Discipline, perseverance, problem solving, leadership, teamwork. These are just some of the skills engrained in the military that often easily transfer into opportunities in the entrepreneurial space. In fact, U.S. military veterans turn to entrepreneurship at a much higher rate than their civilian counterparts, using it to overcome challenges when shifting back to civilian life and, at times, managing their disabilities.
A team from Syracuse University’s Whitman School of Management and the D’Aniello Institute for Veterans and Military Families (IVMF) has been researching military-affiliated individuals and entrepreneurship in an effort to develop data-driven, longitudinal research aimed at better insights into the economic, political and socio-cultural factors that create barriers to entrepreneurship for veterans, active military, reservists and their families. In April, the research team released the 2021 National Survey of Military-Affiliated Entrepreneurs(NSMAE). The data, derived from surveys of more than 2,600 military-affiliated individuals, partially builds on information from the 2020 NSMAE survey, affirming that veterans have distinctive experiences, perspectives and challenges when it comes to entrepreneurship. It also looks at the impact COVID-19 has had on military veteran entrepreneurship and offers some interesting insight into veterans’ overall wellness.
Most of those who participated in the study were new respondents, but there was also a significant group of entrepreneurs who participated in the 2020 survey, giving the researchers a means of comparison of the same entrepreneurs from year-to-year.
“The 2021 report is a great accomplishment,” says Mirza Tihic, former postdoctoral researcher at the Whitman School and an assistant teaching professor at the University’s School of Professional Studies. “We hope to go three to five years out with this longitudinal data set with the vision to make this sustainable and be at a place where veteran entrepreneurs, researchers and educators – on and off the Syracuse University campus—can use the database to make informed decisions to make sure they are promoting a military-connected community that veterans can use to pursue the American dream.”
The 2021 survey indicates that of those who responded, 79% reported some sort of disability. Their motivation to pursue entrepreneurship included personal and financial independence, an opportunity for recognition, work-life balance and flexibility. Sixty percent indicated that this was their first venture into entrepreneurship, while 40% had have multiple ventures. In addition, 45% consider themselves to be social entrepreneurs, focusing on opportunities to improve social, cultural or environmental issues.
The data shows that 57% of these business ventures were service-based, 31% were both product and service-based, and 12% were product based. Fifty-two percent reported that their businesses were profitable in 2020, while 14% reported breaking even and 34% noted a financial loss.
The research furthers shows that entrepreneurship had a positive effect on veterans. Eighty-five percent of those surveyed considered themselves “successful” entrepreneurs. Fifty-six percent noted that becoming an entrepreneur helped them find a purpose after the military, and 36% said that entrepreneurship helped in their recovery process.
There were, however, a number of obstacles that the entrepreneurs faced. Forty-three percent said they had difficulty transitioning from military to civilian life, noting loss of purpose or camaraderie, financial struggles, difficulty socializing into civilian culture, a loss of connection with the military community and finding employment (or employees).
Other barriers included:
Lack of initial capital (49%)
Problems finding employees (43%)
Lack of financing (41%)
The current economic situation (38%)
Irregular income (31%)
Federal regulations and policies (29%)
Taxes and legal fees (28%)
The problems and barriers that changed the most dramatically in the longitudinal study from 2020 to 2021 were finding good employees, which increased by 9.1%; and dealing with federal regulations and policies, an increase of 11.3%. However, during this time period, the entrepreneurs reported that a lack of financing preventing them from pursuing their goals actually decreased by 13.4%.
The survey respondents were testing their entrepreneurial skills in unprecedented times—during the COVID-19 pandemic. Eight seven percent said they were able to successfully adapt their businesses, 56% identified additional opportunities for their businesses, and 79% were able to accommodate remote work. However, despite these adjustments, almost two-thirds of respondents reported losing some business during the pandemic.
This survey also examined veterans’ overall wellness, an important element given that over three-quarters (79%) of the respondents noted a service-related disability. While 79% reported “good to excellent” general health, 31% of those with a service-related disability reported that this created obstacles in their business, and 41% said they do not feel supported by medical and disability service providers.
However, 36% noted that entrepreneurship helped in overcoming disability-related challenges and barriers, while 35% reported that entrepreneurship played a “significant role” in their recovery process.
The study also addressed a variety of personal health challenges among entrepreneurs, including the additional strains of the pandemic, depression, lack of sleep, addiction and suicide. According to Tihic, delving into such sensitive topics was unique in the context of veteran entrepreneurship, but it does reflect growing importance of addressing mental and physical health issues among entrepreneurs. Fortunately, the respondents also reported taking positive steps to maintaining mental health and seeking professional help for significant challenges.
The researchers intend to continue this study, using the data to bring greater attention to the needs of the military community and help address barriers standing in the way of their success, particularly in the entrepreneurial space, as they transition to civilian life.
Principal authors of this report are Rosalinda V. Maury, director of applied research and analytics at IVMF; Mirza Tihic; Adam Pritchard, research associate for IVMF; Alexander McKelvie, associate dean, professor of entrepreneurship at the Whitman School; and Linda Euto, associate director for research and evaluation for IVMF. The ongoing study is made possible through support from the Ewing Marion Kauffman Foundation and the Center of Excellent (OcE) for Veteran Entrepreneurship.
For more information about the the 2021 National Survey of Military-Affiliated Entrepreneurs (NSMAE) visit here.