Milestones and Opportunities for Veteran and Military Family Owned Businesses
by James Schmeling
The Institute for Veterans and Military Families at Syracuse University (IVMF) celebrated four years in operation this past week. It was a milestone for us and our team. Several members of that founding team came from veteran-serving programs at Syracuse University and in the Whitman School of Management. These programs focused on veteran and military-family-owned businesses including the Entrepreneurship Bootcamp for Veterans with Disabilities (EBV), EBV-Families, and V-WISE (Veteran Women Igniting the Spirit of Entrepreneurship) – an entrepreneurship training program delivered in collaboration with the U.S. Small Business Administration (SBA) for women veterans, women service members and women spouses of either veterans or service members.
IVMF and our partners over the course of the past four years (and for four years before that in the programs noted above) have trained over 30,000 people in entrepreneurship and business ownership. EBV & V-WISE graduates alone have launched more than 3,000 new businesses, created over 2,400 new jobs, and generated over $220M in revenue in sectors including professional services, construction, education, retail, health services, and more. They’re succeeding across sectors, building robust businesses, and contributing to their communities by being business leaders and employers.
Instructors, myself included, regularly talk to aspiring business owners before and during the programs offered by IVMF and SBA. The vast majority of these nascent business owners focus their ideas on businesses that serve government or retail customers. Very few, by contrast, talk to instructors about private-sector businesses as a customers.
The discussion circulates among transitioning service members and veterans about the ease of government contracting, and the availability of contracts “because we’re veterans” or “because we’re service-disabled veterans” and one reason may be that these veterans are the only business owners many of them are ever exposed to – government contractors. It’s pretty normal to build business ownership assessment and world view around government contracting if those are the business owners who veteran and service members are exposed to in the course of their day-to-day activities.
Additionally, almost everyone is exposed daily to retail and consumer-facing businesses – veterans, service members, and family members buy goods and services from small businesses every day! These serve as inspiration for the kinds of business under consideration by the prospective business owner. Sometimes they want to evolve an idea and do it better by building better products or services. Again, exposure helps in the ideation for the prospective business owner.
Here’s an interesting fact … according to the report “Veteran-owned Businesses and their Owners—Data from the Census Bureau’s Survey of Business Owners” published by the Office of Advocacy at the SBA, only a tiny minority of veteran-owned firms have government as a major customer. https://www.sba.gov/sites/default/files/393tot.pdf
Specifically, SBA reports that federal government is a major customer (10 percent or more of sales) of only 2.9% of veteran-owned firms. While this is higher than non-veteran owned firms (only 1.7% had federal government as a major customer), this pales in comparison to the 38.6% of veteran-owned firms that do business with other businesses. Even expanding this to state and regional government, SBA finds they are major customers for only 5.9% of veteran-owned businesses. Finally, some 68.7% of veteran-owned businesses serve individuals, which does align with the business ideation done by our veteran and family-member constituents.
With some 38.6% of veteran-owned businesses reporting other businesses as major customers, it’s clear that this represents a major opportunity. It’s also clear that for some reason emerging business owners are not focused on businesses as customers.
This data from SBA strongly supports one pillar of the Coalition for Veteran Owned Business’ (CVOB) central purposes. Business-to-business supply chain opportunities, given their widespread in business ownership, must become top-of-mind for nascent entrepreneurs when they are considering what gaps to identify and niches to fill. Providing awareness of supply chain opportunities earlier in the business life-cycle may enhance the creation of American small businesses, may increase the goods and products manufactured and sold in the U.S. by American manufacturers, and may provide more and better income to a wider array of veteran and family business owners. For those providing services, the CVOB may provide insights into the needs of large private sector companies for services they would like to purchase from veteran and family owned businesses if they could identify and source from them.
Currently, another major barrier is identifying the veteran and family-owned businesses that have products and services available for purchase. There are several companies that have lists of veteran or family-owned businesses. None of them are nationwide and encompassing of all or a majority of business and industry sectors, and none of them are widely available to supply chain purchasing departments. This isn’t to say none of them are robust – they are both robust and useful, but they do not yet meet all of the needs of veteran and family-owned businesses reaching supply chain teams or all of the needs of company supply chain representatives to source from these businesses.
The Coalition for Veteran Owned Business is addressing these issues, and is building awareness of the opportunities. IVMF is providing training and education on the opportunities. Veteran and military family owned businesses can help spread the word, and so can all of you! So, on this 4th of July, talk to a veteran or military family members considering owning a business and pursuing the American Dream – find out if they’ve ever considered selling products or services to business and industry. If they have, send them to the CVOB website (http://veteranbusinesscoalition.org/) and tell them to get involved. And when you’re buying your picnic and barbeque supplies see if you can find products made by veteran or military-family owned businesses!
Happy 4th of July!