People from all walks of life start new small businesses every day. Veterans of the armed forces are an especially entrepreneurial group, transitioning from military service to business ownership by the millions. However, in an economy where starting a small business is challenging for just about everyone, military veterans face some unique challenges of their own. Fortunately, by following best practices and taking advantage of available resources designed specifically for veteran entrepreneurs starting a business, veteran entrepreneurs can build and grow a small business that leverages their skills and expertise.
Why More Veterans Are Becoming Business Owners
After completing their military service, many veterans decide to pair their return to civilian life with the dream of owning a business. According to a report from the U.S. Small Business Administration, the United States has approximately 2.52 million veteran-majority-owned businesses. These represent 9.1 percent of all U.S. firms. In a 2012 U.S. Census Bureau survey, more than 10 percent of business owners were veterans. These businesses employed 5.3 million people, generated receipts of $1.14 trillion, and had an annual payroll of $195 billion. Veteran-owned businesses are often home-based, with 57 percent operating from home compared to 52.2 percent of general small businesses.
States with the highest number of veteran-owned businesses include California, Texas, Florida, New York, and Pennsylvania. These states also lead in total sales from veteran-owned companies. Veterans are 45 percent more likely to be self-employed than non-veterans. Interestingly, military service was found to be a stronger predictor of entrepreneurial ambition than even a graduate-level education. Although these businesses may be classified as small, their economic footprint is significant.
Preparing to Launch a Veteran-Owned Business
If you are a veteran interested in starting your own business, it is essential to develop a solid plan, seek mentorship, and take advantage of the extensive training, loan programs, and entrepreneurship resources available. Having a detailed plan is especially important. A well-crafted business plan will outline your business goals, assess your current capabilities, and chart your future over the next two to five years.
Understanding the Basics of Starting a Business
Most veteran business owners are drawn to fields like construction and professional or technical services. Other common industries include finance and insurance, transportation, and warehousing. While these industries are popular, they are not the only options. Every entrepreneur is unique, and so is every business. Regardless of your industry, certain foundational steps and best practices can help you succeed.
Finding the Right Business Idea
Many aspiring entrepreneurs have a clear vision for their future business. Others need time to explore possibilities. If you are unsure about what kind of business to start, ask yourself a few key questions.
What Needs Can You Meet
Begin by identifying problems in your local community or in the broader market that you can solve using your skills and experience. Meeting a genuine need is a strong foundation for a successful business. Solving problems can also help you establish goodwill and build lasting customer relationships.
What Skills Do You Possess
Your military service likely provided you with valuable skills that translate well into the business world. Whether you gained expertise at a military academy or learned on the job, your skills can be the cornerstone of your business. Choosing a business that aligns with your skills increases your chances of success from the start.
What Are Your Interests
Being competent in a task is one thing, but being passionate about it is another. While you do not need to pursue your dream job immediately, your chances of long-term success improve if you enjoy what you are doing. Look for overlap between your skills and interests to find a business idea that keeps you motivated.
What Resources Do You Already Have
Business success often comes down to how well you use what you already have. For instance, if you are a skilled woodworker with a fully equipped home workshop, you are already well-positioned to start making custom furniture. Given that lack of capital is a major reason small businesses fail, leveraging your current resources is a smart way to start strong.
What Is Your Ideal Work-Life Balance
Running a business often requires long hours and significant personal investment, especially in the beginning. However, it is important to consider your long-term work-life balance. If you want to work remotely, choose a business that allows for that. If spending time with your family is a priority, structure your business so that it allows you the flexibility to scale back when necessary without compromising performance.
Writing a Business Plan
The old saying that failing to plan is planning to fail holds especially true for small business owners. A comprehensive business plan helps you define your capabilities, set goals, and plot a path forward. A business plan also demonstrates to lenders and investors that you have thought seriously about your business and have a clear strategy for growth.
Why a Business Plan Matters
A good business plan outlines what your business does, what makes it different, and how it plans to grow. It also includes financial forecasts, marketing strategies, and operational plans. This document is not only a roadmap for your internal team but also a powerful tool to attract external support. Investors and banks want to see that you understand your business and have the numbers to back up your projections.
Making Planning Easier with Technology
Using centralized data management tools from the beginning can help streamline the process of collecting, organizing, and analyzing your financial information. These tools can simplify the preparation of your business plan, improve accuracy in forecasting, and increase transparency for potential lenders and investors. Choosing a cloud-based and modular solution early can also improve financial reporting and make scaling your business more manageable.
Registering Your Business
Once your business plan is finalized, the next step is to handle legal and administrative tasks to make your business official. The specifics will vary based on your location and the type of business you want to start, but some general steps apply to everyone.
Registering Your Business Name
Securing your business name involves four different types of registration. An entity name protects your business at the state level. A trademark provides federal-level protection. A DBA, or Doing Business As, may be legally required depending on your business structure. Finally, registering a domain name helps protect your online presence. Each registration serves a different purpose, and they often work best when used together.
Choosing a Legal Structure
The legal structure you choose impacts taxes, liability, and operational requirements. Common structures include sole proprietorships, partnerships, limited liability companies, and corporations. Each structure has its advantages and disadvantages. It is wise to consult legal counsel and review government guidelines to make an informed decision that suits your needs.
Securing Licenses and Permits
Almost every business requires some type of license or permit. These could come from local, state, or federal authorities, depending on the nature of your business. Make sure you have all the required documentation in place before you open your doors. Operating without the necessary permits can lead to fines, legal trouble, or even forced closure.
Funding a Veteran-Owned Business
One of the biggest challenges for any entrepreneur is securing the money needed to launch and operate a business. This is especially true for veteran entrepreneurs who may be transitioning into civilian life with limited personal capital or credit history. Fortunately, several programs are designed specifically to support veterans in accessing financing options, including loans, grants, and other funding resources.
Estimating Startup Costs
Before seeking funding, it is important to determine exactly how much money you need to start and maintain your business. This includes everything from securing a location and purchasing equipment to paying for licensing, marketing, payroll, and insurance. Break down your expenses into categories like fixed costs (e.g., rent, salaries) and variable costs (e.g., utilities, materials). Being realistic with your estimates and building in a cushion for unexpected expenses can help prevent cash flow issues later on.
Personal Savings and Investments
Many veteran business owners begin with their savings. Using personal capital gives you full control over your business and avoids taking on debt. However, it also means putting your financial security at risk. If you plan to invest personal savings, be sure it will not jeopardize your basic living expenses or emergency funds. Some veterans also use their retirement savings or a portion of their military pension to fund a startup, though this should be done carefully and with financial guidance.
Friends and Family Contributions
Another common source of funding is friends and family. Loved ones may be willing to invest in your business or offer an informal loan. If you go this route, make sure to treat the arrangement like a formal business deal. Outline the terms in writing, including repayment expectations, interest (if any), and what happens if the business struggles. Clear communication can help preserve relationships and avoid future misunderstandings.
Veteran-Specific Loan Programs
Veterans have access to several business loan programs tailored to their unique circumstances. These include traditional small business loans as well as veteran-focused funding options. The U.S. Small Business Administration (SBA) provides a variety of loan programs, including some specifically geared toward veterans.
SBA Veterans Advantage Program
The SBA Veterans Advantage program reduces or eliminates fees on certain SBA loans for eligible veterans and military spouses. These loans typically range from $150,000 to $500,000 and can be used for a wide range of business purposes. This program also streamlines the application process and offers support throughout the loan approval stage.
Military Reservist Economic Injury Disaster Loan
If you or an essential employee is called to active duty and your business suffers as a result, you may be eligible for a Military Reservist Economic Injury Disaster Loan (MREIDL). This SBA-backed program provides low-interest loans to help cover operating expenses until the business can recover.
Lending Through the VA
While the Department of Veterans Affairs (VA) does not directly offer business loans, it partners with other organizations to help veterans access capital. One such organization is the Office of Small and Disadvantaged Business Utilization (OSDBU), which connects veterans with loan resources and training through the Veteran Entrepreneur Portal.
Nonprofit and Private Loans
In addition to government-backed loans, some nonprofits and private lenders offer financing specifically for veterans. These include organizations like StreetShares and the Veteran Business Fund. These lenders often offer lower interest rates, flexible repayment options, and mentoring opportunities as part of their support packages.
Grants for Veteran Entrepreneurs
Grants can be an attractive funding option because they do not need to be repaid. However, grants are typically competitive and come with specific eligibility requirements. Most are offered through government agencies, nonprofits, or private companies that support veteran entrepreneurship.
Federal Grant Opportunities
Federal grant programs for veterans are usually focused on specific industries, research and development, or job creation. The SBA maintains a searchable database of federal grant opportunities, and sites like Grants.gov can help you find and apply for grants relevant to your business.
State and Local Grants
Many state and local governments also offer grants to veterans starting small businesses, especially if they are located in economically disadvantaged areas or contribute to local employment. Check with your state’s Department of Veterans Affairs or local economic development agency for available programs.
Private Sector and Foundation Grants
Some large companies and foundations provide grant opportunities for veterans, often as part of their corporate social responsibility efforts. For example, the Bob Evans Heroes to CEOs program and the StreetShares Foundation’s Veteran Small Business Award are examples of grants specifically for veterans.
Pitch Competitions and Accelerators
Veterans with innovative ideas may consider entering business pitch competitions or joining accelerator programs. These often provide funding, mentorship, and exposure in exchange for a small equity stake or participation in a program. Organizations like Bunker Labs and the Veterans Business Outreach Center offer platforms to connect veterans with these opportunities.
Crowdfunding and Peer-to-Peer Lending
Another increasingly popular option for raising capital is crowdfunding through platforms like Kickstarter, Indiegogo, or GoFundMe. While this model works best for product-based or creative businesses, it can be an effective way to gain both funding and market validation. Be sure to comply with platform rules and provide clear value to your supporters.
Peer-to-peer lending platforms like LendingClub and Prosper also allow individuals to secure loans funded by a network of investors. These loans can sometimes offer better terms than traditional lenders but may require a good credit score or an established revenue stream.
Establishing Business Credit
Veteran entrepreneurs should also work on building business credit early. Business credit is separate from personal credit and is used by lenders, suppliers, and insurers to assess your reliability. Establishing business credit can help you qualify for loans, negotiate better payment terms, and reduce your dependence on personal guarantees.
To build business credit, start by registering your business, getting an Employer Identification Number (EIN), opening a business bank account, and obtaining a business credit card. Make sure to pay all vendors and creditors on time, and regularly check your business credit reports for errors or discrepancies.
Financial Tools and Services for Veterans
Managing your money effectively is critical to the long-term success of your business. Today’s entrepreneurs can take advantage of a wide range of financial tools and platforms to streamline budgeting, invoicing, tax preparation, and payroll.
Accounting Software
Using accounting software from the start makes it easier to track income, expenses, and profit margins. Look for solutions that integrate with your bank accounts and allow for easy reporting. Many cloud-based options also include features like automated invoicing and real-time dashboards.
Bookkeeping Services
If you prefer not to handle financial records yourself, consider hiring a bookkeeper or working with a service that specializes in small business finances. Some services are geared specifically toward veterans or military families and understand the unique challenges of transitioning from service to entrepreneurship.
Financial Mentorship and Counseling
Veterans can also access free or low-cost financial mentoring through organizations like SCORE, the SBA, and the Institute for Veterans and Military Families (IVMF). These mentors can help with everything from financial forecasting and debt management to securing loans and planning for growth.
Making Informed Financial Decisions
Before accepting any funding, be sure to review all terms carefully. Look beyond just the interest rate and consider the total cost of the loan, repayment schedule, and any personal guarantees. Make sure you understand how the funding will impact your business in the long term. Taking the time to find the right funding solution can help you avoid debt traps and build a more sustainable business.
Building a Business Plan for Success
A business plan serves as your roadmap for launching, managing, and growing your company. It also helps demonstrate your business’s potential to investors, lenders, and partners. For veteran entrepreneurs, a well-crafted business plan is not only a strategic necessity but often a requirement for securing funding or entering a business competition.
Key Components of a Business Plan
The most effective business plans are structured, focused, and data-driven. They typically contain the following sections: an executive summary, company description, market analysis, organization and management structure, service or product line, marketing and sales strategies, funding request, financial projections, and an appendix with supporting documents. Each section plays a critical role in helping stakeholders understand your business vision and operations.
Executive Summary
This section is a concise overview of your business idea, your mission, and what sets your business apart. It should highlight your objectives, target market, product or service offering, and your unique value proposition. Because it is the first thing readers see, it should be compelling and clear, summarizing the key points of your business plan.
Company Description
Here, describe your business in more detail. Explain what your business does, the problems it solves, and why it’s needed. Include information about your business structure (LLC, corporation, sole proprietorship), location, and short- and long-term goals. If your business has a social or community-focused mission—especially one tied to your military service—highlight that here.
Market Analysis
This section outlines the market you’re entering. Research industry trends, customer demographics, competitor analysis, and market size. Identify your target customer and their behavior patterns. Explain how your business fits into the market and what advantages it has over competitors. Demonstrating a deep understanding of your industry builds credibility and helps investors trust your strategy.
Organization and Management
Detail your team structure, including the backgrounds of key members and their roles. If you are the sole operator, describe your relevant experience and qualifications. Include any advisors or mentors who are helping you. Outline the legal structure of your business and ownership breakdown. This section reassures stakeholders that your business is well-positioned from a leadership standpoint.
Product or Service Line
Describe your offerings in detail. What are you selling or providing? What makes it unique or necessary? How does it meet customer needs? Discuss the product or service lifecycle and any plans for research and development. If you hold any intellectual property patents or trademarks, include that information as well.
Marketing and Sales Strategy
Explain how you plan to attract and retain customers. Discuss your pricing strategy, distribution channels, advertising plans, and customer engagement tactics. Identify the marketing platforms that will work best for your target audience, whether that’s social media, email marketing, content creation, or traditional advertising. Be specific about your sales process and any technology you’ll use to support customer acquisition.
Funding Request
If you’re seeking funding, use this section to explain how much you need and how you will use it. Break down your financial needs for things like equipment, payroll, marketing, and operational expenses. Clearly state whether you’re seeking a loan, investment, or grant, and outline the terms you’re offering. Include projections that show how the funding will help your business grow and generate returns.
Financial Projections
Create realistic financial forecasts for at least three years. Include income statements, cash flow statements, and balance sheets. Show break-even analysis and key financial ratios. This section helps stakeholders assess your business’s financial viability and the risks involved. Use conservative estimates and back your projections with real data wherever possible.
Appendix
The appendix includes supporting documents such as resumes, legal documents, business licenses, permits, leases, vendor contracts, and market research data. While optional, it provides additional context and credibility to your plan.
Adapting Your Business Plan for Different Uses
A business plan isn’t static. You may need to modify it depending on your audience. For lenders, emphasize financial projections and repayment strategy. For investors, highlight the market opportunity and growth potential. If you’re entering a veteran business competition, tailor your plan to include your military background and how it shapes your business values.
Using Business Planning Tools and Templates
Numerous organizations provide free templates and tools specifically for veterans. The SBA’s Business Plan Tool, SCORE’s business plan outline, and resources from the Veterans Business Outreach Center are excellent starting points. These guides help ensure that you’re covering all essential elements in a professional and logical format.
Seeking Feedback and Mentorship
Once your business plan is drafted, get feedback from experienced entrepreneurs, mentors, or advisors. Organizations like SCORE, the IVMF, and Bunker Labs offer free one-on-one mentoring to veterans. A fresh set of eyes can help catch issues, strengthen weak sections, and provide insight into investor or lender expectations.
Developing a Strong Mission and Vision
Many veteran-owned businesses thrive because they are mission-driven. Developing a clear mission and vision helps guide your business decisions and align your team’s efforts. Your military experience may give you a unique sense of purpose, service, or discipline—incorporate those elements into your company culture and goals.
Creating a Value Proposition
Your value proposition clearly explains why customers should choose your product or service over others. Focus on the benefits you offer, not just the features. What problem are you solving? How do you make life easier, cheaper, or better for your customers? Keep your value proposition simple, targeted, and consistent across your marketing.
Identifying Your Target Customer
Clearly define your ideal customer by demographics (age, income, location), psychographics (values, interests, lifestyle), and behaviors (buying habits, preferred channels). Understanding your customer helps you craft more effective messaging, choose the right platforms for marketing, and refine your offerings to better serve their needs.
Performing SWOT Analysis
A SWOT analysis identifies your business’s Strengths, Weaknesses, Opportunities, and Threats. It’s a strategic tool that helps you understand where your business stands and where it can go. Strengths and weaknesses are internal factors, while opportunities and threats come from external sources. A well-developed SWOT analysis is useful for refining your business strategy and preparing for potential challenges.
Defining Business Milestones
Setting short- and long-term goals keeps you focused and motivated. Define milestones like product launches, revenue targets, customer acquisition numbers, or market expansion goals. Attach timelines to these goals and regularly review your progress. Tracking milestones also provides measurable success indicators that you can share with investors or stakeholders.
Creating a Contingency Plan
No business is without risk. Having a contingency plan helps you prepare for unexpected challenges like economic downturns, supply chain disruptions, or regulatory changes. Identify key risk areas in your business and develop backup strategies for handling them. This not only protects your business but also demonstrates foresight to investors and lenders.
Implementing Your Business Plan
Once your plan is finalized, it should serve as a daily guide for decision-making. Use it to track your progress, make adjustments, and stay aligned with your goals. Revisit your business plan regularly—especially during periods of change or growth—to keep it relevant and actionable.
Funding Options and Financial Resources for Veteran Entrepreneurs
Access to capital is a major hurdle for any new business, and veteran entrepreneurs are no exception. Fortunately, there are numerous funding options specifically tailored to support veterans transitioning into business ownership. These include government-backed loans, grants, private investors, and crowdfunding platforms. Knowing where to look and how to apply gives veterans an advantage in securing the capital needed to launch or expand their ventures.
Small Business Administration Loans
The U.S. Small Business Administration offers various loan programs to help veterans secure financing. The SBA 7(a) loan program is one of the most popular and provides working capital for nearly any business purpose, including purchasing equipment, inventory, or real estate. The SBA also offers the SBA Express loan, which features an expedited review process. While the SBA doesn’t directly lend money, it guarantees loans issued by approved lenders, which reduces the lender’s risk and increases your chances of approval. Some lenders offer additional benefits to veteran applicants, such as lower fees or more favorable terms.
Veteran Advantage Program
The SBA’s Veteran Advantage program enhances the SBA Express loan by reducing or waiving guaranty fees for veteran-owned businesses. This reduces the upfront cost of the loan, making it a more affordable option. To qualify, the business must be at least 51% owned by one or more veterans, active-duty service members eligible for the Transition Assistance Program, or members of the National Guard or Reserve.
Grants for Veteran Entrepreneurs
While grants are typically harder to obtain than loans, they offer the advantage of not requiring repayment. Government agencies, nonprofit organizations, and private companies offer grants aimed specifically at veterans. These may be tied to particular industries, such as technology or agriculture, or certain demographics, such as women veterans or disabled veterans. Examples include the StreetShares Foundation’s Veteran Small Business Award, the FedEx Small Business Grant Contest, and grants from the Department of Veterans Affairs for service-disabled veteran-owned businesses.
Private Funding Sources
Some veterans seek funding through private investors, including angel investors and venture capitalists. These individuals or groups provide capital in exchange for equity or a share of ownership. While this can be a powerful funding route, it also involves giving up partial control of your business. Veterans with high-growth startups or innovative products may be especially attractive to investors. It’s important to have a strong business plan, a polished pitch, and a clear understanding of the investor’s expectations before pursuing this route.
Crowdfunding
Crowdfunding platforms such as Kickstarter, Indiegogo, and GoFundMe offer veterans an alternative way to raise funds. This model relies on small contributions from a large number of people, often in exchange for early access to products or other rewards. Crowdfunding is most successful when combined with a compelling story, high-quality visuals, and a strategic marketing campaign. Veteran-owned businesses can often stand out on these platforms by sharing their military background and mission-driven goals.
Community Development Financial Institutions
CDFIs are private financial institutions dedicated to serving underserved communities. Many of them offer business loans to veteran entrepreneurs with flexible terms and additional support services. They may also provide financial counseling, business coaching, or credit-building programs. Because they prioritize community development over profit, CDFIs are a good option for veterans who may not qualify for traditional bank loans.
Bootstrapping Your Business
Not all businesses require significant outside funding. Bootstrapping involves using your savings, credit, or revenue generated by the business to fund operations. While this approach limits financial risk and keeps you in full control, it can also slow growth and increase personal financial exposure. Many veterans start with bootstrapping while seeking external funding as the business grows.
Financial Management for Veteran-Owned Businesses
Once funding is secured, managing finances effectively is critical for long-term success. This includes setting up proper accounting systems, creating budgets, tracking cash flow, and preparing for tax obligations. Financial literacy is a key skill for any entrepreneur, and veterans who invest time in learning basic financial management will be better equipped to make informed decisions.
Choosing the Right Banking Partner
Look for financial institutions that offer services tailored to small businesses and, if possible, those that have dedicated veteran programs. Some banks offer special accounts, reduced fees, or educational resources for veteran-owned businesses. Establishing a strong relationship with your bank can also help when you need future financing or financial advice.
Hiring and Managing Employees
As your business grows, you may need to build a team to support operations. Hiring employees introduces new responsibilities, including compliance with labor laws, managing payroll, and creating a positive workplace culture. Many veterans apply their leadership and team-building skills from military service to build high-performing teams in civilian business settings.
Recruiting Fellow Veterans
Some veteran entrepreneurs prioritize hiring other veterans. This can create a strong team dynamic based on shared experiences and values. Organizations such as Hire Heroes USA and the Department of Labor’s Veterans’ Employment and Training Service (VETS) can assist with recruiting and training veteran employees. Hiring fellow service members may also provide access to tax incentives or grants.
Building a Strong Company Culture
Veterans often bring strong values such as integrity, discipline, and service to their business ventures. Embedding these values into your company culture can lead to higher morale, better customer service, and stronger brand loyalty. Clearly articulate your values during hiring and onboarding, and reinforce them through leadership, policies, and day-to-day actions.
Understanding Legal Responsibilities
As an employer, you must comply with federal, state, and local labor laws. This includes minimum wage laws, anti-discrimination regulations, workplace safety standards, and benefits administration. It’s important to consult with a legal professional or human resources advisor to ensure compliance and avoid costly penalties.
Building Customer Relationships
Customer relationships are the lifeblood of any business. Veterans can leverage their communication and service skills to create loyal customers and long-term client relationships. Prioritize customer feedback, respond quickly to inquiries, and exceed expectations whenever possible. Happy customers are more likely to return, refer others, and leave positive reviews.
Using Technology to Enhance Operations
Today’s small businesses rely heavily on technology to streamline operations and improve customer experience. From accounting software and point-of-sale systems to customer relationship management tools and e-commerce platforms, the right tech stack can save time, reduce errors, and improve scalability. Veterans who embrace technology will find it easier to compete in an increasingly digital economy.
Participating in Veteran Business Networks
Joining veteran business networks provides access to resources, mentorship, and potential clients. Organizations like the National Veteran-Owned Business Association (NaVOBA), the Veterans Business Outreach Center program, and Bunker Labs offer educational events, networking opportunities, and visibility for veteran-owned businesses. These networks can open doors to government contracts, corporate partnerships, and collaboration with other entrepreneurs.
Pursuing Government Contracting Opportunities
The federal government aims to award at least 3% of all contracting dollars to service-disabled veteran-owned small businesses (SDVOSBs). Registering as a certified SDVOSB through the VA’s Vets First Verification Program can position your business to win these contracts. Familiarize yourself with the System for Award Management (SAM) and explore contract opportunities on platforms like beta.SAM.gov. Government contracts can provide long-term revenue and validation for your business.
Celebrating Your Status as a Veteran-Owned Business
Promote your veteran-owned status in your branding and marketing materials. Many consumers and corporations actively seek to support veteran-owned businesses. Use certification logos, tell your story, and participate in programs that highlight veteran entrepreneurs. Authentic storytelling around your service and mission can set your business apart and deepen customer loyalty.
Conclusion
Transitioning from military service to entrepreneurship is both a bold and rewarding journey. Veterans bring with them a powerful combination of discipline, resilience, leadership, and mission-focused thinking — qualities that align perfectly with the demands of running a small business. With the right mindset, tools, and support systems, veterans can overcome common challenges and build thriving enterprises that contribute to their communities and beyond.
Business success requires more than a great idea. It demands thorough planning, continuous learning, strong financial management, and the ability to adapt to changing circumstances. Fortunately, veterans do not have to navigate this path alone. There is a growing ecosystem of resources specifically designed to support veteran entrepreneurs, from funding opportunities and training programs to networking groups and government initiatives.