Common Problems for Military Entrepreneurs

By Lindsay Hinger, Business Launch Specialist, SBTDC

The transition from the structured environment of military service to the dynamic landscape of entrepreneurship presents a unique set of challenges for veterans and their spouses. While possessing a wealth of transferable skills, including leadership, discipline, and problem-solving, these individuals often encounter obstacles that impede their entrepreneurial journey.

Business Financing and Access to Capital

Access to capital remains a profound barrier for military-connected entrepreneurs. Traditional lending criteria, typically reliant on established credit histories, often exclude those with frequent relocations, a common experience for military families. Moreover, the risk-averse nature of many financial institutions can deter them from investing in startup ventures, particularly those led by veterans.

It should be noted that veteran respondents do exhibit a higher percentage of being turned down, 24 percent, compared to nonveteran respondents at 18 percent. These percentages imply that veterans are 1.297 times more likely to be turned down for a request made for credit than nonveterans ⁽¹⁾. So, veterans are 29.7% more likely to be denied a business bank loan compared to nonveterans, based on the given denial rates and risk ratio. This heightened risk aversion among lenders, coupled with the challenges of building a credit history while relocating frequently, significantly hinders business launch and growth.

Building a Supportive Network

The transition from the structured, collaborative environment of the military to the often competitive and individualistic business world presents significant challenges for both veterans and their spouses. While the military fosters a strong sense of camaraderie and mutual support, the entrepreneurial landscape demands a different skill set, including the ability to build and maintain professional networks.

For veterans, the shift from a hierarchical structure to a more equitable business environment can be disorienting. The clear roles and responsibilities within the military contrast sharply with the ambiguity and fluidity of entrepreneurship. Building relationships with potential mentors, investors, and industry peers requires a proactive and strategic approach that may not align with their previous experiences.

Military spouses, often facing frequent relocations and disruptions to their own careers, encounter unique obstacles in network development. The challenges of balancing family responsibilities with entrepreneurial pursuits can further limit their opportunities for networking and relationship building. Additionally, the stigma associated with being a “military spouse” can sometimes hinder their ability to establish credibility and build trust within the business community.

Moreover, the lack of a robust support network can lead to feelings of isolation and uncertainty for both veterans and military spouses. Without access to mentors, advisors, or peers who understand their unique challenges, they may struggle to navigate the complexities of the business world and make informed decisions.

Navigating the Business Landscape

Navigating the business landscape requires a diverse skill set that extends beyond military expertise. While veterans and their spouses possess strong leadership and problem-solving abilities, they may lack experience in areas such as marketing, finance, and human resources. Additionally, understanding government regulations, legal requirements, and industry-specific nuances can be overwhelming for new entrepreneurs.

Complicating matters further, 46% of military-connected business owners reported difficulty navigating community resources in the 2022 IVMF National Survey of Military-Affiliated Entrepreneurs ⁽²⁾. This suggests a lack of coordinated support systems specifically designed for military entrepreneurs.

Addressing the Challenges of Military Entrepreneurs

To address these challenges, initiatives like Taking The Leap offered by the North Carolina Small Business and Technology Development Center (SBTDC) are essential. By providing access to mentorship, business education, and networking opportunities, these programs equip veterans and their spouses with the tools needed to succeed.

Supporting veteran and military spouse entrepreneurship is a strategic investment in the nation’s economic growth and stability. By assisting these individuals in their entrepreneurial pursuits, we honor their service and contribute to a more resilient and inclusive economy.

To learn more about the support available to military-connected entrepreneurs, please visit the North Carolina SBTDC website and sign up for our Taking The Leap cohorts.

Citations: 

1. Syracuse University Institute for Veterans and Military Families
2. Syracuse University 2022 National Survey of Military-Affiliated Entrepreneurs