Veteran-Owned Small Business Insights
Madeline Burke, Rachel Evans
In honor of National Veterans Small Business Week, we highlight the important role veteran-owned businesses play in the American economy. Veteran entrepreneurs bring a unique set of skills and experience, helping to drive innovation and create jobs across the country. Below are four insights on veteran-owned businesses with employees based on the latest data from the Federal Reserve.
A majority of veteran-owned businesses expect increased revenue in the year ahead.
Currently, 54% of veteran-owned firms generate annual revenues between $100,000 and $1 million. When asked about the financial health of their business, 44% say they are doing good, very good, or excellent, and only 16% report poor financial condition. Notably, more than 60% of veteran-owned businesses expect their revenue to increase in the next year.
More than half of all veteran-owned businesses are small firms.
Like other employer businesses, most veteran-owned businesses are small. Sixty-one percent of veteran-owned businesses operate with fewer than five employees, and 78% have less than 10. Half of veteran-owned businesses expect to keep their employment levels stable, while close to a third expect to increase hiring in the next year.
Veteran-owned businesses have myriad struggles, from inflation to operations.
During the end of 2023, 80% of veteran-owned businesses cited rising costs of goods, services, and wages as a significant financial concern. Fifty-one percent struggled with paying operating expenses, and almost half experienced higher revenues in one month and lower in the next. In response to these financial pressures, more than half have raised prices, used personal funds or cash reserves, or obtained funding that must be repaid. Interestingly, veterans were 13 percentage points more likely to obtain repayable funding compared to non-veteran small business owners.
Almost half of all veteran-owned businesses have limited access to credit.
Despite only 4% of veteran-owned businesses being labeled a high credit risk, 49% are not fully approved for loans. Compared to non-veterans, they are slightly more likely to rely on big banks and credit unions for financing. According to the Small Business Administration, federal loans to veteran-owned small businesses increased by 14% last year.
