After serving in the military, knowing what to do with your civilian life can be a challenge. For a lot of veterans, there’s an obvious answer: start a small business.
Leadership skills are often honed in the military, and these skills can be key in helping small business owners succeed.
Veteran-owned businesses make up almost 6 percent of all U.S. businesses and are responsible for over $177 billion in annual payroll, compensating almost 4 million employees.
That’s great for the economy—and veteran business owners. But starting a business isn’t always easy for veterans and their family members. Luckily, there are valuable veteran business resources that can give you a leg up.
Why starting a business as a veteran comes with unique challenges
It can be hard to find financing
Veterans looking to open a business may struggle to find financing. Often, they submit more loan applications before getting approved—and when they are approved, it’s for less money than expected.
According to a survey from Federal Reserve’s Small Business Credit, about 60% of veteran-owned businesses receive less financing than they hoped, while that was true for only 52% of nonveteran-owned businesses.
There are a couple of reasons for this: First, veterans often apply for less than $100,000 in loans, and big banks are hesitant to loan smaller sums.
It can be hard to build your credit score
Secondly, there’s that pesky credit score. Life in the military doesn’t afford many opportunities to build up your business credit. But banks don’t always understand why—they simply see a low or nonexistent credit score and make lending decisions based on that factor.
It can be hard to transition back to non-military life
In addition to financing difficulties, veterans also have to adjust to life as a civilian and a business owner.
“The Army is a world of its own,” says Barbara Kent, who co-owns Birdy Boutique and had to make the shift herself.
So which veteran business resources should you use?
The military lifestyle may foster valuable skills, but transitioning from veteran to veteran business owner is still tricky. That’s why it’s important to take advantage of resources designed to help veteran entrepreneurs succeed.
1. National veteran organizations
The first step for any veteran-owned business? Registering with the Vets First Verification Program, run by the Department of Veterans Affairs (VA). Click on the “Start Verification” link right below the fourth paragraph.
Once you’ve registered, you’ll be able to compete for VA “set-aside” contracts. This is when a small business performs work for the government, often doing research or manufacturing of a specific product.
This process can be a little tricky, but the VA has a blog post that can help you get started.
2. Educational resources
To learn all of those aspects of running a business, you need training. Many organizations focus on supporting veteran business owners through educational programs. Here’s where you can find these types of programs:
- SBA Office of Veterans Business Development: There are 22 Veterans Business Outreach Centers (VBOCs) located across the country. (You can find the closest center to you.) The US Small Business Administration (SBA) runs these centers, which offer training, guidance, and business referrals for veteran-owned businesses. Here, you can find help developing a business plan, workshops on internet marketing, and advice on your business’s unique strengths and weaknesses.
- Boots to Business: The SBA also runs this training program, which teaches basic entrepreneurship and the fundamentals of business ownership. Brown-Massey enrolled in the program before leaving the military, and says Boots to Business was “the most helpful veteran-specific resource” because it taught marketing, understanding the competitive space, and even how to pick the correct legal entity for your business.
- Institute for Veterans and Military Families: Located at Syracuse University, this one-of-a-kind institute offers a wide variety of programs for veterans and their families, for those looking to start businesses can learn about what it takes through educational programs and events.
- Patriot Boot Camp: This three-day boot camp happens twice per year and functions much like a tech accelerator. Expect one-on-one mentoring and intensive training. But make sure to apply early: Only 50 entrepreneurs are accepted in each round.
- Warrior Rising: This nonprofit helps “vetrepreneurs” succeed by connecting mentors and mentees, awarding grants, hosting trainings, and introducing business-owning veterans to investors.
3. Small business grants for veterans
Loans aren’t the only option for funding your veteran-owned business. These grants also provide money that can help your new business succeed.
While some government-funded grant programs aren’t veteran-specific, they’re valuable resources for any veteran-owned business, because they’re the largest source of government contracts. You may also find small business grants for veterans by looking for organizations connected to military affairs.
- Grants.gov: This government-run website compiles every federal grant currently accepting applicants. Whether you’re opening a Head Start academy or a restaurant, you can find grants tailored to your industry. Consider searching for “veterans” to find grants targeting vets or tailored to veteran business owners. New grants are posted regularly, so check back often.
- Small Business Innovation Research (SBIR) program: While this program isn’t specifically designed for veterans, research-minded businesses can fund (and potentially commercialize) their innovations through this government-run program.
- Service-Disabled Veteran-Owned Small Businesses program: The US government aims to give service-disabled veterans 3% of all small-business federal contracting dollars every year. By joining this program, you will be eligible for small-business grants for disabled veterans in the form of government contracts.
- Second Service Foundation: Formerly known as StreetShares, this foundation offers veterans access to capital, educational content, mentoring, and networking events.
4. Small business loans and funding for veterans
Traditional banks aren’t the only place to look for loans. A number of lenders and nonprofits specifically target veterans. Here’s where you should consider applying.
- SBA 7(a) Loan: The SBA offers fee-reduced loans of $350,000 or less to veteran-owned businesses (or businesses owned by spouses or widows). The agency’s Lender Match program can help you find a nearby lender to kick-start the loan process. You might hear these referred to as “VA loans” or “VA business loans,” but funding actually comes from the SBA, not the VA.
- Hivers & Strivers: This angel investment firm brings Silicon Valley to the veteran community. If you’re a military academy graduate, you may be eligible for up to $1 million of investment funding.
Opening a new business will always come with challenges. But your military experience can give you the determination and resilience needed to overcome any hurdle.