Veteran's guide to starting a business
Veteran's guide to starting a business
This blog post is provided by digital.com. While it is primarily targeted to military veterans, there's useful information here for any entrepreneur. To read the full, unedited version, CLICK HERE.
As a veteran, many of the skills you learned in the military can be especially helpful in running a business. The wide range of hard and soft skills you acquired through service can be transferred with great success to the private sector. Many veterans are doing just that.
While funding can be an obstacle for many new entrepreneurs, veterans have some advantages. Federal agencies must set aside a certain amount of funding for vets. This is especially helpful, given that many veterans lack sufficient credit history to obtain funding from traditional sources like banks.
How Can Veterans Incorporate Their Businesses for Free?
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How Do You Create a Business Idea?
You might already have a great idea that you’re trying to turn into a reality. However, if you’re not in this category but still want to work for yourself, you’re not out of luck. It’s common for first-time entrepreneurs to spend as much time coming up with their business idea as they do getting it off the ground. The questions below will help you find out which business ideas could work best for you.
What skills do you have?
The first question you’ll want to answer is whether you have specific skills to transition easily into starting a business. Chances are that you learned quite a large range of skills in the military that will translate easily into your project. Did you work as an electrician? That might be a good answer. How about logistics? Even if these areas don’t fit, with some creative thinking, you can come up with some good ideas. Do you have any other skills you obtained before joining the military? Those might also be of good use.
What interests you?
The second question is whether there’s something that specifically interests you. This may be one of the most important things you need to answer. If you’re going to do a job and do it well, you will want to like doing it. If you enjoy something, the more likely you’ll be better at it. Beyond that, having a passion for something you like to do will make your days go by a lot better. It’ll be your driving force and what will get you out of bed in the morning. It could be that your hobby could become your profession.
What resources do you already have?
Thirdly, look at your existing business resources. You might already have in hand various things that might suit you. For instance, if you already have access to a storefront ― perhaps from a family business ― this can be a good start to getting you going. Similarly, if you have built up a solid tool shed and have a large set of tools, you might already be set up to begin some sort of maintenance, carpentry, or odd jobs business. Remember, one of the largest barriers to a business is expenses. If you have anything already on hand, you’re already partially ahead of the game.
What need or niche will you fill?
Another thing to do is to look for an existing need in your community. There may be a shortage of people with a certain set of skills in your town or a business that doesn’t exist beyond a certain driving distance. You might find yourself filling a niche. It never hurts to talk to people about what things they wish they had available to them. There may be a need that people have that they might not even realize. If you can zero in on this, sometimes a simple need can be translated into a profitable business.
What government contracts are available?
Government contracts can be very lucrative, and veterans are often given special consideration when bidding on them. Spend some time browsing the following resources, looking for opportunities that align with your skills and interests:
U.S. Department of Veterans Affairs (VA): If you own a small business, you can be given special consideration when bidding on government contracts, but you need to register with the Vets First Verification Program first. Full details on the program can be found here.
The National Center for Veterans Institute for Procurement: This organization exists to help veterans get a leg up when applying for government contracts. It provides a wide variety of training, mentorships, and exclusive offers.
Veteran Business Outreach Center (VBOC): Part of the SBA, the VBOC provides resources for veterans who wish to start their own businesses, including training, counseling, and mentoring.
Veteran Entrepreneur Portal: This is a division of the VA which provides access to federal services and best practices to help veterans in all stages of business creation.
Service-disabled Veteran-owned Small-business Program: If you have become disabled through your service, this division of the SBA helps connect veterans with government contracts.
VetBiz: Another division of the VA, VetBiz is a portal for verification, acquisitions, and management support. It helps veterans find verified firms and offers training, communications, and assistance in setting up events.
How Do You Develop Your Business Plan?
You need to have a business plan in place to get from where you are now to where you want to be. It’s best to lay out this information well before you begin. Set a few milestones, including dates, for how you plan on obtaining a set of individual goals.
What should a business plan include?
A business plan is a document that provides an overview of your business, including a simple summary that can be presented to potential investors or others interested in your ideas Sum up how you plan on running your company, an analysis of the market, who your competition is, how your business will be organized, how you plan on developing and producing a product (if that’s your plan), financial projections, and more. Let’s break these down.
Executive summary: The first part of your business plan will be an executive summary. This will provide a quick overview of your entire business plan with a mission statement, general information, and highlights of your plan.
Products and services: This is where you describe what product or services your business provides. Outline who your primary customers are or will be.
Financials: This section is crucial if you plan on getting financial assistance or if you plan on selling equity in your business. If you have any existing loans or grants, you should list these here.
Plans: Explain how you intend your business to grow. You should create several projections about where you plan your business to be in the next three to five years.
Company overview: Give a brief pitch for what your company does that nobody else already does ― at least in your area. Failing that, you can go into an explanation for why you’re better than your competition. Think of this as a brief statement that you might commit to memory so that you have an answer when someone asks you what you do.
Market analysis: Describe your industry in general, report on market trends, and provide the outlook for how your general segment of this market sector will trend soon. Identify who your target market is. You may want to draw up a few personas representing your ideal customer. How old are they? Are they predominantly male or female? How much money do they have available to spend? You’ll also need to clarify how long it’ll take to get your product to your consumer from when they request it to when you deliver it.
Business organization: Define your business’ management structure here. You’ll need to include how many employees you’ll have and what roles they’ll perform. Define your ownership structure here as well. If you’re a sole proprietor with no employees, say so. If several other people have invested equity in your company, explain their roles. This is also a good place to bring up your background as a veteran.
Product development plan: Here’s where you cover what services or products you intend to sell. Provide a basic description of the product or service. Describe how it meets the needs of your potential customers or clients. Explain why your product or service is better than your competition.
Financial plan: Money is important for running most businesses. There’s a high chance that you may not have a large amount of money available, but it’s very important to outline what it is that you do have and how you plan on raising the necessary capital. Provide information on your income, cash flow, balances, projected earnings, and expenses.
How Do You Register Your Business?
Now we need to get into the nitty-gritty of going through the legal procedures for operating a business. It may seem like a pain, but it’ll save you many problems in the future.
Choose a business name
This part might seem easy, or it may be difficult. Either way, once you’ve come up with a good brand name, you’ll need to register that name with your local state authorities as a “doing business as” (DBA). This will enable you to deposit any checks issued to that business into a bank account you create for your company.
Define your legal structure
These are the main types of businesses:
Sole proprietorship: This is what it sounds like. You’re the only person in your business, and you have no employees. This is simple, and it’ll enable you to do business as yourself. Don’t forget to register your DBA.
Partnership: If there are at least two people involved, this is a partnership. You’ll need to hire a lawyer to draft a formal agreement between the two or more of you.
Corporation: Corporations are far more complicated. These are separate legal entities owned by shareholders, which will require incorporation. Most businesses starting out may not wish to do this, but there are many legal advantages, such as the fact that you personally won’t be subject to any losses suffered by the company.
S corporation (S corp): Similar to corporations but slightly different, S corps can avoid the double taxation that can occur for regular corporations.
Limited liability company (LLC): LLCs are combinations of partnerships and corporations. Those who own shares in an LLC aren’t liable for losses incurred by the business. Taxes pass through to the shareholders.
Franchises: Although not exactly a legal entity, franchises are a great option for those who might find starting a business from scratch to be overwhelming. In franchises, you don’t specifically own the company but do own the income you generate for your individual franchise. In a good franchise, you’ll typically receive a lot of marketing help in selling an already-established brand.
Register for taxes
Don’t forget this. Your company, once it has been established legally, will need to be registered with federal and, where applicable, state and local authorities. You’ll likely need to get an employer identification number (EIN), although, in some cases, you can use your Social Security number. Check with the federal government to find out if you need one.
Get your documents, licenses, and permits
While this may be a chore, this is important. These vary from state to state and locality to locality and depend on what your specific product or service is. You’ll need to research this before you even think of getting started.
How Do You Find Funding Sources for Veteran-owned Businesses?
You may need money to get started. The good news is that there are a lot of places you can look for help.
If you have a new and innovative product that will interest many people but hasn’t yet been realized, crowdfunding sources, such as Kickstarter, may be a great place to get funding. People will often contribute money in advance for a chance of getting their hands on a new product or for a special offer. It’s a form of small-level investing that has launched many new businesses.
You may be able to get a business loan from your bank or, even better, as a veteran, you may find that you can obtain a loan from places that specialize in providing loans to those who have served in the armed forces.
Beyond banks, you can consider using the Veterans Business Fund. This is a nonprofit organization designed to provide veterans with the resources and loans they need to begin their journey into the business world. This fund isn’t currently accepting new applicants but is expected to resume soon.
Some organizations will give you money outright in the form of a grant, which you don’t need to repay. Here is a couple that are available:
Warrior Rising Veteran Grants: This organization helps connect veterans to funding sources. It focuses on individual “vetrepreneurs” and helps them get started in viable business opportunities.
Idea Cafe Grants: This organization provides grants for entrepreneurs of all shapes and sizes. They specialize in smaller grants of under a few thousand dollars, but also offer a variety of other instructional resources.
What Are Veterans’ Resources for Starting and Managing Their Business?
Beyond funding, there are several other resources available to help veterans run their companies.
Work with the government
One area that may seem like a natural fit for many veterans is to work directly with the federal government as an independent contractor. If you’re a veteran you already have experience working for the government. Therefore, why not convert it into a business partner or customer?
To be able to do business with the government, you need to be registered as a government contractor. This is a necessity if you plan on having the government as a customer. You’ll also need to become familiar with the General Services Administration (GSA), the agency that manages any contracts with the government.
If you’re looking for help, here are a couple of resources:
Veterans’ Institute for Procurement (VIP): Many veteran-owned businesses got their start with a single government contract. VIP is a certification program that helps veterans get approved to apply for a wide variety of often lucrative government procurement contracts.
The System for Award Management: Provides a portal for existing contractors, but its main purpose is to help companies register to do business with the U.S. government in the first place. Its site lets you register, renew, or check the status of an existing application.
Of course, there are resources not directly tied to the government. There are many nonprofits that will help as well. One such organization is the National Veteran Small Business Coalition, which is one of the more comprehensive and full-service organizations. It offers networking opportunities and support for finding funding and seeking mentorships. It’s veteran-run and very much veteran-focused.
Maybe you’re just looking for some good resources to help you learn how to navigate these sometimes treacherous waters of beginning a business. There is a wide range of companies that can help provide courses and information that you may need, including:
Boots to Business: This is another great resource from the Small Business Administration including crash courses on starting and running a business for veterans. It has resources to help veterans with their businesses, whether just starting out or already established.
V-WISE: This is an organization that provides business education specifically for women veterans. It offers training for a whole range of business skills, including business planning, financing, marketing, access to capital, business law, and more.
Entrepreneurship Bootcamp for Veterans: Specifically geared to veterans from the post-9/11 era, it’s also available to families who are caring for veterans. It offers a wide variety of training seminars across the country.
Vet to CEO: An organization run by and for veterans to help former members of the military become successful entrepreneurs. It uses online training to bring veterans up to speed on the basics of starting, funding, and running a business.
Networking and mentorships
One of the key parts of business is connecting with other business owners. Here are many useful resources for veterans:
SCORE: This organization provides many mentoring workshops, some in collaboration with Facebook. Its searchable database helps veterans find experienced mentors, people who’ve “been there, done that” in the business world and can help you do it too.
American Corporate Partners: This group has helped more than 24,000 veterans enter the business world through its large network of mentors, many coming from some of the largest, most successful Fortune 500 companies in the nation.
VetsinTech: Provides mentoring and workshop opportunities for veterans looking to transition into the tech industry. It has a job search board and a place for you to post your resume. A job in a tech company is an excellent way to prepare you to someday start your own.
Hire Heroes USA: Offers free job search assistance to U.S. military members, veterans, and their spouses, and it helps companies find opportunities to hire them. It has helped 65,000 veterans and military spouses get hired.
Patriot Boot Camp: Helps veterans network with each other to innovate in the business sector. It also arranges periodic training sessions around the country, helping veterans pick up extra skills that they can use to start their first venture.
Disabled veterans resources
If you have a veteran-related disability, you may want to check out some of these resources:
Service-Disabled Veteran-Owned Small Business Program: Run by the SBA, this program helps veteran-owned businesses secure government contracts, especially those earmarked for veterans.
Vets First Verification Program: Exists to help disabled veterans gain valuable government contracts, specifically those set aside by the VA. It has extensive information and can help you navigate all the rules and regulations involved.
Free or discounted business software for veterans
There’s a range of companies that provide savings for veterans, which may be useful in your business:
Microsoft offers up to 10% off select products and services. The discount includes business products and services like PCs, Microsoft 365, and mobile products. The discount applies to active-duty service members, veterans, and Reserve and National Guard personnel as well as their family members.
Entrepreneurial U.S. service members can receive one free year of Nimble CRM software. This is especially beneficial to veterans taking advantage of Microsoft’s offer as Nimble integrates seamlessly with Office 365 as well as G Suite. The Nimble CRM combines contact management, social media, sales intelligence, and marketing automation to help manage and grow your business development.
Netsonic is a veteran-owned hosting service dedicated to supporting and showing appreciation for its fellow U.S. military personnel. When starting a new account, simply select the semi-annual billing cycle and enter promo ― PROMO CODE USA ― to apply the discount to basic, advanced, or shared hosting plans.
The Office of Veterans’ Business Development (OVBD): This is the SBA’s liaison with the veterans business community. Its mission is to “maximize the availability, applicability, and usability of all administration small business programs for veterans, service-disabled veterans, reserve component members, and their dependent survivors.” The OVBD assists with training, counseling, mentorship, and oversight of federal entrepreneurship programs.
VetFran: Extensive research shows that veterans regularly find success as franchisees. A veteran’s success is achieved by the unique match of skills and aptitude needed to meet the rigorous demands of small business ownership. VetFran encourages and facilitates the franchisor/franchisee partnership by encouraging discounts and incentives from the former while providing resources and tools to the latter.
Bunker Labs is a nonprofit that organizes events bringing military-connected entrepreneurs and veteran small business owners together. Bunker Labs’ online entrepreneurship curriculum helps aspiring business owners take their business from idea to fruition. Ongoing support from the community allows Bunker Labs to provide practical tools and resources to veteran business owners.
The Institute for Veterans and Military Families (IVMF) focuses on advancing the post-service lives of our nation’s military veterans and their families. Syracuse University and JPMorgan Chase & Co. are its main supporters and, through its world-class advisory board, provide career training, entrepreneurship education, and actionable research which helps foster small business ownership for veterans and active-duty military spouses.
The National Veteran-Owned Business Association (NaVOBA) is another non-profit that supports businesses that are at least 51% owned, operated, or controlled by veterans, by providing networking opportunities and training events. The NaVOBA works with more than 135 of the world’s largest corporations to engage and ensure veteran business enterprises (VBEs) are procurement-ready.
GovConOps (GCO) is a consulting group for government contractors. Its focus is on preparing contractors for success in the pre– and post-award phases of government contracting. Its managing principals and directors have more than 15 years of combined experience producing favorable dispute resolution results. This service is on top of providing audit and investigation assistance, contract advisory and compliance services, business development, and marketing.
Frequently Asked Questions about Starting a Small Business as a Veteran
Starting a small company is especially challenging when you are venturing into business for the first time. Although we’ve covered a lot of information in the article, you may still have many questions and doubts. We’ve answered some common questions about starting your small business as a veteran.
What are the benefits of owning a business as a veteran?
There are many benefits of owning a business as a veteran. The skill set you require to build a small business is instilled in you through various experiences in your service. These take many years to be perfected by others.
You will have access and opportunities to federal contracting dollars as the government considers veterans among others for this criteria.
The Grow with Google program gives you certain incentives and helps you kickstart your small business. They give you access to workshops where you can learn new skills or polish your old ones, and even add a veteran status to your business if it’s online.
You can even get better loans to start your business and payment plans that will be suited to your finances. Your tax incentives are useful in this situation as well.
Will the VA pay you to start a business?
No, VA will not pay to start a business, and they do not provide loans either. But the SBA has programs built for veterans called the Patriot Express. You can learn more about how to get help with your small business on their website.
How many businesses are owned by veterans?
According to the latest data from the SBA, nearly 2 million businesses are owned by U.S. veterans, employing more than 5 million Americans.