SBA Office of Advocacy Releases Study, 'Factors Affecting Entrepreneurship Among Veterans'

Are veterans more likely to become entrepreneurs than otherwise demographically similar individuals?

Using one measure of entrepreneurship -- self-employment -- both past research sponsored by SBA’s Office of Advocacy, plus current data from the Bureau of Labor Statistics, indicate that veterans have had, and do have, a higher rate of self-employment than do non-veterans.

Overall Findings

What could account for this finding?

SBA-contracted SAG Corporation researchers investigated whether military service has a statistically significant impact on veteran entrepreneurship, using three complementary data sources. Their analysis tests the hypothesis that military service imparts some unique training or acculturation that makes veterans more likely to become self-employed than otherwise similar individuals.

Report Highlights

* In the private-sector workforce, veterans are at least 45 percent more likely than those with no active-duty military experience to be self-employed.

* Although veterans are more likely to be self-employed than the general population, analysis of veterans-only data shows that self-employment is negatively correlated with the length of military service. Veterans with four or fewer years of service were most likely to be self-employed.

* Among all veterans, those who chose the military as a career path [five or more years of service] were about 33 percent less likely to be self-employed than those who left after one enlistment. This result suggests that higher rates of self-employment among veterans may be due to individual characteristics, rather than training, education or other qualities imparted by military service.

* An exception to the negative correlation of self-employment with length of service among veterans occurs with the subgroup of veterans who are career military retirees with service of 20 years or more. In this group, additional years of service are correlated with a higher probability of self-employment. The authors suggest that this relationship may result from a wealth effect; i.e., military retirees with longer careers receive larger military pensions, and may be financially better able to pursue self-employment opportunities.

* Career military retirees have higher rates of self-employment than the general population, but they are also predominantly older, male, married, and have at least a high-school education. In addition, self-employed military retirees have a higher average income from pensions than those not self-employed.

* Older military retirees are more likely to be self-employed; an additional year in age increases the probability of self-employment by about 7.5 percent.

* Among military retirees, officers are 55.6 percent more likely to be self-employed than enlisted personnel. The study suggests that this is attributable to differences in education, as most officers hold a bachelor’s degree or higher, and most enlisted veterans are high-school graduates. The measured differential between officers and the enlisted is similar to the differential between high-school graduates and college graduates in the broader general population.

* The cohort of veterans who served in World War II, the Korean War, and the Vietnam War eras were more likely to be self-employed, relative to veterans serving since 2001, or Gulf War veterans [10.9 percent vs. 3.6 percent].

* Age and home ownership show consistent positive and significant effects on self-employment, and are highly correlated to stability and maturity -- as well as providing a potential supply of risk capital.

* In the general population, age, marital status, gender, occupation, home ownership, military service, and some regional and race variables have a significant effect on self-employment, while education and children do not.

* Among veterans, career military service, age, male gender, and children are positive indicators of self-employment, while employment in service occupations and manufacturing occupations are negative indicators.

A full copy of the report is available at http://1.usa.gov/ReportVetsSBA.

Resources for Veteran-Owned Small Businesses
Following, are some SBA and VA resources available to small businesses owned by veterans [VOSBs] and service-disabled veterans [SDVOSBs]:

* SBA/Office of Veterans Business Development

* SBA/Veteran-Owned and Service-Disabled Veteran-Owned Businesses

* SBA/Express and Pilot Loan Programs

* SBA/Veterans Business Outreach Centers

* VA/Office of Small and Disadvantaged Business Utilization [OSDBU]

* VA/Starting a Small Business

* VA/The Center for Veterans Enterprise Web Portal [VetBiz.gov]

* VA/Doing Business With VA

* VA/National Veteran Small Business Conference and Expo: August 15-18, 2011 -- New Orleans

SOURCES: U.S. Department of Veterans Affairs, U.S. Small Business Administration

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Business Proposals: It's All About Trust. ^AF

President Obama, Vice President Biden, First Lady Michelle Obama and Dr. Jill Biden Launch Joining Forces Initiative to Support Military Families

Yesterday, President Barack Obama, Vice President Joe Biden, First Lady Michelle Obama and Dr. Jill Biden [pictured above, during official launch announcement] rolled out Joining Forces, an unprecedented national initiative to support and honor our military families.

"This campaign is about all of us, all of us joining together, as Americans, to give back to the extraordinary military families who serve and sacrifice so much, every day, so that we can live in freedom and security," said the First Lady.

Joining Forces aims to educate, challenge, and spark action from all sectors of our society -- citizens, communities, businesses, nonprofits, faith-based institutions, philanthropic organizations, and government -- to ensure that military families have the support that they have earned.

As part of Joining Forces, businesses and organizations -- including some of the best-known names and brands -- announced major new commitments to support military families in the areas of employment, education and public awareness.

To watch a video of the launch event, or read full remarks by President Obama, Vice President Biden, the First Lady and Dr. Biden, go here.

As the First Lady noted, "Our motto is simple: Everyone can do something."

Find out how you can get involved at JoiningForces.gov.

Resources for Veteran-Owned Small Businesses
To help do our part, GoodBiz113 offers up the following introductory list of resources available to current and would-be small businesses owned by veterans [VOSBs] and service-disabled veterans [SDVOSBs]:

* SBA/Office of Veterans Business Development

* SBA/Veteran-Owned and Service-Disabled Veteran-Owned Businesses

* SBA/Express and Pilot Loan Programs

* SBA/Veterans Business Outreach Centers

* Veterans Affairs/Starting a Small Business

* Veterans Affairs/Doing Business With VA

* Veterans Affairs/Office of Small and Disadvantaged Business Utilization

* Veterans Affairs/VetBiz.gov: The Center for Veterans Enterprise Web Portal

SOURCES: U.S. Department of Veterans Affairs, U.S. Small Business Administration, The White House [photo by Lawrence Jackson]
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Business Proposals: It’s All About Trust. ^AP

SBA Renews Popular Patriot Express Loan Initiative for Three More Years

A very popular initiative that, in just three-and-a-half years has provided more than $560 million in loan guarantees to nearly 7,000 veterans to start or expand their small businesses, is being renewed for three more years, according to the U.S. Small Business Administration.

Patriot Express, a streamlined pilot loan product based on the agency’s SBA Express program, offers an enhanced guaranty and interest rate on loans to small businesses owned by veterans, reservists and their spouses. Over the past two years, due in part to the American Recovery and Reinvestment Act, loan volume increased dramatically.

"America’s veterans have the leadership skills and experience to become successful entrepreneurs and small-business owners," said SBA Administrator Karen Mills. "The impact of this program over the last three-and-a-half years has meant thousands of veterans and their families have had the resources to pursue their dreams as entrepreneurs and, at the same time, create jobs and drive economic growth at a critical time for our country.

"Renewing it means we can continue to fulfill our sacred commitment to the men and women who serve our country by giving them every opportunity for success."

Patriot Express was launched June 28, 2007, to expand upon the more than $1 billion in loans SBA guarantees annually for veteran-owned businesses across all its loan programs. SBA also offers counseling assistance and procurement support each year to more than 200,000 veterans, service-disabled veterans, reservists, and members of the National Guard and their spouses.

Patriot Express loans are offered by SBA’s network of participating lenders nationwide and feature one of SBA’s fastest turnaround times for loan approvals. Patriot Express loans are available for up to $500,000.

The Patriot Express loan can be used for most business purposes -- including start-up, expansion, equipment purchases, working capital, inventory or business-occupied real-estate purchases. Local SBA district offices can provide lists of Patriot Express lenders in their areas. Details on the initiative can be found at www.sba.gov/patriotexpress.

To learn more about additional opportunities for veterans available through the SBA, please visit the website at www.sba.gov/vets.

SOURCE: U.S. Small Business Administration
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SBA Announces Changes to Small Business Procurement Scorecard Format

The U.S. Small Business Administration [SBA] just announced that it is revising the format of the annual Small Business Procurement Scorecard to provide more clarity and transparency on the federal government’s performance in meeting its small-business contracting goals. The revised scorecard will be based on an A through F letter grade system, as opposed to the previous red, yellow and green ratings.

"This revision to the Scorecard will provide greater clarity and transparency on how well each agency is doing in meeting its small-business prime contracting goals," said SBA Administrator Karen Mills [pictured]. "Federal contracts provide critical opportunities for small businesses to grow and create jobs. This revision builds on our ongoing efforts to strengthen the integrity of the overall process for small-business contracting, while also expanding opportunities for small businesses to compete for, and win, federal contracts.”

The revisions will appear when SBA issues its report later this year for federal contracting in fiscal year 2009. Over the past year, SBA has worked collaboratively with contracting and small-business officials to develop the new system. The revised methodology better reflects the unique needs of individual agencies, while maintaining a focus on achieving the statutory small-business contracting goals.

The overall small-business prime contracting goals have been established by Congress to ensure that small businesses get their fair share of federal contracts. The government-wide goal for prime contracts to small businesses is 23 percent of total qualified contract dollars -- with additional goals of five percent for small disadvantaged businesses [SDBs]; five percent for women-owned businesses [WOSBs]; three percent for HUBZone small businesses; and three percent for service-disabled veteran-owned small businesses [SDVOSBs].

SBA negotiates individual goals for each agency, while ensuring that, when combined, they meet the overall statutory goals for the federal government. SBA’s small-business procurement goal, for example, is 67.05 percent. While Scorecards will measure subcontracting activity, that information is not factored into the determination of whether the federal government meets the statutory small-business prime contracting goals.

The new Scorecard holistically assesses an agency’s entire small-business procurement performance. An agency’s overall grade will be comprised of three quantitative measures: prime contracts [80 percent], subcontracts [10 percent], and its progress plan for meeting goals [10 percent].

The letter grades for prime contracting and subcontracting will show an A+ for agencies that meet or exceed 120 percent of their goals; an A for those between 100 percent and 119 percent; a B for 90 to 99 percent; a C for 80 to 89 percent; a D for 70 to 79 percent; and an F for less than 70 percent.

In last year’s Scorecard rating performance for the FY 2008 contracting year, small businesses won 21.5 percent of contract dollars, or about $93.3 billion out of a small-business-eligible base of about $434 billion. More than half of all agencies met their individual goals. The small-business-eligible base for FY2009 was about $437 billion.

An example of the new Scorecard format can be accessed at http://bit.ly/NewProcurementScorecard.

About SBA
The U.S. Small Business Administration [SBA] was created in 1953 as an independent agency of the federal government to aid, counsel, assist and protect the interests of small-business concerns, to preserve free competitive enterprise, and to maintain and strengthen the overall economy of our nation.

SBA recognizes that small business is critical to our economic recovery and strength -- to building America's future, and to helping the United States compete in today's global marketplace.

GoodBiz113's Take
Kudos to Administrator Mills and her team for overhauling SBA's Small Business Procurement Scorecard. From all appearances, the new system delivers more meaningful, at-a-glance information, and is infinitely superior to that used by the Bush administration -- which, despite its lip service to small businesses, was far more intent on awarding multibillion-dollar bundled contracts to its corporate buddies [e.g., Halliburton] than in helping small-business owners and entrepreneurs grow the U.S. economy.

Indeed, we've come a long way since Jan. 20, 2009. And things just keep getting better...

SOURCES: Acquisition Central, U.S. Small Business Administration
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