What happens to a business when the owner is called to duty?
When David Perry's Marine Corps reserve company was called up in January, he opted to go to Iraq, even though he had received permission to retire after more than 20 years of active and reserve duty. His sacrifice was all the more impressive given that he was just beginning to fulfill his dream of owning a business. Only six months before, Perry and Paul Amos had started Amos Perry Builders, which they hoped would specialize in building log cabins. The plan was for Amos, who is also a former Marine and still wears his red hair in a boot-camp buzz, to move to Perry's hometown, Maryville, Tenn. Perry, 43, would handle sales and keep the books, while Amos, 33, would do estimates and oversee construction. Amos knew that he was taking a risk by teaming up during wartime with a reservist. But "in the back of my mind," Amos admits, "I was saying he wasn't going to get called up."
Once Perry was stationed at the Al Asad air base, west of Baghdad, he could occasionally trade e-mail with Amos. But, he says, "The tempo here is too fast for me to even try to stay tuned-in, and I need to remain focused on my mission here."
Such is the complicated life of the reservist or National Guardsman who also happens to own a business. While federal law ensures that employees who are called up are able to return to their jobs, little transitional service is offered for the self-employed, even as Small Business Administration data shows that the self-employed now number 15.8 million nationwide. The Defense Department doesn't even know the number of self-employed people among the roughly 415,000 who've been called up since September 11, 2001. (Of these, 159,702 were on active duty at the end of August.) The agency only recently began collecting this information, says Tom Bullock, a spokesman in the Pentagon's office of Employer Support of the Guard and Reserve.
Some entrepreneurial troops make intensely pragmatic choices when their orders arrive. Dann Hoose, a gunnery sergeant from southern California, sold his truck and shut down his garage-door installation business. Shane VanSteenburgh, a platoon sergeant and homebuilder from Jefferson City, Mo., made a similar move.
But others, displaying the confidence and optimism that typify both the military and entrepreneurs, try to keep their businesses operating, albeit at greatly diminished capacity. Andrew Wetzel's wife, Jenny, has been managing the couple's drive-in movie theater in his absence. And Marine reservists Dave Bellon and Joe Lisiecki left their law firm, Bellon & Lisiecki, in Oceanside, Calif., in the hands of Bellon's wife, Sue. Some help from the government is available. The military will often allow a business owner up to 90 days to get his or her affairs in order. And if a company runs up big bills while its owner is gone, it can apply to the SBA for special loans of up to $1.5 million. Bellon and Lisiecki received a loan of more than $100,000 when Bellon was first activated in 2003. He returned home in September 2003, only to be reactivated four months later. This time, Lisiecki got called too.
What's left of the SBA money pays the firm's remaining employees and covers the mortgage and malpractice insurance, which has to be paid even though the partners aren't practicing while activated.
If their business withers, tough luck. Like good grunts, they have to suck it up.
Of course, this can't begin to compensate them for the opportunity cost of their service. If their business withers, tough luck. Like good grunts, they have to suck it up. Bellon and Lisiecki, who are putting together a class-action suit involving the diet drug Fen-Phen, had been spending heavily on advertising, including a TV commercial, in the last few years. But with the firm struggling to keep up with its present caseload these days, it is turning away all new work, meaning that that money was essentially wasted.
Perry and Amos have also been burned -- in their case by the ambitious projects that they took on not knowing that Perry's departure was imminent. One was a $110,000 job to put a two-story addition on an existing home, designed for the owner's disabled son. It called for them to install, among other things, a whirlpool tub, an 8- by 8-foot shower big enough for a wheelchair, and an elevator.
Perry and Amos started working on it together before Perry left, and they both took paychecks. That created a cash crunch that was exacerbated when a shipment of bricks arrived and turned out to be the wrong color. Amos had already paid for them and the supplier refused to take them back. Because he was low on cash, Amos couldn't afford to buy another batch right away. Work on the addition was delayed for days and "the homeowners were ready to kill me," Amos says.
After that project was over, Amos's luck didn't improve. Landing work has not been easy. "I grew up in the Maryville-Knoxville area and knew so many people that it wasn't very difficult to find jobs," Perry says. "Paul doesn't have the contacts that I had and that's been one of the biggest hardships."
In recent months, Amos has taken many small jobs: building a wheelchair ramp, redigging part of a house's foundation, and repairing a retaining wall. It's not exactly the work the partners dreamed of doing. When Perry returns at the end of the year, he says he'll retire from the reserves and they'll pick up where they left off. But what they'll really be doing is starting over.