We know that small businesses are a vital component of our economy. According to the U.S. Small Business Administration (SBA), there are nearly 30 million small businesses in the United States and they collectively employ 47.8 percent of the U.S. workforce.
Drilling down, SBA reports that 9 million of those small businesses are classified as veteran-owned businesses. According to the Small Business Administration and census estimates, veteran-owned firms showed receipts of $1.14 trillion, had an aggregate annual payroll of $195 billion, and employed more than five million people in 2012. Approximately 7.3 percent of those veterans reported having a service-connected disability. All of these numbers are expected to increase when data from the 2020 Census is reported.
Corporations are realizing the importance of including service-disabled veteran-owned small businesses (SDVOSBs) in their supply chains—so much so that the Billion Dollar Roundtable (BDR) has expanded its criteria of diverse businesses that are counted toward a corporation’s supply chain spend. As of 2018, certified veteran-owned and disability-owned small businesses (both of which are certifications that SDVOSBs are eligible for) are included by the BDR in diverse spend.
Read on to learn more about what classifies a business as SDVOSB-owned and the resources available to certified SDVOSBs.
What Is a Service-Disabled Veteran-Owned Business?
The government limits competition for certain contracts to businesses that participate in its Service-Disabled Veteran-Owned Small Businesses program. Joining this disabled veterans’ business program makes your business eligible to compete for the program’s set-aside contracts, in addition to contract awards under other socioeconomic programs you qualify for, such as those available for veteran-owned, disability-owned, minority-owned, women-owned, or LGBT-owned businesses.
Service-Disabled Veteran-Owned Small Business (SDVOSB) Requirements
A service-disabled veteran-owned small business is defined as:
- A small business.
- At least 51 percent owned and controlled by one or more service-disabled veterans.
- Having one or more service-disabled veterans who manage day-to-day operations and also make long-term decisions.
- Requiring eligible veterans to have sustained their disability during their time of service.
8(a) Economically Disadvantaged Small Business Requirements
The federal government tries to award at least 5 percent of all federal contracting dollars to small disadvantaged businesses each year through its 8(a) program. To qualify for the 8(a) program, a business must:
- Be a small business.
- Not already have participated in the 8(a) program.
- Be at least 51 percent owned and controlled by U.S. citizens who are economically and socially disadvantaged.
- Be owned by someone whose total average adjusted gross income for three years is $250,000 or less.
- Be owned by someone with $4 million or less in assets.
- Have an owner who manages day-to-day operations and also makes long-term decisions.
- Have all its principals demonstrate good character.
- Show potential for success and be able to perform successfully on contracts.
More information about small business categories can be found on the SBA’s website.
Becoming Certified as a Service-Disabled Veteran-Owned Business
Because SDVOSBs fall under two additional categories—veteran-owned and disability-owned —by default, the resources and opportunities available to SDVOSBs are expanded. We’ll include some information about all three types of certification and their benefits here, with an emphasis on resources earmarked specifically for SDVOSBs. Our Definitive Guide for Veteran-Owned Business Enterprises and Definitive Guide for Disability-Owned Business Enterprises offer additional information on those certifications.
NOTE: Veterans come from a variety of backgrounds. You may also be eligible for certification as a minority-owned, women-owned and/or LGBT-owned business enterprise.
If you meet the requirements to be an SDVOSB, your next step is to become certified. There are two types of certification, although they are not equal: third-party certification and certification (or verification) through the federal government.
It is recommended that you complete both types of certification to increase the opportunities available to your company.
To be eligible for set-aside contracts, the federal government requires that a business be certified through its own process, called Vets First Verification.
Third-party certification provides corporate supplier diversity programs with the assurance that an independent, nationally recognized agency vetted your company and verified your veteran-owned status.
The National Veteran Owned Business Association (NaVOBA) and the National Veteran Owned Business Development Council (NVBDC) both independently certify veteran-owned businesses of all sizes.
Learn more about the NaVOBA certification process here.
Learn more about the NVBDC certification process here.
Vets First Verification
If you wish to compete for set-aside and sole source contracts made available through the Vets First Contracting Program of the U.S. Department of Veterans Affairs (VA), you must be verified through its Center for Verification and Evaluation. This is a federal program, with regulations that address veteran eligibility, ownership, and control, as set out under federal law; it is for small businesses only.
Learn more about Vets First Verification, and how you can receive assistance achieving verification, here.
Education, Funding, and Contracting Resources
Education and Training
Fortunately, both federal and private institutions realize the value of supplier diversity and are investing in supplier development. Whether you’re just beginning your business, or you’ve been around for a while, these educational resources can help you succeed.
Office of Veterans Business Development (OVBD)
The OVBD is a subsidiary of the U.S. Small Business Administration (SBA) that is designed to connect veterans and their spouses with resources for starting or growing their own business(es). Initiatives include Boots to Business, which assists active military personnel in transitioning to civilian entrepreneurship; the Veterans Business Outreach Center (VBOC) Program, which provides entrepreneurial development services such as business training, counseling, and resource partner referrals; and Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE), which helps women veterans and female military spouses/partners launch and grow their own businesses.
Learn more about the resources available from the OVBD here.
Veterans Business Outreach Program
The Veterans Business Outreach Program (VBOP) is an SBA initiative designed to provide entrepreneurial development services such as business training, counseling and mentoring, and referrals for eligible veterans who own or are considering starting a business. It is a cooperative agreement between the SBA and 15 other organizations that function as Veterans Business Outreach Centers (VBOCs).
Search for a VBOC here.
National Veteran Business Development Council (NVBDC)
In addition to providing third-party certification, the NVBDC hosts several education and training events, as well as matchmaking and networking events. From working with the Federal Reserve Bank to co-hosting the national Keeping the Promise conference with the U.S. Veterans Business Alliance, the NVBDC offers multiple opportunities for training and education.
Learn more about the NVBDC here.
Devoted solely to service-disabled veteran-owned businesses. VetLikeMe is a news clearinghouse that collects state and national news about issues that specifically affect service-disabled veterans and service-disabled veteran-owned businesses, such as changes to SBA rules and opportunities for raising capital.
Learn more about VetLikeMe here.
Veterans and Military Business Owners Association
VAMBOA is a nonprofit trade association focused on the development, growth, and success of veteran business owners, service-disabled veteran-owned businesses, and military business owners of all sizes. VAMBOA offers business coaching and mentorship opportunities as well as the “Vet Owned” seal for members.
Learn more about VAMBOA here.
Veteran Women Igniting the Spirit of Entrepreneurship (V-WISE)
V-WISE is a training program in entrepreneurship and small business management specifically designed for women veterans and female military spouses/partners. The three-phase program includes a 15-day online course (Phase I), a 3-day in-person entrepreneurship training event held in different parts of the country (Phase II), and ongoing mentorship, training and support opportunities for V-WISE graduates (Phase III).
V-WISE is operated by the Institute for Veterans and Military Families at Syracuse University (IVMF) in cooperation with the SBA.
Learn more about V-WISE here.
Institute for Veterans and Military Families (IVMF)
The IVMF is an interdisciplinary academic institute, headquartered at Syracuse University and focused on advancing the lives of United States military veterans and their families. Among other initiatives, the IVMF provides the Entrepreneurship Bootcamp for Veterans to post-9/11 veterans at no cost.
Learn more about IVMF’s initiatives here.
For more than 50 years, the nonprofit SCORE has been helping small businesses get off the ground through education and mentorship.
Because service-disabled veteran-owned businesses are supported by the SBA, they can take advantage of their services at no charge or at a very low cost. Visit SCORE’s website to find more information on mentors, workshops, and other available resources.
8(a) Business Development Program
The 8(a) program is a business assistance program designed specifically for small, disadvantaged businesses. The highly involved program is government sponsored, and has some inspiring success stories. Participants go through a four-year developmental stage followed by a five-year transition stage. In addition to this nine-year program, participants have access to specialized business training, marketing assistance, and mentorship programs, to name a few of its benefits. Find out how your 8(a) minority-owned business can participate here.
Access to capital is one of the main obstacles to business equality. The federal government offers several forms of assistance for SDVOSBs to secure funding through loans and grants. Additionally, several angel investors specifically aim to invest in LGBTBEs to promote business equality and innovation. Crowdfunding is also increasingly popular as a vehicle for entrepreneurs to fund projects.
Small Business Administration (SBA) Guaranteed Loans
One of the many resources the Small Business Administration provides is access to loans; however, the SBA does not loan money directly to small businesses. Instead, it establishes loan guidelines with partnering lenders around the country. The SBA guarantees that these loans will be paid, which means small businesses (like yours) generally receive lower, more competitive rates and fees compared to those of non guaranteed loans. Find more information about SBA-guaranteed loans here.
Aside from the SBA, the United States offers other government-backed loans and funding resources. You can find more details on how to get funding or grants for an 8(a) categorized business here.
As the name suggests, crowdfunding is used by businesses to pull small investments from a large number of investors—unlike traditional investments made by a handful of people. Many small businesses that have exercised this type of investment strategy have found success.
Crowdfunding sites have become an increasingly popular way to raise money for business ideas ranging from video games to backpacks to feature films to beehives. The SBA provides more details on how to successfully crowdfund for your minority-owned business.
Both the federal government and many of America’s top corporations require their procurement departments to spend a certain percentage with diverse suppliers every year. Once you are certified as an SDVOSB, it’s time to leverage that certification to gain access to contracting opportunities.
Supplier Registration Platforms
To streamline supplier diversity, blue-chip firms invest in third-party supplier registration portals to streamline the buyer-supplier contracting process.
Free registration, seamless communication with potential buyers, and robust opportunity filtering are just a few of the features that a quality platform should provide to suppliers. Register your company with CVM today to start on the path toward working with Fortune 500 companies.
Vets First Contracting Program
The Department of Veterans Affairs, which awards a large number of contracts to veterans, sets aside contracts for veterans through its Vets First Contracting Program. Note that this program is not the same as the SBA’s program for SDVOBEs. To get access to set-aside Veterans Affairs contracts, your business must be verified through the Vets First Verification Program.
National Veterans Small Business Engagement (NVSBE)
The NVSBE is the largest procurement event directly connecting veteran-owned businesses with federal and commercial buyers. It is the signature event for the VA Small and Veteran Business Programs, providing matchmaking, networking, and development opportunities for all veteran-owned businesses.
Learn more about the annual event here.
National Veteran Small Business Coalition (NVSBC)
The NVSBC serves as an advocate to ensure that veteran-owned businesses are given first consideration for federal prime and subcontracting procurement opportunities. The organization consults with the federal government, hosts an annual business development conference, and provides information and advice about how to work with the federal government.
Learn more about the NVSBC here.
Veteran Institute for Procurement (VIP)
VIP is designed specifically for VBEs seeking to work with the federal government. The organization offers three training programs for businesses at various stages, from those wanting to enter the federal market, to those looking to expand within the federal marketplace, to companies ready to go global.
Learn more about VIP here.
8(a) Business Development Program
Small disadvantaged business participants may be eligible for sole-source contracts, up to $4 million for goods and services, and up to $6.5 million for manufacturing, through the 8(a) program.
Potentially, an even greater aspect of the 8(a) program is a participant’s ability to form a joint venture or team to bid on contracts. This gives 8(a) firms the ability to fulfill larger contracts that they may not be able to handle alone, while also developing industry relationships. Interested in learning more about the 8(a) program and its requirements?
Find that information here.
Short for Historically Underutilized Business Zone, the SBA created the HUBZone program to assist businesses in economically depressed areas that often face greater business disadvantages.
Although it is not restricted to veteran-owned businesses, the HUBZone program can be a boon to your firm if you qualify for it. This two-minute video gives a quick overview of the program, as well as details on how to participate in it.
What resources have you leaned on to succeed as a service-disabled veteran-owned business? Make sure to register with CVM’s supplier database so potential customers can find you.