Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The summary
of the proposed small business, prepared by the eligible individual as part of the
Individualized Plan for Employment (IPE) development, as specified in Section
7136.5(c) of these
regulations, shall include:
(1) The proposed
products or services of the small business;
(2) The projected monthly income and expenses of
the small business for the first 12 months of operation;
(3) The number of hours the individual will work
in the small business on a monthly basis;
(4) The initial costs necessary to establish the
proposed small business;
(5) The
individual's resources;
(6) The market
analysis and marketing strategy for the small business; and
(7) The staffing requirements of the small
business.
(b) The eligible
individual shall be required to prepare a Small Business Plan when:
(1) More detailed information regarding the
proposed small business, beyond the information in the summary, is necessary to
assess whether the proposed small business to be operated by the individual is
reasonably likely to produce sufficient income, as specified in Section
7136.6(b)(2) of these
regulations; or
(2) Preparation of such
a plan will provide additional information that is necessary to identify the nature
and scope of vocational rehabilitation services to be provided to assist the
individual to be employed in the proposed self-employment
setting.
(c) An eligible
individual may elect to prepare a Small Business Plan, when not required to do so by
the Department pursuant to subsection (b) of this section, when such a plan would
assist the individual in obtaining resources necessary to establish or operate the
business or in managing the business.
(d) The Department shall provide consultation and
technical assistance necessary to assist the eligible individual in preparing or
revising a Small Business Plan, through its staff or by referral to other sources
such as the U.S. Small Business Administration, a small business development center
at a local community college, Service Corps of Retired Executives (SCORE) or a Small
Business Consultant.
(e) A Small
Business Plan shall include:
(1) A description of
the proposed small business and the products or services to be provided;
(2) The form of business organization;
(3) A detailed market analysis, including
identification of potential customers, the geographic area in which the business
will provide products or services, and potential competition within the
area;
(4) A plan that describes how the
products or services will be distributed and advertised;
(5) A projected timetable for starting business
operations and an estimate of anticipated work hours before operations
begin;
(6) A financial plan that
includes a projection of estimated sales, monthly income and operating expenses for
the first year of operation, an itemization of the costs necessary to establish the
business, and an estimate of when the business will produce income that exceeds
operating expenses;
(7) A description of
required licenses, permits, or zoning variances and insurance;
(8) A description of the vocational rehabilitation
services the individual is requesting from the Department, consistent with these
regulations; the resources that will be obtained from other sources to establish and
operate the small business; how the ongoing operating expenses of the small business
will be funded, whether through the projected business income, loans, or other
sources; and how the individual will provide for basic living expenses until the
small business produces sufficient income, as specified in Section
7136.6(b)(2) of these
regulations; and
(9) A description of
the tasks to be performed by the individual in operating the business and
anticipated hours that the individual will be required to work to obtain projected
income.
(f) The Small Business
Plan and any other available information shall be reviewed by the Rehabilitation
Counselor (RC), with the assistance of other Department staff with expertise in
self-employment, and/or a Small Business Consultant, as appropriate, to assess
whether the proposed small business is reasonably likely to provide sufficient
income to meet the ongoing operating costs of the business and generate income for
the individual as specified in Section
7136.6(b)(2) of these
regulations, including review of the following criteria:
(1) Whether the small business is reasonably
likely to produce the projected income, including whether the products or services
can be produced, marketed and/or distributed, whether a market exists for the
product or services, whether the small business will be able to produce the product
or services in the projected quantities, and whether the projected income of the
proposed small business is consistent with industry standards (i.e., prevailing
income of comparable small businesses within the same industry);
(2) Whether the projected ongoing operating
expenses are necessary for the operation of the business, whether they are usual and
customary for similar businesses, and whether they are sufficient in amount to
generate the projected products or services;
(3) Whether the proposed income of the small
business is sufficient to pay for the projected ongoing operational
expenses;
(4) Whether the small business
is subject to potential liability, risks or insurance requirements that will
negatively affect the projected income;
(5) Whether the projected initial costs are
necessary and are usual and customary for similar small businesses;
(6) Whether all resources necessary to establish
and operate the small business have been identified, including funding sources for
the ongoing operating expenses of the small business and the individual's basic
living expenses; and
(7) Any other
factors that would affect the projected income or expenses associated with the small
business, or the individual's ability to establish and operate the
business.
(g) For the purpose
of a self-employment setting, ongoing operating expenses of a small business include
but are not limited to: rent; utilities; insurance; professional services; payroll
and payroll taxes; inventory; stock or supplies (above and beyond initial stock and
supplies provided for a period of six months as initial costs); advertising;
depreciation; repair and maintenance of property; replacement of tools and
equipment; dues and subscriptions; assistive services, such as attendants, readers,
and interpreters that will be used in operating the business; and transportation
that will be used in operating the business.
(h) If it is determined, after assessment of the
proposed small business, that the self-employment setting is not appropriate because
it will not generate sufficient income, as specified in Section
7136.6(b)(2) of these
regulations, the RC and the individual shall discuss alternative employment
settings, and the IPE shall be developed, or amended, consistent with Section
7136.5(g) of these
regulations.
1. New section
filed 2-28-2008; operative 3-29-2008 (Register 2008, No. 9).
Note: Authority cited: Sections
19006
and
19016,
Welfare and Institutions Code. Reference:
29 USC Sections
705(2)(B),
705(11),
720(a)(2),
720(a)(3),
721(a)(19),
722(b),
722(d) and
723(a);
34 CFR Sections
361.1,
361.5(b)(6)(ii),
361.5(b)(11),
361.5(b)(15),
361.5(b)(16),
361.13(c),
361.45,
361.46,
361.48,
361.50 and
361.52; and Section
19011, Welfare and Institutions
Code.
