From the United States Small Business Administration (SBA), there are over 2.5 million veteran-owned businesses in America. They employ more than 5 million people and generate total revenue of about $1.15 trillion. Furthermore, over 95% of these veteran businesses are considered small and medium-sized enterprises.
But these statistics aren’t the true reflection of what’s happening on the ground. While veteran businesses are often more successful than the average start-up, they still have challenges with funding and mentorship. Keep in mind that starting a business as a veteran is like starting a new career, meaning veterans need all the support they can get. Check out this video below.
Are Many Veteran Businesses Struggling in 2020?
The answer is yes! For starters, entrepreneurship isn’t an easy path for anyone. Yet, for veterans, it appears to be even harder. In addition to some veterans needing extended time to readjust to civilian life, it seems there remains a lack of available resources. At the same time, others experience confusion over what kind of assistance is accessible to them.
The Bureau of Labor Statistics (BLS) reported that since 2001, only 4.9% of all the 3.6 million veterans own a business. In comparison, a stunning 49% of WWII veterans went on to operate businesses after serving.
So why do we have such a sharp decline and disparity in veteran business ownership? The following factors should explain the reason:
Lack of Adequate Capital
Despite their success and significant contribution to the economy, many veteran businesses are struggling to stay afloat. One of the main challenges these entrepreneurs face is a lack of funding.
To raise capital for their business, the average veteran uses up to 30% of their personal savings and 11% of their business or personal credit. To make matters worse, veteran business owners also tend to have less access to funding than their non-veteran counterparts. One of the top reasons for this is a lack of networking opportunities and mentorship options.
In this light, there are several places veterans can now get significant funding for their business. For example, there are veteran loan opportunities from the SBA and Hivers & Strivers, who provide funding for veteran businesses. Furthermore, if you’re a veteran, you might also receive entrepreneurial training from credible vet organizations. Such organizations include the Entrepreneurship Bootcamp for Veterans, Boots-to-Business, and Veterans Business Outreach Center, to name a few.
The Coronavirus (COVID-19) Pandemic
Like many other companies, veteran businesses are feeling the financial strain caused by the novel coronavirus pandemic. As a result, some establishments have had to scale back their operations, furlough, or lay off some employees.
Fortunately, for many businesses nearing their financial limit during this pandemic, they could apply for help. Many companies and veteran business owners applied for the Paycheck Protection Program and the Economic Injury Disaster Loan from the SBA. Both loans offered emergency assistance to small enterprises for utilities, payroll, rent, and mortgages. Veterans were also able to turn to the USAA and VA for additional support and emergency assistance during this time.
Turning Struggle Into a Thriving Veteran-Owned Business
It can be quite intimidating to start and operate your own business successfully. Shifting careers from the military to self-employment is no easy feat. However, many veterans do so every year and find satisfying success.
Although small businesses make up over two-thirds of the U.S. economy, only 9.1% of those enterprises are veteran-owned. So, we are a rare breed, yet necessary in helping keep the country operating, even during the COVID-19 pandemic. Also, from the SBA’s 2017 Statistical Report mentioned in paragraph one, veteran entrepreneurs serve in an array of product and service industries.
According to the chart above, nearly 13% of the insurance and finance industry consists of businesses owned by U.S. veterans. Also, industries like construction, transportation, and agriculture/farming have a steady percentage of veteran-owned business concentration of over 11%. Lastly, between 10%-11% of the professional, technical service, and manufacturing industry businesses are owned by veterans.
Start with the Right Marketing Partner for Your Veteran Business
Fortunately, more organizations and companies are starting to provide dedicated help to vets to ensure their entrepreneurial success. As a veteran-owned business marketing firm, BUILDINGBLOCKS is committed to helping you find the right opportunities to grow your business.
Let us introduce you to a few marketing strategies that could help you build more reliable connections with current and potential clients. Learn how we can best serve you by scheduling a consultation today.