Opportunities grow for veteran-owned businesses

National movement puts veteran-owned firms on a par with minority- and women-owned firms

  • Patrick McCormack, an Army veteran and former Army Ranger, who is currently in the National Guard, bought a drum manufacturing business in 2006 and runs a small shop with two employees, both of whom are veterans.
Patrick McCormack, an Army veteran and former Army Ranger,… (Baltimore Sun photo by Algerina…)
July 03, 2011|By Lorraine Mirabella, The Baltimore Sun

Wading through swamps and running up mountains taught Patrick McCormack more than how to survive punishing conditions without much food or sleep. His grueling Army Ranger training, along with several deployments to Iraq and Afghanistan, taught the Ellicott City native important business lessons as well.

"It takes a lot of discipline to run your own company," said McCormack, 29, who owns custom drum maker MapleWorks Drum Co. in Millersville. "You don't make it through [Ranger] school unless you have the drive and motivation to do what you have to when someone is not watching over you."

McCormack, a member of the elite Ranger corps from 2000 to 2007, recently began promoting his veteran-owner status in online business directories and on the company's website.

"It's an angle we honestly hadn't thought about pushing before," he said, adding that he began using his veteran's status as a marketing tool within the past year. "But musicians who are former military appreciate it, and [other] customers know [the work] is going to get done and get done right, with attention to detail."

Thanks to a growing national movement to put veteran-owned firms on a par with minority- and women-owned businesses when it comes to competing for contracts, opportunities for veterans are growing in the public and private sectors. Increasingly, corporations and state and local governments — including Maryland — have set procurement goals or mandates for working with firms owned by veterans.

Starting next year, Maryland agencies will aim to award 0.5 percent of their procurement contracts — based on the contracts' value — to small businesses owned and operated by veterans. The General Assembly last year approved legislation establishing the goal.

"We as a state and as a country need to take care of them because they took care of us," said Jerry Boden, chief of staff for the Maryland Department of Veterans Affairs.

Statistics released this spring by the Census Bureau offered the first-ever snapshot of veteran-owned business ownership in the United States.

The data showed the country had 2.4 million veteran-owned firms, accounting for 9 percent of all businesses, with 5.8 million employees and $1.2 trillion in sales.

Those figures, which came from the 2007 Survey of Business Owners, measured companies with veteran ownership of at least 51 percent. An additional 1.2 million businesses were equally owned by veterans and nonveterans, the data showed.

Maryland had more than 54,000 veteran-owned businesses, or nearly 10 percent of all businesses in the state.

Experts say it is hard to know whether the number of veteran-owned firms is increasing. The previous business owners survey, done by the Census Bureau in 2002, showed 2 million majority-owned veteran firms — but only firms that responded to the survey were counted. The more recent survey, on the other hand, estimated the total number of veteran-owned firms.

Matthew Pavelek, spokesman for the National Veteran-Owned Business Association, acknowledged the difficulty of gauging the growth of veteran-owned businesses, given the two different sets of data. But he said one thing can be stated with certainty: "There definitely has been an increase in opportunities for veteran-owned businesses to want to identify themselves as veteran-owned businesses."

The number of Fortune 500 firms that have set goals for working with veteran-owned businesses — or firms owned by veterans disabled while in the service — has jumped 50 percent in the past four years, since the business association began tracking those companies, Pavelek said. Some 156 Fortune 500 firms have specific goals related to veteran-owned suppliers or businesses, he said.

The number of states that have passed laws about doing business with veteran-owned businesses has increased from 12 to 17 since 2008, and more have legislation pending

In addition to Maryland's new procurement goal, the state's no-interest loan program, available to veteran business owners since 2008, dispensed $300,000 in each of the last two fiscal years, with loans ranging from $1,000 to $50,000, said Boden of the Maryland Department of Veterans Affairs.

The movement to offer preferred status to veteran-owned firms has been growing since the federal government set a 3 percent goal in 1999 for doing business with small firms owned by service-disabled veterans.

Before that, Pavelek said, "there was no clear definition or recognition that a person who served in the military was a diverse small-business class."

"But if corporations are going to give special incentives to any type of group, veterans have at least earned the right," he said.

Another reason why it's difficult to pin down precise numbers for veteran-owned businesses is that a lot of firms don't identify themselves as such, said Phil Dyer, a West Point graduate and chief executive officer of the financial planning firm Dyer Financial Advisory in Towson.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.