Self-Support (PASS)
• Claim your resources as Property Essential to Self-Support (PESS)

We’ll explain how each of these work. If you don’t get SSI, you should still read about IDA programs, because they can still help you even if you don’t have to worry about the SSI resource limit.

Note: These options are not very well known. Sometimes even Social Security Administration (SSA) employees don’t know about them! If you are getting benefits, you must take the initiative and tell the local SSA office how you wish to use these work incentives to establish your business.

Individual Development Accounts (IDAs)

An Individual Development Account (IDA) is a type of savings plan for people with low income offered by nonprofit agencies in some Arizona communities. When you open an IDA, a special bank account is set up, and all the money that is deposited into the account does not count towards the $2,000 resource limit ($3,000 for couples), as long as your IDA is federally funded.

For most IDAs, the nonprofit agency will match your contribution. For example, if you put in $25 per month, they may also contribute $25, or perhaps even more. This makes them a fantastic way to save! Not only are the funds protected, you basically get “free money” as you go along.

An additional benefit of an IDA program is that participants get free credit repair and financial education classes that help prepare them for running a business. These mandatory classes are a fantastic additional resource for new entrepreneurs.

There are some limitations with IDAs. Usually the maximum savings are limited to a few thousand dollars, and there is usually a period of time when monthly contributions are required (often 6 – 10 months or longer) before the money will be matched and can be used for your business. Also, the money can only be used to buy a home, pay for higher education, or fund your small business.

To learn more, read the DB101 article on Individual Development Accounts.

Plans to Achieve Self-Support

If you’re on SSI benefits, another way to save up money for your own business is with a Plan to Achieve Self-Support (PASS). A PASS lets people on SSI benefits put income and resources in a special account that will help them achieve a specified work goal. The money in that account will not be counted as income or resources by SSI. This means that you can save up money to improve your business. An additional benefit is that while any income you get from your business usually would cause your SSI benefits to go down, your SSI benefits won’t go down if you put that income into your PASS!

The purpose of your PASS is to help you get items, services, or skills you need in order to reach your work goal. PASS plans must be in writing and state how long the plan will continue. If your PASS is to help you be self-employed, you have to explain how the PASS will help your business succeed. A good way to do that is by including a copy of your complete business plan with your PASS application. The money you save in your PASS can eventually be used to pay for things like business operating expenses, materials, equipment, supplies, or training.

Your local AZRSA Vocational Rehabilitation (VR) office can help you with all the paperwork to develop and prepare your PASS. To learn more about AZRSA and find a local VR office, click here.

To learn more about PASS, read the DB101 article on Plans to Achieve Self-Support.

Property Essential to Self-Support (PESS)

Property Essential to Self-Support (PESS) is anything that you own and need to support yourself. The Social Security Administration (SSA) does not count these things as resources when figuring out if you are eligible for SSI benefits. Three types of property can be excluded as PESS:

• All property that you use in a trade or business (for example, your inventory) or personal property you use for work as an employee (for example, tools or equipment)
• Up to $6,000 of the value of nonbusiness property that you use to produce something that helps with your daily living (for example, land that you use to produce vegetables that you eat)
• Up to $6,000 of the value of property if the property gives you a return of at least a 6% per year (for example, property you own and rent to someone else

The first of these is the key for people who are self-employed. If you have your own business, you can have a separate business bank account that is not counted by SSI and won’t impact your SSI benefits eligibility, no matter how large the bank account is. However, only business income and business expenses can be run through this account. If you do not keep your personal money and spending separate from your business account, you could lose your SSI benefits. Be sure to provide your SSA representative with a signed statement that the money in your business account is only used for your business.

Vicky’s Story

Vicky always dreamed of owning her own business someday. She wanted to prepare people’s taxes and she knew she would develop a plan! “There will always be taxes and I wanted work that would never go away, something where I could build a future based on my abilities to work hard and develop relationships,” Vicky recalls.

Initially Vicky was worried that if she worked, she’d lose her Social Security Disability Insurance (SSDI) benefits. However, she talked to a Work Incentive Consultant and learned that SSDI has several work incentives that meant that she could try out working without having to worry about losing her benefits immediately. Feeling reassured by this knowledge, Vicky decided to look for a job where she could learn more about taxes.

Eventually, Vicky got a part-time job for an experienced tax preparer. At her job, Vicky earned about $900 per month. She also continued to get $985 in SSDI for a total monthly income of $1,885. For health coverage, she got Medicare and paid $35 each month to have AHCCCS Freedom to Work coverage.

As she learned about preparing taxes at her job, Vicky decided to explore what it would take to have her own business. She researched some programs that could help her plan her future business and got especially interested in Individual Development Accounts (IDAs) and in the services offered by the Arizona Rehabilitation Services Administration (AZRSA).

The AZRSA helped Vicky develop an estimate of how much money she would need to start her own tax preparation service. Her initial expenses would include getting a computer, proprietary tax preparation software, phones, marketing brochures, various office expenses, and licensing fees. When she added everything up, Vicky figured that she could start her business with just $6,000. One of the ways she could do it so cheaply was that she decided she could run her business from home. Since rent for an office would be expensive, Vicky decided to start small and keep costs down.

The AZRSA also helped Vicky find a good IDA program that would help her save up the $6,000 she needed to get her business started. The nonprofit running her IDA program provided a 2:1 match, meaning that for every dollar Vicky saved up in her IDA, the nonprofit would give her $2! The nonprofit said it wouldn’t put in more than $4,000, but that was still pretty awesome. Vicky quickly calculated that if she saved up $2,000 of her own money, the nonprofit would put in the full $4,000 and she’d have a total of $6,000 to start her business!

Based on her work salary and her SSDI benefits, Vicky had enough money to put $160 into her IDA account every month, while the nonprofit put $320 in her account every month. With this formula, Vicky was able to save up almost $6,000 in the first year! Here’s a table showing how her money grew:

Between the money in Vicky’s IDA and a couple of hundred dollars a friend lent her, she had enough to get her business started and keep it going for the first year. Vicky remembers learning a lot during that year: “I knew I would be busy the closer we got to tax day, but I wasn’t ready for the 23 people who showed up at my home office the day before taxes were due!” It worked out well for Vicky though, because after filing extensions for most of those 23 last-minute filers, Vicky had enough business to carry her into the summer.

Today, Vicky continues to build her client base and is trying to expand her services beyond tax preparation. She has even hired a half-time assistant. Vicky is especially focused on working with the senior community, because thanks to her experience with her own disability, she understands the needs of many seniors. She says, “I know taxes aren’t going away, so I think I’ll have plenty more work in the years to come.”