Former Navy Petty Officer Ronnie Reum knows how to safely jump out of a helicopter into the ocean but is having a hard time finding clients for his small commercial-cleaning company.
The 36-year-old veteran, who has little business experience, is now being mentored in marketing with the help of an eight-month-old "business accelerator." Veteran Entrepreneurial Transfer Inc. of Milwaukee is one of a handful of free programs that have sprung up in recent years to assist veterans attempting to become entrepreneurs after struggling to join the civilian work force.
At VETransfer, Mr. Reum has access to expert advisers as well as cubicle space with Internet service and a phone line to run his business. He hopes the program's advisers will help him figure out how to turn his Milwaukee start-up, Healthy Spaces Cleaning, into a profitable enterprise. The veteran, who left the military in 2002 following an injury, started his business in late 2009. Mr. Reum says the business, which had revenue of about $25,000 this year, is his main source of income.
Overall demand is soaring for enrollment in programs designed to help veterans start businesses.
Mr. Reum says he had to wait five months just to get a slot in VETransfer, for instance.
Ted Lasser, executive director of VETransfer, says there are about 40 veterans who currently want to get in. The program, based out of a 15,000-square foot facility, is funded by the Department of Veterans Affairs and led by a team of six entrepreneurs. He initially expected it to provide free mentoring and resources to only about a dozen veteran-owned start-ups. But to date the program has managed to make room for about 160, serving about 60 on-site and the rest via the Web.
Most VETransfer participants are expected to stay in the program for six months to a year.
Wait lists for some other programs are as long as one year. The typical wait may grow even longer in 2012, with tens of thousands of service members set to return from Iraq by the end of this year.
The unemployment rate for veterans who served in the military at any time since September 2001—so-called Gulf War-era II veterans—is 11.1%, according to the Bureau of Labor Statistics. The national unemployment rate currently stands at 8.6%.
Due to structural shifts in the economy, there is "decreasing demand for the kind of blue-collar jobs that many veterans were trained for as part of their duties in the military," says Richard Burkhauser, a professor of economics at Cornell
University in Ithaca, N.Y.
More than 400 franchisers—ranging from household names like 7-Eleven Inc. andDunkin' Brands Group Inc. DNKN -0.06% to lesser-known chains such as U.S. Lawns Inc. and Caring Transitions—have pledged in recent years to provide financial incentives to veterans through a partnership with the International Franchise Association, the industry's largest trade group.
Mail Boxes Etc. Inc., a San Diego-based retail shipping and business-services franchise that operates under the brand name UPS Store, offers veterans a $10,000 discount on the $29,950 franchise fee for a UPS Store. And starting in January, the company will waive the entire fee for the first 10 qualifying veterans who apply before June 30, 2012, says Stuart Mathis, president of Mail Boxes.
But many veterans including Mr. Reum say they'd prefer to build their own businesses from scratch.
Securing proper financing, however, is a common challenge.
"Many of them don't have a lot of formal training around how to go out and pursue traditional sources of capital," says Mike Haynie, a professor of entrepreneurship at Syracuse University's Whitman School of Management. For fiscal 2011, which ended in September, the Small Business Administration guaranteed 4,311 loans for veterans, down from 4,907 in 2010, though the total amount backed rose to $1.49 billion this year from $1.3 billion last year.
Mr. Haynie, a former Air Force officer, has helped to develop four entrepreneurship-training programs for veterans nationwide, which vary in length and frequency. One program, started in 2007, is open only to disabled veterans. It received 500 applications this year—twice as many as last year—for only 175 slots.
The programs have been funded mostly by corporations such as Wal-Mart Stores Inc.,WMT -0.31% HumanaInc. HUM +0.13% and PepsiCo Inc. PEP -0.06% Meagan Smith, director of a recycling program at PepsiCo, says the beverage maker is providing $500,000 a year for three years to one of the Syracuse programs, and that PepsiCo is benefiting by touting its support for veterans in promotional materials for the recycling initiative.
There is no way to measure what, if any, added value the "accelerator" programs provide to those who participate. Some cite intangible benefits of coaching and mentoring. Others point to entrepreneurship basics.
"It really laid the groundwork on how to properly start a business," says Shannon Meehan, who participated in a boot camp for veterans with disabilities at Syracuse University in July after waiting seven months to get in.
The 28-year-old former Army captain says he is now applying the knowledge he gained from the program—such as how to incorporate a business and develop a customer base—toward a start-up, called Designing Freedom LLC, that specializes in embroidering logos that use a military-style camouflage-pattern onto T-shirts, thermals and other apparel.
"I was really searching for something to do in my life," says Mr. Meehan, who left the military in 2009 due to an injury.
"There's a comfort level with being surrounded by other veterans," he adds. "A lot of them were like me. They had an idea but didn't know what to do with it."
Mr. Meehan's business is now up and running with four employees. He says he's in the process of developing a company website and licensing deals so he can embroider sports-team and other trademarked logos.
Applicants for the programs don't have to be fresh out of the military. Navy veteran Kevin Jones, 50, is still waiting to get into VETransfer. He launched a real-estate investment firm in 2009 and says he needs help growing it because it isn't generating sufficient income. "My expertise has only gotten me so far," says Mr. Jones, who left the Navy in 1989. In the meantime he is working as an electrical technician, one of several low-paying jobs he has juggled in recent years to make ends meet. "I was able to get it started but I can't it get to that next level."
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