Ultimate Guide for Veterans Looking to Start a Small Business

Ultimate Guide for Veterans Looking to Start a Small Business

After their service in the military has concluded, veterans have many potential paths for their future. They can find new jobs, go back to school to gain knowledge and additional skills or perhaps volunteer or take some time off. Still, the transition back to civilian life is often challenging for military veterans.“Given the lack of choices while in the military, the vast array of choices in the civilian world can sometimes be overwhelming,” suggests one expert interviewed for an article in U.S. Veterans Magazine. Additionally, the lack of structure in post-military life, such as no longer having to report to a commanding officer or other authority figure, can make for a difficult adjustment. For veterans who possess an entrepreneurial spirit, who are determined to succeed, and who want to make their mark on the world, starting a small business can be a great option. The specific tasks and challenges of running a small business provide veterans with a strong sense of purpose and enable them to translate their unique knowledge, skills and experience — from their time in the military and from civilian life —  into a profitable venture.For veterans and nonveterans alike, starting a small business is no easy task. However, those veterans who are determined to succeed in their entrepreneurial ventures will find the resources described in this guide a great help in starting or expanding their small business.

Veteran Career Statistics

As they transition to post-military life, veterans face multiple challenges in their careers, but they are also presented with opportunities, once the obstacles are overcome. These statistics illustrate the reality of employment and workforce participation for veterans.

Veteran Workforce Numbers

According to the U.S. Bureau of Labor Statistics (BLS), the total number of veterans in 2018 was 19.2 million. In turn, there were 9.1 million employed veterans and 326,000 who were considered unemployed that year. As of 2018 there were 4.15 million veterans who had served in the period beginning September 2001 (which the BLS refers to as Gulf War-era II veterans). Out of this population, the BLS reports that 3.2 million were employed, while 129,000 were unemployed.Newer statistics about veteran employment suggest an encouraging trend. The U.S. Department of Labor reports that in May 2019, the veteran unemployment rate was 2.7%, its lowest level since 2000. In general, the veteran unemployment rate has been equal to or less than the national unemployment rate for 13 consecutive months, according to the U.S. Department of Labor’s data.

Veteran Job Skills

Certain industries have become known for hiring veterans because of the unique skills that former military members provide. Military.com notes that these fields include information technology, aerospace and defense, weapons and security, and government, all of which are natural fits for many veterans:

  • Veterans may have acquired a great deal of technical knowledge that can be applied to a career in IT
  • Their experience with military planes or aerospace equipment may be valuable to private businesses
  • Their handling of state-of-the-art weaponry can stand out to firms
  • Their intimate knowledge of certain military and government procedures can make them strong candidates for working for some federal agencies

Beyond these fields, veterans can also gain certain skills in the military that translate directly or indirectly to other careers. Skills veterans may have gained during their time in service that prepare them for roles in business include project management, risk management and logistics.

Conflicts and Challenges Facing Veteran-Owned Small Businesses

Veterans can often convert their military experience into management skills applied to their own small business. However, like all burgeoning small-business owners, veterans who choose the entrepreneurial route must overcome serious challenges, some foreseeable, others impossible to predict.

Lack of Entrepreneurial Skills

Even though veterans can leave military service with an abundance of skills, sometimes their service experience is not applicable to the type of business they want to start. In some cases, veterans simply lack the basic management skills required to start a business. Writing for Forbes, Jordan Daykin describes the skills most often associated with entrepreneurial success as being a balanced and diverse mix of abilities that help business owners face challenges and improve people’s lives.  Veterans may possess knowledge and expertise in only one specific subject area. For example, a veteran who served as a hospital corpsman in the U.S. Navy likely has a great deal of medical knowledge, but the person may not know about certain technical or operational procedures that other veterans within that branch of service are familiar with. Moreover, experimenting with new ideas and taking on new roles may be difficult for veterans who are used to reporting in a strict chain of command and following set structures and guidelines.

Financing Struggles

Starting a small business often requires a significant financial investment and a detailed road map for operations and expansion. Obtaining those requirements, though, can sometimes be a challenge.Writing for the Houston Chronicle, Lainie Petersen explains that a lack of initial funding, unexpected expenses, poor planning and business startup delays can thwart even the most determined entrepreneurs. A veteran may possess extensive tech experience that could be useful when starting a small business offering IT services, but even with those skills, the person may not be able to obtain funding to cover initial costs. Similarly, the new business owner may not have established a comprehensive business plan or may not have accounted for unexpected expenses, such as consulting fees or paying for the benefits offered to new hires. With roadblocks along the way, the owner could miss certain deadlines and end up delaying the growth plan. While these challenges face all entrepreneurs, veterans may encounter even more financial difficulties when starting a business, considering that they are more likely to have financial troubles upon leaving the service than civilians experience. MarketWatch’s personal finance editor Quentin Fottrell writes that veterans are more likely than civilians to carry credit card debt from month to month, are less prepared for a financial emergency and hold a bleaker outlook on their overall financial future. Considering that starting a business may require entrepreneurs to invest a significant portion of their own money, it may be difficult for veterans to meet the financial challenge.

Additionally, veteran-owned small businesses face more financing issues in general. A report from the U.S. Small Business Administration (SBA) notes that “despite similar demand for financing, veteran-owned small business applicants were more likely than nonveteran-owned small business applicants to experience ‘financing shortfalls,’ where they received less than the amount of credit they sought.” Veterans also had lower approval rates on average for small business loans, according to the SBA.

Shift in Industry Trends

Veterans may gain knowledge and skills during their time in service, but their skills may not apply to the specific industries in which they want to start a small business. Also, the skills that industries demand changes over time.For example, the field of data analytics is currently booming. According to Forbes writer Gil Press, the data-analytics market “will soon surpass $200 billion.” Current military members may not be able to gain valuable experience within that field. And even if they do, by the time they exit the service, that field may no longer be as hot as it is now, or there may be fewer job opportunities available within it. Veterans who are eager to start small businesses in certain fields may find that those industries are not as lucrative or as thriving as they once were.

Resources and Opportunities for Veteran-Owned Small Businesses

The challenges facing veterans who want to start a small business are real, but there are resources available to help former military members make their entrepreneurial ventures successful.

Veteran-Owned Small Business Loans, Funding and Credits

Not only can veterans apply for the multitude of small business loans that are available to civilians, they also have the ability to apply for financing benefits intended specifically for former members of the military. The SBA offers former military members the SBA Express loan program, which provides qualified veterans with a waiver of the upfront guarantee fee for an expedited approval process for loans in amounts up to $350,000. The SBA’s Veterans Advantage program also offers veteran-owned small businesses reduced fees on loans. Find out more about these and other SBA programs for small business owners on the agency’s 7(a) Loan Program page.Additionally, funding for small businesses may be available through other government programs. The SBA’s Office of Veterans Business Development (OVBD) helps veterans access various SBA programs, offering assistance in raising capital and otherwise preparing to start or grow a small business. The program lets veterans connect with other veterans who own small businesses and with federal sources for equipment and supplies, according to the SBA’s Veteran-Owned Businesses page. Centers that provide OVBD services can be found on the SBA’s Find Local Assistance page.

Women veterans can benefit from the SBA’s Women Veteran Entrepreneurship Training Program (WVETP), which provides 12 months of funding to grantees. The SBA also funds Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE), a program offered through the Institute for Veterans and Military Families that provides online training and mentorship geared specifically to women veterans looking to start a business or expand one that already exists.

Other Government and Business Development Resources

There are additional government and nonprofit resources available to veteran entrepreneurs. These resources can help veterans with tasks such as funding, training and transitioning from the military into the business sector.

Among the services offered to veteran small business owners by the OVBD are business training, counseling and referrals to potential resource partners. The office also provides several entrepreneur workshops and training programs to veterans. Boots to Business “provides participants with an overview of business ownership and is open to transitioning service members (including National Guard and Reserve) and their spouses.” The Veteran Institute for Procurement offers classes, webinars, newsletters and more regarding veteran entrepreneurial business topics, such as successfully obtaining government contracts and expanding one’s business growth.

Helping Veterans Gear Up for the Business World

There are no shortcuts when it comes to creating a business out of nothing but a great idea and a commitment to transform that idea into a money-making operation. Veterans who are willing to invest the time and effort required to turn their small-business dreams into reality will find a wealth of assistance through programs inside and outside government. When you’re ready to turn your small-business plan into action, the resources described in this guide will be there to provide you with a leg up.

CATEGORIES : Small Business


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