Starting in business: Advice from veterans & pros
Going from service member to CEO is a more natural transition than many veterans realize. A large support network has sprung up to help vets start their own businesses, but many don’t know it exists.
The Small Business Administration and the International Franchise Association’s VetFran program recently partnered with Marriott’s Town Place Suites in Clinton, Maryland, to host a workshop aimed at educating veterans on the basics of entrepreneurship and special programs available to former service members.
Choosing the Right Kind of Business
The two biggest components for veterans preparing to start their own businesses are choosing the right kind of business for them and securing capital, experts said.
They also recommended that aspiring business owners take time to think about their passion.
“If they’ve always wanted to own their own business, they should definitely write down what they’re passionate about, what their interests are, what they want to do,” said Paul C. Rocchio, senior director of development and member services for the International Franchise Association. “Maybe tie it into what they did in their military service — what kind of responsibility, what kind of job they had.”
VetFran Manager George Eldridge works with veterans every day. He helped an Air Force veteran start a franchise in his living room and garage that has become so successful that the vet has opened a showroom and warehouse.
“He is in his third year of franchising and in the program and doing great,” he said. (Read More)
Research and possibilities
Eldridge encourages vets interested in business ownership to do their research and examine all possibilities.
“In the military you think, ‘I can’t fail,’ but sometimes you have to think about the risks you’re getting into and have a balanced expectation when getting into something like this,” he said.
Veterans looking toward franchise ownership may find a good match for their interests on VetFran’s website, he said. Over 100 different industries franchise, with the most active being food, followed by hospitality, home-based businesses, child care and petcare.
Contacting the SBA is also a good place to start, advised Laurie Sayles Artis, a Marine veteran who owns Civility Management Solutions, a management consulting firm.
“They are free mentors there to do just that,” she said, noting that this is a cost-effective way to decide what area a vet wants to work in compared with paying for training that turns out to be in an area outside of the vet’s passion.
“I’ve watched people fumble through [without knowing] what business they were getting into before they got there,” she said. “I highly recommend no training until you decide what training you want to get.”
Financing opportunities also abound for veterans. The SBA, which has 68 field offices around the U.S. and 1,000 resource partners, has Veterans Business Outreach Centers throughout the country offering information on how to gain access to capital.
For veteran-specific programs, the SBA helps businesses obtain reduced loan fees for any loan under $350,000.
Earlier this year, the SBA also launched LINC, Leveraging Information and Networks to Access Capital, an online tool that simplifies connections between loan seekers and lenders. By answering just a few questions, an applicant can reach out to lenders all over the country.
“If you qualify for something,even if it’s maybe a non-traditional loan or a micro-loan, the lender will reach back out to you and say, ‘Hey, maybe we can talk about and this is the next level,’ ” said Chris James, an SBA assistant administrator. At least 3,000 veterans have used LINC to make a connection since the program launched two months ago.
“That doesn’t mean it translates into a loan exactly, but at least it’s linking up a business with a potential lender all around the country, and not just your bank,” James said.
VetFran does not provide financing, but, like LINC, it connects veterans to help with funding, working closely with the SBA and lenders within its supplier group to help them afford the franchise opportunity they want.
Those shopping for a franchise can expect to pay from $10,000 to $20,000 for a home-based business, Rocchio said — and into the millions for a McDonald’s or hotel brand, with options everywhere in between.
“Our members participating in the VetFran program are offering their franchises at a discounted rate or in some cases are waving the initial franchise fee to make it easier for [veterans] to become an owner-operator and to own their own business,” he said.
Rocchio and the other speakers urged veterans to think like entrepreneurs and be aggressive in reaching out for help.
“As veterans, you do have a few more opportunities than some other folks,” he said.