How to Start and Grow a Veteran-Owned Business
Veterans have served their country with honor and dedication, and many of them have the skills and experience to become successful entrepreneurs. According to the U.S. Small Business Administration (SBA), there are over 2.5 million veteran-owned businesses in the U.S., generating more than $1 trillion in annual revenue and employing nearly 6 million people.
If you are a veteran who wants to start or grow your own business, you may be eligible for various programs and resources that can help you achieve your goals. In this article, we will explain how to classify a veteran-owned business, what are the benefits of being a veteran-owned business, and what are some of the challenges and opportunities that veteran entrepreneurs face.
How to Classify a Veteran Business Owner
A veteran owned business is a business that is at least 51% owned by one or more veterans, who also control and operate the business. A veteran is defined as a person who served in the active military, naval, or air service, and who was discharged or released under conditions other than dishonorable.
There are two types of veteran owned businesses that can qualify for special programs and preferences in federal contracting: Service-Disabled Veteran-Owned Small Business (SDVOSB) and Veteran-Owned Small Business (VOSB). Veteran small business owners fall in this.
A SDVOSB is a small business that is at least 51% owned by one or more service-disabled veterans, who also control and operate the small business. The management and daily business operations of the SDVO SBC must be controlled by one or more service-disabled veterans (or in the case of a veteran with permanent and severe disability, the military spouses or permanent caregiver of such veteran).A service-disabled veterans is a veteran who has a service-connected disability rating from the Department of Veterans Affairs (VA) or the Department of Defense (DoD). The Department of Defense (DoD) has undertaken an outreach effort to identify small businesses owned and controlled by veterans and service-disabled veterans. The DoD outreach effort aims to improve prime and subcontracting opportunities for veteran and service-disabled veteran-owned small businesses.
A VOSB is a small business that is at least 51% owned by one or more veterans, who also control and operate the small business. A VOSB does not have to be owned by a service-disabled veteran, but it can be.
To be eligible for federal contracting opportunities as a SDVOSB or a VOSB, you must register your business with the VA’s Center for Verification and Evaluation (CVE), which verifies your ownership, control, and operational status. You can apply for verification online at: https://www.va.gov/osdbu/verification/.
What are the Benefits of Being Service Disabled Veterans Owned Business
Being a veteran owned business can give you access to various benefits and advantages, such as:
Small Business Administration Role in Supporting Veterans
You can apply for loans, grants, and other financing options from the SBA and other sources that are specifically designed for veteran entrepreneurs. For example, the SBA’s Military Reservist Economic Injury Disaster Loan Program (MREIDL) provides loans of up to $2 million to cover operating costs that cannot be met due to the loss of an essential employee called to active duty in the Reserves or National Guard. You can also use SBA tools like Lender Match to connect with lenders who offer loans for veteran owned business.
If you have a Veteran-Owned Small Business, you may qualify for advantages when bidding on government contracts—along with access to other resources and support—through the Vets First Verification Program. This program is run by the Office of Small & Disadvantaged Business Utilization (OSDBU).
Training
You can participate in various training programs that can help you learn the fundamentals of business ownership, develop your business plan, access SBA resources and experts, and grow your professional network. Some of the programs include Boots to Business, which is an entrepreneurial program offered on military installations around the world; Women Veteran Entrepreneurship Training Programs (WVETP), which provides entrepreneurial training to women veterans, service members, and spouses; and Service-Disabled Veteran Entrepreneurship Training Program (SDVETP), which provides entrepreneurship training to service-disabled veterans.
Contracting
You can compete for federal contracts that are set aside or reserved for SDVOSBs and VOSBs. The federal government has a goal of awarding at least 3% of its contracting dollars to SDVOSBs and at least 5% to VOSBs each year. You can also benefit from subcontracting opportunities with prime contractors who have goals for subcontracting with SDVOSBs and VOSBs. To participate in federal contracting as a SDVOSB or a VOSB, you must be verified by the CVE and register in the System for Award Management (SAM) at https://sam.gov/.
The VA is one of the largest federal procurement organizations, awarding over $3 billion to Veteran owned small businesses.
VAMBOA as your Veterans and Military Business Owners Association understands well the financial challenges of running a business. They will provide lending and finance sources and tips. Veteran Business Owners, Service Disabled Veteran Business Owners and Military Business Owners will receive valuable membership discounts.
Marketing
You can use the veteran owned business logo on your website, social media, business cards, and other marketing materials to promote your small business and attract customers who want to support veterans. You can also join various organizations and networks that can help you connect with other veteran company owners, such as the National Veteran-Owned Business Association (NaVOBA), which provides certification, advocacy, and recognition for veteran owned businesses.
VAMBOA will assist Veteran Business Owners, Service Disabled Veteran Owned Businesses (SDVOB) and Military Business Owners in promoting themselves and advertising their business.
What are the Challenges and Opportunities for Veteran Owned Businesses
Starting and growing a veteran small business can be rewarding, but it can also be challenging. Some of the common challenges that veteran entrepreneurs face are:
Transitioning
Members of the military are constantly moving, these moves are a significant source of stress and military spouses, who generally take responsibility for deciding where to live and how to navigate the process. You may have to adjust to a different culture, lifestyle, and mindset when you leave the military and enter the civilian world. You may also have to deal with physical, mental, or emotional issues that resulted from your military service, such as post-traumatic stress disorder (PTSD), traumatic brain injury (TBI), or service-connected disability.You may need to seek professional help or support from your family, friends, or fellow veterans to cope with these challenges.
Accessing Capital
You may have difficulty obtaining financing for your small business, especially if you have a low credit score, lack collateral, or have limited business experience. You may have to rely on your personal savings, credit cards, or loans from family and friends to fund your business. You may also have to explore alternative sources of funding, such as crowdfunding, angel investors, or venture capitalists.
Managing the Business
You may have to wear many hats and handle various aspects of the business, such as accounting, marketing, sales, customer service, human resources, and legal issues. You may have to learn new skills or hire employees or contractors to help you with these tasks. You may also have to balance your time and energy between your company and your personal life.
Facing Competition
You may have to compete with other businesses that offer similar products or services in your market. You may have to differentiate yourself from your competitors by offering better quality, lower prices, faster delivery, or superior customer service. You may also have to keep up with the changing trends and demands of your customers and industry.
Despite these challenges, there are also many opportunities for veteran owned businesses in the current market. Some of the opportunities are:
Leveraging your Military Skills and Experience
You can use the skills and experience that you gained in the military, such as leadership, teamwork, discipline, problem-solving, and adaptability, to run your company effectively and efficiently. You can also use your active duty service members and connections to find potential customers, partners, suppliers, mentors, or investors for your company.
Serving a Niche Market
You can target a specific market segment that has a high demand for your products or services and that values your veteran status. For example, you can serve other veterans, military families, government agencies, or patriotic consumers who want to support military veterans owned businesses.
Expanding your Market
You can expand your market by offering your products or services online or in other locations. You can also diversify your products or services by adding new features, benefits, or options that appeal to different customers. You can also explore new opportunities in emerging industries or sectors that are related to your business.
Partnering with Other Businesses
You can partner with other businesses that complement your products or services and that can help you reach more customers or reduce costs. For example, you can form joint ventures, strategic alliances, or franchises with other businesses that share your vision and values.
Conclusion
Veteran owned businesses are an important part of the U.S. economy and society. They contribute to job creation, innovation, and economic growth. They also serve as role models and inspirations for other veterans and civilians who want to pursue entrepreneurship.
If you are a veteran who wants to start or grow your own business, you can take advantage of various programs and resources that can help you achieve your goals. You can also overcome the challenges and seize the opportunities that come with being a veteran entrepreneur.
You can start by registering your business with the VA’s CVE and applying for verification as a SDVOSB or a VOSB. You can then access funding, training, contracting, and marketing benefits that are available for veteran owned businesses. You can also leverage your military skills and experience, serve a niche market, expand your market, and partner with other businesses to grow your business.
Remember that you are not alone in this journey. There are many organizations and networks that can support you along the way. You can also reach out to other veteran business owners who have been through similar experiences and who can offer advice and guidance.
You have served your country with honor and dedication. Now you can serve yourself and your community by starting and growing a veteran owned business.
References
Veteran-Owned Businesses and Their Owners: Data from the U.S. Census Bureau’s Survey of Business Owners. (2017). Retrieved from https://advocacy.sba.gov/2017/04/04/veteran-owned-businesses-and-their-owners-data-from-the-u-s-census-bureaus-survey-of-business-owners/
Veteran-Owned Businesses. (n.d.). Retrieved from https://www.sba.gov/federal-contracting/contracting-assistance-programs/veteran-owned-businesses
Resources for Veteran-Owned Businesses. (n.d.). Retrieved from https://www.sba.gov/business-guide/grow-your-business/veteran-owned-businesses
Bunker Labs: A Network For Veteran Entrepreneurs. (2020). Retrieved from https://centsai.com/military/veteran-owned-business-statistics/