Disabilities No Barrier to the Entrepreneurial Spirit

By ELIZABETH OLSON
Published: July 13, 2006
Link: http://www.nytimes.com/2006/07/13/business/13sbiz.html

WESTMINSTER, Md. ­ Greg Prater loves stocking the vending machines he owns with cans of soft drinks, potato chips and other snacks. And his eyes sparkle when he opens the money box to empty the cascade of quarters, nickels and dimes into a plastic bucket.

The victim of an auto accident as a teenager, Mr. Prater, 40, has a brain injury that left him with cognitive and physical disabilities. But two and a half years ago, he began running his own small business, Greg’s Vending Machines, and his sole proprietorship has been so successful that he recently won a state award.

As traditional work for the disabled, which typically meant tasks like collating, boxing and mailing items for community businesses, began to dry up in the 1990’s, many states like Maryland began to search for ways to help them become self-sufficient. Then in 2003, Maryland rehabilitative services decided to include people with more severe disabilities to see whether they could get them started in business.

It worked so well with Mr. Prater, whose success inspired fellow disabled workers, that the program in June celebrated its first incorporation of individual businesses started by disabled entrepreneurs. Mr. Prater and two other men with serious disabilities signed papers the last week of June to incorporate as MAG Vending.

“We’re really happy about this,” said Donald Rowe, assistant executive director at the Arc, in Carroll County Md., the nonprofit group that administers disabilities programs in Maryland, which like all states receives federal funding, largely from the Education Department.

“This shows that, with a little help, people with cognitive and developmental disabilities can operate their own business,” he said.

Starting in 1996, Mr. Prater spent seven years in workshops packaging and labeling goods. He wound up at the Carroll County Arc, where he impressed Mr. Rowe, who has an M.B.A., with his entrepreneurial flare.

“When he wasn’t working, he was busy selling gum to the staff and his fellow workers,” Mr. Rowe recalled.

In 2003, Maryland’s Reach Independence Through Self-Employment, or RISE, program gave Mr. Prater an opportunity to realize his dream of becoming his own boss.

One day recently, Mr. Prater, who has a ready smile, was unpacking cans and loading one of his five machines. He got a lift to the Carroll Nonprofit Center building in Westminster, Md., where he has a machine, from Earl Haines, a former newspaper delivery man who works at the Arc in Westminster. Mr. Haines helps Mr. Prater purchase, track and unpack inventory and visit his sites.

Once a week, Mr. Haines also drives him to a nearby bank, where Mr. Prater brings his bucket, weighted down with coins, and watches as the teller totals his take and deposits the money in his account.

“To make money” is what Mr. Prater says he likes best. He grosses around $15,000 a year, with about $6,000 in profit. He also receives Social Security disability payments, and is able to support himself in a subsidized apartment.

He sets aside money every month to plow back into his business to buy either new or used machines, which cost $1,500 to $5,000.

Mr. Rowe coached him from the beginning and helped him draw up a business plan. Mr. Prater received a state grant to buy three machines, and has his accounting and taxes done by volunteers.

Encouraging disabled people to join the ranks of entrepreneurs has become a goal of many states as traditional tasks, like the assembling and labeling that handicapped and disabled people had done for decades, evaporated as companies either outsourced the work or eliminated it.

For the disabled, the flexibility of running a business can be crucial to working at all, and surviving economically. Maryland and Vermont have been among the state leaders in training and supporting the disabled in their own businesses. Maryland’s RISE program for the more seriously disabled has helped about 1,500 people learn skills like bookkeeping and marketing.

“There has been a move towards greater independence, especially in helping the disabled run their own businesses,” said Chris Privett, the spokesman for the Arc, formerly known as the Association for Retarded Citizens.

Nationwide, more than five million Americans have a severe disability, according to Census Bureau figures. They have a 42 percent rate of employment.

The severely disabled are also more likely to have health problems, to need Medicaid coverage, to receive welfare and to have a household income below $20,000, the Census Bureau reported.

Ron Pagano, 53, of Pasadena, Md., who has degenerative arthritis as a result of inherited dwarfism, began his own business with the help of the RISE program.

In the 1970’s and 80’s, Mr. Pagano sold life insurance, started an electronic parts distribution company and worked in estate planning services, but eventually his arthritis got so bad that some days he couldn’t get out of bed, he said.

He went on disability in 2000, and later the RISE program provided him with eight weeks of training to evaluate the demographics and finances for a Coffee News franchise. He submitted a business plan for Coffee News ­ a one-page coffee-colored sheet that features human interest articles along with local advertising and is distributed to restaurants, coffee shops and motels ­ and received a $15,000 start-up grant for his franchise in Howard County, Md.

Since his mobility is restricted, Mr. Pagano takes care of the inside jobs, including accounting and billing, as well as the layout, design and printing. His wife, Karen, who is not disabled, handles the marketing, the sales and the distribution to 180 locations weekly.

So far, Mr. Pagano does not make enough ­ he declined to say exactly how much ­ to forgo federal disability and health care, but says, “We’re building something neat.”

Without Maryland’s program, he says, “I’d be sitting here twiddling my thumbs.”

Achieving self-sufficiency takes time, Mr. Rowe acknowledged. The RISE program “is a pioneer project,” he said. “It’s a big commitment, and it’s expensive so we’ve had to take a long-term view.

“But it has changed the perception of what disabled people have the ability to do ­ in a positive way.”

Other states and localities also are helping the disabled to start their own businesses. The Brooklyn Economic Development Corporation was early in the field, offering entrepreneur training for nearly two decades.

Fitzgerald Octave, for example, who developed glaucoma as a result of diabetes in 2002, wanted to start his own auto body shop. He took the Brooklyn program’s three-month course to learn bookkeeping, cash flow management, marketing and other skills that he needed to start and maintain a business.

“The biggest lesson is to get contracts signed,” he said, “not to rely on a handshake.”

Mr. Octave, 50, received a $15,000 grant to start FGO Motors in the Bronx. He is just getting started but says he has learned from his training that he has to generate his own business, so he is planning a Web site and radio and eventually television advertising to keep a steady flow of work.

In Maryland, Mr. Prater’s success, recognized in 2005 when he won the Maryland Disabled Small-Business Person of the Year award, inspired Adam Dunn, 30, of Eldersburg, and Matthew Adler, 24, of Taneytown, to learn about entrepreneurship.

Now Mr. Adler has four machines, including one at the high school he attended. And Mr. Dunn, who is a swimmer in the Special Olympics, also has four.

Together, they are forming a vending company, called MAG ­ after the first letter of their first names ­ so they can get some economies of scale when purchasing their inventory, save on insurance and fill in for each other if one goes on vacation or has a problem.

While they get help from Mr. Haines and other people at Arc, they say they enjoy the independence and self-sufficient feeling they get from running their own businesses.

“I’m the man,” Mr. Prater said with a smile.