RSM 2, Section 1400: Self-Employment

Updated: 02/2026

1401 Overview of Self-Employment

Consistent with DORS policy and procedures, services may be provided to individuals with a vocational goal involving development and management of their own businesses. As specified in federal regulations, all approved employment goals, including self-employment and supported business enterprise goals, must involve work in an integrated, community setting. Individuals whose goal is to remain in a sheltered setting are, therefore, ineligible for DORS services, including self-employment services.

DORS may provide financial and technical support to consumers establishing or maintaining a small business consistent with agency policy. DORS does not have the resources to support informal "hobby-type" businesses which are not designed to be a major source of support for the individual, and for supported self-employment not designed to result in a source of income.

Because of the demands, responsibility, and risk inherent in owning a small business, structured and extensive assessment and planning are required in order to provide the individual with information needed to make decisions which will lead to successful employment outcomes.

1401.01 Supported Business Enterprise

Supported Business Enterprise is a form of supported self-employment for individuals who require supports to perform the functions of and operate their businesses. This may include individuals with significant cognitive or psychiatric disabilities.

Identification of and funding commitment from an extended service provider is a requirement of the Supported Business Enterprise program.
The consumer must perform a core function of the Supported Business Enterprise.
The consumer is supported by a team to include the consumer, DORS counselor, and job coach (when appropriate, as determined by OFS Technical Assistance Branch). The team may also include, as appropriate, case manager, clinician or psychiatrist, family members, advocate, other involved State agency personnel, addictions counselor, and housing staff.
In instances where this policy refers to the consumer, individual, or eligible individual, for Supported Business Enterprise this would be the consumer and their support person(s).
Employment goals for supported business enterprise must be in an integrated, community work setting.
While identification of a support person or entity is required (e.g., a community rehabilitation program (CRP)), development of the business for the individual served must clearly delineate separate funding and financial management from the support entity (e.g., a CRP).
The business plan for Supported Business Enterprise will clearly establish the business function to be performed by the individual and the supports in place to accomplish all required business activities. It will also describe financial arrangements that assure that the business is separate from the support entity.

Minor variances from procedures and policies in this section for individuals in Supported Business Enterprise are noted. Consultation with the OFS Technical Assistance Branch is required to determine appropriate service provision.

1401.02 Application of Policy

Policies and procedures in this section apply to all DORS consumers with an employment goal of self-employment. This includes individuals who are requesting DORS assistance to begin a business or expand a very small business activity into an actual self-employment venture. It also applies to those who have an established business who are requesting DORS assistance to enable them to maintain the business, as well as those proposing to purchase an existing business.

An example of application of policy related to an established business is a self-employed farmer who requests modifications to the farming operation in order to continue farming.

Exceptions to financial and purchase requirements, including any need for vehicle modifications related to the business, will be considered on an individual basis and require administrative approval (see RSM 3, Section 1005). Exceptions to other policy/procedural requirements will be made in consultation with the OFS Technical Assistance Branch.

1402 Role of DORS

The role of DORS in assisting a consumer interested in self-employment is as follows:

Counselor Role

Provide support and information throughout the assessment, planning, and implementation process.
Conduct an initial assessment of the consumer and their suitability for self-employment (see Section 1407.01).
Assist with identification of community resources.
Clarify that DORS direct financial support for a business operation is limited since it may never be the primary funding source (see Section 1403).
Counselor will provide the Self-Employment Fact Sheet (RS-6k).
Any proposal of Business Plan must identify additional funding sources for self-employment operation.

Supervisor Role – Supervisor will review documents with counselor and submit to DORS Management for review.
DORS Management Role – DORS Management will approve or disapprove business plans following Business Plan Review committee (see Section 1407.07).
DORS Administrative & Fiscal Services (AFS) Role – The AFS Director shall provide consultation regarding franchises/franchise agreements and shall approve or disapprove business plans involving franchises.

1403 Financial Standards

DORS will not be the primary funder of any business enterprise. Principal funding will come from other sources, to include the individual, family members, bank loans, workers’ compensation or insurance settlements, Social Security work incentives, and other private or public sources.
As part of Business Plan development, all individuals will thoroughly explore and obtain multiple funding sources, will share in the risk of starting a business and will ultimately assume the risk of owning a business.
If the implementation of an approved Business Plan will require cash contribution by the individual, those monies will be placed in escrow or expended for specific purpose prior to expenditure of any DORS funds for the business.
Workers’ Compensation claimants who are interested in self-employment will comply with all requirements of the Workers’ Compensation Commission regarding consideration of development/funding of a small business prior to requesting DORS financial support.
In situations where DORS financial support is necessary, financial support will be limited to assistance with purchase of specific goods and/or services according to an approved Business Plan and Individualized Plan for Employment (IPE). Financial assistance for goods and services related to the business typically will not exceed $10,000 and will not be provided in the form of cash. DORS shall not provide funding for expenditures that have not been pre-approved in writing by a DORS official.

1404 Terminology

Self-Employed Persons – Self-employed persons are those who work for profit or fees in their own business, profession or trade, or operate a farm. Self-employed persons, while interested in modest growth and supporting themselves through the proceeds of the business, are not necessarily interested in unlimited growth and expansion of the business.
Entrepreneurs – Entrepreneurs are self-employed individuals who identify an opportunity and create an organization to respond to it. Such individuals are often very interested in growth and expansion of their businesses.
Home-Based Businesses – Home-based businesses are those enterprises based in and operated out of the entrepreneur’s residence.

Note: "Home-based businesses" should not be confused with "home-based employment." If an individual’s home is the location for performing job duties as an employee, such as telecommuting, and the individual is working for someone else, the person is not "self-employed."
DORS works with individuals interested in self-employment or entrepreneurship, whether located at the individual's home or another site. DORS also works with individuals interested in home-based employment and telecommuting (see Section 600), though not considered self-employment. DORS provides services to individuals with an employment goal of home-based employment in the same manner as individuals planning to work at an employer's site.

Approvals – Regional Management approval is required to add Self-Employment and related services to an IPE and for IPE Amendment when Business Plan is accepted/approved. For existing businesses, consultation with OFS Technical Assistance Branch is required.
Business Plan Review Committee – Business Proposals and Plans are reviewed by the Business Plan Review committee, consisting of DORS senior leadership. DORS may identify community partners to assist with reviews to address technical considerations. Recommendations and decisions will be given to the Counselor and consumer.
Courses – DORS will support courses related to developing business proposals and plans, as well as courses related to business finances.
Established Business – Consumers with established businesses can seek DORS assistance/ consultation. Regional management review and approval is still required.
Funding – DORS is not to be the primary funder of any business enterprise (Section 1403a). Other sources can include the individual, family, bank loans, Social Security Work Incentives, and/or other private and public sources.
IPE – The IPE fully supporting a Business Plan for self-employment requires recommendation by the Business Plan Review Committee and Administrative Approval for DORS funding by Regional Management.
Length of Time – There is no pre-determined amount of time a Consumer will spend participating in the Self-Employment program, because each situation is unique to the individual. It is expected that the consumer will maintain regular contact to provide updates on self-employment activities.
Measurable Skills Gains (MSG) – Measurable Skills Gains are not recorded for any participation in self-employment.
Prerequisites – There are no academic or intellectual "prerequisites" to participate in self-employment. However, the counselor should consider the challenges associated with owning/operating a business and the consumer’s intellectual, emotional capacities, and abilities.
Service Category on the IPE – The IPE category "Self-Employment Service" is to be used for self-employment services when the consumer is receiving self-employment services through community resources such as Small Business Development Centers or other business development assistance programs.

For self-employment classes offered through local community colleges or universities, use IPE category “College/University Training.” The courses and/or consultation details are to be listed in the description.

Successful Self-Employment Closure – DORS defines "competitive rehabilitated" closure in self-employment/supported business enterprise as "the point at which revenue meets or exceeds the minimum wage."
One of the following forms of documentation must be in the case record, either as an AWARE™ Case Note or attachment:

Profit and Loss Statement or print out from the consumer’s accounting system which shows funds received and expended on a monthly basis.
Other documentation that supports the revenue and expenses of the self-employment business. (see Section 1407.11).

Supported Self-Employment – Consultation with OFS Technical Assistance Branch is required for consumers who wish to pursue self-employment and have long-term support in place.
Technology:

A non-adapted computer and business software would be included on the Business Plan and therefore may not be purchased in advance of Business Plan approval.
An adapted computer (or similar assistive technology) meeting the disability needs of the consumer would not be included in the Business Plan and therefore may be purchased in advance of the Business Plan approval, if included on an approved IPE.

VR Self-Employment Guide – The VR Self-Employment Guide is a multimedia website designed to help people with disabilities and vocational rehabilitation counselors understand the self-employment process. It provides a way for consumers and counselors to assess self-employment readiness and guides them through the process of developing a business plan. The website is self-directed and can be used by individuals on their own or with the guidance of a VR counselor or mentor.

1405 Types of Businesses

A wide spectrum of business ventures may be considered for self-employment. Businesses supported by DORS must:

Comply with all relevant State, federal, and local laws and regulations.
Involve majority ownership and management of the business by an eligible individual served by DORS.
For Supported Self-Employment, involve majority ownership and participation in a core business function by the individual served, with management of the business by identified support person(s).
Be organized as "for profit."
Be established in an integrated, community work setting.
Not involve speculative activities (i.e., engagement in risky business deals on the chance of large, quick profits).
Be designed to be the major source of income for the individual (i.e., not considered part-time, not a “hobby” business, nor secondary employment when the consumer is currently employed in a full-time job). For Supported Self-Employment, be designed as a source of income for the individual (i.e., the business must at least break-even).
Not involve multi-level marketing sales.

DORS reserves the right to deny approval and funding of a business determined by the Director to be inconsistent with community standards. Such determination may be appealed (see RSM 1, Section 304). Staff concerned with the nature of a business being considered/developed by a consumer shall request management consultation.

1406 Business Plan

The Business Plan is a comprehensive document describing all relevant aspects of a business, whether in the proposal and development stage or fully operational. It is the foundation for planning activities and provides justification for undertaking the endeavor. The Business Plan shall include all goods and services required for establishment of the business. The Business Plan provides information upon which funding decisions are made by financial institutions.

The Business Plan shall include:

A brief business description
Information about the business and owner
A description of the customers
Financial information
Summary and mission statement
Detailed business background
Owner strengths to run the business
Type of ownership
Industry selected
Marketing plan including business name, qualities, customers, and similar businesses
Market research and analysis
Marketing plan
Operational plan including location, costs, production methods, and contract services
Management methods
Any related certification, licensure and/or regulatory requirements
Critical risks and potential problems
Community benefits
Financial plan including up-front cash needs, break-even analysis, sales forecast, cashflow statement, income statement, and balance sheet

The Business Plan shall not include:

Goods and services that the individual would require if they were working for another person; that is, not pursuing self-employment, would not be included in the Business Plan and are not considered part of the $10,000 guideline for business-related purchases.
Disability-related needs are not included in the business plan; however, their implications shall be taken into account in business planning. (Disability-related needs are included in the IPE/IPE amendment.)

For example:
- A non-adapted computer and business software would be included in the Business Plan.
- An adapted computer meeting the disability needs of the consumer would not be included in the Business Plan, but related business software needed for the business would be included in the Business Plan.
- Job coaching would not be included in the Business Plan if the individual needed job coaching no matter what form of employment were to be pursued.

Consult with DORS management if there are questions about self-employment purchases to be included in the Business Plan and considered part of the $10,000 guideline.

DORS may financially support business enterprises which are based on an approved business plan which has been reviewed by the Business Plan Review committee. The approved Business Plan will be the basis of the IPE or IPE Amendment which includes specific goods and services required for the business. The IPE may reflect an incremental implementation of the approved Business Plan (see Section 1407.08).

1407 Self-Employment and the Rehabilitation Process

1407.01 Intake/Assessment

Consumers without an established business stating an interest in self-employment:

If an individual states an interest in self-employment or if this option appears feasible, the DORS counselor will:

Obtain information from the individual regarding business ventures being considered, previous business experience, related skills, and other relevant factors.
Discuss characteristics needed for successful small business operation in terms of the strengths, resources, concerns, abilities, capabilities and interests of the individual. These include such traits as:

Well-developed interpersonal skills in order to develop and maintain a customer base, interact with the public, work with employees, suppliers, etc.
Initiative
Flexibility and problem-solving skills
Ability to prioritize and focus
Ability to accept risks inherent in self-employment

As applicable, the DORS counselor will obtain information from providers (e.g., psychologists, physicians, counselors) currently or recently treating the consumer in terms of viability of self-employment for the consumer considering the characteristics required for success (see above). Referral for an assessment of feasibility of self-employment should be considered on an individual basis and include questions for the provider about specific traits required for self-employment.
The counselor and consumer will discuss the individual’s financial goals in order to define what would constitute a successful outcome. Such issues as termination of government benefits, supplementing family income, and earning sufficient funds to maintain competitive employment standards should be considered.
From the outset, individuals interested in self-employment will be informed that DORS will not provide major financial support for business ventures. Only limited funding toward specific goods and/or services required according to an approved Business Plan and IPE will be considered. Such funding will typically not exceed $10,000 and will not be provided in the form of cash (see Section 1403).
If the consumer is interested in starting a business to provide a service and does not already have training or skills in this industry, recommend an assessment of the consumer’s potential for this field.

This would be followed, as appropriate, by skills training and at least two years of work experience before consideration of self-employment would be advised.
Following skills training and work experience, self-employment ideas may be reconsidered.

The DORS counselor will provide the Self-Employment Fact Sheet (RS-6k) to individuals as appropriate.
Review and complete the Preliminary Self-Employment Assessment (RS-4q) form with consumer.
Supervisor provides the Preliminary Self-Employment Assessment (RS-4q) to Regional Management for approval to move ahead.
The Regional Management reviews the Preliminary Self-Employment Assessment (RS-4q) for approval or rejection. If approved refer to Attachment 1400-2: IPE for Self-Employment Guidance on completing an initial IPE.
If appropriate, based on results of the Preliminary Self-Employment Assessment (RS-4q), direct the consumer to the VR Self-Employment Guide website (vrselfemploymentguide.org). Request the consumer read, complete the worksheets associated with "Chapters 1-3," and provide copies of worksheets.
Review completed VR Self-Employment Guide worksheets with the consumer.
The consumer develops a business proposal using the Self-Employment Business Proposal Template.
Consumer submits the completed chapters, worksheets, and the Business Proposal to the counselor.
Counselor and supervisor review the completed chapters, worksheets, and the Business Proposal, and submit them to Regional Management.
If the Regional Management agrees, the Business Proposal will be sent to the Business Plan Review committee for review.
If approved, the counselor and consumer will collaborate to develop the IPE for Self-Employment.
Note: This is a Vocational Counseling & Guidance (VC&G) Plan – not yet a self-employment plan.

Consumers with an established business stating an interest in self-employment:

If the individual has come to DORS to request assistance in order to maintain an established business, the counselor and consumer shall complete the Preliminary Self-Employment Assessment (RS-4q). The counselor shall consult with their supervisor and request approval for consideration to proceed with further review of the business proposal, start at Step 11 above.

Purchases to Maintain an Established Business:

For a business that is already being operated by a consumer, DORS will consider assistance with purchases which directly enable the consumer to continue to operate the business but not purchases which upgrade the business. All purchases must be consistent with DORS and State procurement policy and regulation.

For an established business, consideration may be given to assistance in purchasing the following items:

Adaptive or assistive technology equipment or devices required for the individual to continue operating the business
Non-adapted equipment and devices not typically used in a particular business but required because of the disability

For purchases that are directly related to business operations but not necessary due to the individual’s disability, and in accordance with Section 1407.06, the consumer's Business Plan must be submitted to the Business Plan Review committee for evaluation.

1407.02 Initial Self-Employment IPE

If the consumer decides to move forward, they will create or update their IPE, choosing "self-employment" as their goal (see Section 604.09). The plan must include Self-Employment Services to include completing the VR Self-Employment Guide chapters 4-8, development of the Business Plan, and any goods or services needed because of their disability to help them reach their employment goals. Encourage the consumer to participate in a Financial Literacy course.

The counselor will provide resources and next steps to the consumer.
The consumer will complete the remaining VR Self-Employment Guide chapters using the provided template.
Consumer must provide updates to the counselor at least every 30 days (this expectation will be noted in the IPE).
Consumer submits the completed Business Plan along with documentation of the completed VR Self-Employment Guide chapters.

The IPE or IPE amendment specific to creation of a business is not completed until a Business Plan has been reviewed and approved by the Business Plan Review committee and approved by DORS. In most instances this will not be the initial IPE but will be an amended plan later in the process.

1407.03 [REMOVED]

1407.04 Other Rehabilitation Services

Throughout the time required for exploring self-employment as an option, and developing and implementing a Business Plan, the counselor will continue to identify and coordinate other rehabilitation services which may be required by the consumer.

1407.05 Decision Points

The consumer may decide at any point in the process that they wish to pursue another type of employment outcome. If this occurs, the counselor shall meet with the consumer, consider other vocational options, and amend the IPE, as appropriate.

1407.06 Business Plan Assessment

The counselor will review the Business Plan to be sure all of the required elements are included (see Section 1406).
Counselor and supervisor submit the Business Plan and documents for Regional Management to review.
Regional Management will forward Business Plans ready for review to members of the Business Plan Review committee.
Business Plan Review committee will utilize an online Business Plan Review evaluation to review self-employment business plans.
The counselor, supervisor, and regional manager will be informed of the Business Plan Review committee decision and provided with a Score Summary sheet to share with the consumer.

If approved, proceed to IPE development using Attachment 1400-2: IPE for Self-Employment Guidance.
If not approved, the consumer is given two months to revise and resubmit the plan.

As applicable, the consumer submits a revised Business Plan which addresses the suggestions and recommendations from the Business Plan Review committee. The revised plan must be submitted as one document. The revised Business Plan is submitted back to Regional Management, and then back to the Business Plan Review committee.
The counselor, supervisor, and regional manager will be informed of the Business Plan Review committee decision and provided with a Score Summary sheet to share with the consumer. If the revised Business Plan is approved, move to the next Step/Phase.
If the revised Business Plan is not approved, the consumer is given one additional opportunity to revise the Business Plan and resubmit for a third Business Plan Review committee review.

Business Plans approved by the Business Plan Review committee will become part of the AWARE™ case record. The counselor and supervisor will use it to determine the services and service costs listed on the IPE.
Use Attachment 1400-2: IPE for Self-Employment Guidance when amending the IPE which incorporates the Business Plan.
See DORS Purchase Policy (Section 1000) for providing services and materials in support of the Business Plan.

If the consumer decides not to pursue self-employment, other vocational options will be considered and the IPE amended, as appropriate.

1407.07 DORS Approval

Subsequent to review and recommendations by the DORS Business Plan Review committee, the Business Plan will be forwarded to Regional Management for review. The review will include consideration of:

The recommendations of the Business Plan Review committee.
Implications of disability factors.
Specific goods/services requiring administrative approval and completion of the Administrative Approval (RS-9h) form as appropriate.

1407.08 IPE Amendment/Service Provision

If the business plan is approved, the DORS counselor will:

Advise the consumer and work with the consumer to prepare the IPE/IPE Amendment as indicated in Section 1407.08 and Section 600.
Seek DORS management assistance in the procurement of business goods as approved in the business plan.
Upon completion and approval of the IPE or IPE Amendment, initiate and implement services in a timely manner.
Continue to work cooperatively to assist the consumer with Business Plan implementation.

1407.09 Establishment of the Business

The business is considered to have been established when the individual is ready to serve customers or render services and DORS has provided the services designated in the IPE. An employment record shall be entered in AWARE™ at that time (see Section 907).

1407.10 Entering Employment information in AWARE™

Enter the employment information in an Employment Record in AWARE™, including Employment Start Date. "Stable Date" should not be entered until all self-employment services have been provided to move the case into "Employed" status.

For cases identified as Supported Self-Employment, job stabilization is indicated in the AWARE™ record with entry of the "Stable Date" in the employment record, when:

DORS self-employment services are no longer needed to "stabilize" the employment outcome or to address consumer concerns, and supported employment job coaching, specifically, has decreased to a predictable level of support which may be provided via extended services, including natural support, and,
The individual has transitioned from intensive supported employment job coaching to:

Extended services for youth with most significant disabilities funded by DORS, or
Extended services for either a youth or an adult with most significant disabilities funded by another provider, or
Natural supports.

1407.11 Closure of the Record of Services

Usual closure standards apply (see Section 1000). Closure will be considered on an individual basis and requires the approval of the supervisor. Because of the nature of self-employment, it is likely that a period longer than 90 days will be needed before closure of the record would be appropriate.

DORS defines "competitive rehabilitated" closure in self-employment/supported business enterprise as "the point at which revenue meets or exceeds the minimum wage." Examples include:

The self-employment business has sustained operations for 90 days without additional support from VR. The individual is able to put money back into the business to maintain ongoing business expenses.
The owner makes a net profit from the business or has significant gross income illustrating strong sales and profit potential over time.

Required documentation – One of the following forms of documentation must be in the case record, either as an AWARE™ Case Note or attachment:

Profit and Loss Statement or print out from the consumer’s accounting system which shows funds received and expended on a monthly basis.
Other documentation that supports the revenue and expenses of the self-employment business.

Hourly wage will be estimated based upon gross income earned minus business expenses, divided by the number of hours worked during that time frame.
Example: Consumer worked 40 hours during the time frame and earned $1,000 gross income and had $300 operating expenses. $1,000 - $300 = $700 net income. Divide $700 net income by 40 hours worked= $17.50 hourly wage.

If all closure standards except the income standard described above have been met by an individual in self-employment, the record shall be closed as rehabilitated, non-competitive.

If there are questions about whether income standards have been met for individuals who have successfully initiated self-employment, the OFS or OBVS Director should be consulted.

Note: "Work Status at closure" will be "self-employment."

1408 Financial and Purchase Procedures

The following procedures relate to financing self-employment enterprises. Exceptions will be considered on an individual basis and require administrative approval (see Section 1005).

1408.01 Expenditure of DORS Funds

Purchases involving expenditure of DORS funds:

Must be included in the business plan and IPE/IPE Amendment.
Will be made in accordance with purchase approval requirements (Section 1000).
Will be made in accordance with State procurement regulations.

1408.02 DORS Purchasing Limitations

DORS will not:

Refinance or repay business debts.
Fund construction or purchase of real estate.
Participate in the purchase of vehicles which require a license to operate (leasing or other options may be considered consistent with the approved business plan).
Reimburse consumers for prior expenditures made without pre-approval of a DORS official.

1408.03 Authorizations

Authorizations will be prepared consistent with established procedures (RSM 3, Section 1100).

1408.04 Business Computer Needs

Computer software and hardware required as business equipment and specified in the approved business plan and in the IPE may be purchased consistent with DORS policy regarding purchase of:

Adapted computers (see Section 1602).
Non-adapted computers (see Section 708).

1408.05 Professional Services

Business-related professional services, such as accounting services or legal consultation, may be purchased if required and specified in the approved business plan and IPE. Fees for such services will not exceed the usual and customary charge. Such purchases may require the initiation of service or consultant agreements consistent with State procurement regulations.

​​​​​​​​​​​​​​DORS Official Policy​​​​

Section 1400