New Study Provides Wealth Of Data On Veterans' Business Ownership
November 9, 2004
WASHINGTON, D.C. - American veterans have a strong entrepreneurial sprit, according to a study released today by the Office of Advocacy. The study, Entrepreneurship and Business Ownership In the Veteran Population, shows that 22 percent of veterans are either purchasing or starting a new business, or considering purchasing or starting one.
"Veterans are playing a significant role in our economy," said Thomas M. Sullivan, Chief Counsel for Advocacy. "This study presents a wealth of new data that will help policy makers to understand that role and develop polices that continue to encourage veterans' entrepreneurship."
The Veterans Entrepreneurship and Small Business Development Act of 1999 called for this study. It required the SBA's Office of Advocacy to develop information on programs designed to assist small businesses owned and controlled by veterans and service-disabled veterans.
The study's findings include:
More than one-third of both "new veteran-entrepreneurs" and current veteran business-owners had gained skills from their active duty service that were directly relevant to business ownership.
Prior business ownership and employment experience had a positive impact on an even higher percentage of both "new veteran-entrepreneurs" and current veteran business-owners than did military experience.
A focus on addressing the challenges of home-based business ownership and Internet use in veteran-owned businesses would be useful.
The Office of Advocacy, the "small business watchdog" of the government, examines the role and status of small business in the economy and independently represents the views of small business to federal agencies, Congress, and the President. It is the source for small business statistics presented in user-friendly formats and it funds research into small business issues.
Highlights from the Business Owners Survey
Almost 39 percent of current veteran business owners had their business operation entirely in their residence, lower than the 53 percent level among all small businesses.10 A significantly greater proportion of service-disabled business owners had their business operation entirely in their residence than did veteran owners who were not service-disabled (52 percent vs. 38 percent).11 The level of home-based business ownership by service-disabled veterans was nearly the same as that for all small businesses in general.
Home business location was dynamic in the veteran business owners community. Nearly 36 percent of those veteran business owners who had home-based businesses intended to have some or all of their business outside of their residence in the "foreseeable future."
As with new veteran entrepreneurs, Internet-dependant businesses did not dominate the
population of current firms, but Internet use was not unimportant either. Almost 23 percent of owners indicated that their business was 50 percent or more dependent on the Internet.
Knowledge of helpful government and private programs for small business owners in general, and for veteran small business owners in particular, were among the top problems for veteran business owners, both with and without service-connected disabilities.
The human capital calculus for current veteran business owners was similar to that of the new veteran entrepreneur population. Business ownership skills gained in the military benefited a sizable proportion of the owners population.15 But ownership skills gained from the labor market and previous business ownership were even more prevalent.
A higher proportion of service-disabled veterans than of veterans without such disabilities (52 percent vs. 37 percent) benefited from technological training during active duty service which was ultimately of use in their business enterprises.
Nearly the same proportion of current veteran business owners indicated that they used a small business program specifically designed for veterans (5.8 percent) as did new veteran entrepreneurs in the residential population (5.3 percent).18 A greater proportion of servicedisabled veteran business owners used veteran-specific small business programs (16.7 percent) than did veterans without service-connected disabilities (5.1 percent).
The proportion of current veteran business owners indicating that they had used a general (non veteran-specific) small business program was higher (21.6 percent) than that of new veteran entrepreneurs in the residential survey who had used such programs (14.1 percent).
As with the population of new veteran entrepreneurs, the potential for reasonably strong use by current veteran business owners of well-designed and well-advertised, veteran-specific programs was clearly indicated by the survey results. More than 96.3 percent of new veteran entrepreneurs who were unaware of such programs indicated that they would use them with more knowledge.21 Similarly, more than 95 percent of current veteran business owners said that they would use such programs.
For the complete report and data tables, visit www.sba.gov/advo.
