Veterans contribute greatly to American success, both during their service and upon returning home — and this includes business innovation. Providing an array of goods and services, veteran-owned businesses in the U.S. total over 1.9 million, employ more than 5 million Americans and generate $1 trillion in annual revenue. While veteran entrepreneurs show positive sentiments about their success and promising trends, they also face challenges in securing funding and navigating business regulations and policies. As we celebrate National Military Appreciation Month, it is a great time to recognize these owners and look for ways to support their growth.
Veterans Serve Us in Many Ways—Including Entrepreneurship
Annually, about 250,000 service members transition to civilian life, and an estimated 16.5 million veterans live throughout the country. Not only are veterans more likely to be civically engaged than non-veterans, but the majority of Americans look up to veterans due to their characteristic discipline and patriotism. Even after serving in the U.S. Armed Forces, many continue to look for ways to serve in civilian life by entering fields like emergency response, law enforcement and business.
And veterans’ impact is certainly evident when it comes to entrepreneurship.
Data from SCORE’s 2021 “Megaphone of Main Street: Unsung Entrepreneurship” report show that veterans “contribute to entrepreneurship at a higher rate than non-veterans.” Helping to sustain the health of our nation’s economy, they make up 9.1% of all U.S. business owners.
And with a wide variety of skills to apply, they are opening businesses across sectors. Top industries for veterans include professional services, construction, retail trade and healthcare.
Challenges for Veteran-Owned Businesses
There are several promising trends among veteran entrepreneurs, with high rates of business ownership and 80% considering their enterprise successful. Yet many still struggle to secure funding, scale their businesses and navigate ever-growing, complex government bureaucracies.
According to a 2022 survey by the Institute for Veterans and Military Families (IVMF), common challenges for veteran-owned businesses include accessing financial capital and acquiring business management skills. The IVMF findings list the top financial barriers to business success and growth for veteran entrepreneurs as:
- lack of access to capital (37%);
- lack of financing (34%);
- the current economic situation (27%); and
- irregular income (22%).
Respondents also cited government-created hurdles, such as taxes and legal fees (20%), federal regulations and policies (20%), state regulations and policies (13%), and startup paperwork and bureaucracy (12%).
Additionally, as SCORE details, COVID-19 economic difficulties have played a role in current challenges for veteran business owners as well. Veterans reported “a lack of support from federal (59.4%), state (76.9%), and local governments (78.5%) and their local communities (52.3%) during the COVID-19 pandemic.” Though they applied for COVID-19 relief funds at the same rate as non-veteran business owners, their requests were denied more often than for their non-veteran counterparts.
How to Elevate Veteran Entrepreneurs
As business leaders, former service members are often considered hands-on, agile leaders with in-demand skills. As of 2021, over half of veteran entrepreneurs reported their business as profitable, and 72% said they are able to provide for themselves and their family with income from their business.
Still, many are experiencing challenges in scaling and growing their businesses.
For example, IVMF’s survey found that 46% of veteran entrepreneurs expressed difficulty in navigating local resources for their businesses; 61% described applying for government certification as “difficult;” and 51% of female veteran entrepreneurs reported being denied financing from lenders or creditors (compared to 36% of their male counterparts).
We can better help veteran-owned businesses thrive by promoting small business resources, increasing opportunities for funding and encouraging local patronage.
Specifically, veteran entrepreneurs could benefit from increased awareness about the tools currently available to them. SCORE’s Hub for Veteran Entrepreneurs includes free business mentoring, business workshops, webinars, and educational resources. And PenFed Foundation’s Veteran Entrepreneur Investment Program supports military-affiliated start-up owners in securing capital as well.
Support within the industries and communities they serve is needed, too.
Walmart’s “Find a Future” program helps veteran entrepreneurs grow their business as part of a larger commitment to help create opportunities for veterans and their spouses. In 2022, Yelp launched a new feature that allows businesses to identify as veteran-run on their page; the company also created a veteran-owned business resource hub and committed to providing $100,000 in grants for veteran start-ups. Target opened its site to third-party sellers through the Target+ program. Target additionally set a goal of working with suppliers that are at least 51% owned, controlled and operated by veterans, women or another minority group. And online marketplaces like Amazon and Etsy highlight veteran-owned business by categorizing shop listings. Business customers can also seek out independent sellers with veteran-owned business certifications through Amazon Business.
As individuals, we can find local veteran-owned businesses to support in directories such as the VA’s Vendor Information Page, National Veteran-Owned Business Association, American Veteran-Owned Business Association (AVOSBA), Buy Veteran and Women Veterans Alliance (WVA).
Veteran business owners continue to make commendable contributions to our economy and communities, providing a variety of quality services and products. In observing National Military Appreciation Month, let’s honor veteran-owned enterprises by helping them find the tools and resources needed to start and grow their businesses. With greater opportunities for funding, lower regulatory and policy barriers and more community support, these brave entrepreneurs can continue to serve their communities by doing what they love.