Fewer Veterans Starting Businesses; New Program Will Train Veteran Entraprenuers

Veterans made up only 6% of all new entrepreneurs last year, compared to 12% in 2000.  That’s a 50% decline in new veteran owned business start ups and a continuance of a decline which began over two decades ago.  These findings come from a recently published CNNMoney report based based on research conducted by the Kauffman Foundation, which focuses on entrepreneurial activity.

Findings also show civilians are far more likely to launch new businesses although that is a reverse trend from  just four years ago.  From 1999 until 2008, veterans started their own businesses at a greater rate than civilians, but from 2009 on, civilians have outpaced veterans in starting new companies.

Why the decline?
Older veterans that had a higher rate of business ownership are now retiring and younger veterans are less likely to start businesses.  Rather than start new businesses, many younger veterans are opting for college or trade school.  A survey of veterans who left the military between 2004 and 2006 showed that 48% participated in the Montgomery GI Bill, which provides college education and career instruction.

Jon Robinson, a former U.S. Marine sergeant who now leads Kauffman Foundation’s entrepreneurship programs, said mentors play a key role for first-time entrepreneurs.  However, as older veterans retire, younger vets lose a key source of mentor-ship.  Robinson reasons that civilians are less likely to understand the unique challenges someone faces after returning from military service.

To help resolve this problem, the military is expected to launch a program to offer help starting a business to the approximately 250,000 who leave the military every year.  Boots to Business will become the first formal entrepreneurship program for outgoing service members.

The Obama Administration recognizes the contributions of veteran entrepreneurs, and has identified the need to create a nationwide entrepreneurship training program to unleash the potential of the 250,000 service members that transition each year. To meet this goal, Small Business Administration (SBA) is partnering with the Department of Defense ( DOD) and Department of Veterans Affairs (VA) to include an entrepreneurship training component as a part of the overall changes to the existing Transition Assistance Program (TAP).

The goal of TAP is to strengthen service members’ transition from military to civilian life and to prepare them for success in the next phase of their life. There are now three optional tracks a transitioning service member can choose to explore more deeply as a part of the new TAP: 1) Education; 2) Technical Training; and 3) Entrepreneurship.  SBA and its Resource Partner network will deliver the Entrepreneurship track to transitioning service members who opt-in to receive such training.

To test the Boots to Business initiative prior to national rollout, SBA is working with the United States Marine Corps (USMC) to deliver a streamlined version of the Boots to Business phased entrepreneurship training to approximately 20,000 transitioning Marines in four pilot locations: Quantico (VA), Cherry Point (NC), Camp Pendleton (CA), and Twenty-Nine Palms (CA).
The pilot with the Marines consists of three progressive phases to deliver exposure, introduction, and in-depth training for service members interested in business ownership
The Boots to Business program uses a multi-phased approach to introduce transitioning service members to the fundamentals of small business ownership.  Building on lessons learned from the Boots to Business  pilot programlaunched in the Spring of 2012, the SBA aims to ultimately provide entrepreneurship awareness and opt-in training nationwide to the 250,000 service members from all branches of the military that transition each year.

According to the most recent U.S. Census Data, veteran-owned firms represent 9% of all U.S. firms.  These 2.45 million veteran-owned businesses employed over 5.8 million individuals. Transitioning service members are natural entrepreneurs, possessing the training, experience, and leadership skills to start businesses and create jobs.

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