Soon-to-be veterans training to be business owners
Ventura County (Calif.) Star
In his 25 years with the Navy, John Smith has traveled the world executing complex projects in war-torn countries.
During two tours in Afghanistan, Smith helped manage Seabees from Naval Base Ventura County as they built bases, helicopter landing pads, medical facilities and security towers.
Now as a master chief petty officer at Naval Base Ventura County, Smith is in charge of a special program that provides utility services to the Navy, Marine Corps and the Department of Defense in locations all over the world.
This summer, however, Smith plans to leave his military career and transition into a new role: entrepreneur. He hopes to parlay skills he learned in the field into a successful business venture.
"Most people think that being in the military ... you are just used to getting orders and getting all of the answers handed to you, when in fact it's the opposite," Smith, 43, said. "You have to think for yourself and use all of the valuable skills you've learned. Why work for someone else when I am already doing the things that I could be doing in my own business?"
The dream of launching a startup could become a reality as more programs become available for the estimated 250,000 servicemen and women who transition out of the military each year. Among the services available is a national pilot program called Boots to Business, which is scheduled to launch at Naval Base Ventura County in September.
Rejoining civilian life
The push for Boots to Business and programs like it came after President Barack Obama signed the Veterans Opportunity to Work Act in November 2011.
Under the initiative, servicemen and women are now required to participate in transition programs that will help ease them into the civilian workforce. One program includes higher education, while another is geared for those interested in vocational/technical training. The third is the entrepreneurial track, taught in conjunction with officials at the Small Business Administration.
At Naval Base Ventura County, about 700 to 1,000 attend the transition course annually at the Fleet & Family Support Center, but those numbers are expected to increase now that the classes are mandatory, said transition coordinator Kristin Davy.
While the classes are offered at least twice a month, service members are encouraged to attend at least 12 months before leaving the military or 24 months before retirement, Davy said.
On a recent Wednesday, about 10 servicemen and women attended a two-hour introductory business workshop at the support center.
The workshop was led by Patrick Rodriguez, SBA Los Angeles development specialist, and Bill Goodnick, workshop chairman for the county nonprofit SCORE. Participants listened intently as Rodriguez outlined various loans and programs available to aspiring business owners, while Goodnick explained the basics steps and tools needed when venturing into the business world.
"One of the things you hear about entrepreneurs is they take risks ... but if you are going into business, you want to reduce those risks," Goodnick said. "The more you know and the more planning you do in your business, the better the probability of success. By the time you get through this whole process, you will have enough knowledge to consider if you want to even move forward with your business."
Petty Officer Angel Laracuente, who could be transitioning out of the military this summer, said he was interested in pursuing a future in real estate development.
"Eventually I want to own acres of land and build complexes," Laracuente, 40, said. "I want to get some information about loans and starting this as a business."
For those leaving the military life, having a plan is crucial as they return to an economy still undergoing a slow recovery. According to recent numbers released by the Bureau of Labor Statistics, unemployment rates for veterans in January increased slightly to 7.6 percent compared to 7 percent the previous month.
Although still below the January national unemployment rate of 7.9 percent, young veterans continue to have a difficult time securing employment.
The youngest post-9/11 veterans, those ages 20 to 24, saw an 8 percent increase in their unemployment rate from December to January, remaining the highest rate of all age groups at 31.4 percent, according to the BLS.
"It is a challenge to get some of them back into the labor force because there are fewer jobs and employment opportunities than there were during pre-recession," said Bruce Stenslie, president and CEO of Economic Development Collaborative, Ventura County. "On the positive side, these folks have some extraordinary training and skills that has marketability. They are self-reliant and confident, attributes that are well-suited in entrepreneurship. You definitely have to have nerves of steel."
While more programs are in the pipeline to help those interested in starting their own business, a study from Kansas City-based entrepreneurship nonprofit Kauffman Foundation found veteran-owned startups have been steadily declining over the past two decades.
According to the November 2012 study, veterans in 1996 represented 12.3 percent of all new entrepreneurs. In 2011, however, that number had dropped to just 6 percent.
While the decline could be attributed to the slight increase among nonveterans who became new entrepreneurs, the larger cause of the decrease stems from the larger share of veterans who are aging out of the workforce.
"We are experiencing a temporary reduction in entrepreneur activity in the vet population since a large portion of those living vets are from the Vietnam War era, and to some extent, the Korean War," said Jonathan Robinson, Kauffman Foundation entrepreneurs program manager. "This affects the recently transitioning population of vets because it diminishes their exposure to mentors and role models."
Boots to Business
To help fill that gap, a new program aims to not only connect young veterans with experienced businessmen and women but also to help guide them through the ins and outs of starting a business.
The entrepreneurship track available for transitioning service members also includes the national Boots to Business program. The pilot program started last year as a collaboration among the Department of Defense, the SBA and Syracuse University's institute for Veterans and Military Families.
In California, the program made its debut at the Marine Corps bases at Camp Pendleton and Twentynine Palms, where about 40 military members and spouses took advantage of free business workshops.
Participants have two days of classroom instruction on entrepreneurship. They are then asked to conduct their own market research and initiate a business plan to identify their strengths and challenges they might come across, said Doug Dare, SBA Santa Ana District spokesman.
The program wraps up with an in-depth, eight-week online course where participants formulate a business plan.
"It's a dramatic improvement over the old transition program and I am glad people are leaving the class with something in their hands that they can work on," Dare said. "In the military environment, you don't have much exposure to the business world so this program definitely builds those links from the military to the private sector."
When Nathanael Ligon first joined the military five years ago, he hoped to become a naval aviator. Now just four months before his last day in active duty, the 25-year old sergeant based out of Camp Pendleton instead plans to run his own business.
Ligon took part in the Boots to Business program, where he learned some of the basic tools every aspiring entrepreneur should have. Once he is officially honorably discharged from the Navy in June, Ligon plans to solidify a business plan for several ventures he is interested in, including technology development.
"The class was helpful because it emphasized the importance of being self-motivated and the different types of corporations that existed," Ligon said. "It was definitely informative and was helpful to have all of that in the class."
The Boots to Business program at Naval Base Ventura County is scheduled to begin in September and will also be open to veterans' spouses, Rodriguez said.
Smith said he is considering the program to help him develop a business plan for a company that would provide rental and installation of utilities equipment.
"When you are a military person, you have a lot of capabilities, but sometimes you just don't know what you don't know," Smith said. "I have the industry skills but not the commercial business skills, so this will give me that industry knowledge. Knowing that this is available is very inspiring."