Tag: veteran entrepreneurs

Veteran entrepreneurs have always been at the core of American business owners. In May of this year, Experian conducted a series of interviews with veteran business owners and found that the skills and values learned while serving their country naturally prepared them for entrepreneurship. Of those skills and values were leadership, adaptation, discipline, and perseverance. Recently, the New York Federal Reserve Bank, in conjunction with the U.S. Small Business Association (SBA), released a detailed report about veteran business ownership and found that the number of veteran entrepreneurs is declining. With historical numbers revealing strength in veteran entrepreneurship, what are the reasons for the sudden decline? The U.S. Small Business Association (SBA) reports in a series of surveys, 36% of veteran entrepreneurs had no prior interest in business ownership before their military service. Because of the training and experience of serving in the military, veterans seem to be well-fitted for entrepreneurship. According to the Institute for Veterans and Military families, of those who returned home from prior wars, 49.7% of WWII vets and 40% of Korean War veterans started their own businesses. The U.S. Bureau of Labor Statistics also reports that the highest rates of self-employment were those who served in World War II, Korea, and Vietnam. Veteran business formation declining In a 2011 report, however, the U.S. Small Business Association noted a decline in veteran entrepreneurs and began to look deeper into determining factors. Part of the reason was that the older generation was aging out of the workforce. Since 9/11, only 4.5% of veterans have opened businesses, clearly emphasizing that the rate of new veteran entrepreneurs is in steady decline. Also of note, compared to non-veteran-owned small businesses in any industry, veteran-owned companies with 1 - 4 employees seem to be underperforming in sales. Larger veteran-owned businesses, with 5 or more employees, actually outperform non-veteran owned businesses. Does this reveal that newer, veteran-owned small businesses seem to have more challenges than veteran entrepreneurs of decades past? Factors in the decline of veteran entrepreneur success Recent years have seen many corporate initiatives that encourage veteran hiring and could be contributing to the decline of veteran entrepreneurs. The New York Fed’s report on veteran entrepreneurship notes, however, that veterans are underemployed compared to non-veterans and nearly of quarter of returning vets would like to start businesses. Further details of the report reveal that veterans long to “forge their own path” and “showcase skills”. The challenge for many veterans is the lack of a strong business or personal network with which to begin their new ventures. Because they’ve been away and typically relocate fairly often, the lack of social resources could be a factor in the decline of new veteran-owned businesses. The Federal Reserve Bank analyzed data and Small Business Credit statistics of veteran and non-veteran business owners and found that the biggest factor affecting veteran entrepreneurs is access to capital. Small business access to capital According to the New York Fed Small Business Credit Survey, the firms surveyed had less than 500 employees and were asked about their business performance and financing needs. If more than 50% of the business was owned by a veteran, they were referred to as veteran-owned businesses. The report found that the need for small business financing was similar between veteran and non-veteran owned businesses.The difference was that veteran-owned businesses submitted more applications and reached out to banks large, small and online. Even with the greater number of applications and the variety of lenders, veteran-owned businesses typically obtained less financing and saw lower approval rates than non-veteran owned businesses. During a time of economic recovery (2010 - 2017), the SBA loans to non-veteran owned businesses increased to 82% as compared to 48% for veterans, even with relief programs set aside for veterans. Veterans also seem to be asking for smaller loans, something that also affects women business owners’ access to capital. Larger banks are less likely to approve loans under $100K. Because of the frequent traveling and working overseas, some veterans are also struggling with building solid credit or having collateral. As they’re seen as higher risk, some lenders aren’t willing to take the chance. Veterans are still asking for help Even with these challenges and barriers to capital, veterans are seeking out assistance from the SBA and other resources to grow their small businesses after they have been denied capital. With common traits of strength and self-reliance, veteran entrepreneurs may be starting businesses before they’ve met with financial and business advisors. More preparation and knowledge about which lenders would better meet their financial needs and how to prepare for credit and collateral requirements could be helpful for veteran business owners. The New York Fed report suggests for several recommendations for policymakers to help veteran business owners including: Easier debt financing Mentorship Awareness and marketing To learn more about the challenges faced by veteran entrepreneurs and how to help, access the New York Federal Reserve Bank report here.

Experian Business Information Services has been honoring Veteran Entrepreneurs in the month of May on the Small Business Matters blog featuring a series of posts highlighting military veterans who went into business for themselves. We asked them about making the transition from military to small business, what challenges they faced, and how their career in the service prepared them to run their own small businesses. A common thread among the veteran entrepreneurs we’ve interviewed for this series is family. They came from a military family, they built a family with those who work in their business, or they left active duty to spend more time with their family. To these veterans, it is an honor and duty to serve their country. They show the same commitment and respect to those closest to them. With a family legacy of military service, entrepreneurship and a “passion to serve”, this veteran honors his heritage by sharing his story, starting with his father’s choice to join the Army. In his late teens, Blake Vaughn’s father was involved in a deadly bar fight. When he was given the choice to go to prison or join the Army, he chose to serve. He left the military early to take care of his ailing parents, and, after his parents died, he took in his siblings as well. He soon started his own family and worked for the post office before going into business for himself. In 26 years, he grew his business from nothing into a multi-million-dollar company. Between the 2001 recession and a divorce, the family suffered multiple setbacks, including foreclosure on their home. After the divorce, Blake, still, a teenager, decided he needed to do something to help lift his family out of poverty and help his mother put food on the table. He decided to follow in the footsteps of his father, grandfather, uncles, and brother and join the military. What did you like most about serving in the U.S. Military? “Serving my country and building strong relationships with people. On a personal level, it’s fulfilling to know you’re participating in something greater than yourself. I feel weird and undeserving when someone says, “thank you for serving.” I think of my brother… his vehicle was destroyed by an IED. Thankfully, nobody got hurt. I don’t like to compare the two of us but at the same time, I at least participated in the security of the country. I’ve always had a huge love for our history, values, the Constitution and our country. My wife homeschools our son and part of that is history… so from the perspective of serving in the military, sharing that with my son is cool. The most enjoyable part is the people and the camaraderie. I was a junior officer, so I learned the leadership that comes with that. I’m a big fan of leadership and personal development. As a leader, people don’t care how much you know until they know how much you care. I am more interested in getting to know people first and building relationships and letting them shine. By doing that, I had some excellent relationships with those guys I led. I still have great relationships with them.” What inspired you to make the transition to entrepreneurship? “My father was a veteran and entrepreneur. He was given the choice to go to prison or go to the army after a bar fight. He chose to serve and straightened up his life. He got out and worked for a little while until he decided to start his own business. He built a $12 million business and then lost it after 20+ years. I wanted to serve just as my father, grandfather, several uncles, and brother did as well, but I also wanted to pursue entrepreneurship because I saw the satisfaction that comes from creating something for your family.” Blake worked through college earning his MBA in marketing while waiting to go into the military. Due to delays in his selection process and a government sequester, it took many years before Blake was finally able to attend officer candidate school in the Navy. He served as a gunnery/ordnance officer on the USS CHAFEE in Hawaii before exiting with an honorable discharge into the reserves. In that time, he also married his college sweetheart, whose first husband had passed away and left her with a 1-year-old son. Between his time working through college and after leaving the military, he “bounced around to all areas of business”, working various customer service, finance and hospitality jobs before finally taking the entrepreneurship leap. Tell us about your business. “We started our first business, a restoration franchise in August 2016, handling water and fire damage. Our second business, Patriot Services Construction, started in May of 2017. In our first calendar year, we generated $1.1 million in gross revenue. For our 2nd full year, we hope to close over $2M. We’re also adding roofing to our services.” Blake’s business can be found online here: Restore NTX LLC & Patriot Services LLC What skills from your military career do you apply most often to your business? “Administrative, risk assessment and management, program management, leadership, motivation, inspection, and accountability. It (the military) was extremely grueling work. Only about 2% is cool. The other 98% is mundane repetitive tasks. It can tear you down, so you have to keep focused and motivated to do what’s necessary because if the country calls on you, you have to be ready. I find fulfillment from motivating people and that allowed me to press harder and stay focused. It was a great learning experience for me.” Did you access Government programs to launch your business such as SBA loans? “Yes, we did get an SBA 7A loan for $110K when we first started. We combined that with personal funds and I took on a partner when we started - a guy I know from church named Jeff Lott. We both wanted financial freedom and control of our time. We partnered together to buy vehicles and equipment to launch our business. There’s a book called Rocket Fuel that talks about the combination of visionaries and integrators when building a business. The book is good. I’m a visionary. I look for new revenue sources and he’s the integrator. We compliment each other in business. We’ve found a really good spot. It’s been an excellent partnership.” What is the biggest challenge about being an entrepreneur? “Facing the unknown and taking risks that could cost us greatly. I took away from the military, and my time during training especially, that you’re used to having pleasures in life, being comfortable, and they strip that away… 6 months living out of a backpack. You learn perseverance. You don’t need a lot to live. It allows you to lay it all on the line when you do have challenges. Entrepreneurs, when failure looks like it could happen, they begin to backtrack. Several people I know went back to their corporate jobs. You have to define what is essential and get rid of everything else that doesn’t take you closer to what’s important to you. It’s a challenge… “what if we fail”. Jeff and I didn’t have experience. In our industry, people typically use a direct sales force to get off the ground, build relationships with trade partners to refer work. We tried that and it didn’t get off the ground. Instead of getting scared, we looked into internet marketing instead. We shifted heavily into internet marketing. We have no salespeople whatsoever and 90% of our business now comes from internet marketing.  Creating the right mindset is most important, and being willing to take a risk is part of that. As Grant Cordone says, “Commit first and figure it out later.” We also try to automate our business as best we can, taking advice from Tim Ferris’ 4 Hour Work Week. What is the greatest reward in being an entrepreneur? “Our technicians do hard work and their mindset is serving people, not just making money. It was nice to volunteer a short time in Houston after Hurricane Harvey and tracking through the disaster to help with recovery. We didn’t need to be directed. We knew what to do so we just got to work helping those folks. There’s also satisfaction in creating something important and it’s nice to have more freedom to enjoy life.”

  For the month of May, as we head into Memorial Day, the Small Business Matters blog will feature a series of posts highlighting military veterans who went into business for themselves. We’ll ask them about making the transition from military to small business, what challenges they faced, and how their career in the service prepared them to run their own small businesses. A 2017 Small Business Association report on Veteran-Owned Businesses states that over 2.5 million businesses in the United States are majority-owned by veterans. Nearly all were small businesses, and over half were based out of their homes. While on active duty, many veterans faced situations where they had to be hardworking and resourceful. They’re driven and often fearless leaders who have traveled the world and learned how to work in uncomfortable environments. Many discovered their passion during their time in the service while others found that starting their own business fit their mobile lifestyle. Today we’ll hear from one veteran entrepreneur who drew from her military training to overcome a professional setback, and how the military prepared her to be an entrepreneur.   Sarah Stahl is a mother of 3 children who served in the Army as a Finance Specialist for 3 years. While enlisted she met her husband of 16 years, Daniel, and for the next 12 years, she has been a military spouse. They are still transitioning to civilian life after leaving the military 2 years ago. Stahl discovered her entrepreneurial spirit in high school. She didn’t have a desire to go to college because she didn’t feel like it was a good fit for her. The military was appealing for training and the ability to travel the world. After leaving the military to raise her children, she tapped into her restless entrepreneurial spirit and began creating and selling wedding invitations on the e-commerce site for handmade items, Etsy. Selling on Etsy allowed her to work from anywhere and remain home with her young children. It was a chance encounter through the website that led her to meet the person who would become her business partner. “I had an unusual request for a World of Warcraft wedding invitation, with the bride and groom’s faces built into the invitations. I asked on an Etsy forum for anyone who could help and Merrilee answered.” Together they started taking on personalized requests for wedding invitations and built their first business together, Paper Perfections. As Stahl and her business partner worked closely, and over the internet, they became like sisters. Their friendship led to the creation of their current company, Avant Creative. What did you like best about the military? “World travel & the tight-knit comradery that I have yet to find outside military life. I’m only 36 but my time on active duty (3 years) and as an active military spouse (12 years) I already feel like I’ve lived a whole life. The business venture I’m working on now is a chance to live a second life.” Sarah is also finishing up a masters degree, thanks to her time in the military. How did the military prepare you for entrepreneurship? “I learned about leadership, integrity, and having a DON’T QUIT mentality.” Sarah and Merrilee finally met in person last fall and a month later, Merrilee passed away suddenly. Stahl is still recovering from the loss. Transitioning out of the military, moving to a different place every few years, and running an online business means that Stahl often felt very isolated. “Merrilee was my crutch,” Stahl says, “But I’m independent. I can’t go back to work.” Stahl made the very difficult decision of continuing the business without her friend, “There were 4 of us in total but she knew the other two partners better. Out of necessity, we’ve had to band together to get a hold of things. We’ve had to go through this crisis together so we’re moving towards a partnership.” Business is growing and they’re considering a legal partnership. Although there are still decisions to be made, Stahl is looking forward to growing Avant Creative. What is the hardest thing about being a small business owner? “Probably the fact that there isn't anyone to fall back on. I constantly feel like I'm out on a limb, recreating the wheel. It causes stress in all areas of life and makes me question if what I'm doing is the best path for life.” What is the best thing about being a small business owner? “My schedule. My husband and I have 3 kids and it's invaluable to be able to adjust my work schedule, however, I need to in order to both support and be available for our children.” Did you look into government programs or funding for your small business? “I looked into getting a startup business loan but I’m nervous about funding and interest rates. I’ve been bootstrapping the business, using whatever cash I have on hand. I was looking for funding for a solid brick and mortar, but the debt scares me. I do want to invest in the business and keep growing but I’m not sure if I should go to an investor or get funding. There are still a lot of decisions to be made.” To drive awareness for Avant Creative, Sarah uses social media extensively. She hosts a weekly “Reinventing Marketing” session on Facebook live, where she shares marketing tips and best practices.  She also writes articles and posts videos on LinkedIn where she talks openly about the challenges being an entrepreneur.  Her approach to LinkedIn is to establish a professional brand which leads other entrepreneurs to her marketing services. With young children, a growing business, and finishing up an advanced degree, there’s no question that Sarah Stahl’s time in the military has helped her to step outside of her comfort zone. Hardworking, resourceful entrepreneurs benefit from the military training and experience and Stahl is no exception.