Tips for Running a Small Business While Serving in the Military

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Tips for Small Business Owners in the Military
Can you run a small business while serving in the military? Absolutely! But it's not without its challenges, especially if you are mobilized for a deployment. These tips can help you balance your small business and your military service.
Table of Contents
  1. Question – Should I Join the Guard or Reserves as a Small Business Owner?
  2. Answer – Yes, Absolutely! I Mean, No Way! Well… it Depends.
  3. What to Expect When You Join the Military
  4. Can You Run a Business During Your Initial Training?
  5. But Can You Run a Business in the Military?
  6. Tips for Running a Business in the Guard or Reserves
    1. Start now.
    2. Create business rules, checklists, and systems.
    3. Automate or outsource as much as possible.
    4. Hire well.
    5. Take a trial run.
    6. Save some cash for a rainy day.
    7. Remain flexible.
  7. Now, Let’s Address the Benefits Questions
  8. Guard and Reserve Health Care Benefits
  9. Guard and Reserve Tax Benefits
  10. What Should You Do Next?

Joining the military is a big commitment, even if you skip the active duty route and join the Guard or Reserves, which is traditionally considered a “part-time” military experience. Some of you who serve or have served in the Guard or Reserves might be laughing at the “part-time” statement.

On paper, the Guard and Reserves are a part-time commitment. Traditional Reservists serve “one weekend a month, two weeks a year.”

But that only tells part of the story. In practice, many members serve much more than the one weekend a month, two weeks a year. And they are also on call, 24 hours a day, 7 days a week, 365 days a year.

Why this preface?

Because a reader sent me a question about joining the Guard or Reserves as a small business owner. Since there is no one-size-fits-all business, and each job in the military is unique, there is no clear-cut answer. But I’ll do my best to lay out some observations for how to successfully run a small business in the Guard or Reserves.

Note: While most of the following tips will also apply to active duty servicemembers, there are other barriers to owning a small business while serving on active duty. This article is primarily directed toward members of the National Guard or Reserves, who typically need to have a full-time job in addition to their military service.

Question – Should I Join the Guard or Reserves as a Small Business Owner?

Ryan, I have been looking for the perfect person to ask, and I think you may be the man. I have been curious how the ANG health benefits may be beneficial to someone in business. As well as tax breaks. I do not yet have my business started but I expect to be in full swing in about 2-4 years. I currently have a great job and am doing great for income (car sales) and benefits are good. I serve in my church as well and will continue to do so even while in business.

But am considering health care and change of tax responsibilities once my business has started. Point blank, has serving in the ANG been beneficial to a businessman/owner? Obviously (as a business owner) we have to pay for our own benefits since we have no employer to match or benefit. I have read in certain states that there are State Income Tax breaks for those who serve.

Would these two things (ANG health benefits and State income tax breaks) be valuable in a business owners situation? Or, is there enough reward with health benefits and State income tax breaks to make a business owner interested? (besides the excitement of an adventure, these are two reasons I am considering the ANG). Any answer would be greatly appreciated!

Joshua

Answer – Yes, Absolutely! I Mean, No Way! Well… it Depends.

Hi Joshua,

Thank you for your question. I am a small business owner and a member of the Air National Guard. So I’m experienced enough to give you some tips on what works, and what doesn’t. And I’ll give you some food for thought if you aren’t sure what type of business you want to start.

I’ll start by saying, you shouldn’t join the military strictly for the benefits. They can be many, and they can be valuable. But you need a stronger basis for serving. The military is a full-time commitment, even if your commitment on paper appears to be part-time as it might appear to be with the Guard or Reserves. But you do mention excitement and adventure as another driving point for joining, so let’s assume you’ve decided the military is a good option for you and the benefits are just icing on the cake.

What to Expect When You Join the Military

You may be a professional in your career and you may be at the top of your game. But when you join the military, you start at the same place everyone else starts – at the beginning. This typically means a couple of months of Basic Training (boot camp) and several months of technical training to learn your military job.

Here is a rough timeline military members can expect when they join:

  • Basic Military Training – Two to Three Months, depending on the branch of service, and whether you go officer or enlisted.
  • Technical Training (also called Tech School, AIT, and other names) – Two Months to about a Year. This is where you learn to do your military job. This almost always immediately follows basic training.
  • Assignment – either active duty or your Guard/Reserve unit. Some Guard or Reserve jobs may require “Seasoning Days” which is where you report to your unit and work full-time for a couple of weeks to several months for follow on training.

At the minimum, you can expect to be away from home and your business for a minimum of 4 or 5 months on the low end, to well over a year on the long side.

And this is just the beginning of your military career – this doesn’t include mobilizations, deployments, further training, or other activations.

Can You Run a Business During Your Initial Training?

This is where I’m shaking my head. I don’t see how it can be easily done. During your Basic Training, you won’t have access to a computer or a phone*, much less the time to actively run a business. So the only way to run a business in absentia is if you have a strong supporting staff to take care of the daily activities. In other words, your business needs to be more or less hands off.

*This applies to enlisted basic training, based on my experiences and what I have read about the other branches of the military. Some officer training schools may allow Internet access for completing assignments and may have limited phone access. But your time will be at a premium and you will be hard pressed to have an active role in running a business while training.

Tech school is somewhat different and less restrictive than basic training. Military recruits may be allowed to have phone and computer access at tech school, but your capacity for running a business will be very limited. Your primary focus is on learning your military career. The difficulty of the course load varies by career field, but regardless of how difficult the material, you will be drinking from a fire hose. You will be expected to maintain an aggressive pace while learning your job. There simply won’t be much mental bandwidth left at the end of the day to effectively run a business.

I joined the Guard after a long break in service. I had already attended basic training, so that wasn’t a concern. But I had to attend a new tech school because I joined a new career field. I was able to continue running my business while I was at tech school because my nights and weekends were my own. But my military duties had to come first, even if that meant studying in my off-duty hours (which I did most nights). I underestimated how difficult it would be.

So How Did You Do It? Great question. My business is already established and it is location-independent. I run several websites, do freelance writing, and occasional digital marketing consulting jobs. In other words, I can run a business anywhere I have an Internet connection. And I can take long breaks from my business without losing much. I may take a small hit on revenue if I don’t perform some freelance services, but I make up for that with my military income. I also have several contractors who help maintain my sites when I am not present.

But Can You Run a Business in the Military?

Yes, absolutely. As I explained above, I attended a two-month tech school as a small business owner. And I have been serving for over a year and a half in the Guard. And I haven’t missed anything.

I also know several small business owners who are members of the Guard or Reserves. Most of them have very different businesses than mine. But they all have one thing in common: they have a strong support group helping run their business. This includes spouses, family members, employees, contractors, etc.

But just because some people have success doesn’t mean it will work for everyone. As I mentioned, my business is location independent. Running a physical business requires your presence unless you have employees who can run the business in your absence. So keep that in mind, as your training may take you away from your business for some time.

Tips for Running a Business in the Guard or Reserves

As I mentioned earlier, every small business is different, and every military career brings different challenges. The only way to be successful at both is to have a lot of flexibility in your life and in your business. My business is the ideal type of business for serving in the military because it is location independent. All I need is Internet access, and I’m good.

But there are many other small businesses that work well for military members. I’ve known members of the Guard whose full-time job was also a small business. Some examples include writers, artists, musicians, consultants, contractors, construction company owners, shop keepers / retail store operators, and many more.

The biggest challenge we all face is the possibility of being unexpectedly called away from our business for training or mobilizations.

Here are some tips for small business owners in the military:

Start now.

Either start your business now, or join the Guard/Reserves now, then start your business later. If you join the Guard or Reserves you can get most or all of your initial training out of the way. This will make it easier to start your business since you won’t have to worry about being out of pocket for several months while completing your initial training.

You will also have a better idea of what your military obligation looks like on a regular, ongoing basis. And many units have a rotation schedule for deployments, so you may have an idea of what to expect if you have to deploy (when, where, duration, etc.). Note that all deployments are not scheduled, and are not always predictable.

Create business rules, checklists, and systems.

As anyone in the military can tell you, checklists are your friend. Don’t dismiss this step. Please. One of the first things I do when learning a new skill is to create a checklist. This has saved me countless times. Not only does it ensure quality, but it also prevents errors and omissions, increases my speed in completing tasks, and makes it easier to do the next step.

Automate or outsource as much as possible.

Most small businesses have less than 10 employees. That means you, as the owner, are likely the weakest point in the chain. Your goal will be to automate or outsource as many functions as possible. Failure to do this can destroy your business if you are required to take a prolonged absence from your business due to military obligations. Use the checklists and systems you created in the previous step to make this step easier to accomplish.

Hire well.

This ties in with the above. The better your employees, the stronger your business. The business rules and systems you create will make it easier to hire someone. And the stronger your business rules, the less oversight they need. Yes, you need to check on them. But you won’t need to micromanage.

Take a trial run.

Once you have your business running, your systems in place, you have outsourced and automated, and you have hired help, try stepping out of the picture for a week or two and see what happens. If things go well, you may be ready for an extended absence. Keep in mind that your military obligations could take you out of the picture for anywhere from a couple of days to up to a year or so. It’s likely you would have phone or computer access at some point, but it will be unpredictable even in the best conditions.

Save some cash for a rainy day.

This goes without saying, but all small business owners should save a little extra cash, just in case their business hits a slow period or unexpected costs arise. You will need to determine your cash flow needs, risk tolerance, and other factors to determine the size of your required nest egg.

Remain flexible.

There is a common phrase in the Air Force – “Flexibility is the key to airpower.” (attributed to Italian Gen. Giulio Douhet). This adage is completely true for all aspects of a military member’s life. But it especially rings true if you run a business, either on the side or as your main source of income. You have to be prepared to roll with the punches. But if you have already completed the above steps, you are well on your way to achieving ultimate flexibility.

Now, Let’s Address the Benefits Questions

You mentioned you are interested in military benefits, specifically the health care and tax benefits. Both can be very valuable—especially for small business owners. But they may or may not apply to your situation. Let’s take a look.

Guard and Reserve Health Care Benefits

I use TRICARE Reserve Select (the National Guard and military Reserves health care option). It has been good for me, as it is much less expensive than buying a health care plan from the Exchange. However, my wife and daughters are on a private health insurance plan because my wife preferred the options on a different plan. So we have two different health care plans in my family. It saves us some money, but not as much as if we were all on the TRICARE plan.

Would TRICARE save you money? Almost certainly. An individual health care plan runs roughly $50 per month, and a family plan is roughly $210 per month (2016 rates, rounded). But you would have to balance that with your needs and preferences.

If you are a self-employed individual (as I am) and you don’t have other employees, this is a great deal. Once you have other full-time employees, you may have to deal with providing other health care insurance to them, depending on state or local laws. You wouldn’t be able to give them access to TRICARE, as it is only available to military members. But most businesses start small and you should cross that bridge when you get there.

Guard and Reserve Tax Benefits

Taxes are always a fun topic. Benefits can apply on a national level, and they can vary by state. It’s important to understand what you are getting into before you jump in with both feet.

Here are the most common tax benefits for Guard/Reserve members (keep in mind they can vary by state, so research your state’s laws before assuming these applies to you):

  • Tax deductions for non-reimbursed mileage and/or lodging if you live outside commuting distances (over 100 miles) (Federal). Here is an article that explains Guard/Reserve tax deductions for mileage.
  • Tax deductions for non-reimbursed uniform items (Federal). This applies in limited cases.
  • Tax-exempt military income (Select States). I live in Illinois, where military income is exempt from state income taxes. All other income is taxed at regular income rates. This doesn’t affect my business.
  • No tax for military retirement pay or Survivor Benefits (Select States)
  • Some states offer additional paid time off from state jobs when performing military duties (Select States)
  • Free or discounted military license plates (Select States)
  • And more…

What you may have noticed by now is that the only favorable tax benefits come from direct military service—usually in the form of military income or commuting costs (if not reimbursed). Your service in the Guard or Reserves will not affect your business taxes in any way.

But there are some great business tax breaks available… This is where I recommend you speak with a tax professional or small business consultant. They are outside the scope of this site, and too numerous to get into in this article. But owning a small business often gives you opportunities for a variety of tax benefits, small business retirement plans, etc.

What Should You Do Next?

Take some time to think. It sounds like you are in a good place in life right now. You have a steady job and a good income. And if you are considering the military, you must be in decent health. So you have a lot of options.

Take some time to think about your goals. Can you serve in the military and run a small business? Absolutely! I know several people who do it and do it well. But it will be difficult to start both at the same time. It’s easier to do both if you first establish one, then work toward the other.

Determine your goals, and start working on them.

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About Ryan Guina

Ryan Guina is the founder and editor of The Military Wallet. He is a writer, small business owner, and entrepreneur. He served over 6 years on active duty in the USAF and is a current member of the IL Air National Guard.

Ryan started The Military Wallet in 2007 after separating from active duty military service and has been writing about financial, small business, and military benefits topics since then. He also writes about personal finance and investing at Cash Money Life.

Ryan uses Personal Capital to track and manage his finances. Personal Capital is a free software program that allows him to track his net worth, balance his investment portfolio, track his income and expenses, and much more. You can open a free Personal Capital account here.

Featured In: Ryan's writing has been featured in the following publications: Forbes, Military.com, US News & World Report, Yahoo Finance, Reserve & National Guard Magazine (print and online editions), Military Influencer Magazine, Cash Money Life, The Military Guide, USAA, Go Banking Rates, and many other publications.

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