As we honor veterans for their military service to the United States, we can also salute their contributions to the economy.
Veterans owned 9% of U.S. businesses in 2007, according to the most recent census data. Those businesses generated $1.2 trillion in receipts, or about 4.1% of all business receipts nationwide, and employed nearly 5.8 million people. (The U.S. Census Bureau released the figures in May.)
The International Franchise Association says that 1 in 7 franchise businesses is owned and operated by veterans. That translates to roughly 66,000 veteran-owned franchise businesses in the United States, providing jobs for 815,000 people and generating more than $41 billion annually.
The Right Stuff
Nick Palmisciano, who started the apparel company Ranger Up with some Army buddies in 2006, believes military experience can be great training for creating a business. "Veterans never quit, are extremely creative and industrious, and are exceedingly mission focused. These three attributes are essential to succeeding as an entrepreneur," he said.
"Because of their training and discipline, countless military veterans have found franchised business to be a perfect fit for their skills," said Brian Miller, president and COO of The Entrepreneur’s Source.
Steve Burnett, a Navy veteran and owner of Tasti D-Lite in Jacksonville, Fla., agrees. "Franchises seem to me a natural fit for a vet since we are used to following orders, rules, a system. Franchisors have a proven system which if followed is usually successful."
Key Support and Funding Sources
To start and/or grow their businesses, veterans can get help from unique funding opportunities.
"The Patriot Express Loan was invaluable," said Palmisciano, whose business is based in Durham, N.C. He and his partners were able to expand Ranger Up in its third year of operation, and they qualified for the loan with 10% collateral (compared with 50% for similar businesses).
Burnett noted that Tasti D-Lite participates in the Vet-Fran Program, which gave him a 25% discount on the franchise fee. He also got a loan for equipment from the Navy Federal Credit Union.
The U.S. Small Business Administration (SBA) website lists several resources available to help veterans start businesses, including the Veteran Business Outreach Center Program (VBOC), the Entrepreneurship Boot Camp for Veterans with Disabilities (EBV), and loan programs, including the Patriot Express Loan.
Tips for Success
Steven Carey, a former Air Force fighter pilot who retired as a colonel after more than 30 years of service, started CertaPro Painters in 2008, and it has become one of the top home-painting businesses in the Mobile Bay area of southern Alabama.
He offers four steps for fellow veterans who may want to start a business:
- Take a behavioral test that assesses your strengths and weakness. It will help you determine your suitability for running a particular business.
- Join service organizations like the Air Force Association or the Military Officers Association of America and begin networking with those who have jumped on the entrepreneurial wagon.
- Call five business owners in your local area who have demonstrated success. Sit down over lunch and listen to their story.
- Make sure you are mentally and fiscally ready to take on the challenge of running a business.
"Being an entrepreneur is the most satisfying thing I have ever done, with the exception of being an infantry platoon leader," Palmisciano said. "But you will work twice as hard as you ever have, and it'll cost four times as much and take eight times as long to be successful as you expected."
Michael Kothakota, who started WolfBridge Financial just over two years ago and has seen 200% growth since inception, offered a final tip: "Don't be afraid to be creative. We've all had to do something like jury rig a humvee with duct tape to get the mission done. This is no different."
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