Text: S.Hrg. 112-836 — ENTREPRENEURIAL DEVELOPMENT: OBSTACLES AND OPPORTUNITIES FOR SUPPORTING, SUSTAINING, AND GROWING AMERICA'S ENTREPRENEURS
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[Senate Hearing 112-836]
[From the U.S. Government Publishing Office]
S. Hrg. 112-836
ENTREPRENEURIAL DEVELOPMENT: OBSTACLES
AND OPPORTUNITIES FOR SUPPORTING,
SUSTAINING, AND GROWING AMERICA'S ENTREPRENEURS
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED TWELFTH CONGRESS
JULY 21, 2011
Printed for the Committee on Small Business and Entrepreneurship
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED TWELFTH CONGRESS
MARY L. LANDRIEU, Louisiana, Chair
OLYMPIA J. SNOWE, Maine, Ranking Member
CARL LEVIN, Michigan DAVID VITTER, Louisiana
TOM HARKIN, Iowa JAMES E. RISCH, Idaho
JOHN F. KERRY, Massachusetts MARCO RUBIO, Florida
JOSEPH I. LIEBERMAN, Connecticut RAND PAUL, Kentucky
MARIA CANTWELL, Washington KELLY AYOTTE, New Hampshire
MARK L. PRYOR, Arkansas MICHAEL B. ENZI, Wyoming
BENJAMIN L. CARDIN, Maryland SCOTT P. BROWN, Massachusetts
JEANNE SHAHEEN, New Hampshire JERRY MORAN, Kansas
KAY R. HAGAN, North Carolina
Donald R. Cravins, Jr., Democratic Staff Director and Chief Counsel
Wallace K. Hsueh, Republican Staff Director
C O N T E N T S
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire.......... 1
Sanchez, Ami..................................................... 3
Dietz, Diane..................................................... 8
Rowe, Charles ``Tee,'' President and Chief Executive Officer,
Association of Small Business Development Centers.............. 12
Schick, Holly I., Deputy Associate Administrator, Office of
Entrepreneurial Development, U. S. SMall Business
Snair, Scott, Program Director, New Jersey Veterans Business
Outreach Center................................................ 12
Bottary, Leo J., Vice President of Public Affairs, Vistage
International, Inc............................................. 12
Yancey, Jr., W. Kenneth, Chief Executive Officer, SCORE.......... 13
Weeks, Julie R., Chair of the Board, Association of Women's
Business Centers............................................... 13
Williams, Daryl, Chief Executive Officer, Urban Entrepreneur
Partnership, Inc............................................... 13
Tymes, Clinton, Director, Delaware Small Business Development
Shear, Bill, Director, Financial Markets and Community
Investment, Government Accountability Office................... 13
Alphabetical Listing and Appendix Material Submitted
Bottary, Leo J.
Prepared statement........................................... 107
Letter dated August 4, 2011, to Chair Landrieu............... 166
Landrieu, Hon. Mary L.
Prepared statement........................................... 4
Rowe, Charles ``Tee''
Prepared statement........................................... 133
Schick, Holly I.
Shaheen, Hon. Jeanne
Prepared statement........................................... 50
Prepared statement........................................... 54
Small Business Administration
Report titled ``Opportunities Exist to Improve Oversight of
Women's Business Centers and Coordination among SBA's
Business Assistance Programs''............................. 53
Snowe, Hon. Olympia J.
Prepared statement........................................... 9
Weeks, Julie R.
Yancey, Jr., W. Kenneth
OBSTACLES AND OPPORTUNITIES
FOR SUPPORTING, SUSTAINING, AND GROWING AMERICA'S ENTREPRENEURS
THURSDAY, JULY 21, 2011
United States Senate,
Committee on Small Business
The Committee met, pursuant to notice, at 10:09 a.m., in
Room 428-A, Russell Senate Office Building, Hon. Jeanne
Present: Senator Shaheen.
OPENING STATEMENT OF HON. JEANNE SHAHEEN, A U.S. SENATOR FROM
Senator Shaheen. Good morning, everyone. I apologize for
being a little late. I want to thank all of you for joining us
I am really pleased to be here to discuss the
reauthorization of the very important, as all of you know
around the table, Entrepreneurial Development (ED) Programs at
the Small Business Administration.
I know you were expecting Senator Landrieu, but she is at
another hearing. She has asked me if I could fill in for her
for a few moments this morning and open the hearing. So, I am
here to do that.
I was especially pleased to be asked because the ED
programs are very important to us in New Hampshire. As you all
know, they provide terrific technical assistance and counseling
to small businesses; and for us in New Hampshire, that is
We are a state where 95 percent of our businesses have
fewer than 100 employees. We are clearly a small business
state; and last year SBA resource partners, including the Small
Business Development Centers and SCORE, provided assistance to
over 6500 small businesses in New Hampshire.
By Louisiana standards, that may not be a lot but by Maine
and New Hampshire standards, as Senator Snowe would know, if
she were here, that is a lot for a small state. So, I am glad
that these programs are a priority for Senator Landrieu and
Our goal is to ensure that these programs are as efficient
and as effective as possible, and that they provide the
necessary resources to carry out their goals and
I want to take just a few minutes to talk about some of
these important programs. This past March this Committee held a
roundtable to discuss the reauthorization of SCORE, which as we
all know is a nonprofit association dedicated to counseling and
mentoring entrepreneurs across the country.
At that roundtable, we heard from several small businesses
that have benefitted from SCORE's counseling, including a New
Hampshire business. We had Sheree Burlington from Manchester,
who was here to talk about the difference that it made for her.
She told me that without SCORE's counseling she would not
have survived the recession, and not only has that counseling
helped her to survive, but she has actually expanded her
business and grown over the past two years and added some
Success stories like Sheree's are common with SCORE which
maximizes a small federal investment of $7 million to help tens
of thousands of entrepreneurs start and grow their businesses.
SCORE works by leveraging private sector resources and
knowledge through a network of over 13,000 volunteers and 355
I am very pleased to have Ken Yancey here, who is the CEO
of SCORE. Nice to have you here, Ken. He is going to talk about
some of his ideas for what we can do to support and build
SCORE's capacity in a responsible manner.
Another integral component of the SBA network of training
and counseling services is the Small Business Development
Centers. With over 1000 locations, SBDCs offer a one-stop shop.
They provide a wide variety of information and guidance in
easily accessible branch locations, and again this is something
that I know very personally from what I have seen in New
Hampshire, what a difference the SBDCs make.
I am glad to have Tee Rowe, President and CEO of the Small
Business Development Centers, here with us. Nice to have you
here, and I look forward to hearing your ideas to ensure how we
can continue to provide consistent quality services.
In addition to SBDCs and the SCORE, we also have
representatives from a Women's Business Center and Veterans
Business Centers, both of which do so much to support
entrepreneurial women and veterans.
As we continue to tackle the tough issues that are facing
small businesses in this time of economic recovery, we all know
that it is critical that we do so in a fiscally responsible
To meet that responsibility, we have to continue to examine
our small business programs. We have to make sure they are as
effective and efficient as they can be, but we also have to
look at ways in which we can better leverage our public and
private sector resources.
Last Congress I was very pleased to join Senator Landrieu
and Ranking Member Snowe in cosponsoring S. 1229, the
Entrepreneurial Development Act of 2009, which would have
provided SBA resource partners, many of whom are represented
here today, with the tools they need to help entrepreneurs
create, manage, and grow their businesses.
The legislation was similar to provisions which have passed
this Committee over the last several Congresses, and we hope to
build on those previous efforts in developing comprehensive,
entrepreneurial development legislation.
For the ineffective programs, we hope to find ways to
figure out how we can make those more effective or change them
so that we can utilize every possible resource to operate
effectively and efficiently. That is why your testimony today
and your ideas will be so important.
Unfortunately, like Senator Landrieu, I also have another
hearing that is going on at this point. So, I am going to have
to leave and turn it over to Ami Sanchez, who is with Senator
Landrieu's staff, and also Diane Dietz with Senator Snowe's
staff, to provide opening remarks on behalf of the Chair and
Ranking Member. I would ask Ami to go over the format for
today's discussion as well.
Ms. Sanchez. Thank you, Senator.
Chair Landrieu asked me to extend her sincerest
appreciation for your continued leadership and commitment to
addressing the critical issues facing small business today
particularly on those issues that we will be discussing in
today's roundtable. Thank you very much for that.
Senator Shaheen. Thank you. I look forward to seeing the
written testimony of what everyone has to say this morning.
Thank you all.
Ms. Sanchez [presiding.] Thank you, Senator.
As Senator Shaheen mentioned, my name is Ami Sanchez,
counsel to Chair Landrieu here with the Committee. With me is
Diane Dietz, professional staff member to Ranking Member Snowe.
Senator Landrieu deeply regrets not being able to make it
today. As Senator Shaheen mentioned, she had a couple of other
hearings simultaneously but really wanted to be here and wanted
to convey her appreciation to you for contributing to today's
As Senator Shaheen stated, we will be discussing the
reauthorization of the SBA's Entrepreneurial Development
Program and building on the work that we have done over the
last several Congresses including the reauthorization bill from
the last Congress, S. 1229.
Today's discussion is important to not only evaluating the
effectiveness and efficiency of the programs and soliciting
your ideas on how we can make those programs better, but also
to build a sufficient record in support of the value and need
for the services that these programs provide to small
Chair Landrieu has made entrepreneurial development one of
her top priorities in this Congress and is continuing to work
with her colleagues to come up with a comprehensive
entrepreneurial development reauthorization bill.
As leaders in the field of entrepreneurial development,
your participation in today's discussion is critical and
invaluable. So, thank you for being with us today.
Senator Landrieu has prepared an opening statement which we
will be submitting for the record.
[The prepared statement of Chairman Landrieu follows:]
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Ms. Sanchez. Diane, do you want to say anything on behalf
of Ranking Member Snowe?
Ms. Dietz. Thank you, Ami. I would just echo Ami's remarks
and say that I think many of you, as we were speaking this
morning, have been long champions of the small business
community. So, everybody knows everybody here, and it is
certainly well-known that Senator Snowe has been a champion of
small business throughout her tenure in the Senate.
Senator Snowe has prepared an opening statement that I will
submit for the record, and I would also like to thank each of
you for making the effort to join this morning's roundtable,
and my sincere thanks to Senator Shaheen for her eloquent
[The prepared statement of Senator Snowe follows:]
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Ms. Sanchez. Thanks, Diane.
I would like to begin by going over the format for today's
roundtable. We have a good foundation for a reauthorization
bill that we are going to work on based on the work that we
have done over the last several Congresses.
If anyone has ideas for changes from the last bill or
recommendations on things that we can include or improve upon
moving forward, today is the day to make your case.
Diane and I will be reporting back to Chair Landrieu,
Ranking Member Snowe, and other members of the Committee on
today's discussion and we will be using this discussion to
really develop the bill to make sure that it is appropriate and
an effective bill for building on the programs currently.
We will keep the record open for two weeks, so, August 4 is
the deadline if you would like to submit additional materials
Given the breadth of the things that we want to cover in
today's roundtable, it is important that the focus of today's
roundtable stay on constructive ways to improve coordination
and effectiveness of these programs.
In order to ensure that we are able to cover all the items
on today's agenda, I ask you please make your remarks and
answers as brief as possible to allow for everyone to be able
to contribute to the record.
Also to be recognized to speak, I ask that you please stand
your name card up long ways if there is a question or an answer
that you would like to address and/or something that you would
like to add to the record on a particular issue.
Also when you speak, please make sure that your microphone
is on, and you can do that by pressing the talk button right in
front of you.
At this time I would like to ask each of the participants
to state their name, title, and organization for the record. If
we could start with Tee and just work around.
Mr. Rowe. I am Tee Rowe. I am the President and CEO of the
Association of Small Business Development Centers. We represent
the entire network of 63 leads and over 1000 centers from Guam
all the way to Maine.
Ms. Schick. Good morning. I am Holly Schick. I am the
Deputy Associate Administrator for the Office of
Entrepreneurial Development in the Small Business
Administration, and thank you for the opportunity to be here.
Mr. Snair. Good morning. I am Scott Snair. I am Director of
the New Jersey Veterans Business Outreach Center. I help
veterans with business plans and registering for targeted
contracts with the Federal Government. I do so in New York
State, New Jersey, Puerto Rico and the Virgin Islands, although
my budget does not allow me to travel to those last two places.
And thank you so much for having me. My headquarters is
based at Rutgers Business School in New Jersey.
Mr. Bottary. My name is Leo Bottary. I am Vice President of
Public Affairs for the Vistage International. Vistage is the
largest for-profit CEO membership organization in the world. We
operate here in the U.S. with about 10,000 members and about
15,000 members in 15 countries.
And thank you very, very much for having us today.
Mr. Yancey. I am Ken Yancey. I am CEO of SCORE, and like my
colleagues, thank you for allowing us to join you today.
Ms. Weeks. My name is Julie Weeks. I am the Chair of the
Board of the Association of Women's Business Centers,
representing all 110 Women's Business Centers across the
And like my colleagues before, thank you very much for this
Mr. Williams. Good morning. My name is Daryl Williams. I am
CEO of the Urban Entrepreneur Partnership, a program of the
Kauffman Foundation. We are in seven different states.
And thank you for allowing us to be here to testify today.
Mr. Tymes. Good morning. My name is Clinton Tymes. I am the
State Director for the Delaware Small Business and Technology
Development Center in Delaware, housed at the University of
Delaware, and obviously a member of the Association with Tee.
And thank you for having me here today.
Mr. Shear. Good morning. I am Bill Shear. I am Director of
Financial Markets and Community Investment at the Government
Accountability Office, better known as GAO, and it is always a
pleasure to be here, and thanks very much for the invitation.
Ms. Sanchez. Great. Thank you.
In order to get a better idea of the various programs, the
current core ED programs that are offering services to small
businesses, if I could ask our resource partners that are
represented here today, that is SBDC, SCORE, Women's Business
Centers, and veterans business centers, to briefly describe the
types of clients you typically serve and the types of services
you provide. And if you could, in your answer please clarify
what percentage of your services focuses on counseling, what
percentage focuses on training and, to the extent that you do
this, what percentage focuses on mentorship.
Mr. Rowe. Sure. I will start.
Well, and I will let Clint chime in to correct me because
everybody is a little different. We have 63 networks. So, it is
hard sometimes to paint with a broad brush.
I would say that the typical client of an SBDC tends to
have been in business longer, a couple of years or more. That
being said, we have approximately 50 percent of our clientele
nationwide that is what the SBA calls pre-venture which is that
zero days to one year range.
The majority of the services that an SBDC provides are
counseling. I would say that is 80 percent. About 20 percent is
Mentorship is kind of a, it is a tough thing to define for
us. Because we work in and with business schools, a lot of our
networks do have mentoring but I would not call it a formalized
system in any way, shape, or form.
As to what the typical client does business-wise, we help
everyone in everything from biotech and software development to
machine shops and restaurants. And I do not think there is any
particular way to categorize the small businesses.
Mr. Tymes. I agree with Tee because one of the things about
the SBDC program is that we all are different in that we meet
the needs of our particular state, and that is the way we
design our programs.
So that if, you know, whatever the state, the economic
development agency or the governor, their priorities are in
terms of economic development, we form our programs to meet
those objectives as well.
So, that is why you will never get any two that are ever
going to be the same. Tee mentioned that it is a 50-50 between
pre-venture and existing.
As in Delaware, 70 percent of ours is existing; 30 percent
is pre-venture. But that is all by design using resource
partners, you know, et cetera. But it is all designed to meet
the needs and priorities of each state.
Ms. Sanchez. Thank you.
Mr. Yancey. Thank you, Ami.
At SCORE our mix of services are roughly 55 percent
counseling and mentoring. The balance are workshop
participants. We mentor both face-to-face as well as online,
the same with our educational offerings. They are both face-to-
face and online.
Our clients, we break them into roughly thirds. A third are
nascent or new to business, have yet to start. A third is zero
to one year, and a third already in business.
At the end of a year, what we find is typically two thirds
are in business with the balance being in that nascent or
The services that we offer obviously are the one-to-one
counseling much like our colleagues at SBDC, available face-to-
face and online, as I mentioned, as well as a series of
workshops or seminars, last year almost 10,000 total seminars
across the country that we offered.
In terms of size of business quickly, typically less than
three years. Those that are in business and less than five
Ms. Sanchez. Thank you.
Ms. Weeks. I would like to draw attention to not only those
of you around the table but people in the audience that the
Association of Women's Business Centers just completed a survey
among all of the Women's Business Centers, a summary of which
is over on the table to the side.
We have had discussions with not only the Senate staff but
on the House side too about the need for better metrics. As of
fiscal year 2010, Women's Business Centers helped 160,000
clients around the country which is actually 24 percent higher
than SBA's estimates because the Women's Business Centers
provide more services than can kind of fit into the EDMIS
According to that survey, 58 percent of the clients are
socially and economically disadvantaged; 39 percent of them are
persons of color; 81 percent of them are women, meaning 19
percent of them are men.
Part of the reason for that is not only, I mean, it is open
for all. Anybody who wants to come in, but our services are
different in a lot of ways. It is much more relational, not so
much transactional. It is a long-term relationship. And a lot
of people, women and men alike like that.
Also as of this year, 41 percent of the clients of Women's
Business Centers are pre-start, nascent entrepreneurs; 25
percent are in the startup phase; and 35 percent are in
That is a shift from a few years ago. There are more women
in business, active business owners. And that is again because
sort of like once a client always a client. A lot of women come
in when they are thinking about starting a business. Then they
will come back for more. Then they will maybe train or become a
mentor. So, it is a longitudinal kind of a relationship.
We also asked in the survey about what services do you
provide to your clients. A hundred percent of the Women's
Business Centers provide one-on-one counseling; 100 percent of
them also provide training classes in basic business skills,
the ABCs of starting a business; 92 percent are providing
classes in advanced topics, procurement, certification of your
business, doing international trade, you know, selling to
corporations, a wide range of growth oriented programming.
Seventy-two percent provide loan packaging or linkages to
lenders so it is access to capital as well as training and
technical assistance; 67 percent are providing peer mentoring
There are an awful lot of mentoring circles that are formed
by cohorts of women who are going through classes. Group
counseling, 53 percent of people who want to kind of learn to
gather in a group, not just a training session; 35 percent
women's business certification such as with WBENC, and 13
percent also provide business incubator space which is, you
know, a very good way for startups to provide low-cost overhead
and also to share and mentor with others.
So, that is the variety of what Women's Business Centers
Ms. Sanchez: Thank you.
Mr. Snair. Typically, a Veterans Business Outreach Center,
of which there are 16 in the United States, has several hundred
veterans, I would say, split evenly between veterans starting
up and veterans who currently own their business and either
want to (a) expand and hire more veterans or (b) want to
register themselves as either disabled veteran-owned businesses
or veteran-owned businesses so that they can partake in some of
the targeted contracting that exists for veterans on the
Federal level with, for example, the Department of Defense,
Department of Transportation, or the VA itself, and then
finally the Department of Labor.
Something I was very surprised to find when I started this
center a year and a half ago was that many veterans who came to
me had been diagnosed as incapable of functioning at a regular
workplace either due to severe physical disabilities or due to
mental health issues.
And let me tell you, when a veteran walks in and says, hey,
pal, you are all I have got, you know, hopefully I can start a
business with your help, it is very touching.
When you see somebody like that make a go of it by securing
an SBA-backed loan and going forward with really a clever idea
that allows that person to work out of his home or out of a
shop, it is very rewarding and very touching.
I do not have the numbers comparable to, for example, a
Small Business Development Center, but I would say it is a very
specialized population, and I do want to say the numbers are
It took me a year to get to a little over 100 clients but
it only took me a year and two months to get to 175 clients.
So, I think the word is getting around.
To answer your specific question about training versus
mentoring, I would say to the extent that sitting with a
veteran and writing one-on-one his or her business plan that he
or she can go before a lender with, I would say that falls
Maybe one-on-one training regarding how to maneuver the
roadblocks the center for veterans enterprise has kind of put
up hoping to screen out fraudulent veterans organizations, you
know, showing them the right way to register so they actually
secure that registration, I would call that one-on-one
training. And again, I would say about half and half.
Ms. Sanchez. Great. Thank you.
I would like to go to SBDCs and SCORE. Given the current
budgetary climate, I think it is very important that we have a
clear understanding of SBDC and SCORE's funding structure at
the national level.
Could you just describe that structure, that funding
structure; and if you could, delineate what percentage of your
funding comes from federal sources, what percentage comes from
state and local government but not federal sources, and what
percentage comes from nongovernment and/or private sector.
And for private sector, if you are able to split up how
much you utilize volunteers as part of that private
contribution and what is remaining.
Mr. Yancey. Thank you, Ami.
As you well know, the appropriation that SCORE receives
from the Congress is $7 million and represents roughly 52
percent of our total funding on an annual basis.
Our chapters raise between $3.9 and $4 million a year in
support for the SCORE program. That comes from workshop fees,
seminar fees, as well as donated revenue.
Our foundation also contributed in 2010 $2.8 million or
roughly 20 percent of our total funding, and total funding for
the year was just over $14 million.
We also received in-kind support from various organizations
to help us with technology or space or other needs. Like our
colleagues in ED, we estimate in 2010 that the value of that
in-kind support was roughly $2.4 million.
We do not, for the purposes of reporting, capture a value
of our volunteer time. SCORE volunteers in 2010 gave 1.3
million hours of service. Depending on how you value that
service, Independent Sector which is one of the most prominent
volunteer organization conglomerations, associations, whatever
you want to call it, estimates that on average the value of a
volunteer hour of time in the U.S. is roughly $18. If you look
further, you will find that volunteer management technical
assistance runs somewhere between 70 and $80 an hour.
So, you would be looking between $18 to $20 million and
about $100 million in terms of value of the contribution of a
SCORE volunteer from a time standpoint. But again, it is not a
number that we accumulate and report on from an audit
Ms. Sanchez. Tee.
Mr. Rowe. Well, SBDCs, as you know, receive a regular
appropriation from Congress. Last year it was $112,200,000 I
think after the recission. But for the last fiscal year, full
fiscal year 2010, it was $113 million.
In the core program $107.5 million of that was what we call
sort of our foundation. On top of that the SBDCs receive about
$150 million in cash contributions from their host
institutions, state and local governments.
On top of that is in-kind contributions that a lot of SBDCs
no longer track simply because, as Ken said, tracking volunteer
hours, it gets to be essentially a budget nightmare. And as the
SBDC program has grown over the past 30 years and we have
developed the relationships with the host institutions, the
cash match as appeared, where the statute says it can be 50-50
cash and in-kind, it has essentially become one-to-one cash,
and in-kind is the other side of the coin.
To give you a rough idea, I would venture to say that the
total value that we leverage the $110 million, $112 million
into it is over $300 million in services to small businesses.
Again, I cannot quantify the value in the hours at a
college or university when a business school professor is
lending his or her time in helping one of our counselors. Our
counselors are doing over a million and a quarter hours of
On top of that, they are getting assistance from the
schools. Frankly, we just, yeah, it would be an accounting
nightmare to figure it out exactly. But it is safe to say that
the support from Congress is being leverage at least two to
Ms. Sanchez. Clinton.
Mr. Tymes. Let me just add to what Tee says. At the
university we do not track in-kind either because it just has
become a nightmare.
But just using Delaware as an example, our overall budget
is about $1.25 million when you put all of the programs
together. Our base funding from SBA is $627,000.
So, we have been able to leverage that with state funding,
with support from the university and the private sector, you
know, well over $900,000. That is just in Delaware.
Mr. Rowe. If I could just chime in quick because I got a
little pie chart from one of our SBDCs. It is Oregon but it is
a very good example.
49.5 percent of their funding is coming from states and
local; 34 percent is the federal funding, and the other 15
percent is private sector support, et cetera.
Now, that private sector support sometimes varies wildly.
Last year--now, this year things in California, apparently
their budget is in better shape. So, they will be receiving
support from the state. Last year, the six SBDCs in California
received no state support but got all of their match from
private sector support: foundations, chambers of commerce,
banks, private industry.
So, it does fluctuate but obviously the SBA support is that
seed corn to everything we do.
Ms. Sanchez. Diane, do you have questions?
Oh, I am sorry.
Ms. Weeks. I just wanted to chime in even though Women's
Business Centers are a drop in the bucket compared to those
budgets, the $14 million from the Women's Business Center
program we have estimated it as leveraged up to $60 million in
overall program activity because of the fact that on average
the Women's Business Center budgets, 39 percent comes from the
SBA. The rest come from other federal money, state money,
corporations, program revenue, other sources, that sort of
The average budget for a Women's Business Center is about
$500,000. It ranges from a low, in our survey, of $100,000, and
that is probably one that just got started at the beginning of
a fiscal year, up to the biggest one is like a $3 million
budget. So, there is quite a wide range.
And I should also add that there is a five to one ratio of
volunteers to paid staff. On average, our Women's Business
Centers have four paid staff and five times that many
volunteers. We do not track the hours of the volunteers but we
are leveraging a lot of money and sharing a lot of staff with
SBDC, SCORE counselors, and that sort of thing.
Ms. Sanchez. Diane.
Ms. Dietz. Thank you, Ami.
I would like specifically to ask Tee, and I appreciate Ami
setting the stage for us. As you all know, this is a political
environment where the debt ceiling conversation is ongoing and
will continue in the coming weeks, and budget cuts are
particularly necessary to alleviate the federal deficit.
Because each of you understands budgets and understands the
limitations of those budgets, I believe you are very wisely
leveraging that money.
But I would like to ask Tee, under the current financial
situation that we find ourselves in, what are the challenges
faced by the SBDC program?
For example, I know that SBDCs received a 9 percent cut,
although you did receive $50 million in the Jobs Act that eased
that cut. So, I am curious because in this budgetary
environment, you do handle a tremendous amount of outreach to
the small business community.
What are the challenges you are seeing right now when we
are looking at a jobs report where unemployment is unmoved from
the month previous?
Mr. Rowe. Well, the 9 percent was proposed in SBA's budget
in the last fiscal year. Under the continuing resolution, we
essentially stayed the same. There was that small recission.
I think the continuing issue that SBDC's members have is
always going to be making sure you acquire the match and the
support from the host institution. Now, a small state, for
example, like Delaware or Maine, has a base level of funding in
the formula of about $627,000. Then they have to go out and
In a fiscally challenged state budget, you know,
Connecticut is a good example, but sometimes you are scrambling
for loose change in New Hampshire and Maine too.
Those are probably the biggest single issues. So, we are
always trying to work with our members to develop additional
sources of assistance.
The accreditation process which is the, I guess for lack of
a better word, we used to call it the certification process.
The accreditation process for SBDCs, one of the key tenets is
that there has to be a solid commitment from your host
institution, whether it is the University of Delaware or the
University of Maryland or the University of Georgia or the
State of Ohio or whomever, they have to be committed to you,
committed to your mission which brings up what Clinton said.
The SBDC ends up being integral to the state's economic
development plan; and if you are not integral to that, then you
have got a problem; and it is becoming part and parcel of that
that drives us to make sure that we are integral to the state's
plan, they have the support, and that the support continues
It is a symbiotic sort of a thing. If the federal support
were to diminish, it unfortunately has a ripple effect that
sends a bad message the other way to the host institution. You
know, if SBA and the Congress do not think you are worth it,
why should we pony up.
Ms. Dietz. Well, knowing how important the dollars are from
the SBA to leverage that money, when supplemental funding is
available, how important is it, Clinton, for you in a state
like Delaware on base funding to sort of be able to tap into
those funds? I know it is per rata, if at all, and that is
based on population and the number of people you are serving.
But you are in a very base budget here. It sounds like you
have a big mission and you are really making those dollars
work. So, how important is not only your funding but the
possibility of supplemental funding?
Mr. Tymes. Critical. You know, I mentioned the numbers that
we are able to leverage, and we are able to leverage that
because we can go to the state, et cetera, and say we are
leveraging two or three times. So, at that point it becomes
In terms of supplemental, it is important to us. This year
I must say it is not pro rata from my understanding. If it is
pro-rata it would be absolutely tremendous for us. But from my
understanding the way that it is set up----
Ms. Dietz. What would you do with it? What would you do?
Mr. Tymes. What would we do?
Ms. Dietz. Hypothetically of course.
Mr. Tymes. Number one, we have an opportunity. Tee
mentioned becoming an integral component of economic
development for our state and our host institution, and what we
would do is the following.
One, the Delaware SBDC is a unique model, a unique model in
that we are housed not in the college of business and economics
but we are housed within the technology transfer office of the
university which drives innovation to the market place. So, we
We have been able, because of our technology designation
and a number of other things, to be at the table what we call
the intellectual property committee which determines the future
of all innovation at the university and the state.
Now, we are at that table. What we are going to use those
dollars for is to increase our capabilities to make sure that
we are able to stay at the table and continually contribute to
So, professional development in terms of different business
development strategies and different intellectual property
strategies so that we become ingrained again to Tee's point and
become an integral component of the university.
They have recognized that, and during tough times, yes,
they have come to the table recognizing the value that we
So, that is how we would use those dollars again through
increasing the capabilities and resources for databases to
determine the market feasibility of new and innovative
technologies so that one can make a decision whether or not to
go forth with the patenting process, as an example. Should we
license or should we do a spin out at the university in terms
of a small company.
So, that is how we would use the dollars and again become
an integral component, an indispensable component of the
economic development strategies of our host as well as the
State of Delaware.
Ms. Dietz. Excellent. Thank you.
I just have one more question and then I will turn it back
over to Ami. And that is for Ken.
Ranking Member Snowe loves SCORE. SCORE is a wonderful
program. It is literally powered by the sheer determination of
volunteers who have a wealth of knowledge, and just as Ami
mentioned when we had our SCORE reauthorization roundtable a
couple of months ago, we had nothing but people singing its
Ranking Member loves that you take a team of volunteers
with a small amount of money and you send them out and they do
My question is in fiscal year 2010 SCORE distributed $2.5
million of the $7 million SBA federal appropriation to the
districts and the chapters that are delivering these services.
And I am wondering if the lack of specific direction in the
Small Business Act or by the SBA is something that we should
address because my understanding is that yourself and the COO
of SCORE actually makes that determination.
Can you kind of describe to me how the budget is broken
down and how that money gets out and how much typically gets
out because it sounds like you had a $14 million leverage over
all of the program?
So, can we talk about, as the discussions go on about
expanding SCORE, how the breakdown would be, would we get more
money to the states?
Mr. Yancey. That is a very good question, and we certainly
appreciate the Senator's support.
Today, the way that we distribute the budget is based on
performance from a field standpoint. We do set a dollar amount
cap that will be distributed directly to the field for their
purposes in spending.
That is done based on volume. It is done based on growth.
It is done based on market penetration; and then as you know,
we hold out a percentage that we allow ourselves to make
Adjustments are based on the impact of change in a market
place that are due to reasons that may or may not be
controllable by our volunteers.
New Orleans was a good example many years ago with the
hurricane. Most of our volunteers moved away and did not come
back. But we knew that we needed to invest more there to make
sure that we could re-establish and be valuable and help with
recovery. So we did. That is the way that is used.
In the event that there could be agreement that SCORE would
receive additional funding, the answer is absolutely yes, more
money would go to the field.
In terms of total going to the field, roughly two-thirds of
the budget goes to the field directly and indirectly. Indirect
support includes things like the materials, publications, Web
sites, other educational pieces.
The requirements, the data collection requirements that we
have under EDMIS through our own system, all of that is
provided by a national system. This support is an indirect
We do look also to expansion opportunities, and in the
event that we had additional funds in 2012 or beyond, we would
be looking at markets where we believe we can do more and
better which, quite frankly, include just about every market we
The ability and the need for us to expand and partner and
figure out ways to better leverage existing services that are
in a market, whether it be a Women's Business Center or an SBDC
or any other, Chamber of Commerce or any other program I think
That would include, and I know the Senator is particularly
sensitive to, the needs of rural communities. We believe that
we can partner with anchor organizations that are already
existing in those communities and provide services beyond what
is already available.
Correct, like the people here.
And offer sometimes unique services that might not already
be there. For example, while the Women's Business Center may
have a fantastic presence in a small market, they may not have
an expert in international trade. If they don't, I do; and I
have the ability to get that service to that market in an
electronic fashion either over the telephone or, in many
So, we believe that we can provide skills, unique skills
and abilities, and talents that are not resident and can work
with anchor organizations that are already in place to continue
to add value in those communities.
And assuming that there would be an increase, we would
certainly use funds to do those things.
Ms. Sanchez. Great. Thank you.
We have two representatives from the entities that provide
these types of services that are not officially SBA resource
partners. One, like UEP in the nonprofit world and then a for-
I would like to ask you two if you could provide a
background on what your entities do, how you provide your
services. And really for Vistage, I would like if you could, to
the extent that you provide mentoring not just from experience,
chairs or counselors, but amongst each other in the businesses
that are part of your organization, how important is that to
the success of what you are doing?
Mr. Williams. Again, thank you for having us here. The UEP
is a program of the Kauffman Foundation out in Kansas City,
Missouri, and our focus is a little bit different.
We have touched locally all of your organizations at one
point or another in our work that we do. But we look at
ourselves as an extension of the work that the SBA programs do
because we focus on scalable firms in underserved areas.
So, that is our mission, to really try to move that needle.
And so, we work in a different kind of model where we think
mentoring and coaching are both important but they are
different. So, we separate those. We think volunteer and paid
employees are both important but we separate those as well.
And we work on the side of the coaching and the paid
coaches, on that model, because our businesses are probably at
a different stage than some of your businesses, although we get
some of those clients that come into our doors and we refer
them out to some of your organizations.
And so our focus is twofold. One, we want to make sure that
we have the stats behind what we do in terms of trying to
extract the best practices. So far we have trained
approximately 2000 entrepreneurs.
We have offices on the Gulf Coast. We have a small amount
of local government funding there but most of our funding comes
from foundations, and we have increased the profitability by
these clients by 24 percent over the past five years and their
revenues about 44 percent.
We collect over 250 variables on every entrepreneur. We
want to make sure that we understand what these levers of
success are so when we go to replicate, you know, that we are
extracting the best practices.
But I think that it is very important in terms of working
with these other organizations. I mean, I think there is a
linear path. I think sometimes we may get caught up in our
organizations as opposed to what is best for the clients.
And when you look at clients that are out and we have the
ability to, say, we have a better mousetrap, the
entrepreneurial dream, there should not be any seams in that
process. It should be from startups, from the small veterans
that can move to SCORE, that can move.
But I think on the other side of the lever I think Mr.
Bottary here and what the UEP does, we do not have a lot of
government support. So, when the entrepreneurs get to that
level, for example, in Detroit we are working with 150 of the
top minority auto suppliers. Their revenues range from $1
million to $500 million.
So, we have businesses at that level that we are trying to
help and transform or diverse their manufacturing portfolio,
and we do not have any government support to do that. It is all
I think it is important because at the end of the day what
we are all looking for is impact on communities in terms of the
I think anything we can do to create that linear process
with a seamless integration from the beginning to the end,
because we know no small businesses create all those jobs, and
you know, that is the economic engine that will bring us out of
Anything we can do to encourage that I think is important.
Ms. Sanchez. Great. Thank you. I appreciate that and maybe
there are some things we can learn in how you are utilizing
your approach to serve small businesses in that. So thank you.
Mr. Williams. Absolutely.
Ms. Sanchez. Leo.
Mr. Bottary. Vistage has been around since about 1957. Some
of you may know it as TEC, which was The Executive Committee.
It changed its name back in 2006.
Probably to look at the audiences we serve, we could break
them up into four groups. Largely they are chief executive
officers of companies that are usually in excess of 25
employees in the $5- to $50 million range. We do have about
just over 900 companies that would be over $50-million and
about 300 of those over $100-million in size.
The next group would be CEOs of what we call small business
in terms of our SB group or $1- to $5-million companies under
Next we serve key executives. For many Vistage CEOs who get
the value of the Vistage experience, what they want to do is
make sure that maybe some of their key executives get that as
well. So, it helps kind of improve the bench strength of each
of these companies. So, key executives are a third group.
And fourth are trusted advisors. Those are typically those
who counsel and provide consulting services to CEOs.
So, as a member, for example, so let us say I am a chief
executive of a $5- to $50-million company. I would be part of a
peer advisory group.
So, in my city or county or wherever I am, I would be part
of a group of 12 to 16 CEOs that would be led by a Vistage
chair who is also a former CEO and our Vistage chairs go
through very extensive training not only prior to becoming a
Vistage chair but throughout.
And they facilitate these group sessions where effectively
CEOs who are otherwise just sitting in the chair alone having
to make decisions for the good of their organization want the
benefit of being part of a group where these CEOs are not
By definition, we form these groups in a way where there
are no competing companies but yet at the same time they share
very common challenges and they worked together to do that.
The second part of the Vistage experience is they get one-
to-one coaching. That chair provides them monthly one-to-one
mentoring session throughout the year.
Third, these group meetings that I am talking about are
full day sessions. They meet once a month and for eight of the
twelve months, there is a Vistage speaker. We have about 800 of
them in our stable of, I think, world-class speakers who speak
to topics that the chair believes are most relevant to the
So that is their training. They are very intensive
workshops. They typically last the morning, and then I would
say the next leg of the stool here really comes in the form of
what we talk about as content and connectivity.
So, whether it is through our Web site or white papers or
all the ways, they can engage the content that we can provide
our members; and in addition, they network with one another on
everything from national conferences to all-city meetings to
I guess, getting to the third part of the question, just
briefly, is this idea of mentoring, training, and counseling.
And it is so interesting as I think as we talk about this we
all kind of have our own lexicon, I think, with regard to what
those things mean.
I think on the mentoring side, I would suggest that the
one-to-one coaching really is the heart of what we would talk
about as mentoring at Vistage.
I certainly think the training that both Vistage chairs get
in preparation to lead a group or with regard to the speakers
that come not only to the Vistage meetings but to other such
gatherings are really, really important.
And then I would say on the counseling front what I think
is very interesting about our model in this regard is that we
do not provide consulting services or counseling in quite that
It is a process that we have that we refer to really as
issue processing that helps these CEOs who face difficult
challenges to really come to their own conclusions by asking
really good clarifying questions, by working with them directly
so that they come to their own conclusions, and I think that is
so they are not getting advice pushed on them. It is really
coming to them.
I think ultimately what is really beneficial is when you
are part of a group like this and you are showing up to this
group each and every month there is an accountability factor
that is very much in play here so that as people get together
with mutually agreed upon action steps, what is the path
forward, what are we supposed to do, they are accountable to
their group every month to say how is that working out for you,
you know, how is that going?
And it is a group that really keeps you on task and
accountable. In many respects I think that is part of why
Vistage has been successful. Our retention rates are just over
80 percent and the average tenure of a Vistage member is about
6 plus years.
So, that is the quick overview of what Vistage is about
Ms. Sanchez. Great. Thank you. Following up on this
collaborative approach model that you describe and the value of
mentoring, Julie, you had mentioned both training and
mentoring, in this collaborative approach as well, being
critical to the services that the WBCs provide.
Can you describe in more detail, is there a formalized
process for ensuring that those two are reconciled to the
extent that their trainings are one hits versus this one-on-one
counseling which develops the relationships over a period of
time and what mechanisms that the WBCs employee in and of
themselves to ensure quality control and ensure that there is a
real good return on investment for taxpayers on this?
Ms. Weeks. That is a good question, and one of the values
of Women's Business Centers is that there is not a one-size
fits all of cross all 110. Part of the unique characteristics
of them is that they do different things in different regions.
So that said, I do not know if we can say that there is one
key way that they perform those services. I know that up until
a few years ago, and maybe Holly you can help answer this
question, there were formalized mentoring roundtables that OWBO
and Women's Business Centers did in most if not all of the
Women's Business Centers. That was back I do not know maybe 10
years ago. It was probably before your time.
And I do not think that officially exists anymore, and
actually it would be a good idea perhaps to chat about
revisiting that because there is not right now a mechanism to
ensure, I do not want to say uniformity, because I think that
goes against the grain of the local flavor that Women's
Business Centers have.
But, not to dodge your question, I want to answer it by
pointing to a research study that I did or we did when I was at
the National Women's Business Council.
It was actually really interesting looking at mentoring for
women business owners around the country and it found that
there were three different ways that it seemed to go by size
and growth of business.
At the very beginning, mentoring was a one-to-several
teacher and a small group of students I guess you could say,
and that was those Win net mentoring roundtable things that
were happening at Women's Business Centers at that time.
Then, at the middle stage of growth of a woman-owned
business, it seemed that the existence of mentoring was more
mentor protege pairs. Then at the higher level, it was much
more the TEC/Vistage/women presidents organization peer group
And this was an assessment of what is as opposed to perhaps
the ideal of what should be. So, I think we could have a
conversation about what should be. But that looked to be the
range of what is going on in the women's business community in
terms of mentoring.
I hope that at least partially answers your question.
Ms. Sanchez. Yes, that is absolutely right.
Diane, do you have anything you would like to review?
Ms. Dietz. I would just be curious especially from Clinton
and from Scott, if you could talk about--we have already talked
about some of the coordination you have in leveraging and
university partnerships--so I would also be interested to hear
if you have any best practices for the public-private
partnerships that you have built up over the years or learned
from somewhere else and how that propelled your programs and
your centers forward.
But before you can answer that, I would like to ask Holly
what the agency is doing to encourage the collaborative
approach that is so necessary, particularly today in this
Ms. Schick. Thanks, Diane. We have actually taken several
steps to move the ball forward in that regard, and I think one
of the things that we do is establish a national framework for
these programs to operate, and that is just the basic of how we
do business, and that helps us with the consistency of services
which, I think, is fundamental to how they collaborate and work
One of the things that we do is just in a formal way in the
program announcements, those are the formal SBA vehicles that
we put forward to say this is what the statute calls for you to
do, this is what the agency and Administration see as a
national economic development agenda for priority items.
So, we put all of that into the program announcements that
get provided to the resource partners. In those documents we
have a very specific statement that says you all will
collaborate, you all will play nice, you all will do all of
these great things. So, that is our formal statement.
From experience I know personally that if these programs
were not doing the collaboration and the partnering that
everybody wants them to do, they would not be successful.
It is incumbent upon Clinton, the SBDC, WBC's and the SCORE
chapters, they become part of that local fabric; and if they do
not, it hurts them in terms of their reputation, their client
draw in the community.
So again, we make that formal statement that says you all
will do that. I think we also have, and I will talk about the
SBDC program, through the accreditation process that Tee and I
think Clinton referred to which is a peer quality evaluation
There are components in that review that talk about your
relationship to your customers, to your stakeholders, and all
of those things. And again, the centers would not succeed if
those things were not in place.
Our challenge at SBA is to provide the framework for what
everyone should do consistently but also to be able to allow
enough breathing room for them to get into those local markets
and customize their services, because in every market, and I
think Julie and Ken were talking about that, if there was not
an international trade expert and one of WBCs, Ken's program or
an SBDC might, indeed, have that, and that local network is
really, really important so that again it is seamless to the
customer as Daryl said.
So, I think back to that accreditation process for SBDCs,
that is really important because again they cannot do their job
unless they are connected and hooked in.
So, SBA wants to provide that framework but also give a
balance and allow them the freedom to establish those
relationships as need be. It is a balance, and so, we are
looking for ways that we can help move the ball forward and
certainly welcome any input and dialogue from folks that we can
We also have research that shows through our impact
studies, as well as other studies that the individual resource
partners have done on their own, that speak very specifically
to the niche markets that these programs in kind of a
standalone fashion where their primary market is.
And that research tells us that these programs really
target the statutory mission of what they are supposed to be
doing, and it also tells us that they implement that in an
excellent way in their local marketplace and adjust accordingly
depending upon the resource mix, because we do not have one of
everyone in every market.
Our challenge I think again as we move this ball forward is
finding ways to facilitate, ways to encourage, ways to measure
that perhaps we have not yet mastered, and it is tough to
It is one of those things like you know it when you see it
and when it is working it is really good. So, we are trying to
get our arms around how do you really measure that? We do not
want to layer on a whole other level of reporting kinds of
We get in their narrative reports from the different
centers. They talk about best practices in terms of
collaboration and all of those things, and we try to add annual
conferences and convenings of the group, try to profile some of
those folks who figured out how to do it right, and so that we
can put them up in front of other folks so that people do not
have to reinvent the wheel all over again.
Those are some of the things that we are trying to do, but
again, finding that balance between how we incent and how we
provide the framework but not yet be really oppressive in terms
of the reporting and all of that.
We are trying really hard to see where we can move next to
keep it building.
Ms. Dietz. Julie and then Leo.
Ms. Weeks. Women's Business Centers at an individual level
are extremely collaborative and we have asked in our surveys in
the past, with whom do you collaborate and what do you do with
And virtually all of them are working with SBDCs, working
with SCORE. Other collaborative partners that are interesting
at least in our world is model chapters and the Association of
Business Women Owners [off microphone] have a relationship
What I would say as active as it is at the local level
there will be a couple of words, at the national level we are
not talking as much as we ought to [off microphone]. I do not
think it needs to be something mandated or whatever, but I
would pledge that the three of us plus you and SBA get together
and chitchat about what is going on in our worlds, what can we
do more of, because I think the collaboration that is happening
now is that we are at the ground level and we really ought to
kind of do more talking, and I am sorry I forgot to push my
Ms. Sanchez. Julie, I think that is an excellent idea and I
know Chair Landrieu would be extremely interested in seeing
that type of conversation take place and what progress results
Mr. Bottary. This whole issue of collaboration is so
interesting as we are all talking about it, because I think we
are really taking baby steps toward getting better at it, but
we have a long way to go.
We are not natural collaborators in many respects. We are
brought up, we go to school and we are hiding the answers from
the person next door to us sitting at the desk for fear because
God knows it might help them do well.
Yet, we go into companies, we are asked to work together;
and even working together within the organizations can be a
challenge. If you can imagine organizations having to work
together in that way.
The June issue of Harvard Business Review dedicated the
entire issue to collaboration; and I figure if we were any good
at it, they might not have necessarily done that. So, they felt
it was obviously necessary to cover that ground.
I will say that there are certainly a lot of organizations
that have values statements or posters on the walls or things
that appear on annual reports; but I will say that the people
who started Vistage, so it has nothing to do with anyone
involved with it today.
But they have been enduring and, I think, are really
critical to this notion of successful collaboration. And those
values are trust, caring, challenge, and growth.
That at the end of the day, you have got to trust one
another. You have to be able to convince someone that you care
about their success.
And when you challenge them, if that challenge comes from a
place of caring, people will accept that, and I think work with
that and know that it comes from a good place.
And then in the end if that can fuel growth which, of
course, we hope builds trust and we continue that cycle, we
have got something I think really powerful.
So, to the extent that that is remotely helpful as we are
sitting and thinking about how do we improve upon the way we
collaborate, it is certainly a good start and it has worked
very successfully for Vistage for a long time.
Ms. Dietz. I want to recognize Clinton but I will say that
the Chair, the Ranking Member and I have sat with Ami in many
meetings and with Julie and with many of you, and we do talk
about data, and we do talk about collaboration, and we strongly
encourage you and will be speaking with GAO very shortly,
strongly encouraging you to work together. They all work
together and it is a tremendous impact for communities that
desperately need tremendous job impact right now.
So, Clinton, I'll turn it over to you and Tee.
Mr. Tymes. Sure. First, I just want to say to Leo I was
just on your Web site last week. We are looking at doing a
peer-to-peer for technology-based businesses. I went to your
Web site but we are going to talk afterwards.
But I will say this in terms of collaboration, the Delaware
SBTDC could not do its job without our resource partners. It
would just be impossible.
As a small state we all do the same types of things. We
provide information. We do counseling. We provide the training,
And what we have been able to do in Delaware is, our target
audiences are different, and I think that that is the key, that
our target audiences are different.
So, as example, we do a starting out in business program,
and we go through all the regs and do the business plans, et
cetera, but it is more of an assessment as well because what we
are trying to do is determine at what stage of development that
person is so that we can refer them to the agency that is best
appropriate for their deeds at that particular point in time.
So we work closely with our resource partners. We have done
on the occasion some co-counseling, to be honest with you. And
in Delaware, with the high priority on technology, most of our
SCORE consultants have come from the Dupont Company and
So, we use them. I mean, these are the guys that have
brought new innovative products to market. That expertise is
tremendous so that is how we go about that leveraging.
There was a couple of other things I just want to mention.
Diane, you had mentioned private sector collaborations, and I
will just mention a couple in terms of what we have done in
Delaware with the private sector.
One is a procurement conference as an example of where we
get a lot of private sector companies to sponsor a procurement
conference. Another is a collaboration that we do with
McDonald's and the Marriott and the university, and it is an
entrepreneurial summit and this is targeted to historically
Black university and college students who are in the hotel and
restaurant management majors. They are in terms of
entrepreneurialship franchising with Marriott and McDonald's,
et cetera. Another is with J.P. Morgan Chase chasing a dream.
We go in and work with kids. This is a summer camp on
entrepreneurship. So, these are some of the things in terms of
the public and private partnership.
Lastly, I had a note here we were talking a little bit
earlier about quality control there. From the SBDCs'
perspective, quality is paramount. Holly and Tee have mentioned
the accreditation process. The whole point of the accreditation
process is to go into a program and determine if, in fact, that
SBDC is meeting the needs of its local community. And if you
are doing so, how are you doing it. Number two.
And number three, is it working; what are your measurements
and how are you measuring quality? From an oversight
perspective, the SBA through project managers call our clients.
The Delaware SBDC we send out customer service
questionnaires a few months after we have seen a client. We
also do an annual survey of our clients through Chrisman, the
ASBDC economic impact study there. So quality is a critical
factor, and we do measure it through a number of mechanisms to
make sure that we are providing a quality service and at the
same time meeting those needs.
Ms. Sanchez. Great. Thank you.
With regards to accreditation, is it mandatory for every
SBDC center to be accredited? I do not know if we have this
information, but if you do, can you tell me what the ratio is
of those centers that are accredited through the process versus
those that are not accredited and/or do not make it through the
Mr. Rowe. Every SBDC network is accredited. You have to be.
If you are not accredited--what essentially happens is, well,
the team goes in the whole process; but if the network fails
the accreditation, that report goes to SBA and then basically,
for lack of a better phrase, SBA has the option of either
saying you must take the following steps to remedy as
recommended by the accreditation committee or we will just pull
your ticket, and at which point they put these services of the
network up and do an RFP and say, will somebody, can some other
institution step in.
Now, and I e-mailed you and Diane earlier without wanting
to inundate you with like a wheelbarrow full of paper because
accreditation is a very serious and time-consuming process, and
we are doing 16 reviews a year so that every SBDC is getting
accredited every four years.
Now, that sounds like not very often. But in the interim,
of course, all the processes that have been put in place in the
accreditation process are then being reviewed annually by SBA
when, as Clint said, the POs come in and they do the reviews
and they are going through all of the files that a counselor
has, they are picking out random clients, and they are
discussing with those clients the quality of the services.
And that is on top of the individual customer service
surveys that are being sent out. And just for instance, I know
in Louisiana when Marilyn sends it out and it is 60 days down
the road, and she wants the responses from the client, and then
if she is not getting the response she wants, somebody's head
And on top of that, there is a professional development
requirement in every SBDC for all the counselors on top of your
counseling hours and your client impact metrics.
It is a huge process and a very serious one as to what the
key performance indicators are for our business advisors and
counselors, because it all revolves around making sure that the
clients we are working with in the community, they are getting
the assistance they need, not the assistance we want to give
them, the assistance they need, which is why on the other hand
we have 63 networks and probably 63 different customer impact
But at the end of the day, no matter how you slice it, and
I sent you all just a sample accreditation report. I can give
you all 63 if you really want to wade through it all.
But it goes through in painstaking detail what you have,
what you do not have, how you have met your strategic planning
and your goals, how you failed, and whether you have met the
conditions or not.
It is a peer review process, but it is a pretty tough one.
People are fairly objective about it, to say the least.
Ms. Sanchez. Thank you. Julie and then Clinton.
Ms. Weeks. I just want to say that while the Women's
Business Centers are not formally accredited, there is an
assessment process that has been going on for the last couple
of years whereby, and Holly can chime in with the exact number,
but I think almost all of the Women's Business Centers now have
been visited by some of the same accreditors that the SBDC has
used, and there is a quality control process that is going on
and that will continue to evolve to make sure that Women's
Business Center people are doing things in the correct way.
And certainly all the customer satisfaction surveys and
whatnot that have been done by Concentrance that are evaluating
the three ED programs on counseling which is our only sort of
area of overlap of all three of us, the customers are equally
satisfied with our different methodologies.
And one little thing I would add on that, it can come maybe
later with the recommendations for how we might be able to
change and improve things, is that the Concentrance study is
only looking at counseling. The Women's Business Centers, for
example, do so much more that we are not getting evaluated on;
and that would be a really useful thing to improve.
Mr. Tymes. I just wanted to mention that, one, I have
served on the accreditation committee of our national
association. It is a grueling process.
And the standards by which we have established, which is, I
do believe, it is about six standards at this particular point
in time, are all patterned after the Malcolm Baldrige standards
for quality. So, that is the basis of our accreditation process
Having served on the committee, I will say this that we
have had a number, will have a number, a couple of programs
where, say, accreditation has been referred because certain
standards have not been met.
However, before you can pull a program, there is a process
by which a plan is developed that is monitored by the
accreditation team as well as the SBA so that we can make sure
that the program is brought up to standards which again the
whole accreditation process is about establishing standards so
that all SBDCs are operating on say a standard level at
minimum, if you will.
Ms. Sanchez. Great. Thank you.
Mr. Williams and then Holly and then I think Diane and I
both have questions for Mr. Shear about this concept of
collaboration and quantifying that.
Mr. Williams. Yes. I think that what we are talking about
here is so important in terms of collaboration not just within
the SBA organizations but between SBA organizations and the
ones who are out in the philanthropic community and in the for-
I know I have talked to a few of you already, and I promise
we will reconnect. I have talked to Julie and said we will
I would like to offer to hold something in Kansas City at
the Kauffman Foundation for all of us and maybe some more
people outside of this to come to Kansas City and look at the
idea of standardization of how we measure things, the idea of
how do we have a linear process between our organizations back
to your point, how we can effectively use government resources
and philanthropic resources and private sector resources to
really have this process of really leveraging what we do in
order to make sure we are providing the best services for the
So, if you have a sheet of contacts, I would love to have
that so we can maybe offer that to everybody here.
Ms. Sanchez. I think that is a great idea. That is
fantastic. I love it. We are not even done with this roundtable
and we are already working on the next one.
Mr. Williams. Right.
Ms. Sanchez. That is awesome.
Ms. Schick. Just two quick points. One follow-up to Julie's
comment about the impact study in counseling. We have just
undertaken a pilot impact survey for training specifically for
the Women's Business Center because we understand that a large
percentage of the deliverable on the outcomes are realized from
the training impact and the training activity that we do.
So, we are trying to get started with that to really
evaluate what training contributions will mean to customers'
And second, if I may, I would like to call on my colleague
Ken Yancey who is quiet in this conversation about quality.
SCORE has implemented a very rigorous quality improvement
process. And then when you are managing a very large national
network of volunteers, you can imagine how difficult that is.
So, if I may turn it over to my colleague Mr. Yancey to
speak to that I think we should not end the conversation
Ms. Sanchez. Actually, I think that is great. We
collectively as a matter of form refer to resource partners as
one big group. I think it is really important to note that one
size does not necessarily fit all. It usually does not fit all.
There are different programs to meet different needs and
there are different ways of going about it. I think, as Diane
mentioned, utilizing private sector resources particularly
individuals with particularized knowledge and skill set to
assist business owners is incredibly important and the
quintessential utilization of leveraging private sector.
I mean, do you fire volunteers?
Mr. Yancey. Yes. Yes, we do.
Ms. Sanchez. But I like Holly's point about how when you
are using that specialized expertise and free in-kind
contributions in that way, how do you assure that you are
providing quality services?
Mr. Yancey. Please excuse my silence. We do a lot of the
same things that are being done by the other organizations. We
call our process chapter minimum standards. The chapter is
reviewed against minimum standards once every two years.
It emanated years ago from a question that we used to get
about whether or not a chapter was a unit member in good
standing within the SCORE association. We felt that we needed a
way to measure that, and so now we do.
We recognize chapter performance levels on an annual basis.
We have three tiers based on criteria that has been set
collectively within our organization. From a quality standpoint
in terms of the specific volunteer, we actually follow-up with
every client using a net promoter SCORE process.
Most of you are familiar with net promoter scores. I think
the book was called The Ultimate Question. And the question is,
on a scale of zero to ten, how likely are you to refer a
friend, a colleague, a family member to this service?
I have a net promoter score on every volunteer that
counsels. So, we can look out across the organization and say,
well, this individual has an 8.6 but this one has a 2.5 which
leads us to ask a question, not to say that one is doing a
better job than the other. Often it is driven by the
expectation of the client.
I am sure it does not happen in your programs but
occasionally a client comes to us expecting to walk out of our
office with a grant; and when we do not provide that grant, we
typically do not meet their expectations; and when that
happens, the net promoter score is low.
But it also tells us that we have got to do a better job on
the front end of having people that utilize our service
understand what they should expect. And so, while it is a bit
humorous, it is also something that we take seriously and we
know that we need to work on.
The other thing that we have done recently related to
quality, what we found as we have begun to measure client
satisfaction and more specifically client engagement, in a
partnership we had with Gallup we found that over time SCORE
services have become more transactional than relationship
That is concerning to us, and so we have entered into a
partnership with Gallup and the Deluxe Corporation Foundation
developed a proprietary counseling methodology that is not
intended to tell our volunteers what they need to know about
It is training our volunteers on a counseling process that
is five steps that is intended to result in longer term
relationships, and part of that step is a question that they
need to ask that is collaborative in nature.
Is there another organization in the community that can
better serve this client's needs? If it is technology transfer
related and it is not with Clinton, then we are not doing the
If they are a veteran and there is a veteran service center
in the area that is better able to serve, we have to get that
client there. That does not mean we do not follow-up after the
fact, but we need to get them there, and then we will call
What did you find out? What are you getting? Is it working
for you? How can we help? What are your next steps? And the
next step, maybe we send them to Julie or we send them
But I think that our role as an organization is certainly
to help create jobs and create businesses but we do not have to
do that in a vacuum and do it only with our volunteers.
And so our new plan and strategy is to really be more
collaborative and that is something that we are rolling out. I
think that I agree with Leo's comment, if we were doing a good
job of this, the Harvard Business Review would not have devoted
June to a very good discussion of collaboration so quality is
critical to us.
We are doing a lot of new things and a lot of different
things. From a collaborative standpoint, we think it is
important enough that we are going to begin measuring referral
relationships, not only who we have them with and where they
are but what are the results and how can we improve those.
Those are with chambers and with SBDCs and Women's Business
Centers and with Kauffman and anybody else. With Leo we have a
really exciting conversation ongoing there.
So, thank you for prompting me to suggest this.
Ms. Sanchez. Great. Thank you.
Julie and then we will move on to Mr. Shear.
Ms. Weeks. Just real quickly.
Ken, you have done a really good job over the past few
years diversifying the range of counselors. There has been a
legacy from like 10 or more years ago of SCORE being the
Service Corps of Retired Executives, meaning older white
gentlemen. And a lot of the female clients who would come in,
it would get sort of what are you doing wanting to start a
business, young lady, kind of responses. That legacy still,
maybe there is a little teeny bit of it left.
So, I think that what you are doing now with the more
relationship oriented is also going to better serve the women
who are coming because women are much more relational than
transaction. They do not really want to ask a question and get
an answer and go their merry way. They really want to talk
about it a little more.
So, that will serve you, plus the diversification of the
SCORE counselors. There are far more women and far more people
who are still business owners, not retired, so kudos and I
think that bodes well for ramping up of our collaboration.
Ms. Sanchez. Great. Thank you.
So, I think a take away here is measuring, a successful
collaboration is often times difficult. The more interwoven our
resource members become in providing that seamless service that
Mr. Williams discussed, the more difficult it is to attribute
the success to any one particular entity or service.
So, I know this is something, these are ongoing
conversations that we have had, and Senator Landrieu has
discussed this many times about is it possible and to the
extent that it is impossible, why or why not? Why can we not
measure this effective collaboration? Why is it so difficult?
Mr. Shear, I do not know if you have things to add about
quality control and how GAO is reviewing resource partners and
having these conversations about collaboration and
Mr. Shear. Okay. Thanks. I will say something to tease
myself because you know me well enough that I could probably go
on for a day on this but I will try to be succinct.
Let me just start with a comment Leo made. A lot of times
people do not want to collaborate or, to use Holly's
expression, play nice with each other.
We see different personalities express that. We see that in
terms of our collaboration within SBA and among resource
partners. We see that in looking at SBA with other agencies.
So, we see that, and a lot of times we see certain things
happen sporadically because it is just that you might have some
people out in the field that I will call out in the trenches
that do want to collaborate because they see it as part of
their success, and you have some people that just do not like
to do it.
So, given that, we do not think one-size-fits-all, and I
would like to bring up that the clienteles served tend to be
different. That is one of the reasons why collaboration which
is a requirement or coordination is a requirement is because
you do not want the different resource partners to be competing
with each other. You want it to reach--there is a lot of meat
out there, and you want to reach the intended audience.
So, let me step back from measuring collaboration and just
say there are certain things that we look for, and let me go
back to even our Women's Business Center report which is now a
few years ago.
We made three recommendations in the report, and a lot of
it was creating more of the structure to the program and how it
was operated, make it clear what the district office technical
representatives were supposed to do and things like that,
creating a better structure.
Out of our three recommendations, two of them, the one that
did not deal with coordination, were implemented very quickly,
I would say relatively quickly. I think it was within a year,
which is quick in our standards.
The one on coordination has not been, and it is not like we
want everybody to be doing the same thing. Quite the contrary.
And we do not want SBA to be dictating what everybody is doing.
But a little bit is to step back and think strategically as
far as what are the roles of the different resource partners in
different areas of the country.
In one of the things that you have to build upon, and we
knew and I knew in signing the report, we saw lots of very good
collaborative practices out there, out in the field in a lot of
We are looking for a certain structure. We are still
looking for a certain structure, whether it is through
providing guidance in terms of providing some sense in
strategic planning, and really, what this all takes is
So, I have been very glad recently Holly and others have
been reaching out to us and trying to work with us, what types
of ideas do you have in terms of working constructively with
each other, and it looks like there is that commitment now to
move forward on this front.
But what we are looking for, both within SBA among resource
partners and in terms of SBA administering these grant
programs, is really creating a better structure for it.
Within that, it could involve protocols. We do not like to
micro manage how you get there. There could be certain output
measures like how many times do you observe referrals from one
resource partner to another, but it does not have to be that
exact a number.
Many times it is creating a structure. It is creating
certain protocols for how things can occur. It is creating
guidance based on best practices that we already saw a track
record of certain best practices out there, and we also saw
instances where it looked like resource partners in some
places, not to be named, were not working so nicely with each
So, a lot of times it is just being a little bit more
specific about what are we looking for, strategically what are
we trying to achieve overall.
So, I realize that is a very long answer so thanks for
bearing with me. But that is basically what we are looking for.
Ms. Sanchez. Great. Thank you.
Ms. Dietz. I would like to build on that for those of you
who do not know Bill. For Bill, I always say, this is his
second home. He is a fixture here in the Committee.
Ms. Sanchez. We have a desk reserved for him in the back.
Ms. Dietz. And we certainly look to him for insight because
he has sort of the eagle-eye view of what you all are doing and
how you interconnect. I think I speak for Ami when I say that
as Small Business Committee staff, I can report that one of the
greatest challenges we confront is determining the efficacy and
job creating potential of the individual ED programs and, as
Bill referred to the 2007 report, there is also a report that
came out this May on duplication, inefficiencies, waste.
One of the outcries from GAO is typically a lack of data.
We need data. If we do not have data, we cannot tell you
whether or not this is a duplicative program or whether or not
this is an effective program.
And when I reach out to Julie Weeks who knows women's
entrepreneurial data like the back of her hand, which is why I
am so thrilled she could be here today, she says I have that
and I just got that and I can show you more.
And when I reach out to Tee, I hear I think I know the
number off of the top of my head but I can get it for you and
here you go.
And Ken can bring numbers to a meeting but I feel like at
the end of the day somehow that data does not get back to the
Committee unless I go directly to our ED partners when I should
be getting it from the agency.
So, I guess this question is for Holly. We hear that MOUs
are ineffective despite their very nature in creating
collaboration, and we hear that the data is there but somehow
we are not able to access it.
It is hard for us to measure these programs in terms of how
effective they are when we do not feel like we are getting
enough data. And my counterpart, Meredith West, who works on
these issues very closely with Ami is always saying data, data,
data. I think the first thing she taught me. We need to see
more timely data throughout the collection process rather than
months and years later.
What can these programs, everyone is in the room, do for
the SBA to help you communicate and share that data so we can
get it back to the GAO and they can make more educated
And Bill, if you want to follow up on Holly's answer.
Ms. Schick. Thanks, Diane.
First, I would like to talk about the difference in data.
SBA collects information from the resource partners through
what we call our EDMIS system.
EDMIS was built as a data capture system, not necessarily
built for a client management or an analytic tool, and so when
we get requests for data, although it is not maybe as efficient
as we would like it to be at the current time, that data is
always available upon request to us through our OCI's office.
So, the data is there, based upon all the fields that we
collect. The analytics, not as robust as we would like it to
be, and we have a plan in place right now where we are moving
forward with requirements for a new and more robust version of
EDMIS so that we can, once we get the good data in, we can get
it out in a more expeditious fashion and do more analytics and
more data mining.
We collect impact data through our third-party contractor
Concentrance, and we come up with impact numbers and we use
methodologies that, you know, are approved by OMB.
Our resource partners, they also conduct their own impact
studies and their own analyses of what is being produced out in
the network. We do always hear that in cases, well, it does not
Well, the fact is perhaps it should not because we might be
comparing apples to oranges. In each one of those impact
methodologies there are different parameters for the surveys,
and it would not match necessarily what we do.
So, you know, on the impact data, I think collectively we
all get a big picture but we do not always match. I think that
matching perhaps it is not a good goal in terms of that
Again, back to the EDMIS, any of the data that we collect
from the resource partners comes into our systems and is
uploaded and we collect it on standard forms, that data is
available. It just takes a minute for us to make requests and
get the parameters correct and then have the folks running the
Ms. Dietz. Well, I will say to a person that is speaking
for the Ranking Member of the Committee, oftentimes we make
requests and it is very difficult to get data; and when we work
with resource partners, they often tell us it is very difficult
to get data from the agency.
So, if you could take that back as a constructive request--
Ms. Schick. Sure.
Ms. Dietz [continuing]. That we would love to have more
timely, actionable and available data, I think that would make
our job easier.
I will turn it over to Bill. Do you have thoughts, Bill?
Mr. Shear. Yes. And many times we talk about data where we
are really talking about documentation that might not even be
numbers; and to take this back again, something that you run
into a lot when you are in an auditing agency, including at
SBA, is the idea that everybody says we have lots of data on a
lot of things but a lot of times we are saying, as in here, let
us step back and say strategically what are you trying to
achieve in terms of coordination among resource partners.
In here, our focus is we obviously go out and look at the
programs and we interact with the resource partners, but our
focus is on how SBA runs those grants programs.
And so, in that case we are often a lot of times in our
interactions with the agency in a number of areas, we are
saying these are the types of things we are looking for, and
those things are often documented processes.
And many times we have found that when we interact on those
documented processes, it brings more definition to what the
agency could do to improve those processes, and that is what we
are looking for here.
Just as in our conference call yesterday, I said one of the
best examples of us working in that manner dealt with the SBA's
disaster loan program in terms of what we were looking for and
how do you set policies and procedures, where you are stepping
back and the first step is how do you think strategically of
what you are trying to achieve.
And this might seem very hypothetical, but there is a way
to bring it to life. As I say, one of the strong points here,
we find the Concentrance studies quite useful. You always have
a problem when you go to those served by a program with
But even given that, they are quite useful in terms of
seeing how clients view the services, and that puts these
programs at some advantage to some other economic development
And again, we saw some very good coordination going on,
some best practices, out there. It is a matter of creating more
of a structure and more, whether it is protocols or whatever.
Once you have that in place, coming up with metrics is
easier, but it is a matter that there are all kinds of data out
there. You want to answer the question what does the data
inform in terms of how we can run these programs better.
There are challenges of having three separate programs
versus having consolidated programs. But if those programs were
consolidated, there would be another set of challenges.
Regardless, we are looking for how do you think strategically
and put the pieces together.
Ms. Sanchez. Thank you, Bill.
Ms. Weeks. Just briefly. One of the complaints, I guess you
could say, or suggestions from Women's Business Centers is the
fact that they perceive that when they are quarterly inputting
data into EDMIS and their annual survey, it goes into a black
hole and they never see anything out of it.
In this past year, and Holly and I have talked about this,
it is like not news, but in this past year when we were getting
a lot more pointed questions about tell us your impact, and we
would like to know all the information that we are inputting
into the system like we do not get it out, back out.
And also the survey, and I mentioned it briefly before that
Concentrance is only focused on counseling which is only a part
of what the Women's Business Centers do.
Another suggestion perhaps for us, and Holly and I also
talked about this, is up until maybe, I do not know, six years
ago or so, the Office of Women's Business Ownership had an
annual report. It was like here is our metrics, here is how
many clients were counseled, trained, whatever; and there was
an actual physical annual report from OWBO about the Women's
Business Center program.
Perhaps the ED office could do one not only for OWBO but
proactively publish something that is going to answer 95
percent of the questions that the Hill and everybody else would
have anyway about these three ED programs. I think that would
be extraordinarily useful.
Mr. Yancey. So, I go back to the original development of ED
programs, excuse me, the EDMIS system, Entrepreneurial
Management Development Information System, and that was a
remarkable improvement at the time over what we had.
But the desires of the Congress and the Committee and of
our stakeholders and the GAO and others have changed
significantly since we developed that system.
And so, my suggestion is that it is probably time, once
again, for us to take from Mr. Williams' suggestion and have
programs sit down one more time and let us understand what the
Committee's needs are on a monthly, quarterly, and annual
basis, understand what the SBA's needs are, and then develop
something that makes sense, recognizing in that process that
these three programs are very different in the way that they
are developed, in the way that they are funded, in the way that
money is distributed, and in the way that they are managed.
You know, ASBDC, the Women's Business Centers are trade
associations basically that have a different relationship with
our chapters and money flows differently than it does there.
In data capture and analysis and how we use it for
reporting metrics from a management perspective as well as to
provide you impact data are very different between the
A one-size-fits-all is not necessarily going to work.
However, if, within the system that is developed, we all agree
that there is a core set of data elements that you want and on
what basis you want them, it should not be difficult since we
are all gathering client data from a single form to be able to
provide you what you want when you want it.
From an economic impact matter, that is different. SBDC
does one. We do one. Ours does not only provide economic
impact, but it provides a tremendous amount of information on
client engagement and what drives client engagement. We are
making management decisions from a program perspective based on
that data to help us do a better job with our clients.
I think that whatever we do, if it does not worldwide in a
timely way jobs created, businesses formed, taxes paid, all of
those things that are important, then we have failed.
And my challenge, as Holly and I have discussed many times,
is that while SBA does do an impact survey, we do not have the
information. It is over a year before we have the information.
One of the reasons we are doing our own is that I have the
data within 90 days of the close of the fiscal year, and we
need that in order to tell our stakeholders, Congress and
others that we have been successful and how that success
manifests itself, what it looks like.
I think that it is time, once again, and Holly I am sure
this is on your list although we have not talked about it, for
us to sit down and understand what the needs, what everybody's
needs are, create a baseline and then allow the programs to
develop something that delivers on that baseline as well as
whatever else they need to effectively manage the program.
Ms. Dietz. Thank you, Ken.
I know we are getting close on time, but I do have a couple
of questions especially for Scott. I have not forgotten about
I did want to ask one question and I sort of want to pull
Julie and Bill into this and I think it is a good segue for
wrapping up the roundtable.
I have received a couple of calls from a Women's Business
Center in Jacksonville, Florida, and literally they just called
so I know what they are doing.
We just wanted to let you know that we are collaborating
with these people and we are happy to share our stories and our
best practices, and I have to say, as busy as I can be some
days, I am happy to get those calls. I really am. And they were
fine enough to----
Ms. Weeks. Would you like 109 more?
Ms. Dietz. No comment. But I will say there in the
northeast region, Jacksonville, Florida, and there is a
partnership among ED resources and providers and they are
collaborating to ensure an illumination of waste and
And Pat Blanchard, I do not know if you know Pat, is the
Director and she says for many years over 20 service providers
have worked hand-in-hand meeting regularly, sharing and
promoting each other's programs and services and then focusing
on where there are gaps for existing small business owners. She
said, ``We are a model for collaborating rather than
I wondered if you had thoughts about if this is natural to
Women's Business Centers, if you think they are a model, and
Bill, if this is what the GAO has been really advocating for in
their reports in the last four years?
Ms. Weeks. I would say, yes, that is, the majority of
Women's Business Centers do that. In fact, almost three
quarters of Women's Business Centers are, by their nature, they
are embedded already in the local economic development
organization or maybe even in SBDC.
They are not a standalone organization in the first place.
So, they are a program of a larger economic development group
which lends itself, of course, to all the collaboration and
research that we have asked of Women's Business Centers,
virtually all of them, 99 percent of them, are actively
Their number one partner is SBDCs, also SCORE, local
economic development groups, universities which may or may not
be part of SBDCs, and they are doing a wide variety of things.
Perhaps Jacksonville is documenting it in more detail than
some of the others do. But again, in surveys that we have asked
in the past they are, of course, referring, that is the number
one thing but they are also sharing trainers and educators.
They sit on the boards of other organizations. Other
organizations sit on their boards. They do events together.
This is a natural part of what they do.
And what I said earlier is I think it is happening out
here. It is not happening as much up here. I think we need to
do more of it up here because again that coordination then can
swoop in the other one or two percent who are not doing that
kind of collaboration and it can also bubble up and share some
of those best practices.
Mr. Shear. In discussion we hear a lot about collaboration,
and with Women's Business Centers and the other resource
partners, we observed it when we did the audit work a few years
And again, looking at SBA, there is one point that I really
want to make here about sharing data and documentation. For
example, you said, well, we sent out formal notices, we do a
number of things to try to create that structure to bring about
coordination of services and things of that nature.
Do not be shy about sending it to us. One of the most
difficult things that I find doing, if I am at this Committee
or anything else, of saying an agency has not given us
We are auditors, documented evidence demonstrating that
these things are really working or giving us enough detail. And
many times our role in serving the Congress is like it is not
just what is in our reports. It is the idea that we can, to
some degree, kind of synthesize certain information that comes
from agencies and from others.
So, it seems like there are a lot of good things going on
out there. We are looking for a little bit more of a structure
and a documentation to bring that about.
Ms. Dietz. Thank you, and I will turn it back over to Ami.
Ms. Sanchez. Great. Thank you.
I know we are approaching the noon hour, and I am sure
everyone is hungry. I know I am.
I would like to actually just close with a question. We
have had a lot of discussion here, really helpful and
informative discussion here I think about what SBA, what
resource partners, what other entities can do to kind of make
sure that these programs are effective.
But there is a role for Congress here, and so I would like
to ask each and every one of you if you could give in true
Chair Landrieu style your top five recommendations, your three
to five recommendations for what Congress can do to create,
support, strengthen entrepreneurs as well as the programs that
And for Leo, if I could ask if you could in your answer
give some recommendations for what Congress can do to help
increase private sector involvement and help resource partners
to leverage that private sector support.
Who wants to go first, anyone?
Mr. Snair. I will go.
Ms. Sanchez. You are a brave soul. Thank you.
Mr. Snair. It does not directly apply to this Committee,
but I really think it needs to be stated.
I started helping people start their own businesses after
being a businessman myself for some years, again about a year
and a half ago. And I really find it disheartening when I see
really, really savvy business people who either (a) are
unwilling to take the plunge or (b) have taken the plunge and
are unwilling to expand their business because of the cost of
And I am a registered Republican. I have been my whole
life. I consider myself a pro-business Republican. But I will
say it right now socialized medicine is the way to go. If
somebody does not have to worry about the cost of health care
for himself or his employees, he is willing to take that
business in a million different exciting directions, and I
would argue that socialized medicine is pro-business. Thank
Ms. Sanchez. Great. Thank you.
Mr. Rowe. I am not as brave as Scott. So, I am going to
talk about other stuff.
What Bill had brought up and the theme of collaboration I
think is probably from a small business, entrepreneurial
development point of view the 800-pound gorilla in the room
whether it is capital access or international trade or rural
development or federal procurement--let us pick some quick easy
topics, right--the lack of coordination and collaboration
because you have to deal with what we like to euphemistically
call the alphabet soup, whether it is international trade, and
the SBDC has an international trade center and we are working
with the USEAC, but then you have to go to Commerce and the
Census guys for the trade regulations and over here at EX-IM or
maybe asked me at SBA because it depends on the package, et
That confusion and lack of coordination makes our jobs that
much harder, because we are trying to guide a small business
owner. And I hope they are not sensing the frustration that we
have because when you are trying to assist someone, obviously
you want them to trust you and feel that they are confident in
your skill set and that is why we work so hard on professional
development at SBDCs.
At the other end of the scale, it is, well, okay, go here
but if you are doing this go there. And it makes it look like
either we do not know what the heck we are talking about or the
Federal Government end of it is so dysfunctional that it
And honestly, having been in your shoes, I do not know
exactly how to go down this road. I do not know how you get the
FDIC and the Treasury and the Office of the Comptroller and SBA
and everybody all into one room to sit and think and talk about
what are we really doing, and ICBA and ABA, what are we really
doing about capital access for small business.
If you write that into a reauthorization bill, I know you
will end up with referrals to six other Committees and it will
die under its own weight.
But if there is a way we can start to identify and
coordinate, and maybe it has to be in a bullet fashion, just
what we did in the Jobs Act.
And there is the great international trade effort in there,
and the Office of International Trade at SBA will be working
with several agencies to that TPCC, and SBA and ASBDC have
already worked together and with the Women's Business Centers
to set up the certification so we are already rolling on that.
So, we will have our folks trained as international trade
But then to go the step further and start to push the
coordination which we already do, we work with census so that
we help them run their road shows city by city so that small
businesses can get trade coordination and regulation training.
And I am still confused over who is doing what over there but
thankfully they know. But going down those roads.
In the procurement arena, we work so hard with the PTACs
and many of the PTACs are actually part of SBDCs. We need to
work harder to reach out to Scott and the SBDCs that are also
VBOCs to make sure that that procurement end of things is being
fully coordinated so that the opportunities are not getting
I guess it is that larger, it is thinking thematically and
then building the collaboration from there, maybe if we can
work on that for those areas. I know it is hard when you have
got a big government with 15 agencies.
Ms. Sanchez. Thank you, Tee.
Mr. Williams and then Holly.
Mr. Williams. Yes. There are two areas that you missed
narrowly. Support for entrepreneurs and then the services that
support those entrepreneurs. I think both of those are near and
dear to you UEP's mission and spirit, and along with the
Kauffman Foundation as well.
So, I am going to say in terms of supporting the
entrepreneurs and support we can give for encouraging
entrepreneurs to create and start businesses. If you look on
our Web site, the Kauffman Web site, there is a start up at
2011 that we just announced on Tuesday that talks about, I
think, it is 10 different ways about how policies and the
spirit of entrepreneurship can be encouraged in our country.
So, as opposed to going over all of those now, just take a look
But I would like to talk about the service part and what
Congress can do in terms of encouraging and being more
effective in the service that we offer entrepreneurs.
And one is if they really have specific economic goals
attached to the programs, I mean what are we trying to
accomplish, what needles are we trying to move, what pieces of
the entrepreneurial ecosystem are we not satisfied with, what
is the baseline, and what are we trying to move those two
across at any kind of point in time.
I think then it is easier when you ask for data what the
data is trying to tell you and what you are actually looking
for. And so, I think that would be one thing.
I think clarify the entrepreneurial process as for people
who are using these services. So, when you have five million
people who are looking to these programs and say what can I do,
I mean, what is the process for, let us say, someone who is
trying to do international trade or trying to do a start up or
trying to do different areas of entrepreneurship.
There can be kind of a typology created to say if you are
doing this, here is the development plan of services that the
government offers that can move you from point A to point B.
And I think a lot of times people are confused where to go,
what to do depending on what they are trying to accomplish.
Somebody who is in the restaurant business is somebody totally
separate from somebody who has a new innovation that they are
trying to license or something like that.
So, there has to be away for one to figure out what it is
that we are trying to do in terms, from the government's
standpoint, of the economic goals; and the other side is people
who are trying to use those services need to understand what
the process is to get to where they are trying to go.
I think those two things will go a long way.
Ms. Sanchez. Great. Thank you.
Holly and then Julie and then Leo.
Ms. Schick. First, I would like to state that we look
forward to working with GAO and exploring how we move the ball
forward on this topic, and the thing that Ms. Julie said
earlier we all built upon how we at the Federal level and the
national level, how we communicate with this. We set the tone,
we set a standard. And having said that, the terms of the
dialog [off microphone] and I think that is where that whole
issue of collaboration needs to start.
We had some successes. I was doing some research before I
came over and back in 2009, the Committee received
correspondence that talked about a group called INEAQ. I do not
know if you recall it, it is called the Interagency Network of
Enterprise Assistance for Providers. And it is a team of career
managers from the Department of Commerce, the Department of
Labor, and EPA. And this core group started meeting three or
four years ago to just try to identify who are all the players
in the Federal landscape that touch on the small business owner
The group has grown from core membership of about four to
five agencies to now it has over 19 participants. They meet on
a monthly basis, every other month, and talk about what their
particular program or agency is doing for entrepreneurship.
And I think that has become a good basis for us in
establishing contacts and in seeking input and ideas about how
to handle this and doing what you are doing, why are we doing
what we are doing.
And I think that that would be a good platform, if you
will, to work with GAO and see how that is working to see if we
cannot continue to build on that.
The other projects, I think, that SBA has reached out on in
trying to do Federal cooperation is one through our cluster
initiatives in trying to work with EPA, and Department of
Commerce, and at the local level engaging a number of partners
depending upon the cluster and the organizations to try to get
folks collaborating as best we can. We have also worked with
the Appalachian Regional Commission. We worked with NIST. The
MET program has been around for a long time and certainly SBDC,
in understanding how those operate in the local communities and
partner with those that we try to reach out to at the Federal
So, I think we have got a good running start, if you will,
because we have had some successes. And the INEAP group, I
think again is a good platform to start looking at how we raise
that to the next level.
Ms. Sanchez. Great. Thank you.
Ms. Weeks. So, you asked for five recommendations for you
to consider so I jotted down five, being the numbers person.
Ms. Sanchez. Thank you.
Ms. Weeks. First of all, keep calling these kinds of
roundtables because it forces us to get out of our daily
routine with blinders on, doing our jobs and start talking to
one another more because I mean it is very helpful.
Secondly, I would say demand data on the diversity of the
programs. And I think hearing what Holly is going to be doing
with expanding what they are gathering from the new EDMIS 2.0
or whatever is going to go a long way to help the Women's
Business Center program in particular tell its story. But I
think if you keep demanding that kind of information, that will
be very important.
It strikes me also that the Census Bureau could be part of
this conversation. Every five years there is a quinquennial
business survey, and that is not nearly often enough to find
out really what is going on in the economy. They are like the
mother lode of data on businesses.
The Kauffman firm survey does a really good job of
following a cohort in one year. But you are winding that up in
a year or so, right?
Doing something in-between census years, asking the Census
Bureau to provide more information, they do it on an annual
basis with employer businesses. Maybe there is something they
can do with the 80 percent of firms that are not employer
businesses. So, I would suggest having a conversation with the
economic statistics people at the Census Bureau.
Fourth, I think in the Special Jobs Act or other programs
where there are some special allocations made for certain
programs and projects, the Women's Business Center program is
kind of forgotten as it is a small program, a drop in the
bucket compared to SBDC and SCORE.
But as we now know, more than half of the clients of
Women's Business Centers are now existing business owners, and
hey, we could play a role in growth-oriented enterprise
developments and the job creation. We already do.
And then finally in pinging on that, when we get to the
whole idea of reauthorization, I mean, I know maybe this is a
little too bold, but we the Women's Business Center program
essentially have one hand tied behind our back when it comes to
being a full and active player in growth-oriented
The legislative intent of the Women's Business Center
program, which I am perfectly in support of, has a social
function as well as an economic one. But it sort of requires
that all the money that we get from the SBA in the grant which
is 40 percent of the full budget of all of the Women's Business
Centers be focused on socially and economically disadvantaged
and pre-start business.
All of the work that the Women's Business Centers are now
doing from client demand and from a need for helping existing
business owners grow is something we are doing with the support
of state or local governments, foundations, corporations, that
sort of thing.
Perhaps we can widen the mandate from a public sector
perspective on what Women's Business Centers can do.
Ms. Sanchez. Great. Thank you.
Mr. Bottary. First of all, thanks so much for the
invitation here today. It is always such a great learning
experience to come here and to engage and participate in these
kinds of forums and learn so much about the good work everyone
I think that Bill offered a really important distinction
between collaboration and coordination today, and I think
opportunities to coordinate activities between the public and
private sector I think there is great opportunity there.
I think for us it is a matter of working harder and doing a
better job to learn about all the great things that are going
on here and how hard people are working here and making sure
that we communicate it to our members and out to the business
And conversely, I would really encourage and invite
formally any member of this Committee who would like to go to a
Vistage group meeting, we have 17 of them here just in
Washington, DC, and more importantly and maybe more
appropriately for them to go to a Vistage meeting in their home
state where I think there is not only an opportunity to hear
directly from the CEO members about what their greatest
challenges are and how Washington can be most beneficial there.
But also it gives the Senator an opportunity to speak very
specifically to what is going on here in Washington, because I
will tell you that every time I come here I leave, I think,
just really feeling wonderful about how hard everyone is
working at all the work that is going on and the fact that we
may be a for-profit organization but we are as mission driven
as anyone out there when it comes to all of this.
I think we are all really trying to accomplish the same
things, and to the extent that we can coordinate that much more
aggressively, I think would be my one thought contribution, I
Ms. Sanchez. Great. Thank you.
Mr. Tymes. My one thought is to use the networks that we
have. I mean, we have a tremendous infrastructure here between
our resource partners, and it would always to me be so
frustrating when Commerce has an entrepreneurship program, and
Agriculture has an entrepreneurship program, and Department of
labor has an entrepreneurship program.
And that to me has always been something, and I do not know
how we get it done, but there is no reason why, with the
infrastructure that we have, the skill sets that we have, that
ED programs drive entrepreneurship in this country, period.
Ms. Sanchez. Great. Thank you.
Mr. Yancey. Just very quickly. I know time is of the
essence here. Three things that I wanted to hit that have
already been said.
What you can do, as Daryl said, is to give us really clear
goals. What do you want to move, and allow us to move that the
best way we know how within our programs.
Two, to Tee's point, any barriers that exist that are
hindering our clients from achieving their success need to be
addressed in some fashion, because technical assistance can
only overcome so much and there are a lot of things that need
to be done that will make it easier for people to be successful
in businesses and to create jobs and to move forward.
And finally, to Julie's point, the way that this is going
to stay top of mind is if we keep having these types of
conversations. If we do not have these types of conversations,
we will all get busy and we will get busy doing other things,
not that they are not valuable, but they are not this.
So, for those things that you believe, that Senator Snowe
believes, that Senator Landrieu believes, that Meredith
believes are important, we need to have ongoing communication
and conversation around that.
It is like Leo talked about the importance of TEC and being
accountable. If we continue to have the conversation,
accountability will occur here too.
Ms. Sanchez. Great. Thank you.
Ms. Dietz. So on that note, we encourage you to keep
talking. On behalf of the Ranking Member and the Chair, we
encourage you to keep talking. And I thank Ken for those brief
Ken was recently in Portland doing a SCORE event which was
very well received, and Senator Snowe was happy to support the
forum in Maine. So, we appreciate your work and your time, Mr.
I would like to ask one question before we leave and I am
going to pose it to Scott. VBOCs are rather new. As Scott
mentioned, there are 16 now, and I think they speak to a very
specific part of the population right now that, in some states,
double the national unemployment rate.
The problems faced by returning veterans are unique and
they are compounded by the sheer number of returning veterans,
and when we see a larger drawdown in Iraq and Afghanistan,
those numbers are going to continue to go up.
Scott I think that VBOCs have a unique story to tell. These
people have complex needs. I read one story about a soldier who
deployed in 2003, and he said that he had to shut down his
landscaping business; and then when he was deployed seven years
later in 2010, he was able to keep it going by Skype and
utilizing some of his employees' management skills.
And so, people are being very innovative, and I think
entrepreneurs are innovative. But I am interested to hear from
you how the needs of veterans have changed, what the range of
needs that you see every day, and how you are addressing them.
Also, is there a common misconception among veteran
entrepreneurs, whether it is finding a lender or business
resources? Please speak to the veterans entrepreneurial
Mr. Snair. Sure and I will make it quick.
I do want to say there has been some of the buzzwords I
heard today, duplication and efficiency. For anyone who has
never visited a Small Business Development Center or SCORE
office, I invite you to go.
When you read these statistics and the number of companies
that are helped by these offices and when you read about the
number of jobs that are created by any particular Small
Business Development Center, you would think that these are
bustling places, bloated with lots of people when, in fact,
they are very, very streamlined.
Any given Small Business Development Center is very, very
leanly staffed and I am always amazed when I visit the Small
Business Development Centers, in some cases to collaborate and
work with their veteran clients, I am amazed at the things that
they can do with the small number of people any one of those
It is funny. When I first started this program, I thought
that what I was going to be doing was triaging veterans and
placing them in a program that would help them start their
And about two weeks into it, I said I am the program. I am
not triaging anybody. I am the program. So, if you want to
duplicate my services that will put us at two and I am okay
So, I would say that I complement what goes on at SCORE and
what goes on at the Small Business Development Centers, but I
do not see any bloat or duplication whatsoever amongst these
folks or as I relate to them.
About the biggest misconception I think that is out there
among veterans, two of them I guess come to mind, and then I
will cut it off.
One very similar to what Ken says. They think there is free
money out there, and there really is none. There are veteran-
tailored small business loans that are extremely similar to the
7(a) SBA-backed loan. And unfortunately for veterans because a
lot of times their lives are in turmoil, including their
financial lives, because they are away from their banks when
they are overseas, they come back and it is not that they are
not paying their bills, they just had the capacity to pay them
and call their lenders, their credit is no good, and that hurts
them in getting started up.
So, they think there is free money. There is not. And then
they go for the loan and it is tough for them to get a loan
because they have been away from their financial situation for
a year to 15 months a clip.
And then the second one does not really pertain to me but
there is set aside contracting for veterans on a Federal level.
A lot of them come in with the misconception that it is going
to be easy for them to register, and it really is not.
I think the VA unfortunately has swung the pendulum in the
other direction in trying to avoid fraud by making the process
so unwieldy that it is essentially blocking and scaring away
legitimate veteran businesses, both startup and existing.
So, those are the two things that I see going on right now
that concern me. Thank you.
Ms. Sanchez. Great. Thank you.
I think we have hit our time limit. I want to say thank you
very much to each and every one of you. I think this has been a
really helpful, informative discussion, and I think it is going
to be the first of many discussions that we will have on all of
these topics and all of these programs as we continue through
So with that, I think we will close.
[Whereupon, at 12:31 p.m., the committee was adjourned.]
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