The Time Is Ripe for Entrepreneurship in Vocational Rehabilitation: A Four-Pronged Approach

Abstract

The field of rehabilitation has laid a great foundation for the monumental entrepreneurial changes that have occurred to the worldwide economy due to the COVID-19 pandemic. The use of self-employment as an outcome has fallen below 1% of Vocational Rehabilitation closures but can rise as the field takes a four-pronged approach to helping individuals become entrepreneurs. The idea of entrepreneurship fits rehabilitation philosophy, and through training, legislation, and new vision many persons with disabilities can find successful careers as entrepreneurs.

The rehabilitation field has always recognized monumental events in the world result in monumental opportunities for people with disabilities. Vocational rehabilitation (VR) programs were established with the advent of the industrial revolution and world war, significant legislation has passed after major wars, and adaptive equipment advances soared with the technology revolution. We now have the greatest employment opportunity presented to the rehabilitation field as a result of the major worldwide changes due to the novel coronavirus (COVID-19) pandemic. Suddenly there are home delivery needs due to home travel restrictions, layoffs have resulted in highly skilled individuals being out of work and available to consult, and start-up costs have drastically changed vacancy rates and ways of doing business have evolved. Consumers are ready for new products and services, and people with disabilities can change the complexion of employment by answering these needs through entrepreneurship.

Entrepreneurship, also known as self-employment or alternative employment, has flourished during the COVID-19 pandemic as individuals have pounced on opportunities as ways of doing business have changed due to virus protocols. The sole proprietor and gig economy fields were already experiencing exponential growth across the U.S. prepandemic in many industries such as transportation services, which experienced a 722% increase from 2000 to 2017 (Rothwell & Harlen, 2020). Tax returns indicate a growing number of people in the United States were reporting income from entrepreneurial work, sometimes as a second job, and often times combining multiple individual money-making ventures into their overall earnings (Internal Revenue Service [IRS], 2020b; Rothwell & Harlen, 2020). COVID accelerated those numbers; prepandemic, it was estimated 3.6% of the U.S. workforce worked privately remote, but as of October 2020 that number jumped to 42%, and business owners expect it to stay above 25% in the near future (Ozimek, 2021). Although business overall has changed, entrepreneurship has changed the most, as new high propensity business applications hit an all-time quarterly high in the third quarter of 2020 (U.S. Census Bureau, 2021). These new businesses and entrepreneurs are not Silicon Valley start-ups, rather they represent a full-time worker who drives for Uber three nights a week to supplement her income, or the on-call computer technologist who works for a few different companies but is paid as a consultant and only for the time he is needed at work.

The economy has changed and while some changes in the self-employment world may be employer driven, such as business decisions to outsource jobs for cheaper labor and health care savings, these changes have resulted in an army of individuals who now work as 1,099 employees (i.e., independent contractors; IRS, 2020a) who have management responsibilities that were previously handled by administrations for whom they worked. Not all the changes are good overall for those in the workforce, but they are the reality of what is available. Although once health insurance and a pension were assumed for full-time workers, now <50% of full-time workers are guaranteed health insurance and <10% a pension. The rehabilitation field can continue to roll with these changes by seeing the benefits of entrepreneurship.

The rehabilitation community has looked with caution for ways to become part of the entrepreneurial self-employment movement. There were many good reasons for this in the past. The lack of guaranteed insurance was difficult for a group with high health care needs; until the late 1990s organizations such as the state–federal Vocational Rehabilitation systems had policies that discouraged self-employment (e.g., indicating self-employment was to be used only after all other employment resources were exhausted); and there were concerns with the longevity of entrepreneurial activity (Arnold & Ipsen, 2005).

Overcoming Traditional Barriers

Entrepreneurship can fit well for many people with a disability. The flexible time frames of working can accommodate individuals with physical disabilities who need to rest periodically or those with mental disabilities who are not always able to work a typical 5-day work week (e.g., Griffin et al., 2014). It can be a way of making money without revealing intimate details of the individual’s disabling condition to an employer (Ostrow et al., 2019). New entrepreneurial endeavors have been able to mitigate transportation and accessibility barriers faced by many as remote work has become commonplace (Clark & Hayes, 1988; Ozimek, 2021). It can be a way for people with mental disabilities to design a safer workspace.

The rehabilitation field has experienced challenges and barriers to self-employment for persons with disabilities. A part of that has been the perception that persons with disabilities are not able or the right “type” of person to start their own business. Other barriers have been systemic with federal and state policies discouraging individuals with disabilities from the entrepreneurial world. The perception of who can work on their own has changed with the gig economy; the policies toward persons with disabilities should change as well to make gig economy work options a simple and clear short process for those for whom it is a good fit. A simple one-page questionnaire that allows the person with a disability to describe their job goal, projected income and expenses, and what is needed to begin can be a simple first step for many agencies.

Perception of entrepreneurship can be seen in news media coverage and advice from entrepreneurs such as Bumble CEO Whitney Wolfe Herd, whose entrepreneur enterprise is worth over US$7 billion just 5 years after start-up, telling other entrepreneurs to find something they are passionate about and find a way to monetize it, thinking you can monetize anything (Locke, 2021). Pursue entrepreneurial activities that highlight your skill and where there is demand echoes Kevin O’Leary of Shark Tank fame (Locke, 2020). Just trying to solve a problem in your own life can lead to productive entrepreneurships as Whoop CEO Will Ahmed discovered when trying to figure out how to improve squash performance for his college team, which led to a successful business plan for people wanting optimal health performance (Scipioni, 2021). Although these stories are great, they represent the unicorns of entrepreneurs and make the endeavor seem out of reach for “everyday” entrepreneurship (Welter et al., 2017). For the rehabilitation field and consumers, a better road to entrepreneurship may be to find needs and then create a business to meet the need. With the changing economy due to market forces and COVID-19, there are indeed many new needs to be met.

Entrepreneurship can be accomplished by persons with a disability; in fact, historically, persons with a disability have been self-employed at rates higher than those without a disability, 12.2% to 10%. Some estimates have suggested higher rates for both, with as many as 30% of all Americans being self-employed in some form (Ipsen et al., 2005; Pofeldt, 2020). This is likely due to the increased flexibility, such as alternative hours, remaining close to home, being able to address health issues, and being able to overcome environmental barriers (Boeri et al., 2020). Most persons with disabilities in self-employment work alone (80%) and from home (76%) (East Midlands Development Agency [EMDA], 2009). This bypasses employers’ and counselors’ preconceived notions about the value of persons with a disability and costs associated with providing accommodations (Cook & Burke, 2002).

Past work in the field has laid an impressive foundation for the field to build upon. The National Institute on Disability and Rehabilitation Research granted funds to the University of Montana Rural Institute to understand how the 1998 legislative changes could benefit the interaction between small business development centers and the state/federal VR systems (Ipsen et al., 2005). This work began to create the resources needed for persons with disabilities to enter entrepreneurship through VR. The Department of Labor’s Office of Disability Policy (ODEP) grant to a consortium led by Virginia Commonwealth University made legislative inroads such as having SSA agree that Individual Development Accounts to help finance new business expenses would not be counted toward resource limits (Office of Disability Employment Policy [ODEP], 2013). The Job Accommodation Network has available on its website (www.askjan.org) an excellent list of resources for self-employment, and the Small Business Association has worked to be of assistance to diversified individuals such as those with a disability. Researchers developed a template for capacity building and training needs that can be tested by the field (ODEP, 2013).

Which makes the time ripe for rehabilitation to emphasize entrepreneurship as the best employment option for many clients. In order to cultivate this change, the field needs a four-pronged approach: (a) inform and train key stakeholders on the benefits of entrepreneurialism and the key moment of opportunity presented; (b) realize entrepreneurship fits rehabilitation philosophy and acknowledges that to have a revolutionary change to underemployment and poverty for persons with disabilities some major changes have to occur; (c) suggest and cultivate legislation and federal regulations that promote entrepreneurship for persons with disabilities; and (d) develop researchers and experts in the field of entrepreneurship for persons with disabilities.

Inform and Train Stakeholders on Entrepreneurialism and Moment of Opportunity

Often those deep in any field understand ways to be successful through many years of refining a quality approach. Through observation, training, data analysis, and collaboration, experts in a field become better and develop a more refined approach. Generally, this is an excellent path that leads to continued success. When monumental change occurs outside the system, experts may not immediately see new opportunities because their excellent, refined approach has afforded them the luxury of not needing to examine other approaches (e.g., Wampold, 2001). With the economic changes that occurred during the COVID-19 pandemic, many experts in the field of rehabilitation may not see new developments pertinent to careers for persons with disabilities. Headlines scream about unemployment rates, business closings, and layoffs because these things happen in great numbers, in a single moment during a crisis. Business growth happens in smaller numbers, in vast places on the continent, with a single small technology services business opening in a neighborhood, and another neighbor starting to create carry-out meals from their home, while their sister hundreds of miles away starts driving as an independent worker for Door Dash two nights a week. Over time, these small starts become the economic change of the next 10 years, with some of these businesses hiring employees, and others finding success as a solo endeavor. Oftentimes, people with disabilities are left waiting for these businesses to start hiring, but maybe people with disabilities are the people who should be starting the business. Often those who could start their own business never think of it, and when they do are guided away by well-intentioned family and professionals.

We have to inform, train, and motivate families, professionals, policy makers, and those who have not worked in entrepreneurship that one way out of poverty and into a good career starts with entrepreneurship for many persons with a disability (Dutt et al., 2016). Entrepreneurs are successful because they like the autonomy and the aspects of entrepreneurialism, not because they are necessarily better at it than others, so finding a good fit, much like any career, is key when developing entrepreneurs (e.g., Hamilton, 2000). Persons with disabilities may find being their own boss is the only way to have a boss who does not discriminate.

The world is ready for entrepreneurship for people with disabilities as society is ready to purchase products, services, or assistance in new ways spurred by new needs created by COVID-19. Telecommuting, home delivery of groceries, and the need for masks existed before COVID-19, but now these have become everyday facets of life, whereas these needed services were just a fraction of the market before 2020 (e.g., Ozimek, 2021). Many individuals with a disability have a unique advantage in starting a business due to income that can continue during business development, programs to help offset start-up costs (e.g., Pass Plans, impairment-related work expenses [IRWE]), and a lower opportunity cost involved when the individual is not currently working.

Entrepreneurship Fits Rehabilitation Philosophy

Entrepreneurship is a fitting endeavor in keeping with tenants of the rehabilitation field: consumer choice, beneficence, autonomy, and maximum career attainment for persons with a disability (Rubin et al., 2016). Entrepreneurship provides a path to asset building, success, career development, and a way out of poverty (Balcazar et al., 2014; Ostrow et al., 2019). It allows individuals to structure their business in ways to achieve their definition of success, empowerment, assets, and autonomy (Ostrow et al., 2019).

Assets can take different forms: Many individuals with disabilities need not just monetary assets but also improved sense of self-efficacy, independence, autonomy, and decision-making (Ostrow et al., 2019). These assets, such as getting a chance to participate in the world of work with dignity and in terms that fit the individual’s disability, can lead to future career success either as an entrepreneur or as an employee who has gained vocational insight and now shown value to employers (e.g., Boeri et al., 2020). It can allow a whole subsection of individuals to move away from government subsidies and into financial security (Ostrow et al., 2019).

Entrepreneurship could also be accomplished in a team setting by gathering individuals who can come together as parts of an enterprise, all as entrepreneurs or independent consultants, to enhance a sense of accomplishment through a team approach (Martin & Honig, 2020). For instance, multiple individual members of a day program could work together to meet the food service, cleaning, landscaping, or other needs of the center/community independent living center. These individuals, based on their vocational desires, skills, and abilities, could, for example, come together as a group of 1,099 workers who provide landscape services independently, but as a team to meet the needs of the location. One individual may be a tree trimmer, another a gardener, and so forth. Over time, with success, one individual may see the opportunity to purchase a van through a Plan to Achieve Self-Support (PASS) in order to bring the landscaping services to other businesses. In this way, there is room for advancement, more pay, and autonomy concerning what and how work is performed, fitting a free market economy, all of which ideally lead to higher levels of job satisfaction, dignity, decision-making, and the opportunity to effect social change by showing the community, business owners, and customers that work performed by persons with disabilities can be superior to other options (Ashley & Graf, 2018; Griffin et al., 2014; Ostrow et al., 2019).

The entrepreneur landscape has drastically changed since the last related rehabilitation legislation in 1998. There are numerous opportunities for entrepreneurs to engage in the new gig economy that did not exist even 10 years ago. Radical new ways to get funding for a start-up company include crowd-source platforms sites such as GoFundMe; online common landing sites such as Craigslist, which now has a special section for gig economy jobs; and Kickstarter and Indiegogo have changed the way people find opportunities and acquire funding for start-ups (Ouimette & Rammler, 2017; Yamamoto & Olson, 2016). The Craigslist site, one of many that have similar listings, includes six different types of gig economy jobs broken down by geographical region with jobs in diverse areas such as domestic, labor, crew, and event. Many of these are one-time jobs that allow entrepreneurs to create their own work schedules or show their talents to perspective employers. Sites such as FlexJobs (www.flexjobs.com) allow job hunters to find remote work sites that may be ideal to accommodate some disabilities. Counselors and consumers in the rehabilitation system can become aware of these entrepreneurial opportunities and shown ways to become part of this system through connections with Small Business Development Centers or local technology innovators (e.g., Boeri et al., 2020; Ipsen et al., 2005).

The VR agencies in the United States have recognized in theory, if not practice, that entrepreneurship is a quality employment outcome for persons with a disability. Since the reauthorization of the Rehabilitation Act in 1998 acknowledged self-employment as a competitive employment outcome, with an emphasis on consumer choice, there has been a change in self-employment policy by most state agencies (Arnold & Ipsen, 2005). Previous to the reauthorization, many states had policies requiring counselors to eliminate all other possibilities before considering self-employment and had no policy or a negative policy toward self-employment (e.g., Arnold & Ipsen, 2005). Although the policies have changed, the number of consumers being closed as entrepreneurs in self-employment has steadily decreased from 1.7% of all VR closures in 2005 to 0.9% of closures in 2019 according to Rehabilitation Service Administration (RSA)-911 data (RSA, 2021).

With less than 1% of closures in the state–federal VR system in self-employment and at least 12% of the general population of people with disabilities in self-employment, it is clear there is a gap between these two groups (RSA, 2021). It may be that those who work in a federal or state system are different than entrepreneurs in general and have less positive thoughts, business creation skills, and knowledge, including how to enter the entrepreneurial world (e.g., Colling & Arnold, 2007). Many federal agencies do not allow workers to hold a second job or have restrictions stemming from conflicts of interest concerning secondary employment often leading to long-tenured employees. Indeed, one of the recruitment pitches for working for the state–federal system is that the employment is more secure (e.g., Grobe, 2017). And thus far it has taken consumers about a third longer to be closed in self-employment versus typical closures in employment (RSA, 2021). Counselors are in a difficult position: They usually are not trained in business development, they face federal policies that are incongruent with best practices for developing a business, and closures come more slowly and are more costly than typical (Arnold & Ipsen, 2005; Social Security Administration [SSA], 2021; Walls et al., 2001). They also share the concern of family members regarding the viability of new businesses and income potential (e.g., Yamamoto et al., 2012).

Flexible nationwide guidelines for implementing entrepreneur programs into VR should be established to help counselors understand best practice logical steps. Policies encouraging the use of outside vendors to help create business plans and using agency review are logical first steps for a nationwide guideline (e.g., Arnold & Ipsen, 2005). A universal policy specifying the level, conditions, and amount of investment, yet allowing flexibility concerning alternative work arrangements, would help counselors and consumers understand parameters and what needs have to be addressed from other resources (Arnold & Ipsen, 2005; Boeri et al., 2020). Perhaps state policies that indicate support for self-employment plans that expect the individual to make income over the poverty line, earn higher than minimum wage, or indicate the individual will be working more than 32 hr per week could be a starting point of policy discussion.

There is no “one-size-fits-all” formula for entrepreneurial success. Individuals’ strengths are important to center a business on, but counselors can also help consumers learn how to deal with uncertainty, find ways to create and exploit new opportunities, and connect consumers with other entrepreneurial consumers to build networks of interdependent businesses (Alvarez & Barney, 2014; Dutt et al., 2016; Sutter et al., 2019). Maximum career achievement for persons with disabilities can happen with a focus on strengths and building on existing skills with outside help as needed.

Promote and Cultivate Legislation Supporting Entrepreneurship

To promote entrepreneurship for persons with disabilities the field needs to encourage governments to have social programs that fit both the need for flexibility and for secure benefits of entrepreneurship (e.g., Boeri et al., 2020). Entrepreneurs often have to move fast in a changing marketplace to allow their business to stay profitable for the long term (e.g., Arnold & Ipsen, 2005). In the United States, a Social Security culture that encourages job attempts through allowing health benefits to continue, offers the ability to immediately be eligible for Supplemental Security Income (SSI) or Social Security Disability Income (SSDI) after coming off roles for work, and a judiciary system that understands a failed work attempt does not mean benefits should be withheld is a first step to promoting job growth through entrepreneurship. Many start-ups fail (75%) after the first year, even though the experience may lead to better future employment (Gage, 2012). A system that rewards work and attempts may fit better with the changing economy. Perhaps benefits should not decrease for someone who works but instead go toward a retirement plan or health insurance to make income be valued in a rewarding system. Legislation needs to help entrepreneurs be covered by the range of employment rights (e.g., minimum wage, sick pay, parental leave, paid holidays) that most regular employees enjoy (Office for Economic Co-operation and Development [OECD], 2021).

Health insurance is the necessary key to many entrepreneurs taking the leap into their own business in the United States; it is cited as the number one concern for the self-employed (Boeri et al., 2020). Persons with disabilities would benefit from having the choice of keeping their Medicaid or Medicare benefits or the universal paid-in benefits plans that often provide more needed services to persons with disabilities. Allowing entrepreneurial persons with disabilities to stay on Medicare/Medicaid may be a long-term cost saver. This would be a significant legislative change, but one that would help all entrepreneurs in the United States. Those who are self-employed also indicate they want shared security accounts where all workers would have social insurance paid by employers, contractors, or online platforms so even contracted workers would have benefits for their work (Krueger, 2018). Entrepreneurs in other countries note a need for retirement savings plans for entrepreneurs to be able to pay in for financial security with group benefits (Krueger, 2018). Changes do not have to be costly; an equitable collectivist system could be figured out as an entrepreneurial business need outside of legislative action similar to car or homeowners’ insurance.

Legislatively, the need for start-up cost subsidies such as exemption from business regulatory fees, tax credits for disability-owned businesses, paid leave, and low-cost loans would benefit potential entrepreneurs (e.g., Cottage Grove, 2009; Iacurci, 2021; Kitching, 2014). For some small business endeavors, the start-up costs and acquisition of financial capital are the greatest barriers to low socioeconomic status individuals starting their own business (Tsai, 2004). There are institutional voids and a lack of market access to acquiring resources and bundling those resources to leverage capabilities and create and capture value in an entrepreneurial way (Sirmon et al., 2007). A reduction or elimination of costs and easier access to capital could be provided by VR agencies who can pay for start-up costs and partner with financial institutions for capital. The VR has the power to bring many individuals to a financial institution in a region, thus giving the institution less risk exposure than an individual case would carry.

There clearly should also be the elimination of “noncompetitive” clauses and “no-poaching” of worker agreements that limit a free-market enterprise system and protects companies but not individual employees and entrepreneurs (Krueger, 2018). Noncompete clauses, in which an employee or contractor signs a contract stating they will not compete with the current employer in terms of customers or services for any length of time demanded by the employer clearly takes away the freedoms from an entrepreneur who wishes to use the skills they gave to the employer to now open their own enterprise (Starr, 2019). Consumers should be able to choose with their feet which services are best and not have laws preventing competition.

With the changing economy, the rehabilitation field must be alert and proactive to legislation that may affect persons with disability who are entrepreneurs. Proposition 22, recently passed in California, allows for independent contractors to receive benefits such as minimum earnings and vehicle insurance. There have been calls for policymakers to build a framework for flexible earning opportunities with industry-wide standards for independent workers, which rehabilitation needs to help shape (Browne, 2021). The rehabilitation field needs to continue to have the voice of individuals with disabilities be a part of changing economic legislation.

Rehabilitation leaders should also continue to work with government agencies such as the Department of Labor and the Social Security Administration (SSA) to promote employment legislation. The SSA in the United States has recognized many areas of unstable employment that often come with having a disability. The SSA has developed many incentive programs designed to encourage individuals receiving SSDI or SSI to try to work or be able to work part-time. The 9-month trial work period is one of many SSA programs that recognize the difficulty many people with disabilities have in returning to work. The trial work period allows individuals to retain all SSDI benefits for the first 9 months of working and even longer if the individual makes less than US$940 in that month (SSA, 2021). Since SSA also allows persons with a disability to deduct any IRWE from their earnings this could allow many entrepreneurs to stay below US$940 per month for much of the start-up period of a new business. For someone who own a business, Social Security examines the net earnings of the company—total revenues minus expenses. Similarly, the SSA developed the PASS program to help individuals who are disabled and receiving SSI benefits to save money that is earned from employment toward work goals such as starting a new business or equipment for the business they have started (SSA, 2021). By setting up a savings account the income that goes into this account is not counted as earnings and does not affect SSI benefits. For many individuals, this could greatly help with start-up concerns and costs.

These are great programs developed by the SSA, but they are used rarely. The PASS plans are developed for only 0.1% of those eligible, and Medicaid waiver funds see a similar small usage for business development (e.g., ODEP, 2013). State agencies may need to bring in trainers from SBC to help staff see program connections.

Although there are many great existing programs that can help individuals with disabilities become entrepreneurs, there remain concerns from many individuals that it is difficult to get benefits back if they start working. Part of this may be a disconnect between administrative law judges and others who make disability decisions and the encouragement of trying to work. Anecdotally, it can be difficult for a decision maker to understand that an individual should still be able to receive benefits if they were able to try and work a full-time job, especially if they had some financial success in the endeavor. A clear understanding by all stakeholders would benefit those who wish to try entrepreneurship but are afraid of losing benefits.

Commitment of Rehabilitation Research to the Best Practices on Entrepreneurialism

We encourage the SSA and the Rehabilitation Services Administration to create funding opportunities for researchers to examine the role of self-employment and entrepreneurship as a method for coming off the rolls of Social Security benefits and as a quality employment outcome for those served by the state-federal Vocational Rehabilitation system. These grants would best serve the field if they were longitudinal in nature, include dissemination procedures, and have all materials developed under the grant be in the public domain. Researchers in the rehabilitation field should look for collaboration among many different fields, perhaps to include businesses, small business associations, and internet platforms. Researchers should aim to understand entrepreneurship on its many levels and in a worldwide scope, to include how different legislation, social programs, and environments impact entrepreneurial endeavors.

A state agency that designates one counselor per region as the expert in entrepreneurial planning who could champion the cause for individuals in the system would likely find a great number of self-employment closures (ODEP, 2013). Nonprofit agencies can work to secure funding for entrepreneurial activities from complementary funding sources such as Department of Labor economic development grants or private grants such as those through the Kessler or similar foundations (ODEP, 2013).

The rehabilitation field can help carry this flame of entrepreneurship by encouraging this type of research through conference specialty areas, special issues in journals, and book chapters in the foundations and job placement textbooks that teach entrepreneurship. The world of entrepreneurship changes quickly and rehabilitation needs leaders in the field to keep up with the changes and best practices in order to benefit consumers in the long term in entrepreneurialism.

Conclusion

The rehabilitation field finds itself in a time of great opportunity to change the fortunes of many individuals with disabilities who have not seen success in traditional economies. With a move toward remote working, flexible schedules, and new consumer needs there are opportunities for entrepreneurs who are disabled to find new purposes and roles in the economy. It is a key time for the field to move strongly into supporting entrepreneurial opportunities for persons with disabilities through training counselors and helping all stakeholders see the benefits. These opportunities fit well in rehabilitation philosophy and promote independence and lifelong autonomy. Federal and state policies and legislative advances are essential to allowing these opportunities to be realized. We as a rehabilitation field have the opportunity now to change the employment landscape with entrepreneurism.