LAS VEGAS, Nev. - When shrapnel pierced Henry Dahan's body, including parts of his heart and liver, starting his own company was likely the last thing on his mind. Yet years after his service in Operation Desert Storm and the daunting recovery that ensued, the Purple Heart and Silver Star recipient has established a burgeoning small business.

From interactive museum installations to industrial films and more, Dahan's Santa Monica, Calif., based Playground Digital Technologies Inc. specializes in providing clients multimedia and information technology solutions. He availed himself of federal laws that give preference in the awarding of contracts to service disabled veterans and established a service-disabled veteran-owned small business. His clients include both private sector companies like McDonald's and Siemens and public sector organizations including The National Museum of the United States Army and the U.S. Department of Veterans Affairs.

"If you run a successful business in this country, then you know veterans make exceptional employees and veteran-owned businesses are helping to lead our nation to renewed prosperity," according to Veterans Affairs Secretary Erik Shinseki. His is a sentiment many large companies agree with according to Beverly Kuykendal, the national director for Tremco Incorporated's strategic alliance program which seeks to partner with veterans.

"We look for relationships with service-disabled veteran-owned and veteran-owned small businesses that can return three things: return on investment because we provide resources to veterans; an incremental increase in market share since they allow us to expand our footprint in the federal government due to veteran preferences and a strategic market advantage because they allows us to enter the market in a different way than we are accustomed to," said Kuykendal. "We understand just how valuable the (government) initiatives to work with veteran-owned small businesses are," she said.

Veterans, who obtain additional certifications to increase their competitiveness, like Section 8(a) certification, can be highly marketable according to Ben Reyes, a Vietnam-era Army veteran and the first recipient of the Department of Veteran Affairs' Enterprising Veteran Award. Section 8(a) derives from the Small Business Act and was drafted to help small companies owned by socially and economically disadvantaged persons develop their businesses.

By serving as the subcontractor to large firms on several projects as well as the prime contractor on others, Reyes' Native American, 8(a) certified and service-disabled-veteran-owned Iron Eagle Environmental Services, Inc. has helped federal customers meet their diversity goals.

Of one of his most lucrative contracts in which he teamed with a large company, Reyes said, "As much as I needed them, they needed me too. Together we made a whole lot of money."

He reminds novice service-disabled veteran-owned contractors to "think big" and feel confident that they bring much to the table to both large companies and federal agencies. "You got to go in like a big dog even if you're a chihuahua," he said.

The president of the Wantagh, N.Y., firm also cautions that there is no free lunch. "If you do win a contract, you have got to deliver," Reyes said.

Another veteran who has secured and delivered on lucrative contracts with government agencies is Andy Harold. A few years ago, Harold tried to sell project management services to Beth Myers, small business deputy for the U.S. Army Corps of Engineers Jacksonville District.

Myers explained that the district did not presently have a need for project management services because they had already contracted for what project management services the district needed with another company. Instead, Myers urged him to seek subcontracting opportunities with that company. She also urged him to look for opportunities with other agencies like the Naval Facilities Engineering Command. Myers counseled Harold to develop his firm's core competencies and then effectively communicate those competencies to small business deputies.

"Beth helped us understand that we can't go into a small business office and say 'We do everything since sliced bread,"' said Harold. "If you go to our website today, you will clearly see our four divisions: training, logistics manufacturing, staffing and environmental construction," he said.

Myers, said she is delighted to see how Harold's firm has grown since its start in 2003. "Business is great. We are now 52 people strong in 11 states and will have $10 million in sales for 2010," Harold said.

The Jacksonville, Fla., firm's number one customer is the Army, said Harold, who is a former Navy pilot.

Despite the special programs available to veterans that make doing business more lucrative for them, some common problems persist, according to Dahan.

"It's infuriating...these people who lie, claiming they're disabled vets just to cheat real vets out of what they've rightfully earned," Dahan said. "They're abusing the system to earn a buck and they've done nothing for our country to earn it."

He'd like to see a better system in place to prevent businesses from falsely claiming to be eligible for contracts intended for service-disabled veterans. Currently, the service-disabled veteran owned small business program is a self-certification process, which could make it easy for unscrupulous business owners to lie about their eligibility.

Many government executives in the contracting and procurement arena including Joseph G. Jordan, associate administrator of the Office of Government Contracting & Business Development for the U.S. Small Business Administration. He said they are focused on ensuring that only legitimate service-disabled veteran-owned businesses benefit from initiatives designed for them. His agency has developed a comprehensive approach to rooting out fraud, Jordan said.

They focus a great deal of attention on three stages of contracting oversight: certification, ongoing surveillance, and monitoring and enforcement. Meanwhile, at the Center for Veteran Enterprise, staffers have started conducting onsite examinations of those companies that have applied to be verified as veteran-owned or service-disabled veteran-owned businesses.

In 2007, according to U.S. Dept. of Commerce statistics, approximately 2.4 million veteran-owned businesses generated about $1.2 trillion in receipts.