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Self-Employment and Small Business

This topic provides general information about Small Business and Self-Employment for People with Disabilities interested in entrepreneurship. You can read the topic sequentially, or jump directly to any of its sections listed below:

· Small Business in America

· Small Business Characteristics

· Important Considerations for All Potential Entrepreneurs

· Barriers to Entrepreneurship for People with Disabilities

· Benefits of Entrepreneurship for People with Disabilities

· Resources for Entrepreneurs 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 per cent 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.

Even so, entrepreneurship for people with disabilities is often overlooked by government programs and by many people with disabilities as an avenue from the public rolls to self-sufficiency. The Rehabilitation Services Administration (RSA) statistics for 1997 show that only 2.7 percent of the vocational rehabilitation clients with successful closures became self-employed or started a small business. However, RSA's own recent demonstration programs on client choice reported that between 20-30 percent of their participants chose self-employment, substantially above the rate of self-employment or small business closures reported by state vocational rehabilitation agencies.

These statistics are particularly relevant now because of trends in the national economy. The very nature of work is changing. Governments and private sector employers are reducing their workforces, shifting toward more contingent employment, including temporary, part-time and contract employees. These trends are increasing the demand for contract services and goods and many people are responding by starting small businesses or becoming self-employed.

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?

Barriers to Entrepreneurship for People with Disabilities

Starting a business is a major task for anyone. People with disabilities face additional barriers. It is critical that the potential roadblocks be recognized early on.

From attitudinal barriers to lack of coordination among federal programs, an array of obstacles confront adults with disabilities who want to start a business:

· The possible loss of cash benefits from Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) disability programs

· The possible loss of health care benefits associated with other programs 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.

Other obstacles include unavailability of bonding, inability to obtain insurance, restricted access to support networks, lack of knowledge about bidding opportunities, and discrimination based on misguided stereotypes about the capabilities of people with disabilities. The 1999 passage of the Ticket to Work and Work Incentives Improvement Act addresses some, but not all, of these issues.

Benefits of Entrepreneurship for People with Disabilities

Despite the barriers, many enterprising people with disabilities do run successful businesses. Self-employment and small business ownership are attractive to people with disabilities for several reasons. 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.

Resources for Entrepreneurs with Disabilities

Small Business Self-Employment Service (SBSES)

Logo of the Small Business Self-Employment Service (SBSES)If you have a disability and are considering starting your own business, contact the Office of Disability Employment Policy’s Small Business Self-Employment Service (SBSES) for information. The SBSES World Wide Web site includes links to other entrepreneurship sites, including the SBA and state vocational rehabilitation programs. 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). Visit the SBSES website at:

U.S. Small Business Administration (SBA)

Logo of U.S. Small Business Administration (SBA)Whether you are starting a new business or expanding an established business, the Small Business Administration (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). Outside of these hours, callers may hear a recording of the information 24 hours a day, seven days a week. Write to this service at: 200 North College Street, Suite A-2015, Charlotte, North Carolina, 28202.

Visit the SBA website at:

Office of Disability Employment Policy (ODEP)

U.S. Department of Labor sealThe Office of Disability Employment Policy (ODEP) in the Department of Labor has initiated a range of activities with other Federal agencies to ensure that Federal employment programs for people with disabilities will promote small business ownership as a career option, and that potential entrepreneurs with disabilities know about the process and resources for starting a business. Information on these programs can be obtained from the Office of Disability Employment Policy’s web site at

Also see:

Supported Employment

Customized Employment

APSE: The Network on Employment


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