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Veteran-owned Businesses and their Owners— Data from the Census Bureau’s Survey of Business Owners

Executive Summary and Key Statistics
Source of data. A critical source of data on veteran-owned businesses and their owners is the U.S. Census Bureau’s Survey of Business Owners (SBO). The SBO in its present form is conducted once every five years, and the most recent edition is for data year 2007. About 2.3 million businesses received the SBO survey instrument during 2008 –2009 asking for information about the characteristics of the business and its owners. The information obtained from respondents was combined with additional Census data and administrative records from other agencies to develop a wide variety of data products, including information on veteran-owned firms and their owners. Datasets with specialized veteran-related information from the 2007 SBO were released in 2011. Statistical considerations. The SBO is based on a sample rather than a complete census.

SBO estimates can be considered as a midpoint in a range of possible values. Such “plus or minus” ranges vary depending on a number of factors, especially the size of the data cell in question. The Census data document the likelihood of variance from each of its estimates.

Veteran-owned businesses in general. Census estimated that in 2007:
• There were 2.45 million businesses with majority ownership by veterans.
• 491,000 of these firms were employers, and 1.956 million were non-employers.
• These veteran-owned firms had sales/receipts of $1.220 trillion, 5.793 million
employees, and an annual payroll of $210 billion.
• Veteran-owned firmsrepresented 9.0 percent of all U.S. firms.
• 12.2 percent of all owners of SBO-respondent firms were veterans.
• 8.3 percent of all respondent veteran owners had service-connected disabilities.

Veteran-owned employer firms. The SBO reported that in 2007:
• The 491,000 veteran-owned employers made up 20.1 percent of all veteran owned firms, similar to the share of employers among all firms, 21.2 percent.
• Veteran-owned employers had sales/receipts of $1.126 trillion, 92.3 percent of the sales/receipts of all veteran-owned firms(with and without employees).
Veteran-owned firms without employees. Census also found that in 2007:
• The 1.956 million veteran non-employer businesses made up 79.9 percent of all veteran businesses, similar to the non-employer share for all firms, 78.8 percent.
• Veteran non-employers had sales/receipts of $93.766 billion, 7.7 percent of the sales/receipts of all veteran-owned businesses.

Distribution of veteran-owned firms by industry. One-third of all veteran-owned firms were found in two industries: the professional, scientific, and technical services group (16.9 percent), and construction (15.5 percent). Significant shares of veteran owned firms were also found in other services (9.9 percent), real estate (8.9 percent), and retail trade (8.1 percent). Concentration of veteran-owned firms within industries. Overall, 9.0 percent of all
businesses of the United States were veteran-owned, but this percentage varied by industry, ranging from a high of 13.2 percent in finance and insurance to a low of 5.2 percent in the accommodation and food services industry. Other industries in which veteran-owned firms had higher than average participation rates included: transportation and warehousing at 12.7 percent; mining, quarrying, oil and gas at 12.4 percent; construction at 11.1 percent; professional, scientific, and technical services at 10.9 percent; and manufacturing at 10.5 percent.

Distribution of veteran-owned firm sales by industry. Wholesale trade was the largest single industry group in terms of sales/receipts for both all U.S. firms and veteran-owned firms, accounting respectively for 21.4 and 21.5 percent of total all-sector sales. For veteran-owned firms, retail trade was a close second with 20.1 percent of all sales, followed by construction at 14.1 percent and manufacturing at 13.1 percent. These four industries together accounted for 68.8 percent of all veteran-owned firm sales. Including the professional, scientific, and technical services group, with 6.2 percent of sales, the top five industries together accounted for 75.0 percent of all veteran sales.

Concentration of veteran-owned firm sales/receipts within industry. Overall, 4.1 percent of all U.S. firm sales/receipts were attributable to veteran-owned firms, but this share varied by industry, ranging from a high of 9.2 percent in construction to a low of 0.3 percent in the utilities group. Besides construction, other sectors with notably higher than average veteran shares of sales included: agriculture, forestry and fishing at 7.6 percent; other services at 7.4 percent; transportation and warehousing at 6.4 percent; retail trade at 6.1 percent; and real estate and rental/leasing at 6.0 percent.

Firm size by sales/receipts. More than half of all veteran-owned firms (51.6 percent) had annual sales of less than $25,000; and one-third (33.2 percent) had annual sales of less than $10,000. These shares mirrored those for all firms, and it is important to remember that the SBO captured data on all firms that reported business income of $1,000 or more in 2007. Accordingly, many part-time business activities were included.

Employer firm size by sales/receipts. Not surprisingly, employer firms had higher sales levels than firms without employees. Among veteran-owned employers, 78.1 percent had sales of $100,000 or more, while 38.2 percent had sales of $500,000 or more. Among veteran non-employers, 11.4 percent had sales of $100,000 or more, while only 1.1 percent had sales of $500,000 or more.

Employer firm size by number of employees. More than half (53.4 percent) of veteranowned employer firms had from one to four employees. Businesses with fewer than ten employees accounted for 80.4 percent of firms, and those with fewer than twenty employees accounted for 90.2 percent. Veteran-owned employers with twenty or more employees accounted for 9.8 percent of all firms, while those with fifty or more employees accounted for 3.6 percent.

Veteran-owned firms by gender, ethnicity and race. Veteran-owned firms had majority ownership which was overwhelmingly male (94.8 percent), non-Hispanic (95.2 percent) and White (89.7 percent). Women owned 4.0 percent of all veteran-owned businesses, and self-identified minorities as a whole owned 14.2 percent of all veteranowned firms. Veteran-owned firms majority-owned by African Americans represented 7.6 percent of all firms; 4.6 percent had Hispanic ownership; 1.3 percent had Asian American ownership; 1.1 percent had American Indian or Alaska Native ownership; and less than one percent were owned by Native Hawaiians or other Pacific Islanders.
Number of veteran-owned firms by state. California, Texas, Florida, New York and Georgia had the most veteran-owned firms, in that order.

Sales/receipts of veteran-owned firms by state. California and Texas were again the leaders, followed by New York, Florida and Illinois, in descending order.

Percentage of veteran-owned firms by state. Ranking states by their percentage of veteran-owned firms controls for differences in state populations. South Carolina had the largest percentage at 12.9 percent, followed by West Virginia at 12.6 percent, Virginia at 12.4 percent, Tennessee at 11.9 percent, and Alabama at 11.8 percent.

Percentage of veteran-owned firm sales/receipts by state. Similarly, a state ranking by the percentage of sales attributable to veteran-owned firms showsthat Mississippi led at 6.3 percent, followed by Oklahoma at 6.2 percent, South Carolina at 6.1 percent, Maine at 5.8 percent, and New Hampshire and Vermont, both at 5.7 percent.

Home-based businesses. In 2007, 55.4 percent of veteran-owned respondent businesses reported that they were home-based, compared with 51.6 percent of all respondent firms.

Family-based businesses. Family-owned businesses are those in which two or more members of the same family own the majority of the business. In 2007, 15.1 percent of veteran-owned respondent firms reported that they were family-owned. This compares with a reported 28.2 percent for family ownership among all respondent businesses.

Franchised businesses. In 2007, 1.8 percent of all veteran-owned respondent businesses were operated as franchises, compared with 2.1 percent of all firms. Among veteran owned employers, 3.4 percent were operated as franchises, compared with 4.0 percent for all firms. Franchise businesses are concentrated in certain industries, and the two most important for veteran-owned firms were the 14.1 percent of all veteran franchises that were in the accommodations and food services industry, and 4.7 percent in retail trade.

Sources of capital for business startup or acquisition. By far the largest source of capital for business startup or acquisition was personal or family savings: 61.7 percent for veteran-owned firms and 60.3 percent for all firms. Business loans from banks or other commercial lenders were the second most important source at 9.8 percent for veteran owned firms and 10.7 percent for all firms.

Sources of capital for business expansion. Personal and family savings were a primary source of expansion capital for both veteran-owned firms and all firms, both reporting 30.0 percent. Personal and business credit cards were also important, at 10.9 percent for veteran-owned firms and 12.6 percent for all firms, respectively.

Businesses by their number of owners. Most businesses had only one owner, including 78.9 percent of veteran-owned firms, compared with 61.3 percent of all firms.

Age of owners. Veteran business owners were markedly older than non-veteran business owners, reflecting the age structure of the underlying veteran population. In 2007, 75.1 percent of veteran business owners were age 55 and over, with 36.1 percent age 65 or older, compared with 36.6 percent and 12.5 percent of all business owners, respectively.

Education level of owners. Veterans tend to be better educated than other business owners. In 2007, veteran firm owners were about as likely as all owners of respondent firms to have either a bachelor’s or postgraduate degree (44.0 percent of veteran owners compared to 44.9 percent of all owners). But veteran owners were more likely to have post-graduate degrees (20.2 percent vs. 18.5 percent for all owners) and less likely not to have graduated from high school (3.3 percent vs. 5.2 percent for all owners).

Hours worked by owners in business. Among veteran business owners, 43.5 percent reported that they worked 40 or more hours per week in their businesses, and 12.9 percent worked 60 or more hours per week in their firms.
Service-disabled veterans. Among respondent veteran-business owners, 8.3 percent had service-connected disabilities. Service-disabled veterans formed a larger proportion of non-employer owners than of employer owners, 9.3 percent and 6.0 percent, respectively.

From the report at:


SUBJECT: Qualifying disabled veterans as HUB contractors
COMMITTEE: Defense and Veterans’ Affairs — favorable, without amendment
VOTE: 9 ayes — Menéndez, Sheffield, Collier, Farias, Frank, Miller, Moody,
Schaefer, Zedler
0 nays

WITNESSES: For — James Brennan, Texas Coalition of Veterans Organizations; Philip
Lindner, National Guard Association of Texas; (Registered, but did not
testify: James Cunningham, Texas Coalition of Veterans Organizations
and Military Officers Association of America; Brian East, Disability
Rights Texas; Deborah Giles and Patrick Hogan, Texas Technology
Consortium; Carlos Higgins, Austin Military Officers Association;
Morgan Little and John Miterko, Texas Coalition of Veterans
Against — Peter Aguirre; Karen Box, Southwest Minority Supplier
Development Council; Carmen Garcia, MBE Institute for Public Policy;
Margo Posey, Dallas Fort Worth Minority Supplier Development Council,
Houston Minority Supplier Development, Austin and San Antonio
Southwest Minority Council; Jim Wyatt, Texas Association of African
Chambers Commerce
On — Thomas Palladino, Texas Veterans Commission
BACKGROUND: To participate in the state’s historically underutilized business (HUB)
contracting program as defined by Government Code 2161.001 (3), at
least 51 percent of a business must be owned by one or more economically
disadvantaged persons. An economically disadvantaged person is defined
as someone who is economically disadvantaged as a result of
discrimination caused by that person’s identification as a member of a
certain group, including African Americans, Hispanic Americans, women,
Asian Pacific Americans, and Native Americans.
DIGEST: HB 194 would allow service-disabled veterans to participate in the state’s
HUB contracting program. The bill also would require the state
comptroller, for reporting purposes, to add service-disabled veterans as

defined by federal statute to the categories of groups included in the
The bill would take effect September 1, 2013.
Adding service-disabled veterans to the historically underutilized business
contracting program would provide economic opportunities to a highly
skilled group of individuals who have honored their country through
military service. Their inclusion would strengthen the visibility and
sustainability of the HUB program in ways that benefit the state as well as
other contractors.
By expanding the definition of a HUB owner, the bill would allow
service-disabled veterans greater access to contracts with the state and
other public entities. States such as California and Florida have allowed
service-disabled veterans this kind of access to state procurement
Enlarging the pool of available vendors could help drive down state
contracting costs. At the same time, the state would benefit from the
excellent training and skills these veterans would bring to their duties.
The program would incentivize entrepreneurism for veterans, who, as a
group, have a higher-than-average unemployment rate. HB 194 would
allow disabled veterans to join other groups of individuals who have
sometimes suffered the effects of discriminatory practices. In addition,
service-disabled veterans would spur attention in the media and boost
support for a program some participants say does not receive a sustainable
level of contracts.
Nearly 17,000 businesses were classified as Texas-certified HUBs in fiscal
2012, according to a report by the Texas Comptroller of Public Accounts.
The U.S. Small Business Administration estimates that about 1,000
businesses are owned by service-disabled veterans in Texas, so adding this
group would not greatly impact the HUB program.
Widening the definition of what qualifies as a historically underutilized
business, as proposed by HB 194, would dilute an important program that
ensures that businesses owned by minorities and women have a fair
chance of procuring contracts with government agencies and public
entities. Instead, lawmakers should seek to establish a similar but separate

job procurement program tailored to serving businesses owned by servicedisabled veterans.
The HUB program in Texas is struggling to meet its goals of increasing
the number of contracts available to underutilized businesses and growing
the number of jobs provided by those operations. The state’s spending
with HUBs dropped by $88.3 million in fiscal 2012, when HUB-related
state expenditures comprised 13.8 percent of total expenditures, according
to a study by the Texas Comptroller of Public Accounts. Enlarging the
pool of businesses that could procure contracts through the HUB program
when expenditures are shrinking would not make sense and would harm
businesses for which the program was created.
Much like Veterans Administration hospitals are tailored to provide health
care to the military and former service members, a separate program
should promote contract procurement in a way that suits service-disabled
veterans and honors the commitment they made to their country.