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Supplier Diversity Blog by supplier.io

What We Learned About Diverse Suppliers: Veterans

Veteran Owned Buisnesses

When people hear the term “supplier diversity,” they usually think of minority-owned businesses (MBEs), women-owned businesses (WBEs), or LGBTQ-owned businesses. Often, veteran-owned businesses (as well as businesses owned by service-disabled veterans) are not even considered.

However, that perception is beginning to change as veteran business enterprises (VBEs) and service-disabled veteran business enterprises (SDVBEs) are emerging as important options for supplier diversity programs looking to increase spend and reach. And this importance isn’t just in dollars and cents; it’s also important to the men and women who contributed to the defense of their country and now are ready to contribute to the economy.

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For the second consecutive year, CVM Solutions conducted surveys as part of its industry-defining State of Supplier Diversity reports. What follows are some of the statistics and insights from our findings specifically related to veteran-owned businesses.

Veteran businesses participated at a healthy clip.

Of 380 diverse suppliers that responded to our survey, 7 percent identified themselves as VBEs and 6 percent as SDVBEs - participants could choose more than one category.

What’s more impressive is that just 5 percent of suppliers in the 2017 report said they were VBEs (SDVBE wasn’t an option in last year’s survey), and we received more than double (27 vs. 13) the veteran participants this year despite receiving just 37 percent more respondents overall (and trust us, we were thrilled with both increases).

Diverse certification is important, but …

Of our veteran respondents, 69 percent of VBEs and 81 percent of SDVBEs said they were formally certified as such by a government entity or another organization, and a few respondents said their certification was in progress.

Although those numbers are encouraging, the percentages trailed other diversity categories (for example, 92 percent of minority businesses, 87 percent of women business enterprises, and 95 percent of small businesses are certified). 

With veteran businesses more likely to pursue government contracts (more on that later in this post), this below-average result is surprising and something we’ll keep an eye on in future reports.

Veteran businesses trend toward small.

Eighty-two percent of responding VBEs (and 76 percent of SDVBEs) employ fewer than 50 people, and 52 percent (33 percent for SDVBEs) employ fewer than 10. These numbers outpaced the overall numbers (73 percent for 0-50 employees, and 44 percent for 0-10) as well as other diversity categories such as MBEs and WBEs. Interestingly, only 48 percent of VBEs also identified themselves as small businesses, suggesting some of these suppliers could go the extra mile to secure a small business certification and open themselves up to additional supplier diversity opportunities.

Veteran businesses are somewhat newer than other diverse suppliers.

When asked how long they had been in business, 44 percent of VBEs said more than 11 years, which was less than the 62 percent response for all participants and 61 percent for MBEs and WBEs. Moreover, 26 percent of VBEs have been in operation for three or fewer years, as opposed 15 percent for the entire survey. SDVBEs came in at 24 percent for 11 years or longer, and 19 percent for less than three years. Veterans leave the service hungry for success; supplier diversity programs can provide opportunities to help them reach it.

Government contracts are almost a given.

Not surprisingly, 87 percent of VBEs and 94 percent of SDVBEs seek government contracts. These numbers are much higher than the overall statistic of 62 percent and far surpass most other diversity categories (even small businesses only came in at 70 percent). Veterans generally take advantage of the benefits they’ve earned for their service, so the fact they go after government contracts available to them makes sense.

Portals aren’t popular.

Our report found that VBEs tend to shy away from online portals to connect with diversity partners, with 68 percent of respondents saying they did not receive a single opportunity from this channel (as opposed to 59 percent for all participants). This isn’t to say VBEs should ignore portals, but rather that portals are simply one of many strategies businesses can use to expand their client base.

81 percent of VBEs network.

Survey participants were asked to choose the top three ways they find corporations to partner with. Veteran-owned businesses overwhelmingly (81 percent) selected networking events as their top choice. RFPs and registration sites were the next two most popular choices (59 and 56 percent, respectively) with VBEs but were nowhere near networking events. These top three choices were higher than the overall averages for all participants, suggesting other channels such as emails, cold calls, and outside sales simply don’t pack a punch with veterans like they do with other diverse supplier categories.

VBEs often also fall into other supplier diversity buckets.

An impressive 93 percent of VBE respondents also identified with another supplier diversity category, and 59 percent chose three or more categories. The most common additional category was minority business enterprises at 56 percent, followed by small businesses at 48 percent, service-disabled veteran businesses at 41 percent, and women-owned businesses at 30 percent.

As consumers, VBEs are strong believers in supplier diversity.

We brought back this thought-provoking question for our 2018 survey:

As a consumer, does an organization with a supplier diversity program influence whether or not you will buy from them?

The results we received to this question for veteran-owned businesses created an interesting split. When computing respondents who chose either a slight or a strong influence, VBEs came in at 62 percent, which was significantly lower than MBEs (76 percent), WBEs (73 percent), and LGBTQ businesses (90 percent), as well as the overall response of 72 percent. However, when separating out just VBEs that claimed a strong influence, the number was 43 percent, ahead of MBEs (39 percent), WBEs (31 percent), and all participants (36 percent). These results suggest that the philosophy of supplier diversity seems to be an all-or-nothing proposition with veteran businesses, but no matter the viewpoint, the opportunity supplier diversity affords to organizations cannot be ignored.

Which statistic in this report surprised you most?

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The team has a long history in driving innovative solutions in supplier diversity. We believe that companies deserve solutions that are effective and provide measurable value and results. Started more than a decade ago, supplier.io has rapidly become a prominent provider of supplier diversity solutions to leading corporations. We currently support customers in automotive, healthcare, insurance, retail, manufacturing, education, and banking. One in five Fortune 50 company relies on supplier.io.