Winning Battles for Vetpreneurs

In Baghdad, Capt. John E. James led two U.S. Army aviation platoons in combat operations. During Operation Iraqi Freedom, James’s primary duties were those of platoon leader and battle captain/assistant operations officer. Working with another assistant and under a commander, James planned, managed, and synchronized the deployment of 24 Apache and 10 Black Hawk helicopters. A graduate of West Point, James has flown nearly 1,200 hours and been awarded several combat medals, but he says his greatest achievement is bringing all his soldiers home alive and physically unharmed in 2009.

When James, 31, was honorably discharged in February, he went to work for his family’s Detroit-based 150-employee business, James Group International (No. 81 on the BE Industrial/Service companies list with $30.1 million in revenues). The company, which does logistics work for Ford, General Motors, and Toyota, was started by James’s father in 1971. About a year away from completing his master’s in supply chain management from Pennsylvania State University, James has already increased JGI’s efficiency. For instance, he implemented JGI’s enterprise resource planning for information technology, or ERP/IT, system in conjunction with Ford, giving the automaker greater visibility of product in the supply chain.

James, vice president of operations, joined JGI to fulfill his lifelong dream of following in his father’s footsteps. “I flew halfway around the world and was blessed with the opportunity to help defend those in a foreign country who could not defend themselves. I felt that it was past time to devote myself in similar fashion to the beleaguered communities in my hometown of Detroit.”

James is not alone. Many veterans are exploring business opportunities as a means of self-sufficiency and economic development in their homeland. African American military servicemen and -women account for about one out of every 10 black-owned companies. Veterans of all ethnicities own 2.4 million businesses, generating total sales of $1.2 trillion and paying 5.8 million employees.

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Unlike James, who returned home to an established family business, a number of returning service members encounter difficulties starting enterprises and keeping the doors open. After fighting for their country in Iraq and Afghanistan, many are now learning how to access capital and contracts. Succeeding in business, though, is not unlike winning in battle. Both require courage, leadership, strategic planning, decision-making, teamwork, resourcefulness, and endurance. Former service members may find a U.S. marketplace in turmoil, but their military experience gives them a competitive edge for starting or expanding a business–and stateside programs are here to help.

“Military service itself is excellent preparation that provides many of the ingredients necessary for business success,” says Matthew Pavelek, director of communications at the National Veteran-Owned Business Association. “Working long hours, leadership, and being disciplined, dedicated, and accountable are all developed through military service and are characteristics of successful entrepreneurs.”

Young military officers, like business executives, frequently have authority over personnel whose experience exceeds their own, notes James. “I learned that one’s leadership acumen is rarely defined by the direct orders he gives but by the direct questions he asks,” he says. “My Army experience taught me that my most important contribution was to get my team to work effectively to accomplish the mission. Such coordination of effort is essential for survival in both business and combat.”

To help veterans succeed, says Pavelek, it’s important for them to “know that there is an incredible array of opportunities available.”

Operation Boots to Business
About 250,000 men and women leaving military service each year attend the new Transition Assistance Program of the Department of Defense. Regardless of their length of service, they must all participate (within a year of their separation or retirement) in weeklong workshops that provide information about employment and training.

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In the fall of 2010 and 2011, President Obama called for the creation of two joint task forces: the Department of Defense-Department of Veterans Affairs Veterans Employment Initiative Task Force and the Interagency Task Force on Veterans Small Business Development, led by the Small Business Administration. Approximately 15% of veterans going through TAP are interested in SBA programs, says Rhett Jeppson, associate administrator, SBA Office of Veterans Business Development. Operation Boots to Business is a program that teaches returning service members how to start and develop a business. It is taught on base as part of the new TAP by SBA and its resource partners. The course curriculum was developed in conjunction with the Institute for Veterans and Military Families at Syracuse University.

The Obama administration’s emphasis on small business entrepreneurship will help veterans play a huge role in the

recovery of the U.S. economy, says Vernice “FlyGirl” Armour, America’s first African American female combat pilot. After serving in Operation Iraqi Freedom, the former U.S. Marines captain started a consulting and multinational speaking business. “Our young folks can transition out of the military and struggle and look for a job and end up homeless–or we can give them the tools they need that will supplement their leadership training,” says Armour.

Flying solo as a business owner may prove challenging. Veterans owning sole proprietorships don’t have the support of a platoon or squad team. “There are definitely times when you feel as if you’re alone and as if it’s combat in corporate America,” says Armour.

Armour once heard in response to the statistic that 95% of businesses fail in the first few years that they don’t actually fail–their owners give up. But Armour, who describes her ideas in her book, Zero to Breakthrough (Gotham Books; $25), asks how we can help business owners make the right decisions and give them the resources they need. The military approach of “one mission, one goal, one team” is key to business success. “Sometimes life builds a wall high enough to see if you’re willing to work hard to get over it,” Armour muses. “One component that veterans bring to the fight is what I call a breakthrough mentality. Accomplish the mission–failure is not an option.”

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There’s a lot of support awaiting veterans taking the plunge into business, says Pavelek. “Far too few veterans are aware that everyday Americans are eager to show their gratitude by buying from veterans, that the federal government is required by law to buy from veteran-owned firms, that more than 150 of the top 500 public corporations have special programs dedicated to buying products and services from veteran-owned small businesses, and that state and local governments have passed laws to buy veteran,” he says.

Take Johnson & Johnson and Comcast, which were named among the “10 Best Corporations for Veteran-Owned Businesses for 2012” by the National Veteran-Owned Business Association. Veronica Manuel-Gilbert, Johnson & Johnson’s director of Enterprise Supplier Diversity, says a top-down emphasis on improving the company’s supplier diversity program only makes the future look brighter for veteran-owned businesses. She notes that Johnson & Johnson has improved business analytics to provide better identification of veteran-owned businesses, and continually seeks specific areas where small and veteran-owned businesses can participate.

In 2011, Comcast spent $60 million with veteran-owned suppliers, typically purchasing furniture, product installations, logistics services, and construction. “In addition to our long-standing supplier diversity program and commitment to cultivating partnerships with veteran contractors,” says Ajamu Johnson, senior director, Supplier Diversity and Strategic Procurement at Comcast Cable, “we support veterans in our workforce, programming, and community investment initiatives.” A Joint Diversity Advisory Council of about 40 business and community leaders advises senior executive teams at Comcast regarding diversity efforts and initiatives, including enhancing relationships with service-disabled veteran-owned businesses.

Skin in the Game
The greatest hurdle facing would-be entrepreneurs, along with convincing family that they can still pay the bills, is finding startup capital, says Pavelek. Luckily, veterans have an active SBA program to help them find capital: the Patriot Express Loan, available to veterans and their spouses. From the program’s July 2007 inception through mid-September of this year, more than 9,200 Patriot Express Loans have been made, totaling an approved value of nearly $779 million. Veteran-owned businesses typically borrow in the range of $150,000.

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The agency’s vast network comprises 68 District offices and 15 Veterans Business Outreach centers; the latter provide counseling and training to thousands of veterans annually. The SBA also partners with SCORE, whose 13,000 volunteers, 40% of whom are veterans and the majority of whom are former or current CEOs, provide counseling to veteran entrepreneurs. Veterans also have nationwide access to 100 SBA Women’s Business Centers and nearly 1,000 Small Business Development Centers, many of which are at colleges and universities.

U.S. Army Sgt. Nicole Baldwin served two tours of duty in war zones after 9/11. She was deployed as a unit supply specialist to Iraq during 2003—2004 and to Afghanistan during 2005—2006. She went on the first all-female convoy into the streets of Bagram to visit a local midwives hospital. After her first tour of duty, Baldwin, 28, enlisted in the Individual Ready Reserve and attended Houston Training Schools

to become a licensed aesthetician. Inspired by the herbal remedies her grandmother made to heal facial burns Baldwin had suffered as a child, she wanted to create an all-natural, organic skincare line. Returning to Afghanistan in 2009, Baldwin worked as a civilian contractor until earlier this year, but she kept working on her goal. “I literally had to do all my research and correspondence with my design team, chemist, and lender through late-night e-mails and phone calls,” she says. Because of her experience in the harsh, dry, Middle East climate, Baldwin selected active, moisturizing ingredients for her products: Amazonian babassu oil, which deeply hydrates the skin without leaving an oily residue, and botanicals from traditional Chinese medicine, which reinforce the skin’s natural defenses against oxidative stress.

Baldwin officially started BIAO Skincare on Aug. 1 in Houston using $10,000 of her own money and a $50,000 small business startup loan from PeopleFund, the second-largest microlender in Texas. BIAO is an acronym for beautiful inside and out.

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To promote her line, Baldwin has enlisted 35 women to test the products in exchange for feedback and reviews. She also e-mails beauty bloggers daily and asks them to test her products. BIAO Skincare is sold online (www.biaoskincare.com), but Baldwin is currently negotiating deals with boutique-style retail outlets and one international online retail chain. Six weeks after its product launch, revenues reached $10,000 via word-of-mouth. “Because of my belief in BIAO Skincare,” says Baldwin, “and by being persistent and determined, I’ve found the right doors to knock on for support.”

Taking Control
Marylyn Harris, vice chairman of the Advisory Committee on Veterans Business Affairs, believes that entrepreneurship is a viable career alternative for veterans, especially those who have post-traumatic stress disorder. “It’s more in line with who you are, you have more autonomy,” says Harris, who also owns Harrland Healthcare Consulting L.L.C., a Houston-based certified service-disabled veteran-owned business. “Business ownership is more attractive and symptom-mitigating to veterans because you have a level of control that you don’t always have as an employee.”

Harris is upbeat about business opportunities opening up for veterans. “Vets hire other vets. They are going to create jobs, create wealth, and create well-being for their families. I’ve been talking to everybody from large nonprofits to major corporations about this. We need to think in terms of incorporating veterans in the supply chain, in supplier diversity initiatives, and we’re going to do it quickly.”