The Business Assessment Scale
(BAS), is a self-employment assessment developed specifically for use
by vocational rehabilitation agencies. It was developed by Goodman,
Herzog & Associates, Inc., Traverse City, Michigan and is available
from them through a license agreement. To insure proper use, this instrument
must be administered only by professionals who have been trained by
Goodman and Herzog.
The BAS evaluates the person who already has a business idea. It currently
is undergoing further validation, but in a retrospective study of Michigan
self-employment outcomes conducted by two Michigan Rehabilitation Services
supervisors and Herzog it correctly classified 87.5% of the self-employment
cases. Their study used the records of 24 businesses that had been funded
for two or more years before the analysis. The BAS predicted that 12
of the businesses would be successful and 12 would not. The records
showed that 10 of the 12 businesses predicted by the BAS to be successful
actually were successful and only one of the 12 predicted as unsuccessful
was a success.
The BAS evaluates both the market demand and the individual’s
characteristics: management expertise and skills; his or her commitment,
desire and persistence; technical skills and work experience; and personal
credit and financial solvency.
The counselor and consumer each complete the BAS independently. The
counselor evaluates the consumer and the consumer self-evaluates. Where
appropriate, documents should be supplied to support each factor’s
ratings. Differences are discussed to reach consensus on each factor.
The final score is discussed and next steps determined. Scores should
not be used as the sole indicator of an individual/business’s
potential for success–they are considered in conjunction with
other information such as evaluations, the business plan, recommendations
of the business development expert, and counselor observations of and
experience with the consumer.
Advantages of the Business Assessment Scale
Consistency: It evaluates each person
on the same measures, eliminating any tendency of the decision-maker
to consider some and ignore other equally important qualifications.
Defensibility: Choices based on the
BAS are defensible to the decision-maker and others because the bases
for choices are explicit and valid and because the decision maker has
used all of the information in a consistent manner.
Efficiency: The BAS gathers information
of proven importance, so VR professionals do not waste time, energy,
and other resources on irrelevant aspects of the process.
Use the BAS Twice (during the Self-Employment
First Use: As Part of The Feasibility Study,
Before Developing The IPE
We recommend using the BAS (see Figure 7), Beginning to Develop Your
Business Plan, and the Monthly Personal and Living Expenses Worksheet
as a preliminary feasibility study. When used early in the self-employment
process, the BAS targets those individuals whose current status predisposes
them to success; suggests the knowledge, skills, and experience that
others should acquire before continuing to pursue self-employment; and
it identifies individuals likely to fail even with additional training.
Answering the Beginning to Develop Your Business Plan questions requires
thinking about the business in a realistic way and it requires conducting
some minimal research. Completing the questions in conjunction with
the Monthly Personal and Living Expenses Worksheet provides a clear
picture of monthly living expenses in relationship to anticipated business
income. It also gives you, the VR professional, the opportunity to evaluate
how realistic the consumer is about the proposed business. His or her
answers and worksheet figures help identify areas where more thought
is necessary before both parties can identify self-employment as the
employment outcome on the IPE.
At this stage you are not evaluating whether the business is likely
to be successful. That determination will be made later while the business
plan is being developed or after it is completed.
Second Use: After Training and the Business
Plan Are Completed
Administer the test again after the business plan is developed but
before VR commits to contributing funds to the business. This second
use of the BAS predicts the likelihood of success of both the individual
and the business. At this point the BAS might indicate the individual
is a good candidate for self-employment, but not in the business he
or she has proposed.
To ensure proper use, the Business Assessment Scale is licensed and
administered only by professionals who have been trained by Goodman,
Herzog & Associates, Inc.
Figure 7: Business Assessment Scale
Abridged Version: For Promotional Purposes Only
The Business Assessment Scale is intended as an early assessment of
the likelihood that an individual will be able to establish a successful
enterprise. The Business Assessment Scale has been developed to
assist an individual, counselor, or funder in evaluating the individual
in terms of five attributes/factors, which research has shown contribute
to successful operation of a business. The Business Assessment Scale
can also help identify key areas where additional planning or effort
will be needed.
The Business Assessment Scale can be used:
- to evaluate applicants for a loan fund;
- to evaluate clients as candidates for a self-employment program;
- as a pre-screening tool prior to developing a business plan;
- in conjunction with a business feasibility assessment.
The individual will need to provide initial information regarding
the proposed business. The individual should also be prepared to discuss
his/her credit status. Finally, the individual will need to make arrangements
with employers and trainers to verify skills and experiences.
Follow the steps listed below to complete the Business Assessment Scale:
- The organization representative or "counselor" and the applicant
or "client" reviews the purpose of the assessment scale - and definitions
used. The review should include a discussion of the importance of
the client providing specific, behavioral examples for each factor
- The counselor and client should complete the assessment scale independently.
- The final score should be discussed and next steps determined.
- The client and counselor should plan to spend two to three hours
completing the assessment scale.
Definitions of each factor or attribute appear later in this promotional
copy. For each definition, use the descriptions, levels, and benchmark
scores to determine any appropriate score from 0 to 100. Once you decide
on a score for each factor, write in the scores on the corresponding
line in the Client Initial Assessment table.
Example 1: Jane Doe has no market data but has talked
with several business people in the area who have indicated that "they
think there may be some demand for her proposed service." Because Jane
Doe has no market data, but has some initial suggestion of demand the
score should be greater than zero but less than 50. A score of 15 might
be appropriate because the information is very general.
Example 2: John Doe has national market data for Franchise
X, but no local market data. A score of 20 probably is appropriate because
national and state trends are not necessarily indicative of local demand.
The degree to which the individual possesses the expertise to manage
people and finances. Consider knowledge of, or expertise in, sales/marketing,
operations, finance/accounting. If acquired pre-injury, individual must
continue to demonstrate these skills/abilities.
The degree to which the individual exhibits the following behaviors:
- Commitment of time, personal resources, and skill acquisition directed
toward operating a business.
- Desire to operate a business demonstrated by initiative to research
information, network with individuals and business organizations,
and independently seek professional consultation; and
- Persistence in resolving problems and overcoming obstacles.
Technical Skill/Work Experience
The degree to which the individual demonstrates technical skills and
knowledge of the industry based on work experience and/or training.
The degree to which information supports the need for the proposed
business. The feasibility of the business must be assessed in the context
of the product/service, target market, competition, and market trends.
Evidence of market demand includes: an existing customer base, letters
of intent to purchase the product/service, customer surveys, and demographic
and industry data. An independent assessment may also be obtained to
evaluate the demand for the proposed business.
Personal Credit/Financial Solvency
The degree to which the individual demonstrates the ability to maintain
a positive credit rating. In evaluating a negative rating, consider:
- Reason for poor credit rating (e.g., disability-related issues);
- Patterns of indebtedness or bankruptcy (frequency/recurring problem,
duration of indebtedness, length of time since last credit problem);
- Evidence of recent solvency.
After recording the scores for each factor, multiply the score by the
normalized weight and record the weighted score. (The normalized weight
is a statistical expression of the relative weight of each factor.)
Add the weighted scores to obtain the total score. Discuss the results
with the client or applicant.
The following issues should be considered in evaluating the total score:
- A total score of 61 to 100 suggests that the individual and/or
proposed business possess the characteristics which contribute to
a successful business operation.
- A total score of 41 to 60 suggests that the individual and/or proposed
business possess some of the characteristics which contribute to a
successful business operation, but may require additional skill-building
- A total score of 0 to 40 suggests that the individual and/or proposed
business do not possess the characteristics which contribute to a
successful business operation,
Client Initial Assessment
Client/applicant’s Name: ______________________
Client Initial Assessment Form
|1. Management Exp./Skill
||.218 x ____
|2. Commitment / Desire
||.226 x ____
|3. Technical Skill/Work
||.166 x ____
|4. Market Demand
||.236 x ____
|5. Credit / Financial
||.154 x ____
||(Sum of all weighted
scores) Total Score ____
Scores are not to be used in isolation or as the sole indicator of whether
a business enterprise vocational objective is appropriate. All scores
should be reviewed in the context of other evaluations, including functional
evaluations, business feasibility studies, and market analysis.
Scores of 60 or lower may serve as the basis for additional planning.
The Business Assessment Scale can identify areas where the client needs
to gain experience or make other changes before he/she is prepared to
start and run a business successfully. Applicants may be able to improve
their ratings by resolving credit problems, gaining work experience,
and acquiring management expertise.
©1994, B. Goodman, R. Herzog. Used with permission from the authors.
Chapter 4 Self-Employment Assessment
Study Guide:Business Assessment Scale
- List 4 reasons for conducting assessments as part of the self-employment
- Most of the assessments for evaluating self-employment potential
- Why are business development and marketing professionals concerned
about using many of the available tests for determining self-employment
- List and explain 3 advantages of using the Business Assessment
Scale in the self-employment process.
- The Business Assessment Scale should be used twice in the self-employment
process. When? and Why?
Study Guide Answers: Chapter 4 - Business
© July 1998, 1st Revision June 1999, 2nd Revision February 2001