Attention Sellers: Veterans are Buying Businesses
In case you weren’t aware, U.S. military veterans buying businesses makes for a strong force in the nation’s small business economy.
While statistics have shown this to be true for many years, according to a recent study, it’s younger vets who are coming on as major players in the purchase of small companies.
A demographic study of individuals who were buying or selling a small business was commissioned in 2014. This study was aimed at getting a better understanding of todays’ business-for-sale market. The study, which surveyed more than 2,000 buyers and sellers, revealed some interesting trends that are impacting the market. One of these was the different rationale men and women have for purchasing businesses. Another was that a surprisingly large number of vets are looking to purchase small businesses. The study found that about 13% of prospective small business buyers identified themselves as military veterans.
Veterans Buying Small Businesses Have Resources
With the amount of turmoil around the globe and our country’s response, our military men and women have been asked to do a great deal. These challenges haven’t ended when they return home. Many veterans have faced obstacles when they re-enter the workforce, as the transition from the armed forces to a civilian job can be tough. In fact, the unemployment rate is significantly higher among veterans who served after 2001 and the First Gulf War.
A study from the U.S. Department of Veteran Affairs found that 51.6% of veterans have a family income of under $50,000; however, only 14% of veterans thinking of purchasing a small business said their household income was less than $50,000. But there were over 20% of veteran families who made between $50,000 and $74,999, 17% earned between $75,000 and $99,999 and another 22% made $100,000 to $149,000. Even with these higher salaries, the veteran unemployment rate in the results of the survey is considerably higher (about 10%) than for non-veterans who are about the same age (approximately 7%). Thus, vets who have the resources may be eying the small business market in order to buy themselves good-paying employment.
Recent Vets Looking to Buy and Expand Businesses
The research also showed not only that today’s veterans buying are older vets, but also more recent military personnel. The survey found that roughly 22% of the responding veteran buyers were 65 and older. There were also higher percentages of buyers in the 30-49 year-old (30%) and 50-64 year-old (46%) age brackets.
Not only are younger veteran buyers just looking to start a small business, many are considering the acquisition of a second or third business. The survey results found that 25% of the participating veterans who were pursuing a new business already owned at least one other business and were trying to expand. Compare that number with the slightly lower 20% of non-veterans who expressed plans for business expansion. This idea of business expansion shows that today’s veteran business buyers have real confidence in the small business environment and anticipate that the economy will continue to recover.
On a final note, one may think that older veterans buying businesses may seem more apt to be planning for retirement. However, the research shows that many are entering the business-for-sale market for the first time. Approximately 12% of veteran buyers say that they’ve previously retired from another career but would like to keep working in their own business. This is a sizeable increase from non-veterans seeking small business ownership while retired, which is only 5%.
In summary, small business ownership is still an exciting career step for U.S. military veterans. And with the number of veteran buyers who are active in the business-for-sale market, the prospects of the veteran-as-entrepreneur gives no indications of slowing anytime soon.
Contact a Business Expert
Andrew Rogerson serves clients who are business owners and prospective business owners throughout Southern California and Northern California including areas like San Diego and Orange Counties, the Los Angeles metro area, the California Central Valley, San Francisco Bay Area, Sacramento County, Coastal California, and Sierra Nevada.
If you have questions about business opportunities in and around Sacramento, Andrew can help answer your questions. Take some time to speak with Andrew about business transactions or visit our website. Contact Andrew via email or call him at (916) 570-2674.