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A Veteran’s Guide to Launching a Business: From Op Order to Operating Agreement
SECTION I: SITUATION
1. CAUTION.
Veterans are trained to identify threats early, but in the civilian corporate world, those threats look different, appearing as free online templates, handshake deals, and casual legal advice akin to a barracks lawyer. At first glance, these shortcuts seem harmless. But under pressure, when money is on the line, partners are running to the exits or contract terms are challenged, these devices fail to stand up. Too many first-time business owners step into the market without proper legal personal protective equipment. They rely on generic operating agreements, misfiled registrations, and misunderstood tax elections. The damage is rarely immediate, but picking up the pieces can be catastrophic to a junior entrepreneur. Ignoring early warning signs or skipping pre-mission checks can result in mission failure. In business, the enemy is anything that undermines your legal structure, credibility, or long-term survivability.
SECTION II: MISSION BRIEF
As a veteran, you’re no stranger to structure, planning, and risk mitigation. That mindset gives you a massive advantage. But even the best-laid plans can implode if you skip the legal foundation. Before you sell your first product, sign your first contract, or accept your first payment, you need to establish your business’s formation and governance strategy. That means proper legal documents, not one-size fits all or discount bin paperwork.
SECTION III: EXECUTION
1. COMPANY FORMATION: The 5 W's & H
- Who: Decide your ownership. (A) sole proprietor, (B) partnership, (C) LLC, or (D) corporation.
- What: Determine your business model. Service-based? Product-based? Online?
- When: Sooner than later. You don’t want to form after things go sideways.
- Where: Register in your home state or a strategically beneficial one (e.g., Delaware or Kentucky).
- Why: Legal protection, tax treatment, credibility, and future scalability.
- How: Filing with the Secretary of State and maintaining company records.
Pro tip: For most veteran-owned businesses, an LLC offers flexibility, liability protection, and simple tax treatment. But your mission profile may call for a C-Corp or S-Corp election, especially if outside investors are part of the long-term plan.
2. COMMAND & SIGNAL: Operating Agreements, Bylaws, and More
Your Operating Agreement (for LLCs) or Corporate Bylaws (for corporations) is your business’s Operation Order. This document will outline:
- Roles and responsibilities (Who is the Commanding Officer? Who is the Executive Officer?)
- Capital contributions (Initial “buy-in” from each member)
- Decision-making authority (Can your co-founder sign contracts on your behalf?)
- Profit distributions (Don’t assume 50/50 just because you are “partners”)
- Exit plans (What happens if someone gets out, dies, or goes rogue?)
Every provision is like a paragraph in an Operation Order. If you ignore it, the mission fails in the execution phase. These aren’t documents to pull off websites while you are on fire duty. They need to be tailored to your actual business plan, risk tolerance, and long-term goals.
3. ADMIN & LOGISTICS: Tax Elections, EIN, Licenses, and IP
- Apply for an EIN: This is your company’s social security
- Tax elections: Choose how your entity will be taxed (pass-through or corporate treatment).
- Licensing: Verify whether your business requires federal, state, or local
- IP Protection: Trademark your logo, copyright original works, and secure
Your lawyer and CPA are your logistics officers here. And like my team sergeant used to say, “There are three things you never go cheap on: your doctor, your lawyer, and your tattoo artist.” Skimping on any of them will leave you permanently scarred, one way or another.
SECTION IV: SUSTAINMENT
Veteran-owned business certifications: Want access to federal contracts and grants set aside for VOBs? You’ll need to apply through the Small Business Administration’s Veteran Small Business Certification (VetCert). Requirements include:
- 51% ownership by one or more veterans
- Active management and control
- Proper documentation in place, especially Bylaws or Operating Agreements that reflect ownership and authority
SECTION V: COMMAND & SIGNAL
You need a legal team that understands both the battlefield and the boardroom. At McBrayer, we provide tailored legal guidance for veterans launching or scaling their businesses, from entity formation to corporate structuring to contract negotiations.
Final Thought:
Veterans know better than most, prior planning saves lives. The same is true in business. Every legal decision you make today is either preparation for the next obstacle, or a vulnerability waiting to be exploited.
Alec Betz is a former Green Beret whose twelve years of military service in Iraq and Afghanistan sharpened his ability to develop creative strategies and solutions under pressure. He now applies those skills to his legal practice in commercial real estate, corporate law, and entertainment law. You can contact Mr. Betz at abetz@mcbrayerfirm.com.