Entrepreneurship training in workforce programs

Accessible letter PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2010/TEGL12-10acc.pdf

                                                                       CLASSIFICATION
      EMPLOYMENT AND TRAINING ADMINISTRATION                           Entrepreneurship and Self-
                                                                       Employment
                  ADVISORY SYSTEM
                                                                       CORRESPONDENCE SYMBOL
             U.S. DEPARTMENT OF LABOR                                  OWI
                Washington, D.C. 20210                                 DATE
                                                                       November 15, 2010


ADVISORY:                TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 12-10

TO:                      STATE WORKFORCE AGENCIES
                         STATE WORKFORCE ADMINISTRATORS
                         STATE WORKFORCE LIAISONS
                         STATE WORKFORCE BOARDS and STAFF
                         LOCAL WORKFORCE BOARDS and STAFF
                         ONE STOP CAREER CENTER STAFF
                         STATE RAPID RESPONSE COORDINATORS

FROM:                    JANE OATES /s/
                         Assistant Secretary

SUBJECT:                 Supporting Entrepreneurial and Self-Employment Training through the
                         Workforce Investment System

                1. Purpose. To encourage states to establish parameters for funding entrepreneurial and self-
       employment training under Title I of the Workforce Investment Act of 1998 (WIA), which
       authorizes the provision of entrepreneurial training to adult and dislocated workers, and
       authorizes entrepreneurial work experiences for youth.

                2. References.
        Workforce Investment Act of 1998, Section 134(d)(4)(D)(vi);
        20 CFR 664.460, WIA Final Rules;
        Training and Employment Guidance Letter (TEGL) 16-04, “Self-Employment Training
          for Workforce Investment Clients”;
        TEGL 16-05, “Flexibility Under Current Employment and Training Law for Hurricane
          Recovery Strategies”; and
        TEGL 17-05, “Common Measures Policy for the Employment and Training
          Administration’s Performance Accountability System and Related Performance Issues.”

                3. Background. Small businesses are a vital part of the U.S. economy. They represent 99.7
       percent of the nation’s employer businesses; employ just over half of all private sector
       employees; pay 44 percent of total U.S. private payroll; and have generated 64 percent of
       net new jobs over the past 15 years.1 2 Supporting the development of new small businesses
       through entrepreneurship is an increasingly important strategy in accelerating the pace of
       economic recovery in the United States. Entrepreneurial activities can spur economic
1
    The Small Business Administration defines “small businesses” as firms employing 500 or fewer individuals.
2
    U.S. Dept. of Commerce, Bureau of the Census: Statistics of U.S. Businesses, Current Population Survey
    RESCISSIONS        TEGL 16-04                                     EXPIRATION DATE Continuing
   recovery in many ways, including creating new employment opportunities for the
   unemployed through the development of small community-based businesses, generating job
   creation and tax revenue with the formation of high growth companies, and facilitating the
   transfer of innovative research to the commercial marketplace.

   The workforce investment system promotes entrepreneurship and small business
   development primarily by providing self-employment assistance to workforce system
   customers. Data gathered under WIA between 2005 – 2008 indicates that this assistance is
   provided to a small number of individuals – primarily dislocated workers – in a variety of
   local areas each year. As the workforce investment system supports the nation’s economic
   recovery, providing entrepreneurship and self-employment training and assistance in a more
   systemic and strategic fashion is another way the system can leverage its resources to
   support unemployed and underemployed workers and create jobs.

   The workforce investment system is designed to ensure that workforce development
   strategies align with the needs of employers and leverage the rich resources of collaborative
   partners available at the local, regional and state levels. The Employment and Training
   Administration (ETA) encourages the workforce system to integrate entrepreneurship
   activities into the system’s broader workforce development efforts.

   In 2006, ETA published TEGL 16-04, which encourages the workforce investment system
   to make entrepreneurship training opportunities available to people interested in self-
   employment under title I of WIA. This current guidance replaces TEGL 16-04 and provides
   more detailed information about designing and implementing entrepreneurial and self-
   employment training strategies for adults, dislocated workers, and youth, and provides
   guidance about allowable costs and outcome tracking.

4. Understanding Entrepreneurship in the U.S. Economy. Entrepreneurship comes in many
   forms, and results in businesses that range in size and scope from very small, low-cost
   ventures, to large, high-cost ventures. Approaches to training and support for
   entrepreneurship vary greatly along this continuum. Microenterprise typically refers to very
   small businesses with just a few employees that require very little capital to start. The term
   encompasses businesses such as repair or cleaning services, pet-grooming, computer
   technology, specialty foods, jewelry, arts and crafts, gifts, clothing and textiles, childcare,
   environmental products and services, etc. These small companies create employment for the
   owner and often other family members, or they may grow large enough to employ other
   members of the community.

   On the other end of the size and scope spectrum, entrepreneurship takes the form of high-
   growth/high-value companies that focus on innovation and growth. These companies
   facilitate the transfer of innovative research to the commercial marketplace and generate
   jobs and tax revenue. Between microenterprise and high-growth/high-value companies are
   the many small businesses that employ between 10 – 100 employees. Creating a healthy
   environment for entrepreneurship across the full spectrum creates employment and growth
   opportunities at all income levels in a region.

   Supporting a culture of entrepreneurship benefits individuals, the community, and the
   economy. For communities recovering from economic hardships, entrepreneurship is an
   important employment and job creation strategy. In communities struggling with declining
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   industries, successful entrepreneurs can help diversify the economy while creating jobs. For
   thriving communities, entrepreneurship can be both an employment strategy, as well as an
   opportunity for an expanding community to meet the increased market demand for services.

   Increasingly, entrepreneurship and small business development have been identified as an
   important employment option for populations that have barriers to employment. For those
   unemployed workers who are likely to return to their industry as the economy recovers,
   entrepreneurship may offer an income stream to support a family in the interim. Self-
   employment may offer individuals with disabilities greater workplace flexibility and income
   opportunities. Similarly, individuals in rural areas may have geographic and transportation
   barriers to employment, or they may have to travel outside of the region for employment.
   Entrepreneurship may allow these individuals to work locally, even at home, to contribute to
   economic recovery and growth. Finally, youth may benefit from the leadership and financial
   management skills provided by entrepreneurship work experience, particularly in the tight
   labor market where traditional jobs for youth are scarce.

5. Entrepreneurship Resources and Assistance. Across the country, networks of public and
   private organizations provide support for entrepreneurs and small business owners. These
   organizations support goals of economic development, job creation, and/or self-sufficiency,
   and provide services such as assessment, training, business planning, marketing and product
   development, counseling and networking, and international trade/export and regulatory
   compliance. Frequently administered by community action groups, community development
   corporations, or economic development centers, many of the programs target specific
   populations including low-income, the unemployed, welfare recipients, refugees, veterans,
   and women. Funding for these programs may come from federal, state, or local
   governments, the business community, and private foundations. Community colleges and
   universities are also a source of entrepreneurial training and assistance. In addition, there are
   a number of organizations and models for promoting entrepreneurship among youth.

   The Small Business Administration (SBA) funds a robust portfolio of resources for
   prospective entrepreneurs and small business owners, including Small Business
   Development Centers (SBDCs), SCORE, Women’s Business Development Centers, and
   small business loan programs. These programs operate in states and regions across the
   country, and should be an integral partner in any entrepreneurship activities sponsored by
   the workforce investment system. Full information about all of these programs is available
   at the SBA’s Web site at http://www.sba.gov.

                        1. Small Business Development Centers. Administered and partly funded by the
         SBA, the SBDCs provide training and technical assistance to current or
         prospective business owners. Located in every state, they are usually affiliated
         with a higher-education establishment such as a university, college, or business
         school. Technical assistance is provided free of charge; there is usually a fee for
         training programs.

                        2. SCORE, “Counselors to America’s Small Business.” SCORE, a partner of the
         SBA, is a nonprofit association dedicated to educating entrepreneurs and the
         formation, growth, and success of small businesses nationwide. Over 10,000
         working and retired executives and business owners donate time and expertise
         through counseling and workshops available online and through nearly 400

                                                3
      chapters across the United States. SCORE can be found online at
      http://www.score.org/.

        3. Women’s Business Centers. SBA’s Women’s Business Center (WBC) program
     is a national network providing educational resources to help women start and
     grow successful small businesses. The program's mission is to level the playing
     field for women entrepreneurs facing unique obstacles in the business world.

        4. Veterans Business Outreach Program. The Veterans Business Outreach Program
      (VBOP) is designed to provide entrepreneurial development services such as
      business training, counseling and mentoring, and referrals for eligible veterans
      owning or considering starting a small business. Available services include pre-
      business plan workshops, concept assessments, business plan preparations,
      comprehensive feasibility analysis, mentorship, and other business
      developmental related services. Services are provided in multiple sites covering
      all states and territories.

        5. Financing. SBA provides a number of financial assistance programs for small
     businesses, including debt financing, surety bonds, and equity financing. Banks
     and other lending institutions offer a number of SBA guaranteed loan programs
     to assist small businesses. While SBA itself does not make loans, it does
     guarantee loans made to small businesses by private and other institutions.
     SBA’s primary and most flexible loan program is the 7(a) loan program. It is
     designed for small businesses requiring “brick and mortar” financing, and is
     delivered by Certified Development Companies—private, non-profit
     corporations set up to contribute to the economic development of their
     communities. The Microloan Program provides very small loans to start-up,
     newly established, or growing small business concerns. Under this program,
     SBA makes funds available to nonprofit community based lenders
     (intermediaries) which, in turn, make loans to eligible borrowers in amounts up
     to a maximum of $35,000. SBA also guarantees loans to acquire fixed assets and
     loans to support individuals and businesses as they recover from a declared
     disaster. SBA’s Surety Bond Guarantee (SBG) Program helps small business
     contractors who cannot obtain surety bonds through regular commercial
     channels. Finally, SBA’s Small Business Investment Company (SBIC) Program
     is a public-private investment partnership through which SBA provides venture
     capital to small businesses. More information about SBA financing can be found
     at http://www.sba.gov/financialassistance/borrowers/role/index.html.

Other federal agencies, including the Department of Labor (DOL), the Department of
Education, the Social Security Administration, and the Department of Veterans Affairs,
provide services to support entrepreneurship and self-employment.

     Department of Labor. The DOL Office of Disability Employment Policy
      (ODEP) provides technical assistance, both to entrepreneurs as well as to those
      individuals (or entities) who are assisting entrepreneurs into self-employment,
      and supports the development of best practices in the area of self-employment for
      people with disabilities. See http://www.dol.gov/odep/categories/research/.
      Furthermore, ETA is demonstrating the role of the workforce investment system
      in supporting new entrepreneurs through investment in Project GATE, discussed
                                            4
    below, and through Self-Employment Assistance (SEA), offered through the
    Unemployment Insurance program. Through SEA, states can pay a self-
    employed allowance, instead of regular unemployment insurance benefits, to
    help unemployed workers while they are establishing businesses and becoming
    self-employed. Participants receive weekly allowances while they are getting
    their businesses off the ground. For more information and a list of participating
    states, please see http://www.ows.doleta.gov/unemploy/self.asp.

    Finally, ETA and ODEP are collaborating to implement the Disability Employment
    Initiative within the public workforce system and its partners. Under this initiative
    grants are awarded to states to build capacity for serving people with disabilities.
    Numerous strategies are possible for states to focus their efforts, including self-
    employment. For more information, please see: http://www.doleta.gov/disability/.

   Department of Commerce. The Minority Business Development Agency
    (MBDA) at the U.S. Department of Commerce supports the establishment and
    growth of minority-owned firms in the United States. Through a network of
    minority business centers and strategic partners, MBDA works with minority
    entrepreneurs who wish to grow their businesses in size, scale and capacity. For
    information about MBDA resources, see http://www.mbda.gov/.

   Department of Education. State Vocational Rehabilitation Programs, funded
    through the Rehabilitation Services Administration of the U.S. Department of
    Education (ED), may support eligible participants with disabilities in exploring
    the marketplace, developing a viable business plan, providing necessary
    accommodations, obtaining items necessary for business start-up, connecting
    with community resources (including funding sources), and other activities
    related to entering self- employment. See ED’s technical assistance circular
    RSA-TAC-00-02 (July 24, 2000) at
    http://www.ed.gov/policy/speced/guid/rsa/tac-00-02.pdf.

   Social Security Administration. A number of work incentives are also available
    through the Social Security Administration to assist beneficiaries interested in
    starting a small business (e.g., Plans for Achieving Self-Support, Income
    Thresholds for Medicaid, Property Essential for Self-Support, Impairment-
    Related Work Expenses, Blind Work Expenses, and Self-Employment
    Subsidies). For information on these programs, see
    http://www.ssa.gov/disabilityresearch/wi/detailedinfo.htm.

   Department of Veterans Affairs. The Department of Veterans Affairs also
    administers programs to support veterans’ entrepreneurial activities. The
    National Veterans Business Development Corporation
    (http://www.veteranscorp.org) provides veterans with the tools they need to be
    successful in business including: (1) access to capital, (2) entrepreneurial
    education, (3) electronic marketplace, (4) access to services, and (6) business
    networking. The Center for Veterans Enterprise (http://www.vetbiz.gov)
    supports economic empowerment for veteran entrepreneurs and provides
    resource assistance for veterans and service-disabled veterans who are
    considering business ownership.

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   Financial Resources for Entrepreneurs. Raising capital is a primary concern for many
   individuals contemplating entrepreneurship. The primary source of capital for many new
   businesses comes from savings and other personal resources. Banks and credit unions are
   the most common sources of outside funding. Other sources include borrowing funds from
   friends and relatives, credit cards, home equity loans, customer financing, and employee
   stock ownership. For more significant resource needs, angel investors and venture capital
   firms help expanding companies grow in exchange for equity or partial ownership. Good
   entrepreneurship counseling services and training courses help entrepreneurs navigate the
   process of raising capital.

   Entrepreneurship Networks in Action. In many parts of the country, state, regional, and
   local leaders are developing coordinated strategies to support entrepreneurship. These
   leaders are examining the network of existing entrepreneurship resources, coordinating
   service delivery, and filling in the gaps with new strategies and services. For example, the
   State of Illinois has created the Illinois Entrepreneurship Network (IEN) to help small
   business owners across the state. IEN includes a new Web site, http://www.ienconnect.com,
   which is aimed at helping small business owners looking to expand their companies connect
   with business experts through local Entrepreneurship Centers and many other economic
   development centers supported by the Illinois Department of Commerce and Economic
   Opportunity (DCEO)—the state WIA agency. The Web site features a free business needs
   assessment and a referral within 24 hours for personalized, face-to-face assistance. It also
   includes success stories from entrepreneurs who have used the Centers to help build their
   businesses, and provides links to various services including WIA services for youth, adult
   and dislocated workers. The web site enables individuals to locate their nearest Illinois
   Employment and Training Center for additional career assistance. In addition to the Web
   site, the State also has established a "One-Stop" IEN information center that entrepreneurs
   can call toll free to find the information they need from state government all in one place.
   The IEN also includes a partnership with economic development centers across Illinois
   funded by DCEO, including the Small Business Environmental Assistance program, the
   SBDC, Procurement Technical Assistance Centers, International Trade Centers, NAFTA
   Opportunity Centers, and Illinois Manufacturing Extension Centers.

6. Roles of the Workforce Investment System in Supporting Entrepreneurship.
   Entrepreneurship is an important alternative to traditional employment during a slow
   economic recovery. Workforce investment system resources, including access to
   unemployed workers, knowledgeable staff, and funding to support training, can complement
   and enhance existing efforts to support entrepreneurship and self-employment in a local or
   regional economy. ETA encourages the workforce investment system to seek out existing
   entrepreneurship organizations, develop an understanding of the dynamics of their support
   and assistance, and determine how workforce system resources can best create opportunities
   for customers to access entrepreneurship assistance and training.

   Examples of roles the workforce investment system can play in support of entrepreneurship
   include:

         Engaging with local, regional, and state partners to develop an entrepreneurial
          environment and developing strategies to leverage workforce system resources to
          identify and support potential entrepreneurs;

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     Informing One-Stop customers about opportunities for self-employment and
      entrepreneurship and working with customers to assess whether self-employment is a
      good fit;
     Helping One-Stop customers understand the range of entrepreneurship resources
      available and referring them to counseling and training that best meet their needs;
     Partnering with organizations that support entrepreneurship and co-locating small
      business development resources within One-Stop Career Centers as partners;
     Seeking out opportunities to add entrepreneurship training programs to the eligible
      training provider list;
     Encouraging recipients of Individual Training Accounts to pursue entrepreneurship
      training where appropriate;
     Integrating entrepreneurship strategies into overall youth education and development
      activities for at-risk and out-of-school youth; and
     Developing strategies to help small business owners to grow their businesses, such as
      developing training programs that help small business owners develop growth
      strategies to enable new job creation.

Spotlight on One-Stop Career Centers
Below are two examples of One-Stop engagement in entrepreneurship training and
development.

  Project GATE Demonstration Project: To demonstrate the role of the workforce
  investment system in supporting new entrepreneurs, ETA funded a demonstration project
  designed to assist people in creating or expanding their own businesses—Project GATE
  (Growing America Through Entrepreneurship). The GATE demonstration began in early
  fall 2003 in three states—Pennsylvania, Minnesota, and Maine. Participants in Project
  GATE were offered assessments, classroom training and one-on-one technical assistance
  in developing their businesses and applying for an SBA Microloan or other source of
  business finance. Nonprofit Community-Based Organizations (CBOs) and the SBDCs
  provided the classroom training and technical assistance. In some cases, Project GATE
  represented the state’s first coordinated effort to provide entrepreneurship training and
  support. The final evaluation results from the demonstration, which includes a 60 month
  follow-up of all demonstration participants, is available on the ETA Research Publication
  Database at http://wdr.doleta.gov/research/keyword.cfm.

  Because of the success of the original Project GATE demonstration, in 2008 ETA
  awarded four new Project GATE II grants for the extension of the Project GATE model
  to WIA-eligible dislocated workers in rural areas and over the age of 45. Minnesota and
  Virginia received grants to provide Project GATE services to WIA-eligible dislocated
  workers over the age of 45. North Carolina and Alabama received grants to provide
  Project GATE services to WIA-eligible dislocated workers in rural areas. Each of the
  grants is approximately half-way through the client enrollment period and initial results
  from the grants will be available in Winter 2010.

  Northern Virginia Center for Business Planning and Development: The Center for
  Business Planning and Development (CBPD) is a partnership between the Northern
  Virginia Workforce Investment Board, the Fairfax County Department of Family
  Services (the local One-Stop operator) and the Business Development Assistance Group
  (a local non-profit economic development organization). The CBPD is co-located within
                                           7
      the East Falls Church, Virginia One-Stop Career Center, called the SkillSource Center.
      While the SkillSource Center delivers services to employers and job seekers, the CBPD
      provides technical assistance to emerging entrepreneurs who wish to become self-
      employed through business ownership, as well as expansion and retention services to
      existing small businesses.

      Employers, job-seekers, career changers and would-be entrepreneurs all receive services
      through this co-located partnership. Employers are able to access a full complement of
      business services in addition to workforce support. Job-seekers and career changers
      receive information on self-employment and business startup as an alternative to
      traditional wage employment. As small businesses grow and expand with the help of
      CBPD, they are connected back with the SkillSource Centers for recruitment services and
      other workforce needs.

      All three partner organizations contribute equally to the operation of CBPD, and have
      signed a Memorandum of Understanding outlining the terms of the partnership. The
      Local Workforce Investment Board supports Center marketing activities and operations,
      to fulfill their mission to be demand-side led and promote economic growth through job
      creation. The Fairfax County Department of Family Services provides space and other
      resources, and the CBPD provides its clients with an alternative to a traditional job
      search. The Business Development Assistance Group delivers CBPD services and
      benefits from a connection with the SkillSource Center, an additional service delivery
      location, and resources to serve their clients.

7. Legal Authority for Entrepreneurial and Self-Employment Training Through One-
   Stop Career Centers. State and local workforce investment boards are empowered to
   support and encourage entrepreneurship. Title I of WIA allows states to provide adults and
   dislocated workers with occupational skills training, including training for nontraditional
   employment, and entrepreneurial training (WIA Section 134(d)(4)(D)(vi)).
   Self-employment training programs and providers of these programs can and should be
   included on the statewide and locally maintained eligible training provider lists. WIA
   regulations require that "[t]raining services, whether under ITA's or under contract, must be
   provided in a manner that maximizes informed customer choice in selecting an eligible
   provider.” 20 CFR 663.440(a).
   Local programs also are able to make entrepreneurship experiences available to youth. One
   of the ten required youth program elements described in 20 CFR 664.460 is “work
   experience,” and entrepreneurship is an allowable element of work experience.

   Entrepreneurship training may also be allowable activities under One-Stop partner
   programs. For example, Migrant and Seasonal Farm Worker (20 CFR 669.410) and Indian
   and Native American grantees (20 CFR 668.340) are authorized to provide entrepreneurship
   training as part of their services.

8. Critical Elements of Workforce Investment System Support for Entrepreneurial and
   Self-Employment Training Services. Training is an important component of workforce
   system strategies to support entrepreneurship and self-employment. Based on past
   entrepreneurship demonstration projects, ETA found that a combination of assessment,
   training, and additional technical assistance, delivered through a network of strategic
   partners, met customers’ needs for support. This bundling of services also led to greater
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success for those receiving training. ETA encourages the workforce system to establish
parameters for investing in entrepreneurship training that include these elements, described
in greater detail below.

   a. Broad partnerships. Most communities offer a range of resources to assist
      entrepreneurs. Rather than duplicate existing services, the workforce investment
      system can maximize its investment by developing partnerships with the
      entrepreneurship community and leveraging workforce system resources and
      expertise in support of entrepreneurship needs. Key partners could include SBA
      funded programs discussed above, such as SCORE, SBDCs, WBDCs, and VBOCs;
      Vocational Rehabilitation Agencies, U.S. Export Assistance Centers; local
      community colleges and four year universities; regional economic leadership teams;
      community-based or faith-based service providers; local chambers of commerce;
      other local economic development entities including rural economic development
      organizations; and financing organizations such as banks, venture capitalists, and
      angel investors. The workforce system should develop an understanding of the assets
      and expertise of these partner organizations, and develop strategies to leverage these
      assets as part of any entrepreneurship-related services provided to workforce system
      customers.

   a. Assessment. Entrepreneurship is a high-risk endeavor, and not everyone is suited to
      self-employment. The workforce investment system can provide a valuable service by
      helping customers understand the demands of entrepreneurship and what is likely to
      be required of them, and helping them determine whether their financial skills,
      tolerance for risk, and other skills, attributes, and experience make them good
      candidates for starting a business. The SBA also offers an on-line assessment
      designed to help individuals better understand their readiness for starting a small
      business. The tool links users to additional SBA resources to help improve their
      readiness for starting a small business. It is available online at
      http://www.sba.gov/assessmenttool/index.html.

   b. Appropriate and Effective Training. Many training programs exist for entrepreneurs,
      and the workforce system will need to explore a variety of training and service
      providers to identify those best able to meet the needs of One-Stop customers. The
      workforce investment system should take steps to ensure that workforce system
      customers are referred to quality training programs. Based on past research, ETA
      encourages the workforce system to work with service providers that offer, at
      minimum, basic courses for those just starting businesses that focus on developing a
      business plan. Topics covered in these basic courses also may include market
      research, marketing, pricing, financing, cash flow, accounting, hiring, permits and
      licenses, and legal issues. Other courses should target participants who already have
      developed business plans and may have started their businesses, but need assistance
      in growing the business. These more advanced courses may cover topics such as
      growth strategies, business planning, and customer relations. In addition to training
      courses, some providers also may offer seminars on specific business types (e.g.,
      child-care businesses), e-commerce, or accounting software packages.

       Additional sources of partnership and entrepreneurial education materials can be
       found through a number of national organizations that support entrepreneurship
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             education, including the National Standards of Practice for Entrepreneurship
             Education /Consortium for Entrepreneurship Education.

         c. Ongoing Support and Technical Assistance. Individuals are more likely to succeed in
            entrepreneurial efforts when they have access to additional support services. These
            could include business counseling, which provides assistance with business plans,
            business ideas and/or applications for a business loan. Ongoing support services such
            as marketing support, mentoring, peer support or networking, and individual
            development accounts, as well as referrals to funding opportunities, business
            incubators, credit repair services, and/or business libraries. These services can be
            provided directly through One-Stop Career Centers, or through entrepreneurship
            partners.

         d. Knowledgeable staff. If entrepreneurship training and services are new to a state or
            local workforce system, WIB staff and One-Stop Operators should ensure that staff
            are knowledgeable about characteristics of successful entrepreneurs, the training
            landscape, and the range of technical assistance partners in the region. Staff may also
            consider working with veterans programs such as the Disabled Veterans’ Outreach
            Program and Local Veterans’ Employment Representatives Program, as well as
            Disability Program Navigators staff. SBA-sponsored program partners may be
            excellent resources for recruiting or training staff.

    9. Performance Accountability. Customers receiving entrepreneurial and self-employment
    training are included under WIA’s performance accountability system and are thus subject to
    ETA’s performance policy. 3 As discussed in TEGL 17-05, unemployment insurance (UI)
    wage records are the primary data source for verifying the adult performance measure
    outcomes and the employment portion of the youth placement in employment and education
    measure. Certain types of employment, particularly self-employment, are generally not
    covered by state UI wage records, and the system has noted this as a challenge in providing
    entrepreneurship training. However, supplemental data options for some performance
    measures, combined with performance target negotiations, offer flexibility to accommodate
    entrepreneurship training within the workforce system. These options are discussed below.
    In order to verify employment status for the Entered Employment, Employment Retention and
    youth Placement measures, supplemental data and administrative records may also be
    accepted (please see Table 1 below). This option may require some additional follow-up by
    local workforce investment areas to track more closely those individuals who receive
    entrepreneurial training, but also provides a significant opportunity to make a full and
    accurate account of employment outcomes for this set of participants. ETA strongly
    encourages states and local workforce investment boards to develop guidelines for accurately
    reporting the employment and retention of adult participants in entrepreneurship training, as
    well as placement of youth in employment or education, by using supplemental data sources
    and administrative records.



3 It should be noted that data element 340 of the Workforce Investment Act Standardized Record Data (WIASRD)
layout allows states to identify and track the type of training provided to an individual, including entrepreneurial
training. This can subsequently be used to help sort outcomes for those participants who received entrepreneurial
training. For more detailed information on the WIASRD layout please use the following link:
http://wdr.doleta.gov/directives/attach/TEGL/TEGL17-09.pdf.
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   ETA recognizes that the Average Earnings measure presents some additional challenges for
   those grantees who are utilizing entrepreneurial and self-employment training. First, as
   mentioned earlier in this section, people who are self-employed are generally not covered by
   state UI wage records. Second, per TEGL 17-05, supplemental and administrative data
   cannot be used in calculating the Average Earnings measure for those grantees that have
   access to the UI wage records, as states do. ETA is considering alternatives that would allow
   grantees to take full credit for achievements of self-employed participants made under this
   measure. In the meantime, states and local workforce investment boards that want to expand
   entrepreneurial and self-employment training can use this as a legitimate factor in negotiating
   performance targets for Average Earnings.

   Lastly, as a final note on performance, we encourage local areas to partner with organizations
   such as SBDCs as a useful resource in determining additional metrics that demonstrate the
   impact of entrepreneurship training and other services.

   Please consult TEGL 17-05 for detailed information about ETA’s common measures policy.

   Table 1. Common Measures Policy - Allowable Data Sources (from TEGL 17-05)
      Common Measure                Allowable Data Source
      Adult Measures
      Entry to Employment           Wage Records and Supplemental Data Sources
       Employment Retention               Wage Records and Supplemental Data Sources
       Average Earnings                   Wage Records
                                          Supplemental Data Sources (only for grantees that do
                                          not have access to wage records)
       Youth Measures
       Placement in Employment or         Wage Records and Supplemental Data Sources for
       Education                          placement in employment and military
                                          Administrative records for placement in education or
                                          training
       Attainment of a Degree or          Administrative records
       Certificate
       Literacy and Numeracy Gains        Assessment instrument


10. Allowable Costs. There are a range of activities allowable under WIA that promote the
    success of small businesses and entrepreneurship. The following uses of WIA funds are
    allowable when they are reasonable and necessary costs in support of the purpose of the
    grant:

          Entrepreneurial Training. WIA funds may be used for training for new entrepreneurs
           and small business owners, which can range from general business courses to specific
           courses on such topics as how to address legal and personnel issues.

          Skills Training. WIA funds may be used for skills training for potential employees,
           and, subject to certain restrictions by fund source, for customized training for
           incumbent workers. Small businesses can also arrange On-the-Job Training (OJT)
           with One-Stop Career Centers. WIA regulations at 20 CFR 663.700(a) allow
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    businesses to receive reimbursement of up to 50 percent of the wage rate to
    compensate for the employer's extraordinary costs, with the business incurring the
    remainder of the costs. Requirements for incumbent worker training are found at 20
    CFR 6.

    However, states may request waivers to allow greater flexibilities in using these
    options including the ability to use Local funds for incumbent worker training, and
    for implementing a sliding scale for the proportion of the costs for which small
    businesses receive reimbursement, up to 90 percent reimbursement of the wage rate
    for an OJT. States may request a similar waiver for customized training costs.

   Recruitment and Hiring. Posting jobs, recruiting workers, conducting interviews, and
    screenings applicants are business services that are regularly offered by One-Stop
    Career Centers, and can be provided to small businesses.

   Credentials. WIA funds can be used to pay costs associated with obtaining a skill or
    occupational credential that demonstrates the expertise of the entrepreneur or small
    business owner. Examples include a barbering credential, certified pension
    consultant, title examiner, or notary. The definition of credential can be found in
    TEGL 17-05. WIA funds may not be used to cover the costs associated with standard
    business licenses or degrees that do not pertain to a specific skill or occupation.

   A portion of Equipment, Software, and Computer Costs. Equipment, software, and
    computer costs are all treated differently under the Office of Management and Budget
    Cost Principle Circulars on allowable costs. Although WIA funds cannot be used to
    purchase equipment or other capital assets, software, or computers for the sole use of
    the small business’s commercial operation, if they are purchased by the business and
    used to provide training to eligible program participants, the business can charge a
    user fee to the grant as follows:
    o Equipment (acquisition cost of $5,000 or more with a useful life of more than one
        year). For capital assets such as equipment, a use allowance fee may be charged
        to the grant for the time the equipment is used for training. The fee is capped at 6
        and 2/3 percent of acquisition cost on a yearly basis and may only be charged
        proportionate to the time the assets are used in training. (See 20 CFR 225 (OMB
        Circular A-87) Appendix B, Item 11 for a more detailed description of
        depreciation and use allowance costs and their application to Federal grant
        projects).
    o Software. Software is not considered a fixed asset under the allowable cost
        principles. For software costs, a share of the annual licensing agreement fee or
        other such costs associated with the use of the software may be charged to the
        grant proportionately based on the amount of time the software is used for
        training of eligible program participants.
    o Computers. Computers are considered to be either supplies or equipment based
        solely on the purchase price and definition under allowable cost principles.
        (Computers are generally considered to be supplies if they are personal property
        other than equipment and cost less than $5,000 per unit. However, this is not the
        case if purchased as a part of a network with a total acquisition cost of $5,000 or
        more.) As a supply, the proportional share of the cost of a computer may be

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               charged to the grant based on the time the computer is used for the training of
               eligible program participants.

   Please note that business capitalization costs or other economic development activities
   not directly tied to training are not allowable.

11. Resources. The Federal Government provides a variety of information and resources that
    may be of value to the workforce investment system as it develops strategies in support of
    entrepreneurship. Examples of such resources are provided below.

          U. S. Small Business Administration (SBA). The SBA offers a number of resources
           online to plan, launch and grow a business: http://www.sba.gov.
          Entrepreneurship Competency Model. In collaboration with the Consortium for
           Entrepreneurship Education (CEE), the Employment and Training Administration
           (ETA) has worked with education, business, and industry leaders to develop a
           comprehensive competency model for entrepreneurship as it relates to all careers
           areas. The model is designed to be adaptable along with changing skill requirements.
           CEE has committed to working with entrepreneurship leaders and partners to keep
           the model current. The model can be accessed here:
           http://www.careeronestop.org/competencymodel/pyramid.aspx?ENTRE=Y.
          ETA Occasional Paper 2009-22, “Think Entrepreneurs: A Call to Action”. This
           paper, authored by the Consortium for Entrepreneurship Education and subtitled
           “Integrating Entrepreneurship Into the Public Workforce System Throughout
           America,” analyzes current entrepreneurship operations and policies in the public
           workforce investment system, and collects information on ways Workforce
           Investment Boards and One-Stop Career Centers currently provide support for
           developing entrepreneurs. The report provides descriptions of how to implement
           entrepreneurship training strategies. It can be accessed at
           http://wdr.doleta.gov/research/FullText_Documents/Think%20Entrepreneurs%20A%
           20Call%20to%20Action%20%2D%20Integrating%20Entrepreneurship%20into%20t
           he%20Public%20Workforce%20System%20Throughout%20America%2Epdf.
          Project GATE Interim and Final Reports. These detailed reports from ETA’s
           entrepreneurship demonstration project provide detailed descriptions of project
           components and interim and final observations and outcomes. They are valuable tools
           for any WIB or One-Stop thinking about providing entrepreneurship-related services
           and resources. The interim report can be accessed here:
           http://wdr.doleta.gov/research/FullText_Documents/Growing%20America%20Throu
           gh%20Entrepreneurship%20%2D%20Interim%20Report%2Epdf and the final report
           can be accessed here:
           http://wdr.doleta.gov/research/FullText_Documents/Findings%20from%20the%20Ev
           aluation%20of%20Project%20GATE%20Report%2Epdf
          Workforce3one. Sponsored by ETA, Workforce3One is an interactive
           communications and learning platform designed to build the capacity of the
           Workforce Investment System to develop strategies that enable individuals to be
           successful in the 21st century economy. The site houses numerous resources on
           entrepreneurship and entrepreneurship training: http://www.workforce3one.org.
          U.S. DOL Office of Disability Employment Policy (ODEP). ODEP provides
           information about the benefits of entrepreneurship as an employment option for
           people with disabilities: http://www.dol.gov/odep/pubs/publicat.htm#options.
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          Disability Employment Initiative. The Disability Employment Initiative establishes
           Disability Resource Coordinators in a limited number of states to improve the
           workforce development system’s capacity to serve people with disabilities:
           http://www.doleta.gov/disability.
          The Road to Self-Sufficiency: A Guide to Entrepreneurship for Youth with
           Disabilities. Developed by the National Collaborative on Workforce and Disability
           for Youth, a technical assistance center funded by ODEP, this Guide promotes the
           benefits of entrepreneurship education and self-employment for all youth, including
           youth with disabilities, and provides tools to assist providers in making
           entrepreneurship education programs accessible to youth with disabilities:
           http://www.ncwd-youth.info/resources_&_Publications/entrepreneurship_guide.html
          Self-Employment Technical Assistance, Resources, & Training (START-UP / USA).
           U.S. DOL’s Office of Disability Employment Policy established START-UP / USA
           to provide technical assistance and disseminates resources nationally to individuals
           interested in pursuing self-employment. In addition, ODEP funded three pilot projects
           in Alaska, Florida, and New York. These projects generate data and information to
           validate systems capacity-building strategies and systems change models for
           successfully increasing self-employment opportunities for individuals with
           disabilities. More information is available at http://www.start-up-usa.biz/.
          Veteran Entrepreneurship, Self-Employment, and Small Business Development. The
           SBA maintains information about services to support veteran entrepreneurs at
           http://www.sba.gov/aboutsba/sbaprograms/ovbd/index.html.

12. Action Requested. State and local workforce investment boards are strongly encouraged to
    examine existing strategies for promoting entrepreneurship as an employment strategy,
    establish parameters for funding entrepreneurial and self-employment training, and explore
    further opportunities for supporting entrepreneurship.

13. Inquiries. Inquiries should be directed to the appropriate regional office.




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