It only took a red Ferrari and a quick chat about franchising potential for 16-year-old Daniel Ramirez to know what he would do one day. Ramirez, who spent 22 years in the U.S. Air Force as a flight engineer, said he never forgot that talk with the owner of the McDonald’s franchise where he worked as a teen.
So when he retired from the military in 2011, he looked for a business to buy.
Ramirez is in good company. An estimated 3 million veterans are small-business owners, according to the Small Business Administration (SBA), including roughly 7,000 Delaware veterans.
With 250,000 service members transitioning out of the military each year, many are looking to organizations like the SBA to get started, or to agencies like the state Office of Supplier Diversity or Procurement Technical Assistance Center to leverage the “veteran owned” designation and compete for government contracts.
The transition from soldier to business owner is a natural move, according to officials, who point to the exceptional training, leadership skills and tenacity inculcated by a career in the military.
“When you’re in the military realm, you’re accustomed to being in a leadership position,” said Larence Kirby, executive director of the Delaware Commission of Veterans Affairs. “Young men and women in the military are given responsibility, authority and ownership of what they do. You pair that with technical training, leadership and higher education, and they’re one of our best assets.”
Ramirez was no exception. After retirement, he zeroed in on the Papa John’s pizza franchise and opened his first store in Camden in 2011, just three months after his retirement from the Air Force. Since then, he’s purchased three additional stores and plans to open a fifth in the next few months.
“I didn’t want to work for anyone else,” said Ramirez. “I want to work for me.”
With the average cost of a Papa John’s franchise between $250,000 and $300,000, buy-in is pricey. Ramirez was able to find a loan on his own for his first store, but turned to the SBA’s Delaware District for financial backing for the others.
Currently, the SBA waives the fees for loans to veterans for under $150,000 and fees are reduced for loans from $150,000 to $5 million, according to Jim Provo, veteran business owner specialist at the SBA’s Delaware district. That loan program is one of several initiatives offered by the organization that provides educational resources, entrepreneurial training and special financing to veterans.
“There are lots more veterans returning home, and the job market is not particularly strong,” said Provo, who estimated that he sees about 100 veterans a year. “Less than 5 percent of Americans are veterans but almost 13.9 percent of the businesses are owned by veterans.”
Provo said the SBA provided guarantees on loans to veterans totaling $5.3 million in fiscal 2015, triple the $1.4 million they offered the year before.
The SBA is a self-sufficient organization that guarantees it will pay 50 percent to 75 percent of the loan if the owner defaults. But it’s also a source education and “can do” spirit that’s a match for military personnel preparing to transition to civilian life.
Every two months Provo gathers key business professionals as part of a two-day Boots to Business program (B2B) that offers entrepreneurial training, part of the Department of Defense’s Transition Assistance Program.
Jeremy Brown attended one of the Boots to Business classes sponsored by the SBA. After more than 11 years of active duty that included time as a C-17 instructor pilot at Dover Air Force Base, Brown was considering options for post-military life, and he hoped to keep his young family in Delaware.
“I was in the process of putting feelers out,” said Brown, who is married with four young children. “But, big surprise, there are not a ton of jobs that really fit and that would allow me to stay here.”
The Boots to Business program challenged Brown’s mindset that he couldn’t afford his own business, and he began to scout existing franchises. He found Two Men and a Truck, a full service moving and packing company in Dover that was for sale.
Brown said he received a loan backed by the SBA, secured operating credit and purchased the business last year, allowing him to put down permanent Delaware roots while his business geared up.
“It’s been so much fun,” said Brown, has more than 20 employees and draws from his operational experience for his new ownership role. “I’m naturally drawn to higher pressure, higher intensity days. It’s neat to learn what the labor force looks like outside the military and the Department of Defense. It’s very different — not better or worse, just different.”
Michelle Morin said it’s little wonder that veterans are so successful as business owners. As executive director of the state Office of Supplier Diversity, Morin’s team assists Delaware businesses certified as a diverse supplier (minority, women, veteran, service disabled veteran, and disabilities-owned businesses) compete for state and federal contracts. OSD also operates a separate Small Business Focus.
“Veterans are very capable people. They’re not looking for handouts,” said Morin. “They’re the hardest for us to measure because they’re just going to get it done.”
Under her tenure, the OSD’s roster of veteran-owned businesses has increased from nine to 24. Businesses are verified as veteran-owned through a free federal certification process, which enables the business owner to register with the OSD, also for free.
It’s a designation that automatically includes their name and federal NAICS (North American Industry Classification System) code in an online directory and increases visibility among interested buyers who work for the state.
Morin points to the 2016 Democratic National Convention in neighboring Philadelphia. Already, organizers of the event are seeking diverse suppliers.
“It’s access to opportunity,” said Morin, who said the state of Delaware under the Markell administration has increased its spending with the OSD and the Small Business community to $213.9 million in fiscal 2015 — $78.98 million with vendors certified with the OSD, $3.4 million with certified veterans and service disabled veteran-owned businesses.
Ed Fayda of Fayda Engineering & Energy Solutions registered with the OSD in 2013 when he started to pursue transportation projects and has led or managed more than 250 public works projects for the state totaling $500 million.
“Our sales have increased since 2013 and we’ve been offered a new commission with new customers, including the Delaware National Guard,” said Fayda, who served in the Navy from 1975 through 1979 on a destroyer out of Norfolk, Va. He added that his certification doesn’t provide an objective competitive advantage but rather “tips the scales” in a head-to-head bid.
Fayda got an engineering degree from Villanova University thanks to the GI Bill then worked for more than two decades for an engineering firm. When he started his own company in 2009, he said veteran-owned business wasn’t even a classification with the OSD, so he relied on his reputation and business relationships to grow his business.
“I believe that it definitely adds value, said Fayda. “Our revenues have increased partly because we are a veteran owned small business.”
He said he’s also tapped SBA resources to finesse his marketing plan.
Joseph Cunane took the reins of his family’s business about 10 years ago. A certified Service Disabled Veteran-Owned Small Business, Guardian Environmental Services offers environmental remediation, facility support services and general construction.
“I always like the thought of helping people and protecting the environment,” said Cunane, a veteran of the Air Force Pararescue team stationed in Biloxi, Miss. “That’s what I was interested in when going to the Air Force and this type of work is similar.”
As a certified business with the OSD, Cunane said he regularly receives contract information and participates in workshops and training events through the agency.
With just under 100 employees, Cunane said his business is poised for growth.
“The OSD sends us contract information that comes up for the type of work we go after,” said Cunane, who owns a second business that performs mechanical and grounds maintenance work primarily for the state. “But there’s no easy ticket here.”
Scott Soucy said he’s received a number of considerations through the Office of Supplier Diversity. As the owner of Secure Transport, a high-end limousine service based in Middletown, Soucy hopes to franchise his business to provide opportunities for other veterans who may find the transition to a traditional civilian work force challenging.
“Once they lose that regimented environment, it’s hard. But they’re great people,” said Soucy, who said he used the SBA to map out a business plan. “They have a lot of integrity, a lot of motivation, all the tools needed for a small business.”
Morin said she’s hopeful that more veterans will seek certification through her agency, but she understands that like all of the participants in the OSD program, they want to be evaluated and appreciated on the quality of their work.
“What they do and how they do it is the true nature of inclusion,” she said.