[Senate Hearing 114-596]
[From the U.S. Government Publishing Office]
S. Hrg. 114-596
OPENING DOORS TO ECONOMIC OPPORTUNITY
FOR OUR VETERANS AND THEIR FAMILIES THROUGH ENTREPRENEURSHIP
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
UNITED STATES SENATE
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
JUNE 25, 2015
__________
Printed for the Committee on Small Business and Entrepreneurship
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED FOURTEENTH CONGRESS
----------
DAVID VITTER, Louisiana, Chairman
JEANNE SHAHEEN, New Hampshire, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
MARCO RUBIO, Florida BENJAMIN L. CARDIN, Maryland
RAND PAUL, Kentucky HEIDI HEITKAMP, North Dakota
TIM SCOTT, South Carolina EDWARD J. MARKEY, Massachusetts
DEB FISCHER, Nebraska CORY A. BOOKER, New Jersey
CORY GARDNER, Colorado CHRISTOPHER A. COONS, Delaware
JONI ERNST, Iowa MAZIE K. HIRONO, Hawaii
KELLY AYOTTE, New Hampshire GARY C. PETERS, Michigan
MICHAEL B. ENZI, Wyoming
Zak Baig, Republican Staff Director
Robert Diznoff, Democratic Staff Director
C O N T E N T S
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Opening Statements
Page
Vitter, Hon. David, Chairman, and a U.S. Senator from Louisiana.. 1
Shaheen, Hon. Jeanne, a U.S. Senator from New Hampshire.......... 2
Witnesses
Panel 1:
Nowosielski, Katrina, Owner, Storm Guard of LA, Lafayette, LA.... 4
Tansey, Albert, President, Tansey Electric, Manchester, NH....... 7
Sayles Artis, Laurie, President and CEO, Civility Management
Solutions (CMS), Bowie, MD..................................... 11
Panel 2:
Carson, Barbara, Acting Associate Administrator, Office of
Veterans Business Development, U.S. Small Business
Administration, Washington, DC................................. 27
Haynie, Michael, Executive Director, Institute for Veterans and
Military Families, Syracuse University, Syracuse, NY........... 33
Daugherty, Scott R., Assistant Vice Chancellor and State
Director, Small Business Technology & Development Center,
Raleigh, NC.................................................... 37
McCaffrey, Charles W., Acting Director, Veterans Business
Outreach Center at Community Business Partnership, Springfield,
VA............................................................. 41
Alphabetical Listing and Appendix Material Submitted
Carson, Barbara
Testimony.................................................... 27
Prepared statement........................................... 30
Responses to Questions Submitted by Ranking Member Shaheen,
Senator Gardner, and Senator Ernst......................... 51
Daugherty, Scott R.
Testimony.................................................... 37
Prepared statement........................................... 39
Haynie, Michael
Testimony.................................................... 33
Prepared statement........................................... 35
McCaffrey, Charles W.
Testimony.................................................... 41
Prepared statement........................................... 43
Response to a Question Submitted by Ranking Member Shaheen... 55
Nowosielski, Katrina
Testimony.................................................... 4
Prepared statement........................................... 6
Sayles Artis, Laurie
Testimony.................................................... 11
Prepared statement........................................... 13
ScoutComms
Letter Dated July 10, 2015................................... 50
Shaheen, Hon. Jeanne
Testimony.................................................... 2
Tansey, Albert
Testimony.................................................... 7
Prepared statement........................................... 9
Vitter, Hon. David
Opening statement............................................ 1
OPENING DOORS TO ECONOMIC
OPPORTUNITY FOR OUR VETERANS
AND THEIR FAMILIES THROUGH ENTREPRENEURSHIP
----------
THURSDAY, JUNE 25, 2015
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The Committee met, pursuant to notice, at 9:36 a.m., in
Room 428A, Russell Senate Office Building, Hon. David Vitter,
Chairman of the Committee, presiding.
Present: Senators Vitter, Fischer, Gardner, Ernst, Ayotte,
Shaheen, Cantwell, and Hirono.
OPENING STATEMENT OF HON. DAVID VITTER, CHAIRMAN, AND A U.S.
SENATOR FROM LOUISIANA
Chairman Vitter. If I can have everyone's attention, good
morning. This hearing of the Senate Small Business Committee
will come to order.
Thanks for joining us today to examine how we support
veterans' entrepreneurship through various programs at the U.S.
Small Business Administration. I want to thank Ranking Member
Shaheen for suggesting this hearing and for working with me on
a comprehensive veterans' entrepreneurship bill that we hope to
mark up next month.
We will be hearing from two panels of witnesses today. The
first is a panel of entrepreneurs who have honorably and
bravely served our country in the Armed Forces, and the second
panel includes representatives of programs that help these
veterans start and grow their businesses.
Of course, veterans are invaluable members of our
community, serving our country in so many ways, both here and
abroad. Of course, it started with their valiant military
service, but it also continues in terms of being business
leaders and absolutely vital members of our economy. They gain
valuable experience throughout their service, and 69 percent of
veterans say that their biggest challenge after leaving the
military is finding a job. We have over one million veterans
currently unemployed, with unemployment rates for veterans at
nine percent, and in some markets as high as 21 percent.
So, we are here today to examine how we can better serve
our returning heroes through entrepreneurial development
programs at the SBA that target veteran service members
throughout their transition to civilian life.
The SBA operates a number of relevant programs. We are here
to find out how we can make them even better and more
effective. There are SBA's core technical assistance programs,
such as Small Business Development Centers, SCORE, and Women's
Business Centers, that also serve and have outreach initiatives
specific to veterans. And, the SBA has supplemented these
efforts with several new innovative initiatives aimed at
supporting veterans and their families, like Veterans Business
Outreach Centers, Operation Boots to Business, Veteran Women
Igniting the Spirit of Entrepreneurship, and the
Entrepreneurship Bootcamp for veterans with disabilities. These
programs serve as vital resources for veteran entrepreneurs for
training and counseling on how to translate their professional
skills into a viable, sustainable business operation.
Today's hearing will inform us in a number of areas,
including the development of legislation that we are working
on. I am particularly interested in finding out more about the
role SBA's core entrepreneurship programs play in delivering
entrepreneurship training to veterans nationwide and how we can
ensure that any new initiatives are fully integrated with these
partners.
I also want to ensure that our veterans get the highest
quality assistance as they start their own businesses and that
we are making effective taxpayer investments. Metrics for these
programs must be clearly defined and reliable and measurable,
and the grant award process must be robust and fully
competitive.
I know that our witnesses can shed really important light
on these and other issues, and so thanks to all of our
witnesses participating today once again.
Now, I would like to turn to our Ranking Member, Senator
Shaheen, for her opening statement.
OPENING STATEMENT OF HON. JEANNE SHAHEEN, RANKING MEMBER, AND A
U.S. SENATOR FROM NEW HAMPSHIRE
Senator Shaheen. Thank you very much, Mr. Chairman.
Good morning, everyone. Thank you to our witnesses who are
here to enlighten us this morning.
I really appreciate this opportunity to discuss a topic
that is incredibly important not only for our veterans, but
also for our economy and for our nation as a whole, and, let me
apologize at the beginning of my remarks because I will have to
leave at about 10:30 because the Appropriations Committee is
marking up legislation today and I want to make sure I am there
to see how we are spending the money. So, I apologize in
advance to the second panel, which I am afraid I will miss
entirely.
Today, there are approximately 2.4 million veteran-owned
small businesses across the United States and they represent
about eight percent of all small business. Veteran-owned small
businesses generate over $1 trillion in revenue each year and
they employ nearly 5.8 million people.
In my home State of New Hampshire alone, there are nearly
14,000 veteran-owned firms, accounting for $6.7 billion in
sales. That is roughly 10 percent of the companies and 5.6
percent of all sales in New Hampshire. That is the fifth-
highest percentage in the country for those small businesses.
Now, today's hearing is about the federal government's
investment in promoting veteran small business ownership and
entrepreneurship, specifically through programs at the Small
Business Administration.
Military veterans who choose to become entrepreneurs play a
critical role in our nation's economy, as those statistics
show. Their training and leadership skills provide a natural
foundation to establish and grow businesses, which in turn
create employment opportunities for returning veterans and
American workers. That is why we must ensure that the federal
government makes veterans' small business development a
priority and that the programs being administered work
effectively and efficiently.
Encouraging veterans to start small businesses and succeed
has been one of my top priorities on this committee, and I know
that it is something that the Chairman shares as well as other
members of the committee. Earlier this year, I introduced the
Veterans Entrepreneurship Act, which was approved unanimously
by the committee and it would make fee waivers permanent for
veterans for SBA loans to help them get access to credit.
Now, today, we have an opportunity to take a look at the
full range of programs that are offered through the SBA to help
veterans start and grow small businesses. The SBA offers
programs that provide critical information, education,
training, and counseling to our veterans. The committee's
review of these programs is timely and I look forward to
discussing ways we can make these efforts more effective and
responsive to veterans' needs, and I am sure our panelists this
morning, particularly those of you on the first panel, will
have some thoughts about that.
I want to, as I said, welcome all of you today, but I want
to take this opportunity to just say a few words about the
witness from New Hampshire, Mr. Al Tansey. Mr. Tansey is
President of Tansey Electric, which is an electrical
contracting business in Manchester, New Hampshire. He was
recently named the SBA New Hampshire and Region 1 Veteran Small
Business Owner of the Year. Congratulations, Al, for that
recognition. He has a great story about his journey to becoming
an entrepreneur and the importance of making sure our veteran
support programs are working effectively and in a coordinated
fashion.
So, again, thank you all very much for being here. Al,
thank you so much for coming down from Manchester, and I look
forward to hearing what each of you have to say this morning.
Thank you, Mr. Chairman.
Chairman Vitter. Thank you, Senator Shaheen.
And now, we will go to our first panel. I will introduce
the other two members of our first panel.
Mrs. Katrina Nowosielski is a Marine veteran and owns Storm
Guard of Louisiana with her husband, James. Their company
offers hurricane protection products to residential and
commercial structures. They reached out to the Louisiana Small
Business Development Center at the University of Louisiana at
Lafayette upon starting their business and have continued to
rely on the SBDC's services as their company has grown.
And, of course, you just heard about Al Tansey. Welcome.
And, finally, Ms. Laurie Sayles Artis is the owner of
Civility Management Solutions in Bowie, Maryland, and a veteran
of the U.S. Marine Corps. Before establishing her business, Ms.
Artis went to SCORE, where she started working with a mentor
who helped her navigate the early challenges of starting a
business and has continued to help her expand her contracting
business.
Welcome to all of you. You will each have five minutes to
testify, and, of course, your full written statement will be
made a part of the record.
And with that, we will start with Mrs. Nowosielski.
STATEMENT OF KATRINA NOWOSIELSKI, OWNER, STORM GUARD OF
LOUISIANA LLC, LAFAYETTE, LA
Mrs. Nowosielski. Hello, everyone.
Chairman Vitter. Hi.
Mrs. Nowosielski. Well, I did not write it, so I am just
going to impromptu----
Chairman Vitter. Sure.
Mrs. Nowosielski. When I was 16, I attended my brother's
Marine Corps graduation. The first thing that I heard was boots
hitting the ground in unison. It was so powerful, and just
feeling the essence of all the Marines there, I knew at that
point that I wanted to be a part of that. I wanted that
strength and that power behind me.
A couple of years later, after I graduated, I joined the
Marine Corps. I served four years, and I served a 10-month tour
in Iraq, which is where I met my husband. When we came back, we
had about two years left of service and we transitioned out at
that point because we were ready to start our family.
We moved to Florida, where James, my husband, began working
for a hurricane shutter company in South Florida. We spent
about a year and a half there and decided to move home to
Louisiana around family. We realized that there were no
companies really focusing on hurricane protection there the
same way that they did in Florida. So, we used the business
model that we experienced there, and we replicated it at home
in South Louisiana, and it has gone pretty fantastically.
We began in Florida using the SBA from a distance. They
guided us from start to finish on how to go about those things.
Basic questions were answered. The liaisons there are
phenomenal. They are wonderful, wonderful people. They helped
me with things that I could not possibly have done for myself.
I began with QuickBooks training, which was something that
I had very little knowledge of, and anybody who is in business
knows that books are probably one of the most important things
to grasp. So, that was really important. It was one-on-one
training. They matched 50 percent of the program. So, that was
something that I could not have afforded on my own.
I started with that. They helped with a Web site, as well,
50 percent towards the Web site, producing the Web site. So,
again, something that we could not have afforded, starting a
new business on our own, and a combination of those two things
really pushed us forward to a place that we would not have been
able to get to financially on our own.
They also helped us with a line of credit in our first
year, which we attempted multiple times to get a line of credit
and got denied, and, the SBA helped us to get a line of credit,
which helped us to purchase materials which, obviously, allowed
us to float things longer and really get on our feet. That was
all within probably the first two years.
And then, after that, they have provided us with an
advisor, basically, who comes in, looks at our books, and then,
in turn, will guide us on where we should go, what we should
think about next, because we are young business owners and this
is our first venture in business. He really keeps us on track
and lets us know what to think about next and where we should
go from there. And, again, that service, in general, has really
guided us through this whole process.
This will be our eighth year of business and we are going
strong, and, you know, we are actually venturing out into other
things, as well, since this has grown. It is providing for our
family wonderfully, and we could not be more grateful for the
services. We continue to use the services along the way.
As far as anything that could be bettered, I have a really
hard time coming up with anything that I could complain about
with the service. A lot of the programs that I know you guys
are concerned about are things that were not available when I
got out, so the program from getting out, to what information
you get, to transitioning that to a home state as opposed to
just the bases where you get out, those things were not
available when I got out, so I have a hard--you know, I cannot
really testify on that, but----
[The prepared statement of Mrs. Nowosielski follows:]
[GRAPHIC] [TIFF OMITTED] T0056.001
Chairman Vitter. Okay. Thank you very much.
Mr. Tansey.
STATEMENT OF ALBERT TANSEY, PRESIDENT, TANSEY ELECTRIC,
MANCHESTER, NH
Mr. Tansey. Good morning, Senators. It is with great honor
that I am afforded the opportunity to address the Committee on
behalf of veterans' members and the Veterans' Business Owner
Initiative. It is also a great honor to be sitting in between
two Marine veterans.
The Veterans' Business Owner Initiative is an organization
I hold dear to my heart, and I am not alone. The VBOI is
established to assist veterans facing physical and emotional
challenges and run successful business ventures, giving
veterans an organized environment, encouraging them to develop
skills in management, operations, and financial planning.
As you are all aware, there are many government-funded
programs that give veterans access to building loans, business
loans, and most needed moral support. We as an organization
strive to create a safe haven for veterans to dream of
entrepreneurship and give them the tools they need to get
there.
You may be wondering how I know so much about the VBOI and
the local success story. I am a small veteran business owner
myself and I am personally connected to the organization as
their president.
I did not have the easiest life after service, a common
story among veterans. I joined the Army in 1977, was discharged
in 1980. I immediately went into the Army National Guard, but
felt that disconnect from the service and I reenlisted back in
the United States Navy under the advanced weapons program--
electronics program. I was discharged in 1985.
Like many veterans, I was unsure of what to do. I was able
to get back into the International Brotherhood of Electrical
Workers in my hometown in 1985. And over the next 23 years, I
worked as a union electrician and basically worked for other
people in different shops from time to time.
In 1997, I moved up to New Hampshire and I moved my trade
and assets up to New Hampshire, in Manchester. Over the next
several years, I worked for a couple of contractors, at which
time I decided I was going to venture off on my own. A customer
I was working with locally suggested that I not retire and
start my own business.
At that point, I ventured into my local SBA and met Miguel
Morales and he suggested going to a veteran roundtable that was
hosted in Nashua, New Hampshire, and Miguel and Ray Milano and
a few others, and at that point, I met Gerald Pinsky from the
Veterans Association who was there to support the SBA on their
ability to help veterans.
Gerald was at the meeting supporting the SBA in their
mission to support veteran entrepreneurs. I started attending
the VBOA classes in Manchester that were taught by Gerald. I
worked my way through the 18 business modules. After
graduation, with both the SBA and the VBOI's support, I was
able to put together a business plan and financial projections.
With the assistance and recommendation of both the SBA and
VBOA, I approached the Radius Bank and received a line of
credit through the Patriot Loan Act of $300,000 to start my
business.
I could not believe how my rapid success, with $500,000 in
revenue the first year and $1.2 million revenue in the second
year. I finally had purpose in life, a feeling that many
veterans lack in their personal and professional lives. Taking
control of my destiny has changed my life, and I am here today
to speak for all veterans that lives will be changed with the
help of the VBOI.
Why the VBOI is better than most business organizations?
Because we are veterans helping veterans create and start and
own businesses. The Veterans Business Owner Initiative believes
that the qualities that make good warriors also make good
entrepreneurs. The VBOI has achieved many accomplishments since
its inception in 2004. In 2006, with the help of Babson College
students, the Empowerment Bank Loan Fund was established to
provide small loans to veteran members teaching how to
establish and maintain good credit relationships. Loans are
$150 to $1,500 and are made in a step-wise fashion to build
confidence. Over 100 loans have been given. All but three have
been repaid.
I could go on and on about the success stories that have
emerged from the organization, but unfortunately, we do not
have the time. But, I do want to stress why I am here today.
The future of the VBOI and countless number of veterans is
only possible with your help. The future could be bright if the
VBOI can increase its establishment around the country, not
only in New England. A dart thrown at a map of the U.S. will
land on a spot where I guarantee you will find at least one
dozen veterans who will give anything for the education
opportunity I have had because of the cooperation of the VA and
the SBA.
With the support from the Senate, the VBOI can continue to
support veterans and give back to them a return on the service
they have given to us. With determination and thoughtful
planning, we are optimistic about the future of the program and
our role as veterans helping veterans to do more to overcome,
to excel at whatever goals we choose for ourselves.
Thank you very much for your time.
[The prepared statement of Mr. Tansey follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Thank you very much for your testimony.
And now, we will go to Ms. Artis.
STATEMENT OF LAURIE SAYLES ARTIS, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, CIVILITY MANAGEMENT SOLUTIONS, BOWIE, MD
Ms. Artis. Good morning.
Chairman Vitter. Good morning.
Ms. Artis. Thank you, Chairman Vitter, Ranking Member
Shaheen, and members of the committee, for this opportunity to
testify, and I ask that my complete testimony be entered into
the records.
My name is Laurie Sayles Artis and I established Civility
Management Solutions in August of 2012 as a professional
services company. We are a woman, minority, service-disabled,
veteran-owned small business, and I am also located in a
HUBZone area in Prince George's County, Maryland, and currently
in the process of submitting our 8(a) package on business
development.
I was born in Chicago and joined the United States Marine
Corps and served during Grenada, Lebanon, and Desert Storm. My
job in the Corps was maintenance management, which means I
monitor the management and functionality of equipment for the
fighting Marines, like the rifles, trucks, and the radios, and
I had the honor of preparing Reserve Marines for the
possibility of serving in Operation Desert Storm.
The development of Civility Management Solutions came from
an opportunity that I got to work in a corporate office of a
woman-owned small business that was also 8(a) and HUBZone, in
which I managed up to 128 staff nationally within eight
government agencies totaling up to $11.5 million in contract
value. And, mind you, when I got out of the Marine Corps, I
started as a receptionist based on staffing agencies'
qualifications, making $17,000 a year.
But whereas my experience of serving in the Marine Corps
gave me courage, discipline, teamwork, and tenacity that
attributed to my transition into the civilian workforce. It was
a slow and steady process, but the Corps taught me to lead and
survive. So, what I was lacking was business acumen.
Before establishing, I went to SBA SCORE, over three years
now, and obtained a mentor, and I was appointed a retired Major
General, Fred Elam, who was just perfect. Our first meeting
was, ``Is your husband in agreement? Take courses with SBA and
get an attorney and an accountant before you need them.''
[Laughter.]
If my mentor lacks expertise in any area, he refers me to
another mentor to ensure that I get the proper insight or
response.
My highlight of the relationship with SCORE is the
Washington, D.C., office honored me in 2015, this year, as
``Client of the Year'' for my entrepreneurial spirit and
accomplishments.
So, in January of 2014, I attended VWISE and experienced
networking at its best with women veteran entrepreneurs. But,
adding more substance for the training for federal and
commercial contracting would be great to add value for the
program.
The VWISE National Graduate Training Conference was a big
kick. It allowed advanced training. It gave some booth exhibits
to women that owned businesses and also provided for more
networking opportunities for the graduates.
It is clear that the heightened awareness in our country
for veterans and veteran entrepreneurs is there. However, as of
recent, I have spoken with Fortune 500 companies that stated it
is difficult to find strong veteran candidates for employment
and procurement-ready veteran-owned businesses for being a part
of their supplier diversity office. We need more synergy in
promoting veterans to the commercial opportunities, as I do
plan to be a conduit on that and would appreciate the support
of the program.
I am a recent graduate of the Montgomery County,
Maryland's, Veteran Institute of Procurement, and they are
doing an excellent job of training veteran-owned businesses
that are already procurement-ready for doing work with the
federal government. They are slowly doing it, and they are the
only ones out there who are doing it.
During my training, I had a group exercise for responding
to sources sought, also called an RFI request for information,
and since graduation, my company has been awarded work with the
Department of the Army because I was able to respond to their
sources sought due to the training. And, the work was set aside
for a service-disabled veteran-owned small business, and we
went after it and won.
So, I suggest that they become an authorized program as
opposed to just being a grantee.
Lastly, as an officer on the Veteran Entrepreneurship Task
Force Committee, which is a non-federal community group that
advocates for veteran-owned small businesses that offers
recommendations and advice to Congress, government, and other
entities also providing training to us, I have been affiliated
for the past three years and have received much support,
guidance, and information relative to being in business with
the federal government by attending their monthly meetings.
Again, thanks for the opportunity to share my experience
with the committee on veteran entrepreneurship programs.
[The prepared statement of Ms. Artis follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Great. Thanks to all of you for your
excellent insight and testimony.
Because of her schedule and requirement to leave in a
little bit, I will turn first to Senator Shaheen.
Senator Shaheen. Thank you, Mr. Chairman.
I want to start, Mr. Tansey, with you. You talked about the
importance of the roundtable with other veterans in helping to
encourage you to actually make the jump to go out on your own.
Can you talk about how important that is for veterans
everywhere, as you talk about the sort of support for getting
direction for what you might want to do when you get out of the
service?
Mr. Tansey. Yes, Senator. Thank you. I know for myself, the
SBA was an integral part of myself getting started, but joining
the Veteran Business Owner Association Group locally, the
veteran-to-veteran peer networking, there is something about
when I left the service--and I speak for myself, but I know I
speak for a lot of veterans--when we leave the service, there
is what I call the service disconnect, and we feel like we do
not belong ``out here'' and there is that longing to belong to
something.
What I found inside my group is that the veterans meeting
with other veterans, it is not just the peer-to-peer network as
far as growing the business intelligence, but also the veterans
helping each other talk about problems they may have in their
current lives. And, it helps boost the morale and the
confidence.
One of the important things about--you know, I bring a lot
of veterans--I tried to bring a lot of veterans into my
businesses. Veterans already have the package. We just have to
learn how to open it up. Most veterans are conditioned to
adverse conditions, to strive to make sure that the mission is
completed at all costs. And once they have the respect and the
honor, they are very loyal. We call it, we have your six. It is
a proven fact.
Senator Shaheen. So, you talked about going into SBA and
the support you got there. Are there ways in which we can do a
better job of helping reach out more to veterans so that they
know that SBA is there and that it is available to help when
people have an idea or want to start a business?
Mr. Tansey. Yes. I am currently working with Miguel
Morales, my local SBA interaction up there in Manchester, who
goes to Pease Air Force Base from time to time to give the
boost to business talk, and I call it the Charlie Brown effect.
When people are leaving the service, all they hear is wah-wah-
wah-wah-wah. Let me out the door.
[Laughter.]
So, I was instrumental in helping with Jerry. We put
together a pamphlet for the VBOI that he can hand to the
individual so they can have it in their packet. I am going to
be working with him here closely to put together a packet so
the individual, when he leaves the service, has something to
hold onto that within two, three weeks afterwards, when the
dust settles, he has got numbers he can call, people he can
come to, because it is instrumental that he come back to
ground.
Senator Shaheen. I think that is a great idea, and thinking
about how we can do that kind of outreach through SBA is really
important.
Mr. Tansey. It is very important at all the programs, the
SBA, the PTAP, the VA, the VBOI, all start talking to each
other. I mean, they all have wonderful assets. They all have
wonderful programs. What we need to do is combine them all
together to get them talking. Get the conversation open and see
what happens. I think you will be surprised.
Senator Shaheen. Thank you.
To our other two panelists, Ms. Artis and Ms. Nowosielski,
I was very pleased to see that we have two female veteran-owned
business representatives here, because as you are probably
aware, unfortunately, women veterans are under-represented in
terms of starting their own businesses. So, I wonder if you
could talk about how we could increase awareness among female
veterans about the assistance that might be available and
encourage them to take those great ideas, like both of you have
done, and start their own business? Either one.
Ms. Artis. Thank you. It is odd, by the way, to have two
women Marines in a room, because I have actually gone on a boat
cruise with veterans. It was 192. I was the only woman veteran
on that cruise. So, it is a pleasure to be here with her.
But, as far as having more visibility, I would say that--I
know that they have the TAP programs out there. Thank goodness
now for the Internet, when comparison to the time that I got
out, that stuff did not exist, that they need to incorporate
more information there, because a lot of veterans are getting
out thinking to start their business in this generation,
whereas that was not my thought. It was more about I just need
a job. I wanted to put a suit on and go to work.
So, now the pace has picked up, and there is a huge women's
movement that is going on. There are a lot of nonprofits that
exist. So, it is just a matter of someone spending the time to
kind of bringing all those entities together, or at least
getting on their mailings, getting in their e-mail world, so
that they can be informed of what the SBA is offering.
I, myself, personally, am a huge mentor and I am sharing
all the time. One of the first things I ask, do you have a
SCORE mentor, and if they tell me no, then I advise them how to
get one.
Senator Shaheen. Thank you. I would point out that Senator
Ernst, who just left, is also an ex-Marine, so we actually had
three in the room today.
Ms. Artis. That is amazing.
Senator Shaheen. And, can I just ask, Mrs. Nowosielski, do
you have anything to add to that about, as somebody who came
out a little later and was starting up, what was most helpful
to you?
Mrs. Nowosielski. I would definitely agree with both Mr.
Tansey and Ms. Artis on the TAP program. When exiting, they
give you a ton of information. There was a lot of literature,
and for myself, I made a giant packet, because I did do the
Charlie Brown effect. You do not hear anything. You are just
ready to go.
And, so, you get out there, and I probably still have it in
a file somewhere, where it was just a giant pile of
information, and I did go back through it when I was ready to
consume it and use that guidance, and I think that is how I
ended up at the SBA, because it was in there. So, it absolutely
is there. You just have to want it and you have to want to go
for it.
I think that one of the things that a lot of folks do is
they end up in the medical facility, the VA medical facility,
and I think that maybe that might be a really good place to
connect and be given information again at one point, and they
do have a ton of information there, as well.
The Web sites are helpful, obviously. We get out there and
we just surf. I found a lot of my own information that way. You
just go from one place to another to another, connecting. But,
the information is there. It is there. You just have to look
for it.
Senator Shaheen. Thank you all very much. My time has
expired.
Thank you, Mr. Chairman.
Chairman Vitter. Thank you, and we will go to Senator
Hirono. I will wait until last. Senator.
Senator Hirono. Thank you, Mr. Chairman, and thank you all
for coming to testify.
I am a member, also, of the Veterans Committee as well as
the Armed Services Committee, so I am very focused on the
transition from active to veteran status, and I have heard from
meeting with veterans all across my state that the TAP--that is
a lot of information given to you pretty much in a very
condensed way when all you are thinking about is leaving,
transitioning out. And, I think you make a good point that
there needs to be other--maybe the rest of you also agree--that
there needs to be other points at which this information is
readily available to the veterans.
Mr. Tansey, you mentioned that there are all these
different programs and they should be talking to each other and
you do not see that happening in the way that would be
beneficial for veterans who seek this kind of information.
Mr. Tansey. Yes. I do see some talking back and forth, but
as a personal note, I see different programs out there.
Everybody is pining to be the next best thing for the veterans'
needs.
Senator Hirono. Mm-hmm.
Mr. Tansey. So, some things get lost in the translation for
the different programs. I am just a conduit to try to take in,
bring all the assets to bear. SBA was an integral part of me
starting my business and they have great assets. Part of the
issue for the SBA in my state is they say, you know, they need
the support from the outside world. So, my organization, I
encourage all my members to support the SBA, to get that
interaction back and forth, to get that communications open.
Senator Hirono. So, the SBA is in every state, but, for
example, I have some experience with SBA's, the Small Business
Development Centers, and those can be in different communities.
I am wondering whether--and that is kind of a one-stop place
for just people who are interested in starting small
businesses, not necessarily a veteran-focused one-stop center.
Are there any of these veterans programs that can serve as more
of a one-stop center for veterans who are interested in
starting their businesses, of all the different programs that
are out there? Any of you?
Mr. Tansey. I know for myself, as President of the Veterans
Business Owner Initiative, currently, we have been going for
about 10 years----
Senator Hirono. Are you in every state?
Mr. Tansey. No. Right now, we are only in New England. That
is pretty much why I brought packets down----
Senator Hirono. Yes.
Mr. Tansey [continuing]. Because I want to be in every
state. What I would really love to do is to interact with the
SBA. SBA is already in place. They already know the contacts.
All we need to do is talk, and----
Senator Hirono. So, how is your organization supported,
then? You are only----
Mr. Tansey. We are self-supported. We are a 501(c)----
Senator Hirono. Okay.
Mr. Tansey [continuing]. So, we are actually looking for
funding to start a pilot program for two years. We would love
to have 10 locations over two years with a small funding just
to see how the program goes along before it actually gets, you
know, totally funded. We are a 501(c), so--it is veterans
taking pride in their own organization to help other veterans.
Senator Hirono. So, there are federally supported programs
that you are also familiar with. Would you like to respond?
Ms. Artis. Yes, ma'am. There are--actually, the VWISE is
something that SBA has funded. I understand that VIP, as well,
is kind of as a grant scenario. They should be authorized,
though, because they provide something that nowhere else can we
get, because it is for ready companies for federal government
work, meaning they would like for you to have three employees.
They would like for you to have already some funds on the
books. Then when you go, of course, you are getting knowledge
that you can apply immediately and be able to bounce off what
you have already set up to what the experts are saying about
what you are doing and being able to come away with really
improving what your organization has to offer.
But, I really need to echo one thing that he has stated
that is very true. We can be a little territorial as veterans,
meaning that veterans supporting veterans is a much bigger deal
for us, seasoned veterans like him and I, specifically--I
notice he is a little younger--because we have been through a
lot already to get through the transition. And many of the
newer veterans, you know, they have to become civilians first.
Veteran, civilian, the same thing, because that process takes a
while. I do not know when I stopped saying, ``I am going to the
head.''
[Laughter.]
And, I was working in a professional environment before I
switched over to going to the bathroom, so that is my comment.
Senator Hirono. My time is running out, but I just wanted
to ask, would it be a good idea for us to try and bring all of
these various programs together, at least under--if not
physically under one roof, at least under one Web site that you
could go to and that you could see all of the array of
assistance? Is there such a place right now on the Internet
that you could go to?
Mrs. Nowosielski. I do not know of a place, but I do like
the SBDC connection with the whole thing. There are a lot of
veterans, and because they are housed at the universities, when
a lot of us get out, we end up using our G.I. Bill, and we are
looking for things and it is there. And, I like the idea of
having it connected at that point, whatever programs are
available. They have a direct, you know, connection. I have
used the SCORE program, as well, which is a wonderful,
wonderful program which the SBDC pointed me in their direction.
I signed up for their Web sites, and they send out when they
have meetings and different things and you can attend. So, I
think that that is a great, great core place----
Senator Hirono. SBA----
Mrs. Nowosielski [continuing]. If you are looking for one
spot--the SBDCs, the local----
Senator Hirono. Okay. Thank you.
Mrs. Nowosielski. Yes, ma'am.
Senator Hirono. Thank you, Mr. Chairman.
Chairman Vitter. Thank you, and we will go to Senator
Cantwell.
Senator Cantwell. Thank you, Mr. Chairman, and I appreciate
the witnesses being here today and for their testimony.
I wanted to ask you about access to capital. What
challenges did you face getting access to capital as small
businesses? Do you think military members have unique
challenges there? What are some of the things that we can do to
help with that?
Mrs. Nowosielski. I think that unique challenges--I would
not say anything unique other than what a non-veteran would
experience. But, just like any small business in that first
year, they want to see that you have legs to stand on and
nobody does at the beginning. So, it was very hard.
The way that we ended up with a line of credit in our first
year of business was that it just so happened a person at a
bank needed the products that we had. There was no-one local
selling them at the time. And, she just really went to bat for
us. It took one person to stand up for us, and she got us an
SBA line of credit for $50,000 and that is what got us started.
But, I had been to multiple banks up until that point and was
denied multiple times.
Senator Cantwell. Any of the other witnesses?
Mr. Tansey. I know for myself, I believe I have the last of
the American Patriot Loan Act. Unfortunately, it helped me get
my business going, my line of credit, $300,000. It was
instrumental in me getting my business going. But, it was what
I had to do to get that loan. As a veteran, not only did I have
to throw up 100 percent collateral--my house, my retirement,
the whole nine--I had to take a life insurance policy out. The
only thing I did not have to give was a child, for just a small
loan. And, after researching that loan, we found that the
Patriot Loan had a very large failure rate.
So, I know my organization, we are talking back and forth
about something a little different, a loan package for
veterans, for veterans. We are working in the avenues of trying
to start our own intermediary bank, so----
Senator Cantwell. And, what would that do? What size would
you be looking at?
Mr. Tansey. Uh----
Senator Cantwell. For, like, starter loans?
Mr. Tansey. For starter loans?
Senator Cantwell. What range, yes?
Mr. Tansey. Ten to $20,000, $30,000 for starters, but it
could go up to $150,000, depending on the entrepreneur, their
record, basically on their credit scores. But, it would be a
loan for the veteran, the customer, me the customer, not the
banks. Having to put up--most veterans put up their lives on a
ticket.
We sign an oath to defend the Constitution of the United
States. And when we come back--we put our lives on hold for
many, many years, some 10, 20 years. So, they do not have the
ability to build that credit establishment when they come out.
So, they are starting like a green bean coming out of high
school. So, they do not have the greatest credit score. They do
not have the credit history, so it is hard for them.
Senator Cantwell. Or the private sector work experience.
Mr. Tansey. Or work experience, exactly.
Senator Cantwell. Sometimes you get somebody who works in a
field and then decides to spin off and go their own route, but
they do not have that, here is five years where I worked in
this sector.
Mr. Tansey. And, actually, that is all highlight points
that the bankers look at and say, well, this is a high-risk
loan, so we are going to attach so much to it, and we should
not have that.
Senator Cantwell. So, it is the collateral that--so, you
are looking for ways to have things without a high level of----
Mr. Tansey. Collateral.
Senator Cantwell [continuing]. Collateral, yes.
Mr. Tansey. Exactly.
Senator Cantwell. Okay. Ms. Artis.
Ms. Artis. Actually, ma'am, I can say that is still a
problem. I do not have financing. I have been just blessed with
the whole family-friend scenario. But, I do know that is one of
the biggest challenges. I am one of the younger companies here
on the table. That is still a continuous challenge among my
peers that I speak to. That is the biggest challenge, is
getting the capital to fund the professional services that they
offer.
Senator Cantwell. And are you thinking the same range that
Mr. Tansey was talking about?
Ms. Artis. Yes. Actually, that range would be a safe range,
specifically in the services that we provide, because we are
just waiting for the government to pay us for the services that
our staff may have already provided to them. So, we just need
that float money between pay periods.
Senator Cantwell. Okay. Thank you, Mr. Chairman. I know you
have a second panel that you want to also get to.
Chairman Vitter. Yes. Thank you.
Senator Cantwell. Thank you. Thank you to the witnesses.
Chairman Vitter. Thank you very much.
I have a few questions. Ms. Nowosielski, I know you went
into this somewhat, but specifically, what were some of your
biggest challenges as a transitioning service member, coming
out of the service and thinking about business?
Mrs. Nowosielski. The biggest challenge was probably
funding and figuring out how to get money in order to make
money. And then going to school and juggling with an education
through all of those things.
Challenges, probably the financial aspect of it. We just
grew slow. We started really small and we spent--what we made,
we spent, and then we grew, you know, over a period of seven
years. We just had to take a slow route as opposed to getting
money to do bigger things. There were many projects that we had
to pass up because we did not have the capital to do them at
the time.
Chairman Vitter. Right. So, single biggest challenge was
capital----
Mrs. Nowosielski. Probably, yes, sir.
Chairman Vitter [continuing]. And funding to get started as
a business.
Mrs. Nowosielski. Yes, sir.
Chairman Vitter. Okay. And, after you were initially
started, what were some of the continuing issues that SBDC, in
particular, helped you with?
Mrs. Nowosielski. Education was the biggest thing that I
received help with. We received a business advisor through the
SBDC who came in and broke down books and explained to us how
to read financials and how to navigate through what we should
spend and what we should not spend, and what we could afford
and not afford. They also came in and helped. We do light
manufacturing, so they helped us to set up our assembly line in
an efficient manner. They helped us to find used equipment,
things like that, that was affordable for us at the time so
that we could pick up production and produce more. And those
things were extremely valuable to us.
Chairman Vitter. Great. Okay.
I know that SBA tries to create sort of a whole network of
support for veterans' business owners. In your personal
experience, how would you grade that sort of network?
Mrs. Nowosielski. I think I would grade it an A. I think it
is wonderful. I had no problems. Everything that I asked for
was provided and then some. I was never told no or turned away.
If they could not provide it, they gave me a point of contact
where I could get the help.
Chairman Vitter. Okay.
Mrs. Nowosielski. I have zero complaints.
Chairman Vitter. Great. Okay.
Mr. Tansey, I think you have dealt with VBOI as well as
SBA, right?
Mr. Tansey. Yes.
Chairman Vitter. How would you compare them, and is there
duplication? Is there overlap or duplication that is
counterproductive?
Mr. Tansey. Well, I believe the SBA and the Boost to
Business program, I did not go through that program, but
working with Miguel, I get the logistics of it.
The VBOA basically is an 18-class module starting from
conception all the way up to financial and out the door
business planning. So, we were able to build a business plan.
The SBA also provides this kind of support, but what I found is
that the veteran-to-veteran peer networking within the group--
the group dynamics is what has changed my attitude as far as
what is better and what is worse than others. VBOA groups
themselves, you have to experience. As the President of the
VBOA, I invite each and every one of the panelists to come to
one of our meetings in Massachusetts or New Hampshire, you
know, an open invite, to see the difference in the lives of the
veterans as they transition back.
Basically, there are a lot of veterans out there that are
having issues with post-traumatic stress, alcohol, drug-related
issues, the pill pop from the Veterans Administration to help
quiet the voices in the head. Coming back to the group, I see
time and time again those people getting off the medications
and getting back into the real world. It is real time. It is
real. But, I do not want to push away the SBA, because the SBA
has always been an intricate part of my business.
Chairman Vitter. Right.
Mr. Tansey. It still is.
Chairman Vitter. Right. Okay. Thank you very much.
Let me go to Senator Ayotte.
Senator Ayotte. Thank you, Chairman. It is really an honor
to have you here, Mr. Tansey, and thank you for coming today,
and congratulations on being named the New England Veteran-
Owned Small Business of the Year. That is terrific. I am glad
to hear that you have been able to grow with the help of the
Veterans' Business Owners Initiative.
I know that you have already testified, but I also
understand that you were the first Veterans' Business Owners
Initiative member in New Hampshire to reach $1 million in
sales.
Mr. Tansey. That is correct.
Senator Ayotte. That is fantastic. And, I know this started
in New England and that one of the things you have told this
committee today is that this program has been effective and we
should expand it nationwide. What can we do, do you think, to
be able to take what has happened in New England and really
scale it up nationwide, and what--I know you have probably
already talked about this, but--what do you think is the most
important tool that is part of this program? You talked about
the peer-to-peer mentoring aspect of it.
As you know, Senator Shaheen and I work together on a lot
of these veterans issues, whether it is the health care issue
that we are trying to make sure that our veterans in New
Hampshire get more access to health care because we do not have
a full-service hospital, and wanting to make sure that whatever
we are doing is the best to have that local connection, because
I think that is probably why it has been so effective for you
and helpful for the veterans. So, just any thoughts for us on
how we can take what you are seeing and make it for everyone to
have that opportunity.
Mr. Tansey. Thank you, Senator. It is good to see you
again.
Senator Ayotte. Great to see you.
Mr. Tansey. I am happy to see a couple supports for the
women-owned initiative in New Hampshire. I support the SBA on
women's issues, also.
Senator Ayotte. Yes. Fantastic.
Mr. Tansey. The VBOI, basically, we have an idea how we can
take this model. We have a model already set in place. We have
the numbers all put together. And, I would love the support of
the Senate or Senate subcommittees to take a look at our
numbers, to present a pilot program to where we could reach out
to 10 cities for pilot for two years and see how it goes.
Senator Ayotte. Mm-hmm.
Mr. Tansey. But, my experience, the peer-to-peer mentorship
between the veterans, whether it is man-on-man or woman-on-
woman, we have women businesses in our group already, so----
Senator Ayotte. Yeah.
Mr. Tansey [continuing]. It needs to get out there. We need
your help.
Senator Ayotte. Absolutely. So, I have a question for you.
One of the issues that we have been hearing a lot, too, on,
because I serve on the Armed Services Committee, as well, is,
so, veterans, in terms of the experience they come out of the
military with, we know that that experience, incredible in
terms of the training, the leadership skills, the ability to
work with other people. But, often, how you put--let me use an
example. You have been a sniper. How does that translate into a
job description that an employer can understand so that we can
make sure that veterans get hired more?
And, so, wanting to make sure--like, much of the training
that you get in the military--it is often that private
employers--veterans do not know how to translate that, or
private employers, frankly, are not translating this incredible
skill set of our veterans so that they know what our veterans
are capable of so we can get more veterans hired.
I just wanted to get your thought on that. I mean, you come
to this, obviously, with having served and having that
experience of the peer-to-peer, but getting that issue of
translation of skills so that we can get more veterans hired, I
just wanted to get your thought on that.
Mr. Tansey. It is basic military training. As we transpire
through military training, it is drawn into us to lead by
example and to expect the unexpected. Most veterans in a
cohesive unit group know what the guy to the left and the guy
to the right does. And in the case of troubling times and that
person is no longer there, we can take up the slack. As a
leader of a unit, you become in-tuned to exactly the needs and
the attributes of each one of your members and you learn how to
key off those assets to trigger that veteran to the next level.
Unfortunately, in the business world, it is do or die. We
want it done. Why is it not done yet? So, the business owner in
the real world does not really understand the concept of what
goes through a military mind, because it is droned into us, it
is driven into us, it is reactive. What I see time and time
again is veterans coming back to veterans, and we can key off
on those key points because we know them, and we take them to
the next level of confidence. And, once a military member that
has been trained hits that confidence level, you cannot stop
them.
Senator Ayotte. Right. I am a little partial, because I am
married to a veteran. He has his own business, so I see that.
[Laughter.]
But, I think getting that word out, whatever we can do to
get the word out to employers, private employers, so that they
are hiring more veterans, would be terrific. So, any thoughts
down the line you have for us on that, I would really
appreciate it.
Ms. Artis. I would like to add, snipers and individuals
that have interesting jobs in the military that kind of have
more of a difficulty transitioning, apprenticeship programs and
training, specifically now all these certifications that they
have out here in IT, at this point, all service members are
operating on computers. They have e-mail addresses, things,
again, that did not happen in our era. But, nonetheless, they
are very techy. So, those types of programs need to be
elaborated on, and the G.I. Bill funds need to be allocated for
them to be able to use that for those sources, not just a
typical four-year degree, because you are 30, 40 years old and
you are not about to go to school--or do not desire----
Senator Ayotte. I totally agree. There are actually a lot
of great advanced manufacturing jobs where you need those skill
sets and the pay is good, so we can transition to that. That is
not a four-year degree, but getting those skills, so I
appreciate it.
Ms. Artis. Yes, ma'am.
Senator Ayotte. Thank you.
Chairman Vitter. Great. Thank you all very much. We really
appreciate your testimony here, as well as everything you are
submitting for the record.
We will now move on to our second panel, and as they get in
place, I will go ahead and start introducing them.
Ms. Barbara Carson is the Acting Associate Administrator
for the Office of Veterans Business Development at the SBA. She
is responsible for veteran-related programs for active duty and
reserve service members, service-disabled veterans, and
military dependents and survivors.
Dr. Michael Haynie is the Vice Chancellor of Syracuse
University, responsible for veteran and military affairs. Dr.
Haynie also serves as the Founding Executive Director of
Syracuse University's Institute for Veterans and Military
Families and as the Barnes Professor of Entrepreneurship.
Before beginning his academic career, he served for 14 years as
an officer in the United States Air Force.
Mr. Scott Daugherty is also a U.S. Army veteran. He serves
as the Assistant Vice Chancellor for Economic Development at
North Carolina State University and the State Director of the
Small Business Technology Center, which provides confidential
business advisory services and educational programs for
existing businesses and start-ups. And, in 2011, he was also
appointed by Governor Beverly Perdue to serve as North
Carolina's first Small Business Commissioner and was a part of
the Senior Management Team of the Department of Commerce there.
And, Mr. Charles McCaffrey has served in the U.S. Navy,
including the Navy Reserve Officers Training Corps and on the
President's National Security Telecommunications Advisory
Committee Cybersecurity Collaboration Task Force. He now serves
as a Director of the Veterans Business Outreach Center in
Springfield, Virginia.
Welcome to all of you. Just like the last panel, you will
be invited to testify here for five minutes each, and, of
course, your entire written testimony will be made a permanent
part of the record.
So, we will start with Ms. Carson. Welcome.
STATEMENT OF BARBARA CARSON, ACTING ASSOCIATE ADMINISTRATOR,
OFFICE OF VETERANS BUSINESS DEVELOPMENT, U.S. SMALL BUSINESS
ADMINISTRATION
Ms. Carson. Good morning, Chairman Vitter and Ranking
Member Shaheen and members of the committee. Thank you for the
opportunity to testify on the U.S. Small Business
Administration's continuing efforts to empower veteran
entrepreneurship and small business ownership.
We do this by executing programs and policies that maximize
the availability of SBA services for veterans, service members,
and their spouses. We are grateful for this committee's
continued support of SBA's programs to provide training and
counseling, access to capital, and federal procurement
opportunities for our nation's heroes and job creators.
As small business owners, veterans continue to serve our
country by creating critical employment opportunities and
driving economic growth. They possess the skills, discipline,
and leadership to start and operate successful businesses in
their communities. In fact, veterans over-index in
entrepreneurship and are at least 45 percent more likely than
those with no active duty military experience to be self-
employed. Nearly one in 10 small businesses are veteran-owned,
and these businesses generate over $1.2 trillion in receipts
annually and employ nearly 5.8 million Americans.
SBA's programs are making a significant positive impact to
ensure that we create the next greatest generation of veteran
small business owners. This year, to provide training and
counseling, we executed on our first appropriation for Boots to
Business, the entrepreneurship track of the DOD's Transition
Assistance Program, known as TAP. This has trained over 27,000
transitioning service members and their spouses to date.
Working through the interagency governance of TAP, we are
extending Boots to Business to all active duty service members
and spouses at any point during their service through the
Military Lifecycle Strategy. And, with support and active
participation from the private sector, nonprofit NSBA resource
partners, we are extending this program to veterans of every
era and their families through a program we call Boots to
Business Reboot.
For access to capital, we will sustain the SBA's Veterans
Advantage Policy to waive fees for veterans and their families
that qualify for SBA guaranteed loans of $350,000 and below,
and reduce fees by half for SBA guaranteed loans between
$350,000 and $5 million. This policy has already saved veterans
over $8.6 million in fees since January 1, 2014.
In the area of federal contracting, we are very pleased to
report that the SBA's leadership will soon announce that the
federal government exceeded the three percent goal for
contracting with service-disabled, veteran-owned small
businesses for the third straight year.
We continue to provide funding to programs for our severely
disabled veterans, called the Entrepreneurship Boot Camp for
Veterans with Disabilities, as well as programs for women
veterans, called the Veteran Women Igniting the Spirit of
Entrepreneurship program.
OVBD's commitment to its mission extends to and is enabled
by our partners. Our network of 15 Veteran Business Outreach
Centers, known as VBOCs, is the cornerstone of our delivery
model. These VBOCs serve as providers and integrators of
business assistance and maintain the expertise to refer
veterans to other federal and local service providers, as well.
In many cases, VBOCs are extensions of SBA's business offices
and assist SBA employees assigned as Veteran Business
Development Officers.
Our 15 VBOCs extend the services nationwide by
collaborating extensively within SBA's network of resource
partners, which also includes Small Business Development
Centers, Women's Business Centers, and SCORE. This
collaboration allows VBOCs to maximize SBA's integration of
service and knowledge for veterans, as exemplified by the VBOC
Directors who will testify today.
Our partnership model also extends to other veteran
entrepreneurship centers of excellence, such as the Institute
for Veterans and Military Families at Syracuse University, who
is also appearing today.
SBA's innovative private partnership framework enables our
effectiveness, and importantly, our efficiency. Our
collaboration produces success stories like Mr. Timothy Page.
After serving 27 years on active duty in the U.S. Army, Tim
attended Boots to Business at Fort Meade in Maryland as the
first step of his transition mission to pursue small business
ownership. His idea was to create eco-friendly car washes that
he calls Auto Spas, and through the facilitation of Mr. Mark
Williams and SBA's Boots to Business Program, he was introduced
to Ms. Melissa Dent, who is a counselor at the Maryland Small
Business Development Center, who helped him develop a business
plan.
Just this past May, Tim competed in a business plan
competition that was privately funded specifically for Boots to
Business graduates, and that is where he won first place and
$30,000 in seed capital. His first Auto Spa will open in
Forestville, Maryland, in the spring of next year.
While Tim's story is a great example of how our programs
and partners integrate to empower veteran entrepreneurship, it
also highlights a gap that we must address, and that is access
to capital. We can and must do more to get capital, and in
particular start-up or seed capital, into the hands of veterans
like Tim. We must also strengthen and modernize our information
technology infrastructure so that we may sustain our programs
and make SBA more accessible.
In addition, we must enable data sharing between SBA and
federal agencies, such as the Departments of Defense, Labor,
and Veterans Affairs, as well as external partners. This will
allow us to synchronize our efforts, connect veterans and
military spouses with the resources they need, and report on
essential performance outcomes, such as business formation,
capital acquired, and the creation of jobs.
Thank you for the opportunity to testify today and to
highlight our mission. By authorizing our work, you are
mandating that the United States government does all it should
to provide the American dream of business ownership to those
who have fought and continue to fight every day for our
country.
Thank you, sir.
[The prepared statement of Ms. Carson follows:]
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Chairman Vitter. Great. Thank you very much, Ms. Carson.
And now, we will move to Dr. Haynie.
STATEMENT OF J. MICHAEL HAYNIE, VICE CHANCELLOR, SYRACUSE
UNIVERSITY, AND DIRECTOR, INSTITUTE FOR VETERANS AND MILITARY
FAMILIES
Mr. Haynie. Mr. Chairman, members of the committee, thank
you very much for the opportunity to spend a little time
talking about an issue that is a personal passion of mine. As
both a military veteran and also an entrepreneurship professor,
veteran business ownership really does represent for me the
nexus of two passions.
Beyond my written testimony, I think what I will spend my
time doing is just reflecting on just how far I think we have
come as a community over the course of the last eight years or
so.
I left active duty service in 2006. I was fortunate that
while I was a serving Air Force officer, the Air Force sent me
off to get a Ph.D. in business strategy and entrepreneurship,
so I made my transition from military service directly to a
role at Syracuse University as an entrepreneurship professor
and found myself in a situation where I saw an opportunity to
leverage that new role in service to the only professional
community that I had ever known, which were military and
veterans.
I created a program in Syracuse in 2007 called the
Entrepreneurship Boot Camp for Veterans with Disabilities, a
program designed to empower our wounded warriors who may face
barriers to traditional employment as a consequence of some of
the disability challenges that they may face so that they could
leverage self-employment as a path forward.
I share that story only to suggest, at the time, there was
very little focus on business ownership, particularly
institutionalized focus on business ownership, as a path
through the transition process. And, I know that because the
very first opportunity I had to go talk to some soldiers about
this new program that we were trying to create was several
months prior to the first offering. I went to Walter Reed and
about 200 soldiers in a Wednesday morning Commander's Call in a
gym and talked to them about business ownership, and after I
was finished, one of the vocational counselors there spent some
time scolding me about talking to transitioning soldiers about
business ownership because it is too hard and they are going to
fail.
I, again, share that story only as a means to reflect on
the fact that today, with the introduction, for example, of
Boots to Business, we now have institutionalized a path to the
transition to civilian life focused on business ownership in a
way that is very, very powerful, and, I think, empowering to
this community.
We look at programs like the EBV program I mentioned, the
VWISE program. In my two minutes, I will also share that VWISE
is a program that was created in 2010 at the request of the
Small Business Administration, but as an entrepreneurship
professor, that first conversation, I pushed back a little bit.
I was not sure why we would create a business ownership
training program specifically for women, because there is
nothing necessarily that says to me I would train a woman to be
a business owner any differently than I would train a man. As a
veteran, I jumped right to veterans, our veterans.
I could not have been more wrong, however, and I commend
the SBA for pushing to explore that path, because one of the
things I realized when we delivered the first program in San
Antonio, Texas, in 2011, was that many of the women that
participated, many of the female veterans that participated,
maybe had been out of the military five, seven, 10, 15 years,
and this was the first veterans-related event that they had
ever participated in.
And, exploring that motivation, what we found is that as a
consequence of the fact that women are much less likely to
self-identify as veterans, they are also much less likely to
participate in typical veteran-focused events, trainings,
because they will represent a stark minority in the context of
many of those programs, and importantly, we also heard from
some of those participants that they do not necessarily always
feel safe, and when I mean--physically safe is what they are
referring to--at some typical veterans' events.
The outcomes that we have realized from the VWISE program
over the course of the last four years or so have been
remarkable. Forty-one million in revenue was generated by
businesses created by VWISE graduates. Sixty-five percent of
those going through the program have created businesses. And,
they are hiring, and they are hiring other veterans. Currently,
the average number of employees from VWISE-created businesses
exceeds four. That is a very powerful outcome for that
particular program, and it is an outcome that actually exceeds
what you would see from like training programs.
So, with that, I will say I am excited for the opportunity
to both work with this body, to expand opportunity for veteran
business ownership, and I am broadly excited for the future
because I think this is a community on the edge of really doing
remarkable things as an engine for the economy of this country.
Thank you.
[The prepared statement of Mr. Haynie follows:]
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Chairman Vitter. Great. Thank you, Dr. Haynie.
And now, we will move to Mr. Daugherty. Welcome.
STATEMENT OF SCOTT R. DAUGHERTY, ASSISTANT VICE CHANCELLOR FOR
ECONOMIC DEVELOPMENT, NORTH CAROLINA STATE UNIVERSITY, AND
STATE DIRECTOR, NORTH CAROLINA SMALL BUSINESS TECHNOLOGY AND
DEVELOPMENT CENTER
Mr. Daugherty. Good morning.
Chairman Vitter. Good morning.
Mr. Daugherty. Mr. Chairman, Senator Hirono, I am the State
Director of the North Carolina SBTDC. I am also here today
representing the Association of Small Business Development
Centers, which, as you know, are the 63 SBA-funded SBDCs around
the country and across the globe.
My remarks are really based on 30 years' worth of working
at--working on how to help small businesses and veteran-owned
businesses be successful. I have been Chairman of our National
Association multiple times, probably due to brain injury
earlier in my life.
[Laughter.]
But, I have had opportunities to engage with many, many of
my colleagues around the country. Your own SBDC Director in
Louisiana, Rande Kessler, and I have been very interactive.
And, I have a pretty good appreciation for what that resource
can do.
As you noted, I am a veteran. I am personally and deeply
committed to services from whatever source that will help the
women and men of the military find opportunities to realize the
American dream and create a business.
The SBDCs are actually the SBA's largest and most impactful
resource in the country for business assistance. They have an
unrivaled national presence, multiple locations in each state
and locality. We are viewed as highly successful. I can tell
you that we are highly introspective, measure everything, just
like in the military we used to paint rocks that did not move.
We count and measure everything. We want to know why we are
doing, what we are doing, and how we are doing.
SBDCs have a very long and successful record of serving
veterans going back to the days when the primary tool for
veterans leaving the military was the TAP program at the
military installations. That certainly has been true of our
SBDC in North Carolina for many, many years.
The other thing that I think is often overlooked in this
process, and I am going to talk briefly about this in a moment,
but the assistance and resources to veterans and those
leaving--transitioning from the military is more than an
educational program. It really is an opportunity through
resources like the SBDCs to gain that trusted business advisor
relationship with a counselor who can provide probing questions
and guidance on how to move forward.
Our own service to veterans in North Carolina is
significant. We have a very substantial military base in our
communities. Fort Bragg is the largest military installation in
the United States. Camp Lejeune is the Marines' East Coast
representative. We have an Air Force base with an active
fighter wing, and, believe it or not, the largest and most busy
Coast Guard air station in the United States.
We have had a lot of opportunity to provide instructional
support along with partners in the Boots to Business program
around our State, but most important is the one-on-one
counseling that we provide to the businesses. Twelve to 14
percent of our client base, which is around 4,200 to 4,500
counseling clients a year--12 to 14 percent are veterans. And,
that is reflective of our big military presence, but it is also
reflective of our interest in serving them.
To give you a little idea on the scalability of things,
there are around 24.6 million veterans in the country and that
is roughly 12 percent of the national population. It is a
declining number, though, as veterans from World War II and the
Korean War have declined, and now it is my era, the Vietnam War
era veterans that are passing on, as well. The current military
is about one percent of our national population, and so one of
the consequences is that we can anticipate that the actual
veteran population will begin to decline slightly in the years
ahead.
You are considering legislation on the Small Business
Development Act, and it has applicability to our ability to
serve the needs of veterans in the years ahead. A renewed and
continuing commitment to helping existing veterans and those
who are transitioning is a very laudable and noble undertaking.
I support it. I have a few concerns, and I would like to share
just a couple of observations.
First, the new business start-up process, which is what we
have been talking about much of this time with the prior panel
and their start-up experience, it is a process. You do not just
wake up one morning, you are a successful business owner. It
has four steps.
The first is the information gathering step, where folks
will independently or through some sort of program like the TAP
program or the Boots to Business program, which they are
offering at the various military installations, is you take in
information.
The second is kind of the processing part of it, and that
is reflecting on what you have heard and learned in that
preliminary environment and making some conscious decisions
about do I proceed with a plan to start a business.
And that is when you get to what I characterize as the
action planning step of the process. That is typically maybe a
longer-term educational program, like your eight-part online
service, and most SBDCs have some sort of multi-week program.
Chairman Vitter. Mr. Daugherty, if I can just ask you to
wrap up.
Mr. Daugherty. All right. Anyway, so you have multiple
stages.
What I would leave you with is this. You already have a
very robust service delivery network. We ought to capitalize on
that and utilize that network for delivery of enhanced services
to veterans and to transitioning veterans. So, I encourage you
to look at the SBDCs as a delivery mechanism.
[The prepared statement of Mr. Daugherty follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Vitter. Great. Thank you very much.
And now, Mr. McCaffrey.
TESTIMONY OF CHARLES W. McCAFFREY, DIRECTOR, VETERANS BUSINESS
OUTREACH CENTER AT COMMUNITY BUSINESS PARTNERSHIP, SPRINGFIELD,
VA
Mr. McCaffrey. I would like to thank the members of the
committee for allowing me this opportunity this morning to
testify. I encourage the committee's continued support of
veteran entrepreneurship programs.
As was noted earlier, I am a Navy veteran with 20 years of
military and government contracting service. I am also a repeat
business owner offender, if you will, first as a partner in an
Italian deli and market in State College, Pennsylvania, more
recently as a management consultant here in the metro D.C.
area.
When I transitioned from the military, we had a two-day
program that taught you how to get veterans' benefits, how to
write a resume, and to tie a double Windsor. I am happy to say
that we have expanded those programs and I am very honored to
be able to lend my experience to assisting my fellow veterans.
The organization I represent, Community Business
Partnership, was founded in 1995 and is a nonprofit
organization working in collaboration with local, regional, and
national organizations to promote small business growth in our
communities. We are a sponsored program of George Mason
University under the Office of Research and Economic
Development.
We accomplish our mission through a variety of separately
funded programs, including a Small Business Development Center,
a Women's Business Center, a Business Finance Center, and a
Business Incubation Center that provide training and
counseling, access to capital, low-cost office and meeting
space, networking opportunities geared to meet the needs of
today's small business owners. On May 1 of this year, we were
also designated as a Veteran Business Outreach Center for the
National Capital Region, including Northern Virginia,
Washington, D.C., Maryland, Puerto Rico, and the Virgin
Islands.
Although we only recently received designation as a VBOC,
Community Business Partnership has a long history of supporting
veteran entrepreneurship. For the past 10 years, we have hosted
the Veterans in Business Conference. What started as a small
gathering of 25 veteran business owners has grown to the
premier veterans' entrepreneurship conference in the metro D.C.
area, bringing together more than 275 veteran business owners,
federal agency representatives, prime contractors, nonprofits,
and service providers each year.
In 2012, we were approached by the TAP office at Marine
Corps Base Henderson Hall to provide entrepreneurship training
to transitioning Marines as part of the Department of Defense
Entrepreneurship Pathway. At the time, Boots to Business was an
unfunded program requirement that involved significant
commitment from limited resources. But having supported
socially and economically disadvantaged small business owners
for many years, we knew this was a worthwhile initiative and we
became part of the pilot program.
In 2014, Community Business Partnership, along with the SBA
Washington District Office and its resource partners, ranked
number one in the country for total number of Boots to Business
classes held and total number of attendees. In addition, we
participated in the Boots to Business Reboot Program held at
the Eisenhower Executive Office Building with 110 attendees
comprised of veterans and their families.
In 2015, we are positioned to provide Boots to Business
classes at 16 military installations and in the metro D.C. area
as well as a Reboot program and monthly one-day intensive
business plan bootcamps.
In 2014, Community Business Partnership held 244 training
events with 3,430 attendees and provided 1,119 hours of
counseling to 413 clients. Veterans make up 11 percent of our
training clients and 17 percent of our counseling clients, and
we would not be able to achieve these numbers were it not for
the many public and private partners that we work with,
including local Chambers of Commerce, Economic Development
Authorities, Objective Rally Point D.C., and Dog Tag Bakery,
just to name a few.
As proud as I am of the numbers representing our support of
veteran entrepreneurs, it is actually their successes that
really tell the story. Staci Redmon is a third-generation
service-disabled veteran. After 20 years of federal service,
she started Strategy and Management Services in 2008 to work in
the federal contacting arena. Staci was a participant in the
first veterans' entrepreneurship mentoring group started by
Fairfax SBDC in 2010, was a resident business at the Business
Incubation Center at Community Business Partnership. She
received training from our Women's Business Center and lending
assistance from our Business Finance Center. Through budget
cuts, sequestration, and furloughs, SAMS has endured with the
support of Community Business Partnership and closed their 2014
fiscal year generating $13.5 million in revenue and employing
130 individuals.
In 2013, Staci received the Virginia Small Business Veteran
of the Year Award from the Virginia SBDC Network, and Staci
exemplifies the spirit of that award in service to her country,
success in business, and involvement with her community. And,
she also embodies the long-term commitment that the SBA
resource partners strive for with our clients.
Again, I thank you for the opportunity to testify today and
to share our efforts and their successes in veteran
entrepreneurship.
[The prepared statement of Mr. McCaffrey follows:]
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Chairman Vitter. Okay. Thank you all very much for being
here, for your testimony, both oral and written.
Now, we will go to Senator Hirono.
Senator Hirono. Thank you, Mr. Chairman.
Thank you all for testifying. What I get from all of your
testimony is that we have a number of programs that are
specifically targeting veterans, and it appears as though there
is quite a lot of collaboration that is already occurring, so
that is really good to know.
I was struck by, is it Mr. Daugherty, you mentioned a four-
step process which is too often not addressed by the various
programs and initiatives that we have to help our veterans. I
know you ran out of time. Did you have a suggestion as to how
we can better address these four steps?
In fact, one of the steps that I was curious about is the
reflective part. Is there counseling, or are they the
challenges of opening a business? Is that the point at which
that kind of information would be helpful to the veteran?
Mr. Daugherty. Yes. I think----
Senator Hirono. Could you expand a little bit more?
Mr. Daugherty. I think it is. The important element in the
process is that training is a piece of it, reflection is a
piece of it, and access to business advisory services to kind
of sort through the options and opportunities, and how do you
think through it and build a plan that will allow you to be
successful?
And, too many of the programs have a piece and do not have
that other piece. You are just hoping that occurs. And, what
you want is something that is integrated, that provides an
opportunity. So, it could be a training program like the one
you have developed, but there ought to be a direct connection
to your business advisory resources in terms of delivery of
that kind of consultative support to the clients. I think it
would be very helpful.
Senator Hirono. You noted that the SBDCs, those are a
nationwide SBA small business effort to help small businesses,
and I am familiar with a couple of them in Hawaii. The SBDCs,
would that be a setting for the kind of more complete support
that you are talking about, Mr. Daugherty?
Mr. Daugherty. Well, it exists. It is already out there.
They are already serving veterans. And, there are lots of
terrific ideas we heard in the first panel. They are really
great. But, if you are talking about the application of very
scarce federal-level resources, how do you get the best bang
for the buck to assure that there is integration?
Sometimes within agencies, you know, there are silos, and I
am not----
Senator Hirono. Yes.
Mr. Daugherty [continuing]. Speaking out of turn.
Senator Hirono. No.
Mr. Daugherty. You know, you have an office----
Chairman Vitter. You are not shocking us, do not worry.
Mr. Daugherty. No, exactly.
[Laughter.]
So, you have an Office of Small Business Development. You
have got a veterans' office. And then you have got this thing
called field operations, which is kind of disconnected from all
three of them in terms--so you are really relying in the end at
the local level, the goodwill of folks to make it happen as
opposed to it being part of a strategic way to think about the
delivery of service.
Senator Hirono. Ms. Carson, would you like to weigh in on
how we can create a more integrated way to respond to the needs
of the veterans who want to have their own businesses?
Ms. Carson. Thank you for the opportunity to do so. I think
that I could turn to Mr. McCaffrey, as well, and say that one
of the--we identified the same problem that Mr. Daugherty has
identified, which is a lack of integration and then a
difficulty in getting the word out to the veterans who need
these resources.
So, the Veteran Business Outreach Center, we just competed
14 of those grants this spring, and the criteria within it
included--it was heavily weighted, as well. You must show a
partnership. What is your network? What is your knowledge of
all the resources that are available to veteran entrepreneurs?
And, it was a competitive process.
So, that is in one place where we are showing that we
recognize as an agency, a federal agency, that we absolutely do
not have all the right ideas, nor the funds to enact them, but
we do have partnerships and knowledge, and my office is
accountable for knowing what those are across the federal
space, connecting at the state level and local levels where it
really happens. If I cannot get a local lender to help a
veteran entrepreneur get access to capital, then something is
not right at the higher levels. So, we are engaging at every
level.
And, as Mr. Daugherty said, good will is not enough in all
cases. So, we have done things like funding our resource
partners to help us deliver Boots to Business across the nation
and around the world with the help of the Institute for
Veterans and Military Families.
So, I would like to say that we do hear this concern and we
are absolutely acting on it to better integrate and optimize
what is available for veterans, and I really want the Veteran
Business Outreach Centers to be that first point, that triage,
if you will, for a vet, that they will not have everything for
everyone, but they know enough to transfer them to----
Senator Hirono. Right now--excuse me. My time is----
Ms. Carson. Sorry.
Senator Hirono. Oh, it is up. Do you mind if I----
Chairman Vitter. Go ahead.
Senator Hirono. A couple more minutes. So, there are only
15 Veterans Business Outreach Centers, so I do not know where
these 15 centers are. Do you have one in Hawaii, for example?
Ms. Carson. No, I do not have one in Hawaii. The Women's
Business Development Center out of Chicago does service Hawaii
and is already in coordination with the SBA district office
there.
Senator Hirono. Is there an intention to have these
outreach centers in every state, or are you working through the
VBOCs?
Ms. Carson. The VBOCs----
Senator Hirono. I mean--there are all these acronyms.
SBDCs.
[Laughter.]
SBDCs. I know you have SBDCs in Hawaii.
Ms. Carson. Currently, we are authorized and appropriated
for 15, and that is what we have. So, we make the most of that
network by building upon our partnerships that also exist
within SBA, the SBDCs, SCORE, and Women's Business Centers to
reach every state and territory for our veterans.
Senator Hirono. So, if I were to contact the SBDC on the
big island, for example, which I have visited with, and started
talking with them about the veterans business outreach efforts,
they would be familiar with all of the resources?
Ms. Carson. They have been a fantastic partner in our
veteran programs and initiatives on their own, and we are
integrating them with the Women's Business Development Center
in Chicago, which just stood up. It is a recent awardee. So,
together, they will service your veterans in Hawaii very well.
Senator Hirono. I just want to end by thanking all of you,
particularly, Dr. Haynie, I really appreciated your commitment
to helping the disabled veterans, and all of you, because that
may be a very special group of veterans that we ought to
provide specialized kinds of resources to, just as I thank you
for your acknowledgement that women veterans should have
particular programs that are just their needs.
Mr. Haynie. You are very welcome.
Senator Hirono. Thank you very much, Mr. Chairman.
Chairman Vitter. Great. Thank you, and thanks to all of you
for your testimony, just like our first panel. This was an
important hearing, including because it is not in a vacuum. As
I mentioned at the beginning, the committee is working on a
bipartisan veterans' entrepreneurship bill. We hope to mark it
up next month. We want all of your continued input, so you will
certainly get drafts, and please give us all of your input. Mr.
Daugherty suggested some, and we want to follow up on all of
that. So, thank you very, very much for your work.
With that, this hearing is adjourned.
[Whereupon, at 11:05 a.m., the committee was adjourned.]
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