Comstock’s Article: Life After ServiceNovember 30 2018
Comstock's Business Magazine November 6, 2018
Life After Service
Expanded resources for veterans help pave the way toward business ownership
After Kirk Hawkins returned from each combat mission, the F-16 fighter jet pilot sat down in a room with military leaders and his team for the debrief.
They reviewed and discussed what worked, what went wrong and how next time could be better. It was standard practice in the military and a practice that Hawkins, CEO of Vacaville-based ICON Aircraft, carried over into his own business.
“Not many times in business would you spend an hour doing something and four hours talking about it,” says Hawkins, founder of the sports plane manufacturer. The sessions where he debriefs with his team after launching major projects are important because they offer “a completely non-emotional, performance-based evaluation.”
It’s just one of the many lessons Hawkins says he took from his time in the U.S. Air Force. A native of rural South Carolina, Hawkins was the first in his family to finish high school and graduate college. He earned a master’s degree in engineering from Stanford University and then spent eight years in the military before earning a master’s degree in management from Stanford’s Graduate School of Business in 2005, eventually launching ICON a year later.
“I was surprised that a lot of what I had done and learned in the military was applicable or useful in the corporate world, particularly from a leadership or management standpoint,” Hawkins says.
Business ownership among veterans has grown in recent years, and California is home to the highest number of veteran-owned businesses in the country. Yet transposed against those numbers is not only a declining percentage of the overall share of veterans who own businesses, but a growing population of homeless veterans in Sacramento. The most recent report by the nonprofit Sacramento Steps Forward found a 50 percent increase in the number of homeless veterans in the last two years. Meanwhile, local employers struggle to fill skills gaps in the workforce that often veterans are capable of filling.
Research shows that veterans are more likely to own their own business than nonveterans, and ownership has grown in recent years. Between 2007 to 2012, total veteran business ownership rose from 2.4 million to 2.5 million firms nationwide — that’s from 8.9 to 9.1 percent of all U.S. businesses, according to the latest U.S. Census data available. The number climbs to 3.1 million veteran-owned businesses, or 11.3 percent, when co-owners are counted.
While the data shows more veteran-owned businesses, the statistics tracking self-employment paint a different picture. Overall, the ranks of the self-employed (which includes independent contractors) has fallen from 11 to 10 percent between 2005 and 2014. The decline is greater within the veteran population from 15 to 12 percent.
And the overall share of veterans starting their own business isn’t as high as it once was. After World War II, nearly half of veterans owned or operated their own business, according to Syracuse University’s Institute for Veterans and Military Families.
That’s in large part because the employment landscape has changed over the decades, says Rosalinda Maury, director of the institute’s Applied Research and Analytics division. Today, there are more options for veterans in the workforce who are transitioning to civilian life.
Private employers are seeking veterans because they see the valuable skills someone with a military background can bring to their company, says Maury, whose institute also helps run a Boots to Business program for outgoing servicemen and women who want to start their own ventures.
In terms of what veterans chose to do when they return to civilian life, “There’s definitely competition to business ownership,” Maury says. “There are a number of different things you can be doing.”
Another part of the issue, experts say, is that veterans don’t often view themselves as having the characteristics of a business owner, even though many are disciplined self-starters who know how to work with others and can execute a plan or idea from beginning to end.
“They don’t think of themselves as entrepreneurs because their lives are so regimented in the military,” says Niki Peterson, senior program manager at UC Davis’ Institute for Innovation and Entrepreneurship. “But they make such good candidates.”
That’s because in the military, Peterson says, men and women learn to be resourceful, rely on team members and lead — all traits that can make a successful business owner for many members of the military, even the rank and file.
Peterson plans to take this message to Travis Air Force Base this December when she gives a keynote speech to veterans about connecting to the array of resources available to them when they leave the military.
She wants to encourage service men and women who might have a business idea to come to the institute’s Big Bang! Business Competition — a free, open-to-the public contest that provides mentors and workshops to guide contestants in formulating a business plan, identifying potential customers and discovering whether their idea could work. The winners can receive up to $15,000 in prize money.
“Being in business for yourself is certainly not for the faint of heart,” Peterson says. “I believe veterans should feel encouraged that they are, indeed, cut out for it.”
FINDING THE RIGHT TOOLS
When Michael Donoho, the former executive chef at the Waldorf Astoria in Boca Raton, Fla., proposed the idea of opening a restaurant to Jeff Belaski, a friend from his days in the U.S. Marines who lived in Sacramento, they didn’t even think to look for programs targeted toward veterans.
Unaware of the government and private programs designed to help veterans, the duo bootstrapped their business — borrowing money from family, emptying their own bank accounts and turning to personal credit — to open The Waffle Experience in Natomas. Belaski describes this as a stressful and painful time.
“I walked to 30 different banks, savings and loans and community banks. Nobody gave us money. Nobody wanted to touch us,” says Belaski, who was told most restaurants fail and are a bad investment.
After the restaurant opened in 2014, Belaski found the Veterans Business Outreach Center in Sacramento, a nonprofit founded in 1980 and partially funded by the Small Business Administration that provides veterans with free business consulting services, training and workshops. The staff, Belaski says, helped him network and craft ideas for how to expand to a second location.
He then connected with Veteran Launch, a nonprofit based in Oakland that helps veterans secure business financing. A $250,000 loan paid for two vans and equipment needed for Belaski and Donoho to open a second restaurant in Folsom in 2016.
That mentorship and loan money has turned a successful, farm-to-fork restaurant into one on the path to franchising across the country. The first franchise opened in Elk Grove this year and others are planned for Dallas, Chicago, Scottsdale, Ariz., Seattle and West Sacramento.
“I didn’t join the Marine Corps to eventually become a business owner, but to come out and know these programs are out there and people want to say thank you … it’s great,” says Belaski, who left the Marines in 1992 and says he didn’t have the resources that veterans today do.
But that military attitude to persevere is the reason, he says, that he and his partner didn’t give up on their idea for a restaurant despite the odds against them.
After 9/11 and the wars in Afghanistan and Iraq, there has been a proliferation of veteran-specific entrepreneurship programs created to help veterans, according to a 2016 report published by the Institute for Veterans and Military Families that examined the state of entrepreneurship among veterans.
States and the federal government have created programs and incentives to give a boost to veterans interested in starting their own business. The U.S. Department of Veterans Affairs, for example, offers an online Veteran Entrepreneur Portal intended to connect veterans to the resources they need, with information about how to get financing or contract with the federal government. That’s a far cry from the days when a soon-to-be veteran was only handed a flier upon leaving the military.
The Small Business Administration provides financing and loans that have helped more than 200,000 military-connected individuals who are or want to become self-employed since the mid-2000s, according to the report. The nonprofit Veterans Business Outreach Center that helped The Waffle Experience advises about 20 veterans a month on plans to either start or expand their business — veterans of all ages but mostly those in their 50s and older, and veterans who have a disability.
“Some just know they want to start a business but don’t have an idea. Others have a business plan,” says Pinder Virk, events and training ambassador at the VBOC. “We give them a platform where they can go back to their normal lives after service.”
There are also tax benefits for veterans. In 1941, California passed legislation that waives the general business license fee to any honorably discharged member of the U.S. military who sells merchandise.
In 2007, the Sacramento County Board of Supervisors voted to also waive half the cost the general business license fee to veterans who run a service-related business. In September, the board voted to waive the full cost of the fee. That break is a minimal cost to the county at $49,000 a year, but it’s one that Supervisor Sue Frost says gives veterans the leg up they deserve.
“Their personality is one of service and giving. They are not the kind of people who ask for help,” Frost says. “One of the ways I think we can help them is have programs they’ve earned.”
THE EMPLOYMENT GAP
At ICON, Hawkins values veterans for the technical skills and mindset they bring to his plane-manufacturing company.
He says the veterans who come to him do so not only with technical skills on how to build or fly an aircraft, but with the willingness to work on a team yet be a self-starter, plan and self-assess their work and inspire others to follow.
“I have a bias for veterans,” Hawkins says. “They are patriots, sacrifice, work hard, have a high values system and work under pressure.”
In California, honorably discharged veterans are bumped to the top of the hiring list for state jobs, known as the veteran preference. The same preference is given to veterans applying for a federal government job. Last year, 12,251 veterans worked for state government, 5.7 percent of its workforce, according to the California Department of Human Resources.
Veterans, like other state residents, are finding work in California’s growing economy. The state unemployment rate among veterans dropped from 7.1 percent to 5.8 percent between August 2015 and August 2017, according to the California Employment Development Department.
At the Sacramento Veterans Resource Center, staff work with veterans to help them find jobs — providing them free training to improve their interview and computer skills, teaching them how to write a résumé, go after a job and showcase skills they learned in the military. Most of the time, it’s just about getting a foot in the door, says case manager Shane Kunzel.
“It’s all about networking,” Kunzel says. “I ask employers to give veterans a chance, to really look at their résumé and get them an introduction.”
Of the 700 employees who work at ICON, roughly 10 percent are veterans. The core values of the business — Push, Excel, Lead, Own It and Go For It — are written on the back of ICON’s company ID card. Hawkins says they stem from the lessons he learned in the military.
“The core values of ICON are a lot you find in a military fighter,” Hawkins says. “There’s a natural cultural fit for who we are.”