Virginia Leads as the Top State for Veteran-Owned Businesses
As military members transition into civilian life, veterans often find success in the business world, out-earning their nonveteran peers. In 2022, the median income for veterans reached a record high of $50,476, compared to $38,254 among nonveterans. Notable veteran business owners, including Nike co-founder Phil Knight and FedEx founder Frederick Smith, have demonstrated that military service can be a strong foundation for entrepreneurial endeavors.
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The Landscape of Veteran-Owned Businesses
Research indicates that while the number of veteran-owned businesses has been decreasing, veterans are more likely to be self-employed than nonveterans. Additionally, veterans with small businesses boast higher average net worth. Despite their unique skill sets and discipline, veterans face concerns such as business regulations, lack of connections, financing, and acquiring customers, pointing to potential gaps in support for veteran entrepreneurs across different states.
Lendio, a business financing platform, analyzed six metrics to identify the best states for veterans to succeed in business. These metrics, categorized into veteran labor market and entrepreneurship, include veterans’ income, employment, business ownership, startup survival, patent innovation, and new business growth.
Which states are considered the best for veteran entrepreneurs in the United States?
- Virginia – The Pinnacle of Support
Virginia emerges as the top state, driven by robust earnings and employment for veterans. With a median income of $68,124 in 2022, Virginia veterans outpace nonveterans by 1.6 times.
- Wyoming – Balancing Labor Market and Entrepreneurship
Wyoming secures the second spot with a well-rounded performance in both veteran labor market (8th) and entrepreneurship (6th). The state witnesses a remarkable 42.7% increase in new business applications year over year.
- Oregon – Entrepreneurial Hub
Oregon, while ranking in the middle for the veteran labor market, excels in entrepreneurship. Boasting 96.4 patents per 100,000 population and a startup survival rate of 58.4%, it clinches the third position.
- West Virginia – Growing Business Hub
West Virginia, with 7.3% of businesses owned by veterans, experiences a startup survival rate of 55% and a 25.9% yearly growth in new businesses.
- South Dakota – Sustained Employment and Business Growth
In 2022, 58.5% of South Dakota’s veterans were employed, and the state witnessed a 6.1% veteran-owned business rate. The startup survival rate stands at 55.7%, the second-highest in the nation.
- Massachusetts – Entrepreneurial Prowess
Massachusetts leads in the entrepreneurship subcategory with high patent rates (125.6 per 100,000) and a startup survival rate of 55%.
- Alaska – Strong Veteran Employment
Alaska stands out with veterans earning 1.5 times more than nonveterans and a high employment rate of 57.5%.
- New Hampshire – Thriving Veteran-Owned Businesses
New Hampshire boasts a 7.7% veteran-owned business rate and saw 80 patents filed per 100,000 population in 2020.
- New Mexico – High Earnings and Business Growth
Veterans in New Mexico out-earn nonveterans by a ratio of 1.6, with a significant 32.8% year-over-year growth in new business applications.
- Maryland – Strong Veteran Employment and Income
Maryland secures its position in the top 10 with a veteran employment rate of 54.3% and veterans earning 1.4 times more than nonveterans.
Why Virginia is No. 1
Virginia stands out for its robust veteran labor market, with 58.7% of veterans employed. The state’s favorable economic environment contributes to veterans’ earning potential, making it the top state for veteran-owned businesses. This is indicative of the broader trend where veterans, armed with unique skill sets and discipline acquired during military service, outperform in the civilian workforce.
Which states are notable runners-up for veteran entrepreneurs, and why?
States like Alabama, Texas, and South Carolina excel in either veteran labor markets or entrepreneurship. Alabama, with 6.8% of businesses owned by veterans and a 1.6 times higher median income than nonveterans, stands out. Texas and South Carolina score well for their veteran labor markets, driven by high income ratios of 1.5.
Other notable states include California, Washington, and Kentucky, praised for their entrepreneurial communities. California reports the highest number of patents per 100,000 population (127.8), while Kentucky sees a substantial 30.5% year-over-year new business growth. Washington boasts a high patent rate at 118 per 100,000.
What tips can help veterans succeed in starting their own businesses?
Veterans, equipped with valuable skills and experiences, can translate their strengths into the private sector. To embark on a successful entrepreneurial journey, veterans should consider the following tips:
Craft a Robust Business Plan:
Begin with a well-researched business idea, emphasizing your unique value in the chosen niche or industry. Consider financial projections, marketing tools, and an operations plan.
Explore Grant and Loan Opportunities:
Explore programs, grants, and loans designed to support veteran entrepreneurs, such as the Small Business Administration’s Boots to Business initiative. Seek financial support and coaching from organizations and nonprofits.
Build a Strong Network:
Connect with other entrepreneurs, veterans, and mentors for guidance and support. Engage with the local business community and join industry-specific groups to spread the word about your business.
Establish Solid Legal and Financial Foundations:
Choose the appropriate business structure, such as an LLC, sole proprietorship, or corporation. Ensure separation of personal and professional finances and compliance with federal and local regulations.
Practice Patience:
Building a successful business takes time. With the right tools in place, resilience will be key as you navigate the challenges of getting your business up and running.
The success of veterans as entrepreneurs highlights their significant contributions to the American economy. Continued efforts are needed to empower veteran entrepreneurs, allowing them to leverage their unique skills and experiences in the business world.
