From the time he was a young man, Steve Stewart knew he wanted to serve his country. Now, Steve' s sense of patriotism may place his business in jeopardy.

Like thousands of military reservists around the country, in the wake of the September 11 attacks, Steve faces the possibility of being called to active duty. But Steve owns and runs ColorTech Printing in West Plains, Mo., and when he leaves, what happens to his company?

Steve, now 31, joined the Army reserves when he was 20, then served on active duty as an officer for four years after college. Leaving the military, Steve was placed on mandatory six-year inactive reserve duty, scheduled to end in February, 2002.

" When I left the service, my intent wasn' t to go into business, but I saw an opportunity and seized it," recalled Steve. " When you sign your name to buy and build a business, this (being called up) is the last thing you think you' re going to be faced with." Steve isn' t looking for sympathy; he just wants his business--and his 14 employees--to survive while he serves his country.

Steve is not alone. Small business is a much bigger part of our economy than it was during earlier conflicts such as Vietnam. Over 20 million people were employed by companies with fewer than 20 employees in 1998. Self-employment has likewise blossomed. In 1998, there were 15.7 million companies with no employees other than the owner.

What happens to these small companies and these self-employed entrepreneurs if and when the owners or key personnel are called up? Making matters worse is that deployments happen very quickly. A business owner may only have a week before he or she has to ship out. They could be gone from six months to two years.

Steve hasn' t been called up yet, but he' s wrestling with those issues now. " Who will step in my shoes? Do I promote internally or hire from outside? Should I bring in a partner? Then there' s the problem that someone could be a closet embezzler."

Having faced the possibility of being called up during the Kosovo conflict, Steve took a number of steps to get better prepared. He' s cross-trained employees to do other work and has treated them well enough so that he has a very high retention rate. " We have a good work force and the average employee has been here about nine years."

Steve has been actively seeking advice. He was dissuaded from bringing in someone from outside to run the company when he learned of a business owner who asked his investors to step in while he was in Desert Storm. They were honest but not very good businessmen. The company is still recovering.

Fortunately, Steve has one asset not available during Desert Storm. Congress authorized Public law 106-50, the Military Reservist Economic Injury Disaster Loan program (MREIDL) providing low-interest loans for small businesses that have a key employee called to active duty. It provides loans up to $1.5 million.

Because the loan program is so new, there are still a number of kinks to work out:

  • You can' t apply for a loan until called to active duty. Since you may have less than a week before deployment, and it takes 7-21 days minimum to be approved, you' re facing a " catch-22." Rick Weidman, Chairman of the Task Force on Veterans' Entrepreneurship, is pushing for a " pre-approval" process.
  • Most entrepreneurs who are self-employed don' t have many operating expenses, but their families are dependent on their income. Currently, the Small Business Administration (SBA) states the program only covers expenses not lost profits. What will happen to these reservists and their families?
  • Very few reservists know about it. Only 50 applications have even been requested. (For more information about the loan program, call 1-800-U-ASK-SBA or click on " Disaster Assistance" on

As an entrepreneur called to active duty, you' ll face many challenges, whether or not you qualify for a loan. Steve is well aware of this: " Nobody watches your business like you do." Even with the best planning imaginable, how do you replace the owner of a business? Especially when they want to come back?

© Copyright Rhonda Abrams, 2001

Rhonda Abrams writes the nation' s most widely-read small business column. She is the author of The Successful Business Plan: Secrets and Strategies, Wear Clean Underwear, and The Successful Business Organizer. For free business tips from Rhonda, register at