Small Business and Self Employment for People with Disabilities

Small Business in America

With more than one million new businesses each year, America's economy depends on small businesses for its vitality and growth. According to the 1997 report of the U.S. Census Bureau, the nation's 17 million small, non-farm businesses constituted 99.7 percent of all employers, employed 52 percent of private workforce and accounted for 51 percent of the nation's sales. Small business-dominated industries provided 11.1 million new jobs between 1994 and 1998, virtually all of the new jobs created during that time period. Small businesses are most likely to generate jobs for young workers, older workers and women, provide 67 percent of first jobs and produce 55 percent of innovations.

Thousands of people with disabilities have been successful as small business owners. The 1990 national census revealed that people with disabilities have a higher rate of self-employment and small business experience (12.2 percent) than people without disabilities (7.8 percent). The Disabled Businessman's Association estimates that 40 percent of home-based businesses are operated by people with disabilities.

The University of Montana Research and Training Center on Rural Issues for People with Disabilities has documented that entrepreneurs with disabilities have successfully operated a wide variety of businesses: Accounting Services, Air Conditioner Repair Service, Auction Service, Auto Body Repair Shop, Bakery, Bicycle Shop, Boat Making Shop, Child Care Service, Chiropractic Practice, Contract Services, Counseling Service, Farming, Janitorial/Maintenance Service, Piano Refinishing Service, Real Estate Office, Restaurant, Freelance Writing, Used Clothing Store, Weed Abatement Service and Welding Shop. The type of business that a person with a disability can operate is limited only by imagination.

Small Business Characteristics

Although the U.S. Small Business Administration (SBA) establishes industry-specific definitions, it generally considers any business with fewer than 500 employees, including self-employed individuals, to be a small business. The Federal Reserve Board's report, "National Survey of Small Business Finances (1995)," found that small businesses were home-based 53 percent of the time. Twenty-four percent of all new businesses in 1993 began with no outside financing. The remaining 76 percent received funding from traditional sources, such as banks, credit unions, and finance companies, or from family members or credit card advances.

Although many people believe that 80 percent of all small businesses fail within five years, statistics from the U.S. Census Bureau reveal a different story. The Census Bureau reports that 76 percent of all small businesses operating in 1992 were still in business in 1996. In fact, only 17 percent of all small businesses that closed in 1997 were reported as bankruptcies or other failures. The other terminations occurred because the business was sold or incorporated or when the owner retired.

Important Considerations for All Potential Entrepreneurs

The SBA advises anyone thinking about starting a business to ask themselves several questions before going forward:

• Am I a self starter?
• How well do I get along with a variety of personalities?
• How good am I at making decisions?
• Do I have the physical and emotional stamina to run a business?
• How well do I plan and organize?
• Are my attitudes and drive strong enough to maintain motivation?
• How will the business affect my family?

Important Considerations for Potential Entrepreneurs with Disabilities

Self-employment offers many benefits for people with disabilities:

• The freedom, flexibility and independence that come from working for oneself
• The opportunity to work in a disability-friendly environment
• The ability to reduce the need for transportation
• The ability to accommodate changing functional levels
• The ability to create an accessible work environment
• Individuals with disabilities who receive income support, such as Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) disability payments, can increase their income while staying within the income and asset requirements of those programs.

But anyone considering entrepreneurship must also be aware of the challenges involved in starting a business. There remains an array of obstacles ranging from attitudinal barriers to lack of coordination among Federal programs:

• The possible loss of cash benefits from SSDI or SSI disability programs
• The possible loss of health care benefits such as Medicare or Medicaid
• The inability to get credit because of poor credit ratings
• The lack of assets to use as collateral
• The lack of access to programs promoting self-employment and small business development
• Government disability programs that overlook entrepreneurship as an avenue from the public rolls to self-sufficiency.

The 1999 passage of the Ticket to Work and Work Incentives Improvement Act addresses some, but not all, of these issues.

Resources for Entrepreneurs with Disabilities

If you have a disability and are considering starting your own business, contact the Office of Disability Employment Policy's new Small Business Self-Employment Service (SBSES) for information. The Office of Disability Employment Policy's Web Site is http://www.dol.gov/odep/. It also provides information on a variety of other technical assistance resources for writing business plans, financing, and other issues specific to developing a small business. Individual assistance is available at 800-526-7234 or 800-232-9675 (V/TTY).

Whether you are starting a new business or expanding an established business, the SBA has a variety of programs to assist you. Free one-on-one counseling is available locally to help entrepreneurs and potential entrepreneurs in the areas of planning, financing, management, technology, government procurement, and other business related areas.

The SBA's Answer Desk is a national toll-free telephone service which provides information to the public on small business problems and concerns. This service provides general information about SBA programs and other programs available to assist the small business community.

Business Information Assistants are available to speak directly with callers between the hours of 9:00 a.m. and 5:00 p.m. (East Coast Time) by calling the Answer Desk at 800-UASK-SBA (800-827-5722).