Self-Employment for Persons with a Disability

Published: May 2, 2005  |  Source: spinalcord.org
237

In most of the world, the ultimate determination of self-control is employment. This is the basis for almost all micro-lending activity worldwide. Self-employment carries with it connotations that have traditionally precluded people with a Disability. However, people with disabilities have been using self-employment as an effective route to a job for centuries. The difference in the 90’s is that the “system” is beginning to want a piece of the action. Social planners are beginning to see that economic empowerment for people with disabilities makes good business sense for society as well.

Traditional work options for people with disabilities have expanded somewhat with the Americans with Disabilities Act and other policy initiatives. However, over 50% of all people with a disability are currently unemployed. (1) Some studies indicate 70% as a more realistic figure when factoring in fully remunerative work versus sheltered or supported employment. This lost productivity represents a loss to the gross national product the vicinity of $5 billion annually (2), not to mention outlays in public dollars for individual supports, also in the billions of dollars.

Rehabilitation and placement services work to reestablish the individual’s capacity to earn and contribute. In some cases, rehabilitation includes bringing a person with an existing profession or skill to the point of job entry. Counselors and job coaches are trained to develop employment skills and options for their clients. They are adept at working with employers to open up employment and work opportunities where someone else has developed and built the job base. They are capable of establishing a course of training for individuals, pursuant to full employment, once they understand the potential job openings that exist.

Where the work option is self-employment, counselors and job coaches are less versed. Rehabilitation and placement service agencies are not aware, on the whole, of economic development resources, business start-up methods, or entrepreneurial characteristics and requirements.

A key process to developing business ownership as a work option for people with disabilities is to incorporate personal and business supports from both economic development and social service resources. The successful integration of these systems has never been easy, and can only be done with great effort. Once accomplished, however, the resulting support mechanisms will work well in tandem. ( In New Jersey’s disability loan program, the total integration of economic development and social service programs is still in process. However, to the degree that it has been achieved, it has resulted in persons with a disability seeking business start-up and expansion assistance being received positively in either court. The perception that self-employment is a viable option for these people has been the major attitude shift viewed in both camps.)

The attitude shift is showing. US Rehabilitation Services Administration (RSA) Director Dr. Fred Schroeder has indicated that the RSA, major funding source for vocational rehabilitation services nationally, was placing more emphasis on self-employment and entrepreneurship as an option of consumers of Vocational and Rehabilitation services as of this year. At the recent conference of the President’s Committee on Employment for People with Disabilities, President Clinton emphasized self-employment and entrepreneurship as viable work options for this population. This action, while providing little in the way of concrete funding as yet, clears a path for federal agencies to target self-employment as an option.

In most of the world, the ultimate determination of self-control is employment. This is the basis for almost all micro-lending activity worldwide. Self-employment carries with it connotations that have traditionally precluded people with a Disability. However, people with disabilities have been using self-employment as an effective route to a job for centuries. The difference in the 90’s is that the “system” is beginning to want a piece of the action. Social planners are beginning to see that economic empowerment for people with disabilities makes good business sense for society as well.

Traditional work options for people with disabilities have expanded somewhat with the Americans with Disabilities Act and other policy initiatives. However, over 50% of all people with a disability are currently unemployed. (1) Some studies indicate 70% as a more realistic figure when factoring in fully remunerative work versus sheltered or supported employment. This lost productivity represents a loss to the gross national product the vicinity of $5 billion annually (2), not to mention outlays in public dollars for individual supports, also in the billions of dollars.

Rehabilitation and placement services work to reestablish the individual’s capacity to earn and contribute. In some cases, rehabilitation includes bringing a person with an existing profession or skill to the point of job entry. Counselors and job coaches are trained to develop employment skills and options for their clients. They are adept at working with employers to open up employment and work opportunities where someone else has developed and built the job base. They are capable of establishing a course of training for individuals, pursuant to full employment, once they understand the potential job openings that exist.

Where the work option is self-employment, counselors and job coaches are less versed. Rehabilitation and placement service agencies are not aware, on the whole, of economic development resources, business start-up methods, or entrepreneurial characteristics and requirements.

A key process to developing business ownership as a work option for people with disabilities is to incorporate personal and business supports from both economic development and social service resources. The successful integration of these systems has never been easy, and can only be done with great effort. Once accomplished, however, the resulting support mechanisms will work well in tandem. ( In New Jersey’s disability loan program, the total integration of economic development and social service programs is still in process. However, to the degree that it has been achieved, it has resulted in persons with a disability seeking business start-up and expansion assistance being received positively in either court. The perception that self-employment is a viable option for these people has been the major attitude shift viewed in both camps.)

The attitude shift is showing. US Rehabilitation Services Administration (RSA) Director Dr. Fred Schroeder has indicated that the RSA, major funding source for vocational rehabilitation services nationally, was placing more emphasis on self-employment and entrepreneurship as an option of consumers of Vocational and Rehabilitation services as of this year. At the recent conference of the President’s Committee on Employment for People with Disabilities, President Clinton emphasized self-employment and entrepreneurship as viable work options for this population. This action, while providing little in the way of concrete funding as yet, clears a path for federal agencies to target self-employment as an option.

People with disabilities currently have some assistance with which to achieve self-employment. Policies at the Social Security Administration, for example, are in place that will allow an individual on SSDI to develop a business while keeping his or her benefits for up to four years. Vocational Rehabilitation agencies in several states have initiated new self-employment programs which provide some of the start-up monies needed by eligible persons through direct purchase or through establishment of loan loss reserve funds. Independent Living Centers (consumer-run groups) are beginning to add business counseling to their traditional roles of housing and employment support.

Opening avenues to financing and capital is a critical element of this process. For most persons with a Disability, the concept of starting a business is only a dream – one that is beyond reach. In most cases, they simply do not have the work history and/or credit history to access financing. In other cases, they may have the skills, the finances and the drive, but lack direction and support from within the economic development community. Improvement in school-to-work and employment opportunities may change this for future generations of people with disability, but not for the current group of 25- to 50-year-olds.

The majority of persons in this population do not have access to great amounts of collateral or personal resources. Like many of the clients served by Association for Enterprise Opportunity (AEO) member organizations, the vast majority of individuals with a disability who might qualify for entrepreneurial development as a work option do not have resources such as homes and property to collateralize loans.

What this population does have is time. Since the majority are receiving some form of social support and payment, they have the luxury of taking the time to plan the business properly, research the market, gain experience in their chosen field, and review potential financing scenarios. Assistance from traditional microenterprise mechanisms and programs is needed.

Analyzing potential with an eye to the individual’s efforts at solid planning and market testing of business concepts versus heavy reliance on collateral and co-signers to approve financing is a basic premise of AEO members. By opening the development services of these organizations to people with disability, the micro-lenders can avail themselves of the additional operational and lending capital which may be possible through social service programs.

Possible benefits to AEO organizations of opening the doors to people with a disability include:

  • partnering with an existing vocational rehabilitation licensed provider to offer business planning and development services as a consultant to the VR counselor, as a provider under Social Security rules allowing direct purchase of development services through a PASS, or to make use of existing supported employment programs to provide the follow-through needed with an infant business
  • inclusion of Social Security and Vocational Rehabilitation dollars in the overall financing package, adding greater potential to fund a business with less direct cost
  • obtaining a client base of individuals with prior work and business experience who have had a disability interrupt their careers as entrepreneurs
  • expanding the base of potential founders and grantors

Initiating a relationship with state vocational rehabilitation services offices is the first step. Another step is to contact their state Developmental Disabilities Council and Social Security Offices for leads to agencies serving people with a disability in employment and self-employment. Interested organizations can also contact the NJ Disability Loan Fund for information. By incorporating very little change in the way they do business, AEO organizations can open the door to new clientele and new approaches to economic development.