For veterans with more experience on the battlefield than in the board room, sometimes the hardest part about launching a business is knowing where to start.
Here are the top tips for veterans who want to start their own businesses, from three top entrepreneurship experts.
1. Do some recon
Maybe you’re still in the process of transitioning to civilian life and have no idea how to get started as an entrepreneur. Or you’re a veteran with a great idea, but you’re not sure if it can be anything more than a hobby.
That’s nothing a little reconnaissance can’t solve.
“It is never too early to get information about whether business is right for you,” said Barb Carson, associate administrator for the Office of Veterans Business Development at the Small Business Administration.
SBA has a number of resources to help get you thinking like an entrepreneur. For service members transitioning out of the military and their spouses, there’s Boots to Business, a free program offered on military bases within the Transition Assistance Program. There’s a similar iteration for veterans — Boots to Business Reboot — as well as other resources available through Veterans Business Outreach Centers.
These types of programs can help you determine some business basics, such as whether you have the right idea and if now is the right time to launch that idea.
“Go get that in person one-on-one time,” Carson said. “It’s an investment of your time and not any money.”
2. Make a plan
Ever heard the saying, “Give me six hours to chop down a tree, and I will spend the first four sharpening the axe”?
Misty Stutsman, director of entrepreneurship and small business at Syracuse University’s Institute for Veterans and Military Families, points to that as a good example of what it means to create a plan.
“Simply put, there is nothing that will make you fail faster than an ill-thought-out business,” she said in an email. “Your business plan allows you to set a road map for your business and test your business ideas.”
This should be a “living, breathing” document with information about your business’ direction, goals and projections, she said. It doesn’t have to be 50 pages long, but it should answer key questions, such as who your customer is and how you will monetize your idea. She pointed to an entrepreneurship guide out of Syracuse’s Whitman School of Management, “Nuts and Bolts of a Great Business Plan,” that can help you get started.
Sean Falk, a Marine Corps veteran and committee member for the International Franchise Association’s VetFran initiative, said banks, and often landlords, require a business plan. He recommended finding someone to help you compile it or even checking out templates available online that can help you identify the information that should go in the document.
“You really need to put your time and effort into it,” he said.
Then, let it guide you.
“No matter what you do, fall in love with the business model, not the product,” Falk said. “Just because you love ice cream doesn’t mean that you can open up an ice cream shop and be successful.”
3. Ask for advice
Find a veteran business owner and ask for advice, said Falk, who has experience both as a franchisee and a franchisor and business mentor.
That shouldn’t be too hard, given the number of businesses owned by veterans nationwide — 2.52 million, according to a recent SBA report of Census Bureau data.
In the military, “we have this built in understanding of where to go to ask for advice, or we’re not afraid to share experiences or how to do things the best way, or best practices,” Falk said. “I think members of the military need to replicate that when they get out into the business world or get ready to go into the business world themselves.”
Veterans said that developing and maintaining mentorships was one of their biggest struggles when starting a business, according to data from a recent IVMF study.
Stutsman said it’s important to find someone who can give you tough advice that will help your company grow. She suggested checking out groups like SCORE, Veterati and American Corporate Partners to help you make those connections.
Falk added that a mentor can help you check crucial items off of your business launch to-do list, ultimately letting you get your business off the ground more quickly.
“When I talk to other veterans, they are tripping over themselves to help other members of the military be great in the future,” he said.
4. Get your finances in order
“You’re not ready to start a business if you’re counting on a loan to launch your venture,” SBA’s Carson said. This doesn’t necessarily mean you need to have cash in hand, but you should have financial resources available.
A good rule of thumb is that you should already have 10 percent of the loan you’re trying to acquire, she said. So, if you want a $100,000 loan, you should have $10,000 on hand.
Access to capital is the most difficult and crucial step in the process of starting a business, and there are several ways to go about it, Stutsman said, including “bootstrapping yourself, friends and family, crowdfunding, investors, and bank loans.” There are also some nontraditional and underutilized routes, such as business plan competitions and the Treasury Department’s Community Development Financial Institutions Fund.
SBA’s website also has information to help you with financing, including connections to specific loan opportunities for veterans and military family members.
“Accessing capital is vital for your success, but preparation, a solid business plan, and realistic projections will set you up for funding in no time,” Stutsman said.
5. Determine your model
Do you want your company to be a sole proprietorship, a limited liability company, or an S corporation? Do you even know what any of those mean?
Get to know the models and choose the legal structure that’s right for you. Then start filing your paperwork with state and local governments and the appropriate agencies, Stutsman said.
Here’s where you may also want to consider franchising, which would give you the benefits of being your own boss without the drawbacks of doing all the legwork of an entrepreneur.
A franchise brand provides its franchisees with rules, directions, equipment, training and other resources to help them run a business, much as a company would its employees. When starting a business from nothing, you have to come up with plans for everything from marketing to uniforms, but as a franchisee, your corporate office does that for you.
“Military members have been used to coming into an organization — the military — and following rules, procedures, operations manual,” said Falk. Franchising similarly requires adherence to established procedures, so veterans are often very good fits for the business model.
The same IVMF study mentioned earlier showed networking as another area where veteran entrepreneurs struggle.
“It is important that you get out there and network with those who are in similar industries or have worked through similar challenges that you’re facing. This interaction will not only help you grow as an entrepreneur, but word of mouth is the best way to grow your business,” said Stutsman. And make sure you listen more than you talk, she added.
In addition, Carson said, networking can help you “broaden your ideas of what’s possible.”