2021 saw one of the highest number of new business starts in the US – more than 5.4M. Gusto—which runs payroll and benefits for 200,000+ businesses nationwide— surveyed business owners that started-up in 2021 to better understand who started businesses and why during an ongoing pandemic and economic uncertainty. Among the groups that experienced significant growth of new business creation in 2021: Veterans. According to our survey, 10.7% of new business owners in 2021 were veterans. This is a 100% increase from the public Census data which shows veterans made up only 5.4% of entrepreneurs in 2019.
Why did so many more veterans take the plunge into entrepreneurship in 2021? The top three reasons are as follows:
- 48% said it was because they were worried about finances
- 27% said they had been laid off from another job
- Nearly a quarter (24%) said they were seizing a pandemic-related business opportunity
When we compared why veterans started new businesses to all new business owners, the data shows they were more likely to start their business out of economic need:
|I seized a pandemic-related business opportunity||You ran a previous business and voluntarily shut it down to start a different business during COVID||You were laid off from another job||Partner was laid off from their job||Worried about finances||Responding to childcare responsibilities due to the pandemic|
Veterans also differed in the industries in which they started their businesses. Veterans were significantly more likely to start a business in Goods-Producing/Logistic sectors (construction, manufacturing, utilities, transportation, and warehousing) than all new business owners. The survey shows 47% of veteran entrepreneurs started a business in Goods-Producing/Logistic sectors, while only 11% of non-veterans started a business in those sectors. With those sectors experiencing rapid growth during the pandemic it created a healthy pipeline of opportunity leading many veterans to report their business is doing better than predicted (46% for veterans, compared to 41% among non-veterans).
In terms of what’s next? Many are looking to hire – 63% of veterans said they would hire additional employees in 2022. Still they are doing so at a more cautious clip, as 71% of non-veteran owned businesses projected adding headcount over the coming year.
Research shows that new businesses are engines of economic growth. Veterans are playing a bigger role in driving the economy forward, translating military training to business success. If you are a veteran looking to start a business or grow your existing business there are many resources available to support you on your journey.