Service Members & Veteran’s Guide to Starting a Business

“The primary difference in veteran entrepreneurs is perseverance,” said Mark Cuban, the billionaire Shark Tank investor who has invested in dozens of startups, to an audience of veteran entrepreneurs. “You’re used to having your back against the wall, used to fighting through the muck. you’re used to dealing with an insane bureaucracy,” Cuban said. “Having that veteran mentality makes you more suited for being an entrepreneur.”

In addition to the qualities of mental toughness and resiliency that Cuban describes, veterans also bring a number of other advantages to the table.

Overall, veterans make up between 9% and 10% of all business owners. But they are overrepresented in a few industries. The top-10 sectors for veteran entrepreneurship are represented by the percentage of veteran-owned businesses in the industry, according to the Small Business Administration.

Veterans select a widely diverse set of sectors for their entrepreneurial activities, according to the Small Business Association and U.S. Census Bureau data.

The most popular industries among veterans are:

• Professional, scientific and technical services. The amount of veteran entrepreneurs who go into this sector is 17%, which is not surprising. It’s where veterans can readily take advantage of their edge in technological training and experience working and repairing sophisticated electronics and machinery. Veterans frequently put their security clearances to work in these sectors, as well.
• Construction. The construction industry attracts 16% of veteran entrepreneurs after their service and runs a very close second to the professional, scientific and technical services when it comes to popularity among veterans. Veterans tend to be experienced in the project management and logistics of running a construction business and do well managing multi-disciplinary teams of specialists and leading them to a common goal, which is the essence of the construction industry.
• Real estate. When they go into business for themselves, 9% of veteran entrepreneurs choose to get into the real estate industry. Success in real estate requires hard work, a head for numbers, tolerance for calculated risk and extraordinary self-discipline when it comes to sales and time management. Veterans frequently excel in each of these dimensions.

The best sectors and industries for veteran entrepreneurship are the ones where veterans can leverage their advantages of mental toughness, resiliency, favored status in government contracting and the ability to take advantage of the public’s general goodwill towards veterans as a group.

At the same time, veterans may want to consider industries where their disadvantages — limited access to monetary and social capital — are minimized.

As the SBA notes, veterans are attracted to insurance and financial services. While veterans comprise about 5% of the adult population in the U.S., they make up more than 13% of all the insurance and financial services business owners in the country.

Many major financial services companies offer excellent sales training and support, and you can establish your own agency or financial advisory firm under their umbrella. You’ll have to work very hard and master the art of prospecting and selling in your early years, which can prepare you for any endeavor you choose.

The capital requirements to get started are usually minimal. There’s no inventory to buy and no equipment to lease. You don’t even need an office to get started. You can launch your business with a couple of nice suits, a car, a phone and a laptop.

To get started in the financial services business, take good care of your credit rating for several years before you launch. Most reputable financial services firms will do a credit and background check before they bring you on board. Interview with several different insurance and financial advisory companies and local offices to find the best match for you.

All veterans understand the importance of planning before mission execution. Starting a business is no different. You need to plan carefully and line up resources and expertise. As a veteran, here are some things that need to be on your shortlist of things to accomplish.

Financing has long been a difficulty for veteran and service-disabled veteran-owned businesses. A 2018 Federal Reserve study found that veteran-owned companies were more likely than other companies to experience serious cash crunches due to lack of access to credit and financing. Veteran-owned businesses get turned down for credit more often and get approved for less than the amount sought more frequently. Since 2010, SBA-guaranteed loans have increased by 48% for veteran borrowers compared to an 82% increase for other borrowers, according to the Federal Reserve.

Lack of access to capital is among the most commonly cited problems veterans run into when starting a business. It's often advisable to estimate spending and savings to gain a better financial picture. But Mark Cuban cautioned veteran business owners not to get distracted by the prospect of raising money. “Don’t start with raising money,” he advised. “Raising money isn’t an accomplishment. It’s an obligation.”

But there are times when there’s little choice. If you need to borrow money to buy equipment and inventory, to make payroll or for any other purpose, the following vital resources for funding your startup may help.

If you’re a veteran starting a new business, you’ve got a lot of support. The government and the private sector provide a wide variety of resources for veteran entrepreneurs. These organizations and initiatives help veteran business owners by providing education, mentorship, support networks and access to investment capital and low-interest loans.

• American Corporate Partners

This private-sector organization connects post-9/11 veterans, active duty spouses and eligible military spouses with corporate professionals for customized mentorships.

• Bunker Labs

This nonprofit, national network of veteran and military spouse entrepreneurs is dedicated to helping people in the military-connected community start a business.

• DogTag, Inc

This five-month in-residence fellowship program enables service-disabled veterans and military family members to gain first-hand experience in operating an actual bakery in Washington, D.C. In the process, those completing the program will have earned a certificate in business administration from Georgetown University.

• Entrepreneurship Bootcamp for Veterans with Disabilities (EBV)

This recurring program is an initiative of the Syracuse University’s Institute for Veterans and Military Families. It’s primarily designed for post-9/11 veterans with disabilities.

• <a href=“https://grow.google/veteranled/#?modal_active=none” target=“_blank”>Grow With Google

Google offers a number of options for veteran business owners to promote their businesses as “veteran-led” on their search engine. It also features several courses for veteran-owned and military spouse-owned businesses within their Grow With Us app. Google for Startups is partnering with Patriot Boot Camp, Bunker Labs and Veteran Capital to help veterans and their families grow their businesses.

• LiftFund

This Texas-based non-profit SBA lender specializes in providing loans to women- and minority-owned businesses. Loans for qualifying veteran-owned businesses are available, and LiftFund also conducts workshops and provides counseling throughout the loan process.

• National Veterans Entrepreneurship Program.

An initiative of Oklahoma State University, the VEP consists of a five-week online course of study, followed by an intense eight-day in-person course of instruction held on-site at the OSU campus in Stillwater, Oklahoma. There's also an ongoing mentorship and assistance program for graduates.

• National Veteran Owned Business Association

NaVOBA strives to create corporate contracting opportunities for veterans through certification, advocacy, outreach, recognition and education.

• Rosie Network

This nonprofit advocacy group provides training and support for entrepreneurship in military families, particularly among military spouses who typically have high unemployment rates because of frequent relocations. Among their programs is Service 2 CEO, an eight-module program of instruction in entrepreneurship, which includes financial counseling and meetings with veteran business owners.

• National Veteran Small Business Coalition

This trade association represents veteran-owned and disabled veteran-owned businesses and works to ensure that these groups are given first consideration for federal contracting and subcontracting opportunities.

• VetFran

This organization focuses on helping veterans connect with franchising opportunities. Over 600 franchise companies participate, and VetFran screens them for quality.

• Veteran Capital

Describing itself as a "modern military transition company," Veteran Capital connects transitioning service members with tech companies to work full-time in a three-to-four-month fellowship program while they are still in the service. The military, not the tech company, pays their salaries. The veteran is exposed to operations in the tech industry and learns the ins and outs of entrepreneurship. At the end of the process, the tech company can hire the veteran directly, or the veteran is better prepared to start and lead his or her own business.

• Veteran Institute for Procurement

The Veteran Institute for Procurement focuses on helping veterans interested in selling to the federal procurement. The program is free and consists of an intense three-day seminar. Topics include contracting, teaming agreements, business development, human resources, accounting and finance.

• Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)

This program for women veteran entrepreneurs is run by the Institute for Veterans and Military Families at Syracuse University. The program includes an online course, an entrepreneurship training event and ongoing mentorship, training and support opportunities for graduates launching or growing their business.

• Office of Small and Disadvantaged Business Utilization (OSDBU)

This is the federal procurement office in charge of ensuring that the federal government achieves its objectives in awarding contracts to women and minority-owned and disadvantaged businesses, to include veteran and service-disabled veteran-owned business enterprises.

• Small Business Administration

This federal agency helps business owners by facilitating access to startup capital, low-interest loans, education and coaching.

• Federal Contracting

This resource is the SBA's introductory resource page for small business owners interested in contracting with the federal government. It includes links to further information on certifications, size standards, policies and procedures and other topics.

• LenderMatch

This program from the Small Business Association helps business owners find lenders whose lending criteria match their circumstances. The free online tool allows small business owners to fill out a quick online form and connects them with lenders within 48 hours.

• Office of Veterans Business Development

This subagency within the Small Business Administration focuses on developing entrepreneurship and small business survival and success within the veteran and military community. The agency strives to expand the availability and usability of small business programs for veterans and their dependents or survivors.

• Veterans Business Outreach Centers

This initiative of the Office of Veterans Business Development assists with business training, counseling and resource partner referrals. They conduct pre-business planning workshops, concept assessments, assistance with developing business plans, feasibility analysis and mentorship in centers established across the country.

• Boots to Business

This program, run by the Small Business Administration, is part of the military's Transition Assistance Program. It is offered to all military service members as they transition out of the service and back into the private sector. It provides an overview of entrepreneurship and applicable business ownership fundamentals. It's not limited to transitioning active-duty service members; Veterans of all eras and spouses are also eligible.

• Service-Disabled Veteran-Owned Business Program

This SBA initiative seeks to assist service-disabled veteran-owned businesses in achieving success in federal contracting and subcontracting. The federal government’s goal is to see that 3% of federal contract awards go to service-disabled veteran-owned businesses.

• State and Territory Business Resources

Just as you can create a business to sell goods and services to the federal government, you can do the same for your state or any other state or territory. Click the link to search for contracting resources specific to your state.