After World War II, 49.7% of returning veterans owned and operated a business. After the Korean War, that number fell to 40%. It’s been falling ever since – in 1996, just 12.3% of young veterans were small business owners. And today, only 5.6% of post-9/11 veterans have taken the entrepreneurial plunge.
That is according to a new study of veteran small business owners, conducted by the Institute for Veterans and Military Families at Syracuse University (IVMF) in collaboration with Bunker Labs. So why are we losing a potential class of business owners who come out of the military well equipped with important entrepreneurial skills such as leadership, teamwork, focus, organization and diligence?
Indeed, a study by Experian found that veterans tend to own businesses with larger employee bases and have more longevity than non veteran-owned business. What’s more, about 25% of transitioning service members want to start a business, yet few veterans have the network, resources, or support they need to start and grow their ideas, Bunker Labs has found.
The Syracuse study looks into factors that account for the motivation, success, failure or survival in veteran entrepreneurship. In the report, Bridging the Gap, Motivations, Challenges, and Successes of Veteran Entrepreneurs, veteran business owners cite difficulty accessing capital as one of three core impediments to starting or expanding their businesses. Limited or no opportunities to network and difficulty developing mentorships were the other top blockers.
More veteran business owners — 59.4 percent — use personal and family savings for their businesses versus their non-veteran counterparts. They are less likely to use bank loans than non-veteran entrepreneurs.
Veteran-owned businesses employ over 5 million U.S. workers and cover a payroll nearing $200 billion, the report said. If the trends continue among younger veterans, this number could continue to go down as would the incomes for households of veteran entrepreneurs who have higher incomes and greater wealth.
“We cannot continue to watch as veterans become a smaller and smaller part of the U.S. entrepreneurial population,” says Dr. Mike Haynie, IVMF Executive Director and Vice Chancellor for Strategic Initiatives and Innovation at Syracuse University. “Veterans and entrepreneurship are a natural fit given their ability to take risks, be determined, think on their feet and survive challenges. We must continue to encourage them to pursue this path, and support them every step of the way.”
The report suggests a way to combat declining entrepreneurship: “Taking an ecosystem approach to facilitating entrepreneurship requires ensuring that there is relationship density, strong network effects, and connected resources for entrepreneurs.”
Programs such as Florida SBDC at FIU, other small business development centers around the state and nation, and SCORE chapters offer free business counseling and can connect veterans with key resources to help them launch or run businesses. Our colleges and universities offer programs too. In addition, GrowBiz compiled a short list of other free resources for veterans who want to start businesses:
- Get certified as a Florida Veteran-Owned Business: The Florida Office of Supplier Diversity (OSD) certifies veteran-owned businesses for free. Certification offers benefits such as referrals to state agencies and other organizations seeking certified businesses; a listing in OSD’s Certified Business Enterprise Vendor Directory; and exclusive emails containing contract and networking opportunities, special events and training announcements. Find out more here.
- Veterans Florida: Seeking additional help starting your business? Veterans Florida can help through the Veterans Florida Entrepreneurship Program. The Florida SBDC Network is a partner and the six Florida locations for the Entrepreneurship Program include Florida Atlantic University in Boca Raton.
- Patriot Boot Camp: A resource site for active-duty service members, veterans, or military spouses seeking mentors, educational opportunities and a community of experts and peers to help build their businesses.
- SBA resources for veteran-owned small businesses: Resources include funding programs, training, and federal contracting opportunities.
- Bunker Labs: Supported by JP Morgan Chase and other organizations, this non-profit offers programs for veteran and military spouse entrepreneurs dedicated to helping the veteran community start and grow businesses. There is a program coming soon to Tampa.
- And more: In addition, free programs offered nationally include FranVet (for franchisees), the SBA’s Boots to Business and the Vets First Verification Program (about VA set-asides). Find out more about 11 of them on this helpful blogpost.
Today we honor our military veterans and their families. Your sacrifices for our country will never be forgotten. Thank you for your service.