Starting a business is always challenging but it’s harder than it should be for military veterans — and particularly for female veterans.
Female veteran-owned businesses make up just 15.2% of the 2.52 million veteran businesses, according to Census Bureau Statistics. About 97% of those have no employees.
Also, only around 15% of all veteran-owned firms are minority-owned.
“Those statistics are staggering, yet they highlight the flagrant gender gap, with respect to pay and the persistent challenges that women entrepreneurs face when sourcing capital for their businesses,” said Chassity Jackson, a U.S. Air Force Veteran and CEO of the clothing line Battle Beauties. “The lack of accessibility to capital and manufacturing resources were the most difficult challenges for me as an emerging entrepreneur.”
It’s important for female entrepreneurs to learn the fundamentals of business, said Patricia Frame, a fellow U.S. Air Force Veteran and founder of the consulting firm Strategies for Human Resources.
Too many female veterans “go into government contracting because they think their veteran status will get them work quickly and that often is not what happens,” Frame said. “So, getting a solid business plan and learning about financial matters is vital.”
Jackson and Frame recently took part in the Ewing Marion Kauffman Foundation and CNBC + Acorns Invest in You’s “Rebuilding Better: A Virtual Town Hall for America’s Small & New Business Owners” for advice from financial and entrepreneurial experts.
Both U.S. Air Force veterans have learned a lot about the challenges that come with starting a business. Here is their advice on launching a successful business:
1. Start with a focused strategy
In the early stages of building a business, it’s important to have a focused business approach — that’s crucial to avoid wasting time and resources.
“The more focused you are from the outset, the less frustration you’ll experience, and the more traction you can generate,” says Tara Falcone, a certified financial planner and founder of ReisUP, a firm that offers financial wellness programs for colleges and universities, corporations, and individuals.
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Jackson said having a niche target market for Battle Beauties Fashion was key.
“I would advise entrepreneurs that they can be just as effective starting out small, developing a limited quantity of products or services to test their proof of concept, and monitoring how their ideal customers respond to those limited quantities first,” Jackson explained.
To help get focused, Bunker Labs offers a free program for veteran entrepreneurs called Launch Lab Online that provides mentoring, actionable exercises for customer discovery, and opportunities for community feedback.
2. Secure funding
Jackson and Frame financed their businesses from their own savings but recommended that veteran entrepreneurs fundraise from various sources of capital.
There are many initiatives that veterans take advantage of the many initiatives that support small businesses. Veterans can obtain low cost loans from the SBA Veterans Advantage Guaranteed Loans program, which also provides fee relief on small loans for veterans, active duty military members, and their spouses.
There are also pitch competitions through organizations like StreetShares and Bunker Labs that help veterans get funding from non-dilutive grants. Women veteran entrepreneurs can seek convertible debt funding through NextSeed’s veteran businesses communities portal, and graduates from one of the military academies may be able to obtain angel funding through angel investment group Hivers and Strivers.
Frame says that there is a misconception that the veteran status gives them government grants covering all of their financial issues. The belief that there is “free money” for veterans can lead to the mismanagement of assets that ends up costing them their business.
“Learn what you need to understand first, build your network, then define a plan and implement it with all of your resources and support ready to help you succeed,” Frame said. “If possible, work for a veteran-owned company first too. Learn from their mistakes!”
3. Networking
Networking is key for small business owners.
Female veterans should “seek out mentors and sponsors in business, and build a network of like minded female entrepreneurs to learn from and obtain support in their entrepreneurial journey,” Falcone said.
The coronavirus pandemic has largely ruled out in-person networking but there are many ways to network virtually.
The first step is to keep your online profile up to date so that it reflects an optimal personal brand. LinkedIn is a great platform for veterans to connect with fellow business owners in the same industry. To make meetings through the Internet more personal, you can set up virtual coffee over Zoom. In these conversations, it’s important to have talking points about your business ready to go. Industry events like the Small Business Expo have also gone virtual.
“Three of the most valuable resources that were helpful to me were business networking events, my social capital, and being connected with my local Chamber of Commerce in Destin, Florida,” Jackson said.
While networking, it is important to be clear about your core values as it relates to your business. Frame mentioned, “These values can help you attract the business you want from like-minded people and help you hire the people you need to grow.”
4. Figure out what makes your business unique
There are over 30 million small businesses in the U.S., and making yours stand out is key to building a solid business.
First, research your competition. Know the industry you are getting into. Then ask yourself: Why should customers buy your products or pay for your services over another competitor? Is the product better? Is it a better value?
If you’re having trouble answering this, you can ask your customers or employees.
You also need to ask – what do you specifically bring to this business? Define who you are, where you come from and how you can solve a problem or fill a need. From investors to customers, you, the business owner are an important part of the equation when people are deciding to do business with you.
“Women veterans bring many valuable perspectives and experiences to the start-up sphere.” Falcone said.
Once you’ve established all of that, you have to stay current with what’s happening in your industry and what your customers want. Then, continuously innovate how your company approaches products and services.
5. Be willing and ready to adapt to change
The coronavirus is the perfect example of how unforeseen events can upend your business, your industry – and the entire economy. Entrepreneurs have learned that they must adapt if they want to survive. As we’ve seen, many businesses have already been forced to close due to the pandemic – and there will be many more to come.
A business successful in pivoting their business strategy is Gargiulo Produce in Hillside, N.J., that was selling fresh produce and other food items to restaurants and cruise ships before the coronavirus pandemic.
“When this crisis hit and we started opening our doors again for retail, it brought the company full circle. In the respect that we now, again, are going direct to consumer,” said Monica Gargiulo, director of business development for Gargiulo Produce.
It was a quick pivot to help their family business survive. That quick thinking, selling direct to consumers was so successful that they actually had to hire more workers during the pandemic – while many other businesses were laying off workers or going out of business. And, they decided to keep that part of the business – even when restaurants started to reopen.
It’s also a good idea to keep operations running lean – you never know when the next disruption will hit. Keeping operations as lean as possible will allow a small business to operate longer in the event of a crisis. And, it could be the difference between staying afloat – or going out of business.
“The best thing any entrepreneur or business owner can do to prepare for the unexpected is ensure they have sufficient cash reserves to sustain them should revenue dry up suddenly,” Falcone said. “Finally, business owners should be informed about and prepared to take advantage of PPP [paycheck protection program] loans and other relief programs available.”
6. Stay optimistic
Entrepreneurs should focus on what they can control, instead of factors outside of their control. Take the time to take a look at the market dynamics in the industry of your small business and be ready to seize opportunities for growth where they exist.
Both U.S. Air Force veterans, Jackson and Frame, have a positive outlook when it comes to the future of their business and say that everyone should, too.
“I am optimistic about how much I have been able to create new designs during the pandemic,” Jackson said. “There will be an expansion internationally as well as other concept production aspects of the fashion businesses.”
“I am an optimist by nature,” Frame said. “I am adding new marketing actions and reminding my network I am still here and still interested in growth.”
Disclosure: Invest in You: Ready. Set. Grow. is a financial wellness and education initiative from CNBC and Acorns, the micro-investing app. NBCUniversal and Comcast Ventures are investors in Acorns.