Being self employed makes a lot of sense for a lot of reasons. The valuable experience that most veterans gain provides them valuable discipline and organizational skills that helps them get the mission accomplished better than most.
Judy Stringer with Crain’s Cleveland Business shares important insights on how veterans and entrepreneurship are a great match.
Marine Tor Eastlake always knew he wanted to start his own company — for the flexibility ownership offers, as well as for the opportunity to create jobs for other veterans.In 2006, two years after returning from two tours in Iraq and one in Okinawa, Japan, the father of five took the plunge. Eastlake left the security of his full-time job to start Clean Seasons, a landscaping, painting and refinishing company based in Middlefield.
Following several years of bustling business, however, 2014 got off to a slow start. That is when a fellow Marine suggested he reach out to SCORE counselors for advice.
“I was spreading myself too thin,” Eastlake said. “Turns out when people are looking for a company they want it to be specialized in that service and not be doing a couple of different things. (SCORE) helped me see that I needed to pick landscaping or painting and refinishing and focus my business on that.”
He said the free, one-on-one counseling was instrumental in getting his business back on track. SCORE is a nonprofit association of retired executives who lend their business expertise to emerging enterprises.
Veterans like Eastlake are at least 45% more likely than those with no active duty military experience to be self-employed, according to a 2011 report from the U.S. Small Business Administration’s Office of Advocacy.
Matthew Pavelek, a spokesman for the National Veteran-Owned Business Association, said there are an estimated 3.6 million businesses with majority ownership (51% or more) by veterans. That number rises to 5 million when you count companies with veteran ownership of 9% or more.
In Ohio, there are 180 verified veteran-owned small businesses, 125 of which are service-disabled veteran-owned, according to Genevieve Billia, public affairs specialist with the U.S. Department of Veterans Affairs.
Vets are dependable, and they’re goal-oriented toward a task. Those are two of the characteristics that make them great employees and great entrepreneurs, said John Renner, veterans’ business development officer with the SBA Cleveland District Office.Yet, to get a business off the ground and running, they often need a little help, whether it is devising a marketing strategy or setting up a QuickBooks accounting system. A number of government agencies, universities and even private sector companies are responding to that need with support, training and incentives aimed at veteran entrepreneurs.
The SBA offers technical assistance and management advice, but it’s best known for its government-backed small business loans.
As part of its Veterans Advantage program, the 3% fee the SBA typically charges to guarantee a loan is waived. That saves veterans about $5,200 in up-front costs on a $300,000 loan, Renner said. His office made 63 such loans in 2011, 67 in 2012 and 53 in 2013. Thirty-five vet-owned businesses have taken advantage of the program so far this year.
“For the last couple of years, we have seen a record number of applicants,” Renner said. “We get calls from vets every day.”
In addition, the SBA has specialized services and assistance for veteran-owned businesses that want to sell their products or services to the government. Federal law requires at least 3% of all federal agencies’ contracting dollars go to businesses owned by service-disabled veterans.
The Cleveland SBA, in partnership with the Northeast Ohio Procurement Technical Assistance Center, offers workshops and counseling to help get veteran business owners certified through the U.S. General Services Administration so they can “get into the game,” he said.
“Three percent of $500 billion is a pretty big number,” Renner said.
Four years ago, VOBOhio, a nonprofit group based in Dayton whose mission is to put more veterans to work, launched Vetrepreneur Academy, an eight-week program at Wright State University that builds entrepreneurship skills in veterans who are interested in starting a business.Between 2010 and 2013, the program trained about 65 people in the Miami Valley region, which has a high concentration of veterans because of Wright-Patterson Air Force Base. Paul Salchak, VOBOhio’s director, said in that time, academy grads generated 20 businesses.
This year, Vetrepreneur Academy was folded into an even more ambitious initiative — a business incubator called Vet Town — and will be offered twice. Salchak expects about 15 additional businesses to come out of the incubator’s 20 to 25 participants.
Grant money and private donations have made it possible to provide most of the programming for free. Family members of veterans are able to take advantage of the courses and one-to-one counseling, too.
“We are getting not just more visibility for the participants in the program, but more and more of the folks that come into the program are ready to go, closer to taking their businesses and products to the marketplace,” he said.
While VOBOhio is centered in southwest Ohio, the program is designed to be scalable and reproducible anywhere there is enough interest and veterans to support it, Salchak said.
Vets need apply
Not all programs have gained traction.Independence-based Proforma hoped a program to waive franchising fees for veterans would entice former military men and women into becoming part of its network of independent promotional products distributors.
Despite 40 to 50 inquires since it announced the offer in late 2012, founder Greg Muzzillo said the discount — valued at more than $20,000 per franchise — has yet to produce a new veteran business owner for Proforma.
Muzzillo speculated many veterans may not feel they have the sales experience to operate a Proforma franchise.
“They certainly are hardworking, dependable and task-oriented. Some (interested veterans) even had an officer’s background with leadership skills as well,” he said. “There is probably not a whole lot of direct sales going on in our armed forces, however.”
Still, Muzzillo said, he has no plans to retract the offer.
“We are happy to keep the program forever,” he said. “I firmly believe all small business, and large ones, should find some way to help vets find a path back in the U.S. because they gave so much more than we can understand.”