SBA Hot Topic Tuesday – Retirement is Advancing the Decline in Veteran Business Ownership

May 23, 2023

Delaney Sexton
Contributing Editor

SBA Hot Topic Tuesday – Retirement is Advancing the Decline in Veteran Business Ownership

“Many veterans choose business ownership. However, veteran business ownership is falling,” reads a report by the SBA Office of Advocacy. “As those owners age out of the workforce, the number of veteran firms is decreasing. Meanwhile, the composition of the veteran population is shifting, and some demographic groups have experienced increases in veteran ownership.”

According to the “Deconstructing the Change in Veteran Business Ownership” report, veteran business ownership fell from 11% in 2014 to 8.1% in 2020. Looking at business ownership changes from 2017 to 2020, veteran-owned businesses were down by 11.5%.

One of the biggest contributors to the decline in veteran business ownership is the age demographics of veteran owners. Over half of veteran business owners are age 65 or older while less than 10% of veteran owners are under age 45. The older generation of veteran business owners is retiring, and a 5.2% decline in ownership for veterans 65 or older reflects this shift. Of veterans who have served since 2001, less than 5% have started a business.

As the military population changes, the veteran population adapts as well. Certain groups are seeing an expansion in veteran ownership. In 2020, a majority of veteran businesses were owned by men (94.9%), but women veteran businesses have been on the rise from 2017 (3.8%) to 2020 (4.4%). Veteran ownership for racial and ethnic minorities is developing too. Black, Asian, and Hispanic veteran businesses have increased by 22%, 15.2%, and 13.9% respectively.

40% of veteran businesses were concentrated in three industries: professional, scientific, and technical services; construction; and retail trade. The growth of veteran businesses in these three industries declined anywhere from 8% to 11.5%. Two industries that experienced an increase in the share of veteran ownership were utilities and information.

SBA Office of Advocacy Report