The presence of military experience is a stronger predictor of self-employment than both education and availability of financial assets.

The Rent to Own (RTO) industry is a primarily a service sector. Depending on the length of contract, the level of interaction between RTO industry employees and consumers can be 25-50 times higher than in traditional retail environments (assuming a 12-24 month weekly rental agreement versus a retail consumer visiting a traditional retailer twice before purchasing big-ticket items.).

When recruiting employees, RTO companies place a high premium military service. Employees with prior military experience have lower turnover rates and a higher level of overall success in close-contact customer relations common in the Rent to Own sector. But did you know that military experience is also the best predictor of success as a business owner?

There are no fewer than nine rent to own companies currently offering franchises in North America, three times as many as just 5 years ago with more rumored to begin franchise offerings in 2008. Couple that with the increased number of veterans and the possibilities of growth for franchise companies targeting veterans is significant.

According to data from the Small Business Administration, individuals with military experience are 9.4 to 11 percent more likely to be self-employed than to work for someone else. The presence of military experience is the strongest predictor of self-employment in the SBA's model, outpacing both education and availability of financial assets. See full study here.

Using the Panel Study of Income Dynamics (PSID), the SBA study analyzed the characteristics of the self-employed compared with individuals employed by others. An examination of differences between these two populations, both through univariate statistical comparisons and multivariate logit modeling, provided information about various determinants of the self-employed, including educational attainment and non-educational factors.

While secondary to military experience, the study found that educational attainment remains an important determinant of self-employment. Individuals with more schooling are more likely to start their own business, particularly in certain industries. Heads of household with post-baccalaureate experience are up to 8.3 percent more likely to be their own boss rather than work for someone else.

Highlights of the study include:

- Individuals with military experience are 9.4 to 11 percent more likely to be self-employed than to work for someone else, all else equal. The presence of military experience is the strongest predictor of self-employment in the model.

- Obtaining more education increases the probability of self-employment. For instance, a head of household with some college (but less than a bachelor’s degree) is 3.3 percent more likely to be self-employed than not. That figure rises to 4.4 percent for those with a baccalaureate degree and to 8.3 percent for those with graduate experience.

- The homeownership variable is one of the better indicators of self-employment, with homeowners being around 7 percent more likely than non-homeowners to be self-employed. Moreover, for every $100,000 increase in the value of an individual’s house, the probability of self-employment increases by 2 percent.

- For heads of household, the self-employed are more likely to be older, married, white, military veterans, Internet savvy, and rural. For wives, the self-employed are more likely to be older than 30 years of age, white, and military veterans; they are also more prone to be employed in the service sector and have greater relative wealth (as measured by the value of their home).