[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]
FIELD HEARING IN DEERFIELD, IL: BRIDGING THE ENTREPRENEURIAL GAP:
ADDRESSING BARRIERS TO SMALL BUSINESS FORMATION AND GROWTH
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON AGRICULTURE, ENERGY, AND TRADE
OF THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
__________
HEARING HELD
DECEMBER 11, 2017
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 115-050
Available via the GPO Website: www.fdsys.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
27-721 WASHINGTON : 2018
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HOUSE COMMITTEE ON SMALL BUSINESS
STEVE CHABOT, Ohio, Chairman
STEVE KING, Iowa
BLAINE LUETKEMEYER, Missouri
DAVE BRAT, Virginia
AUMUA AMATA COLEMAN RADEWAGEN, American Samoa
STEVE KNIGHT, California
TRENT KELLY, Mississippi
ROD BLUM, Iowa
JAMES COMER, Kentucky
JENNIFFER GONZALEZ-COLON, Puerto Rico
BRIAN FITZPATRICK, Pennsylvania
ROGER MARSHALL, Kansas
RALPH NORMAN, South Carolina
JOHN CURTIS, Utah
NYDIA VELAZQUEZ, New York, Ranking Member
DWIGHT EVANS, Pennsylvania
STEPHANIE MURPHY, Florida
AL LAWSON, JR., Florida
YVETTE CLARK, New York
JUDY CHU, California
ALMA ADAMS, North Carolina
ADRIANO ESPAILLAT, New York
BRAD SCHNEIDER, Illinois
VACANT
Kevin Fitzpatrick, Majority Staff Director
Jan Oliver, Majority Deputy Staff Director and Chief Counsel
Adam Minehardt, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Rod Blum.................................................... 1
Hon. Brad Schneider.............................................. 1
WITNESSES
Mr. Steven Whittington, Founder and Chief Executive Officer,
LifeWorking Enterprise, LLC, Lake Forest, IL................... 5
Ms. Meg Barnhart, Founder and Co-Creator, The Zen of Slow
Cooking, Lake Forest, IL....................................... 9
Mr. David Borris, Owner, Hel's Kitchen Catering, Northbrook, IL.. 11
Ms. Cheryl Besenjak, Partner, Grow Well Farms, LLC, Hoffman
Estates, IL.................................................... 13
APPENDIX
Prepared Statements:
Mr. Steven Whittington, Founder and Chief Executive Officer,
LifeWorking Enterprise, LLC, Lake Forest, IL............... 29
Ms. Meg Barnhart, Founder and Co-Creator, The Zen of Slow
Cooking, Lake Forest, IL................................... 34
Mr. David Borris, Owner, Hel's Kitchen Catering, Northbrook,
IL......................................................... 37
Ms. Cheryl Besenjak, Partner, Grow Well Farms, LLC, Hoffman
Estates, IL................................................ 41
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.
BRIDGING THE ENTREPRENEURIAL GAP: ADDRESSING BARRIERS TO SMALL BUSINESS
FORMATION AND GROWTH
----------
MONDAY, DECEMBER 11, 2017
House of Representatives,
Committee on Small Business,
Subcommittee on Agriculture, Energy, and Trade
Washington, DC.
The Subcommittee met, pursuant to call, at 9:36 a.m., in
Room 209, Village Hall, 850 Waukegan Road, Deerfield, IL, Hon.
Rod Blum [chairman of the Subcommittee] presiding.
Present: Representatives Blum [presiding] and Schneider.
Chairman BLUM. Good morning. Thanks for being here today. I
call this meeting to order.
Before we begin, I want to thank Mr. Schneider for letting
me meet with him in his district to hear from his constituents
today, and what a lovely district it is. We rode around for 20,
25 minutes this morning, a beautiful area.
We will talk to our witnesses today. I am looking forward
to hearing your testimony as well. We are glad that you are
here today.
Brad and I may be members of different political parties.
Were you aware of that?
Mr. SCHNEIDER. I did not know.
[Laughter.]
Chairman BLUM. We are both proud Midwesterners and work in
a bipartisan manner on our Committee for the owners and
employees of America's small companies.
Back in Washington, there is a lot of discussion about the
plight of the entrepreneur. We hold hearings, roundtables,
write legislation, hear from trade associations as to how best
to create an environment to spur entrepreneurship.
At the same time, Washington is also the prime source of
unnecessary burdens on small businesses and entrepreneurs. It
is where regulations are created that put unnecessary burdens
on small businesses in my district in Iowa, in Brad's district
here in Illinois and across this country.
Regulations are one of the top concerns of small businesses
and entrepreneurs in the United States. Entrepreneurship,
sadly, has declined by almost 50 percent since the late 1970s,
and regulations have been a major contributor to this.
Today we will hear from small business owners that have
overcome the obstacles, beat the odds, taken the risks and
initiative to start their own businesses. I want to hear about
your concerns, what changes you would like to see in order to
reduce the regulatory burden and the Federal paperwork burden,
and how we can serve you in Washington, D.C.
Again, I appreciate the Ranking Member for his hospitality,
and the witnesses for taking time away from their businesses to
be here today. I look forward to your testimony.
I now yield to the Ranking Member for his opening remarks.
Mr. SCHNEIDER. Thank you, Mr. Blum. Thank you for joining
us, and welcome to not just Illinois but to Deerfield, my home.
I want to thank everyone for joining us today for this very
important hearing on bridging the entrepreneurial gap. I am
very glad to have you here.
Before we begin, I want to thank the Village of Deerfield
for hosting us this morning in their facilities. I want to
thank our witnesses for making the time to first prepare for
today and then for being here today to share your perspectives.
I want to thank my team, Mr. Blum's team, and the Committee
staff for working so effectively to make this hearing happen
today. It is not easy to bring a hearing from Washington out to
the field, so they worked very hard to make this happen. Again,
thank you.
Once again, I want to thank all of you for joining us.
I greatly appreciate this opportunity provided by the House
Small Business Committee to hear directly from entrepreneurs
and small business owners who are actively engaged in our
community and our national economy.
Today we are here to talk about the experiences and
opportunities and challenges they and other entrepreneurs
confront in starting and growing their businesses. Hopefully we
can also explore ideas for creating more opportunities and
smoother pathways for future entrepreneurs.
Between World War II and 2008, in every economic recovery
following a recession, it has been entrepreneurs who have set
the economy in motion through their ability to create new
markets, promote innovation, and stimulate every industry. It
has been startups and small businesses that lead the way.
Entrepreneurship has long been the cornerstone of our
economy, and a vibrant entrepreneurship culture is necessary
for the United States to enjoy continued economic prosperity.
But this last recovery was different. Small businesses and
new startups lag the broader economy. In fact, in recent years
we have seen a dramatic decline in entrepreneurship, with a low
in 2014 of just 450,000 new businesses starting up. The decline
can be attributed to many variables, like access to capital.
Lack of capital remains an ongoing problem for all
entrepreneurs. The problem is particularly pronounced for women
and minorities, as well as veterans. These disparities come
with significant costs to our economy. We are losing out on
millions of jobs that could be created by these new firms.
In addition, small business operators can also lack access
to information and education. The Small Business Administration
is one important resource to help small businesses overcome
this barrier.
For example, entrepreneurship education within the SBA
provides resources such as growth assistance, financial
literacy education, and information for young entrepreneurs. I
was pleased that my amendment to increase funding for
entrepreneurial education programs within the SBA by $4 million
was passed by the House of Representatives. This helps ensure
that the United States remains the best place in the world to
start and grow a business.
Another important resource for small business entrepreneurs
are small business accelerators and incubators, which offer
resources that many small businesses lack such as office space,
access to professional services such as legal expertise and
important guidance.
That is why I was happy to introduce the Accelerator
Startup which would create a grant program to provide funding
for small business accelerators and incubators particularly
outside of traditional markets that currently dominate startup
activity.
Let me take a pause to welcome Michael Edgar, who is
working with the Greater Waukegan Development incubator in a
community just like what we are trying to target.
As small businesses face these challenges, they also have a
hard time getting the funding they need to adequately address
the threats from cyber attack. That is why the bipartisan
legislation such as I introduced with Representative Bryant
would create a loan guarantee program to allow small businesses
to purchase the necessary technology and services to protect
their businesses. This is an important step while providing
more access to capital for struggling small businesses.
In addition, entrepreneurs are the key to renewed growth in
local communities in the economy as a whole. Currently, this
sector is experiencing growth as more immigrant entrepreneurs
start businesses. That is why it is so important that we pass
immigration reform. We should be advancing strategies to draw
on innovation, hard work, and the entrepreneurial spirit, not
creating barriers for these people to achieve their dreams.
Similarly, we should not create additional challenges for
small businesses through much-needed tax reform. We absolutely
must reform our outdated and overly-complex tax code, but the
current tax hike being considered in Congress hurts our small
businesses and saddles future generations with trillions more
in debt.
In Congress, it is our job to ensure that those with the
entrepreneurial spirit and dedication to succeed have access to
these and other vital resources. This includes providing access
to capital, reforming our tax code in a fair and bipartisan
way, and helping to promote research and innovation. These
efforts and others will allow small businesses to prosper and
ultimately create jobs.
This hearing gives us the opportunity to hear from business
founders regarding their experiences in starting a business and
the challenges they overcame to become successful. It will give
the committee insights into areas of achievement, as well as
areas where entrepreneurs still face the greatest obstacles.
In that regard, I want to again thank the witnesses for
their participation and insights. I want to again thank the
Chairman for allowing us to do this here. And with that,
Chairman, I would yield back.
Chairman BLUM. Thank you, Mr. Schneider. I must say, Brad,
that this facility is much nicer than where we hold our Small
Business Committee hearings in Washington, D.C.
[Laughter.]
I would like to take a moment to explain the timing lights
for our witnesses. You have 5 minutes each to deliver your
testimony. The light right there will start out as green. When
you have 1 minute remaining it will turn to--guess what?--
yellow. And when your 5 minutes is up, it will turn red. We ask
that you try to adhere to that time limit.
I will now yield to Ranking Member Schneider to introduce
this morning's witnesses.
Mr. SCHNEIDER. Thank you. It is my pleasure to introduce
our first witness, Mr. Steven Whittington, the Founder and CEO
of LifeWorking Enterprise, an office space for freelancers,
entrepreneurs, and small businesses to work collaboratively and
productively.
In addition to running the business, he is a board member
of the Lake Forest Chamber of Commerce. Prior to working at
LifeWorking, he worked for Proctor & Gamble for more than 20
years. Steve is also a United States Army and Ohio National
Guard veteran who got his Bachelor of Science from the Ohio
State University and the Institute of Technology. And according
to my homework right here, his daughter is going to----
Mr. WHITTINGTON. She was just accepted, yes.
Mr. SCHNEIDER. Welcome, Mr. Whittington.
Mr. WHITTINGTON. Thank you.
Mr. SCHNEIDER. Our second witness today is Meg Barnhart,
Founder and Co-Creator of The Zen of Slow Cooking. The company
sells slow cookers and spice blends online through Whole Foods
stores. In 2017, The Zen of Slow Cooking won the Sophie Award
for best new product in seasonings. This is like the Academy
Awards of food.
Ms. BARNHART. Like winning an Oscar.
Mr. SCHNEIDER. She won in the spice category and for her
work for creating employment for adults with developmental
disabilities. Thank you for your leadership in this area.
Before founding The Zen of Slow Cooking, Meg worked in the
hospitality business and started her own event planning
business. As a passionate advocate for children with learning
disabilities, Meg served as the President of the Lake Forest
Learning Disabilities Association.
We are pleased to have you here, Ms. Barnhart.
Our third witness is Mr. David Borris. Mr. Borris, of Hel's
Kitchen Catering in Illinois, is testifying. He started Hel's
Kitchen almost 33 years ago, in 1985, with his wife Terry. It
is a small homemade food store in Highland Park. Over the years
they expanded it into a full-service catering business,
employing 33 full-time and over 80 part-time seasonal
employees. In addition to working with Hel's Kitchen Catering,
David has been a leader with the Mainstream Alliance since
2008.
I am glad to have Mr. Borris here. Thank you for joining
us.
Our final witness today is Ms. Cheryl Besenjak. Did I get
that right?
Ms. BESENJAK. Besenjak.
Mr. SCHNEIDER. Besenjak. I always get it wrong.
She is the Executive Director of Growing Healthy People, an
Illinois not-for-profit corporation. She is a Managing Partner
of Grow Well Farms, LLC. The company recognizes the need for
new farmers over the next 10 years and is taking steps to hire
veterans to fill this gap.
Before starting her current venture, Cheryl had a career as
a copyright permissions publishing professional. She founded
the Permissions Group, a premiere copyright consulting company.
Ms. Besenjak also served our country in the Air Force
Reserves. Thank you for your service.
Welcome, Ms. Besenjak.
And with that, I turn it back over to you, Mr. Chairman.
Chairman BLUM. Thank you very much, Brad.
Mr. Whittington, you are recognized for 5 minutes. I would
like to remind you before you start that the University of Iowa
beat the Ohio State University----
[Laughter.]
They do get to go to the championship----
[Laughter.]
You are recognized for 5 minutes.
STATEMENTS OF STEVEN WHITTINGTON, FOUNDER AND CHIEF EXECUTIVE
OFFICER, LIFEWORKING ENTERPRISE, LLC, LAKE FOREST, IL; MEG
BARNHART, FOUNDER AND CO-CREATOR, THE ZEN OF SLOW COOKING, LAKE
FOREST, IL; DAVID BORRIS, OWNER, HEL'S KITCHEN CATERING,
NORTHBROOK, IL; CHERYL BESENJAK, PARTNER, GROW WELL FARMS, LLC,
HOFFMAN ESTATES, IL
STATEMENT OF STEVEN WHITTINGTON
Mr. WHITTINGTON. Good morning, Representatives Schneider,
Blum, staff, and audience members. I want to thank the U.S.
House of Representatives Small Business Committee for this
opportunity to speak and share my experience and perspective on
issues regarding small business formation and growth.
Again, my name is Steve Whittington, and I am the Founder
and CEO of LifeWorking Enterprise. I am a United States Army
and Ohio National Guard veteran, a 20-plus year veteran of
Procter and Gamble and, yes, a graduate of the Ohio State
University.
Melinda, my wife and fellow ``Proctoid'', and my daughter
Jennifer, a senior at Lake Forest High School and a future
Buckeye, are residents of Lake Bluff, Illinois since 2014.
I also sit on the board of the Lake Forest/Lake Bluff
Chamber of Commerce and on the executive board of Love Inc. of
Lake County, a faith-based non-profit based in Waukegan,
Illinois.
LifeWorking Enterprise, marketed and branded as LifeWorking
Coworking, is a shared, community, new-way-to-work place. Our
first, but not last, location is in Lake Forest, Illinois, only
15 minutes north of here. We are a diverse community of
freelancers, entrepreneurs, creatives, non-profits, small
business and corporate remote workers that value the increased
productivity, energy, lack of distractions, and collaboration
that a professional co-working place provides.
In addressing this topic today, I would like to start with
a view of the current business landscape, forming from my
startup experience and evolving with my involvement with
several area Chambers of Commerce.
For my business, I have found it critical to understand who
is doing the work from a generational perspective. As you
likely know, the millennial workforce, defined as those born
between 1982 and 2004, are the largest percentage of the
current workforce and are well-documented as valuing
flexibility, working for purpose, and willing to choose work-
life integration over a bigger paycheck.
Less discussed is the contingent workforce. These are the
temporary workers, 1099s, post-corporates, freelancers, and
moonlighters that are currently estimated by the U.S. Bureau of
Labor Statistics to be over 30 percent of the workforce, and
will grow to 40 percent by 2020. A significant percentage of
this workforce are GenX-ers and Boomers that actually have a
very similar perspective to their millennial counterparts.
At LifeWorking Coworking, who are these contingents? They
are an ex-Allstate employee teaming up with his life partner to
create a workplace safety and self-defense startup, an ex-
Walgreen's executive leveraging his operational expertise with
a call-center startup, and an ex-Shire employee who joined a
startup focused on helping academic Ph.D.s transition to non-
academic careers.
Pivoting to challenges in the small business environment,
it is well-documented and shared with this Committee in
previous hearings that small businesses, those with less than
500 employees, represent over 99 percent of employer firms and
account for half of the jobs in the private sector. Impacting
this group directly moves the needle in either direction, and
this group is being impacted.
Early data for cyber Monday 2017 by Adobe Analytics
indicate that, collectively, shoppers spent almost $3.4 billion
on online purchases, a 17 percent increase over last year.
Looking at the underlying data, over 50 percent of the virtual
store visits and 40 percent of the revenue were made from
tablets or smartphones, an increase of 20 percent and 41
percent respectively over last year. This could indicate that
the online shopping experience is becoming more frictionless
and shoppers are feeling more secure with online transactions.
As a Chamber of Commerce member, you see how the nature of
online engagement is not only challenging the relevance of
small retail but the relevance of the Chamber itself. What is
the equity of the Chamber when Google, community Facebook
groups, and NextDoor.com are now your go-to's, when technology
and a workforce that embraces mobility and immediacy is
transforming social interaction and consumerism so
dramatically? Even the name is archaic.
In recognition of the need to transform, in April 2015 the
Association of Chambers of Commerce Executives launched the
``Horizon Initiative: Chambers 2025,'' an initiative to drive
relevance and transformation of the Chamber of Commerce as we
know it today. The outcome of this initiative was the
definition of eight influences that Chambers should consider,
including globalization impacts, population shift, technology,
and leadership at the community level.
Interestingly, and relevant to this discussion, is a ninth
influence added this year entitled ``Limitations of
Government.'' This influence speaks to a perception of the
inadequacy or inefficiency of government at all levels that
inhibits the ability of the Chambers to change. Objectively,
you would rightly say that an organization that is pre-
transformational likely looks more outwardly versus inwardly to
find the problem. However, we all know as small businesses that
you have to deal with the perception, real or not.
Turning to barriers to small business formation--and I'm
talking quickly--for me, this begs the question: How do you
take the first step in launching your own business in whatever
form it may take? And then, when you have done that, how do you
ensure that you are there on day 366, 731, et cetera, et
cetera?
With regard to starting a small business, the first
question is what risks must I consider for me to take this
jump? There are three things to consider.
Access to capital is an easy starting point and well
discussed in previous Small Business Committee hearings. The
ability to source capital if you are not well collateralized,
if you don't have the trusted relationships to advise you
towards appropriate, non-predatory sources and, frankly, to
share the risk, there will continue to be a barrier to entry
or, worse, an increasing failure rate of small business
startups.
Secondly, healthcare. As I have had the opportunity to talk
to people that are considering starting their own businesses
and from my own consideration, before you can chase your
professional passion, you must consider the personal risk.
While not the only risk, one of the most important and,
frankly, most uncertain today is healthcare. The specter of
healthcare costs, especially to a contingent worker that is
more likely considering it for family, could be significant
enough to stymie an entrepreneurial startup and, if not, haunt
that startup as it operates and grows.
Finally, fear of the unknown, which is not unfounded based
on small business failure rates. The questions start to fly:
How do I get started? How will my business make money? How do I
get customers? Where am I going to work? These can be crippling
non-starters without access to industry expertise, trusted
advisors, and help that is do-focused and not tell-focused.
Switching to barriers to growth or what I call ``sometimes
you get what you ask for,'' I think that there are several key
barriers beyond the obvious access to operational and strategic
capital.
The first is lack of resources. Whether creating from your
home or your storefront, you quickly figure out what you don't
have, simple business services like copies, posters, business
cards that need to be more professional than your design skills
and home printer will allow; discovering that a website doesn't
actually create itself; or venturing into the marketing realm
and realizing that digital marketing and social media aren't
the same thing and that search engine optimization is evil, or
it is not; Facebook ads are better than boosted posts, or they
are not; and no one looks at Google+ on social media, but you
better have an account for your business?
A second is working in your business versus on your
business. As a small business, you quickly discover that in
many cases time is a commodity that rises above dollars in
importance. A day ends, and you have succeeded in changing the
toilet paper in the bathrooms, replaced the toner cartridge
after two store visits, watched six promotional videos, each
touting how their email marketing solution will be the first
step to immortality and, if you are at home, you have done two
loads of laundry and broken into the holiday cookies at least
10 times.
So where is the opportunity? I believe that an effective
way to positively impact the formation, growth, and
transformation of small business is in the communities in which
they reside.
The demise of the suburban community is a myth. If you are
paying attention, you will see the press presenting about as
many stories of generational and commercial suburban flight as
you will see escaping the urban centers for the new rockin'
suburban oases. The reality is that communities focused on
economic business development, urbanizing with respect to
amenities, walkability and transit-oriented development are and
will thrive.
Suburban communities are themselves set up to be incubators
with human resources across the generational spectrum bringing
energy, skills, scars, insight and wisdom that are considerate
of both work and life. Networks are strong. The coffee shops
are a great indicator. In the city, coffee shops are humming,
lots of transactions and folks with headphones getting work
done. In the community coffee shops, you see groups of yoga
pants, blue-hairs, elder statesmen, book clubs, biking clubs,
et cetera.
What will need to be true is that in the community Chambers
of Commerce, economic business development, and the
municipalities themselves must get out of their own way and
work together in partnerships that drive this transformation.
An integral component of such partnerships will be private
entities like LifeWorking Coworking, not solely incubators or
accelerators as currently defined, but catalysts in the
community providing a place for like-minded, complementary
businesses and non-profits to collaborate, learn more quickly
in an energizing and creative environment, and ultimately
figure out how to make 1 plus 1 equal 3, and punch much bigger
than their own weight.
So, what does help look like? I believe that success or
failure will be the result of efforts and interventions and
partnerships at the municipality level, including local
government, non-profits, and private enterprises. For this
Committee, however, I believe that there are several important
considerations.
Healthcare for small business should be a continued focus,
supporting creative healthcare solutions for small businesses,
especially those below 50 employees, solutions like association
healthcare and/or group captive options that allow access to
the same kinds of benefits as larger enterprises while
mitigating some of the risk.
With respect to local government and municipalities,
minimizing unnecessary regulation while incenting
municipalities, economic development commissions, and key non-
profits like Chambers of Commerce to better partner and
transform to ease the entry into business for entrepreneurs,
drive sustainability, and catalyze growth.
Finally, enabling and incenting community public-private
partnerships that provide workplaces that drive productivity,
collaboration, and community, much like Chicago's own 1871, the
internationally recognized incubator/accelerator that has been
the genesis of well-known startups and spun off similar
entities like the veteran-focused Bunker Labs and the
internationally recognized healthcare incubator Matter Chicago.
In closing, I believe that in today's environment the
potential for small business expansion and growth is strong and
discussion doesn't need to focus on threats but opportunities.
I also believe that, as is typically the case, the majority of
our collective focus should be less about what we don't have
and a lot more about what we can do together, mixed with just a
little bit of Robert Fulgham's perspective that ``All I really
need to know, I learned in kindergarten.''
Thank you very much.
[Applause.]
Chairman BLUM. Thank you, Mr. Whittington.
Ms. Barnhart, you are now recognized for 5 minutes.
STATEMENT OF MEG BARNHART
Ms. BARNHART. Thank you both for giving me an opportunity
to shine a light on my business, but also the social part of my
business, my social enterprise.
Can you all hear me? You can't hear me?
How about now? Can you hear me now? Okay, awesome.
The origin of my business, The Zen of Slow Cooking, began
many years ago, and is really captured in this picture, which
is my three children. I had a very un-Zen-like life when they
were little.
Chairman BLUM. Show it the other way, too.
Ms. BARNHART. And my middle son was diagnosed as
developmentally delayed and didn't have language until he was
4. So, as you can imagine, when we got to school it was very
challenging, and I found myself struggling to get food on the
table. I called my best friend and said, ``What do I do? Tell
me what to do, I will do anything.'' She said, ``You are not a
failure. Get off the phone and buy a crockpot.'' So that is
what the genesis of my business is.
I understood the first two pieces of advice, but not the
third. I did not grow up with a slow cooker, but I went out and
got one and fell in love with this little device. It gave me
the opportunity to recreate my childhood from scratch at dinner
hour as I experienced it as a child. It also gave me the
opportunity in the afternoon to help my children with homework
and take them for walks and what not.
I cooked steadily with my slow cooker until my daughter
started crying two years into it, saying she couldn't eat any
more thick meat, because all I knew how to make was pot roast
and chili, so I knew I had to step it up. By then I understood
the science behind it, and my food actually got quite good.
Fast-forward to 2010, I decided to spend a year studying
what life would look like for my son when he aged out of the
system, and I found in Illinois only 24.5 percent of adults
with cognitive challenges and 36.5 percent with physical
challenges were employed. You have met my son Doug, both of
you, and I couldn't imagine a life where he wasn't shining his
life, an unbelievably wonderful guy. So I decided to create a
business forum for other adults like him.
So I shared my vision with a friend and said I know this is
my calling in life, but I am not sure what to do. And she said,
``What are you having fun with?'' I laughed and said I was sort
of having fun with this slow cooking. I used my prep time as a
quiet time in my day, and she said do something with that. So
that is where the idea for The Zen of Slow Cooking came. It
took me another year to find someone to help me kick it off the
ground. I found a young mom who was doing some food writing,
had just moved from the U.K., and we co-created The Zen of Slow
Cooking food blog in 2012. And then using our most popular
recipes, we created a line of premium spice blends exclusively
for the slow cooker. I brought them to the Lake Forest farmer's
market, and we began patching up these little tins and we just
sold them. We were so excited that first day when we sold out
of all these tins, until we realized we were going to have to
blend 40 more for the next week.
We blended and sold, blended and sold in different markets,
and then in 2014 we had a lot of our clients asking for us to
sell them to their friends out of state. So we left our home
kitchens and went to a test kitchen, and that is when we
started our partnership with Planet Access Company. It is a
social enterprise corporation and provides training and
employment for adults with disabilities.
Each week my partner would blend the spices. I would pick
them up, run them up to Waukegan, where they would get hand-
packed. I would take them to the stores and sell them, or
online market, and we did that. In 2015 we opened our first
wholesale account, and we also had the good fortune of
interviewing with Whole Foods, and they loved us. They asked us
to come on board, but they said you have to change your
packaging, so we changed it to this very nice merchandisable
packaging and brought it to their markets.
So we started with three Whole Foods in 2016. We were also
finalists for ``Chicago's Next Best Food Product,'' which led
to a meal kit with the online grocery retailer called Peapod.
And then in 2017 we are now in 50 stores, working our way
through the Whole Foods market in Northern California and
Oregon. Our meal kits have now expanded from Chicago to five
states on the East Coast. And, as you learned, we won for best
new spice product, which was very exciting. And we also became
a Certified B Corporation, which I will share a little bit of
that. We are very excited.
And in addition to our for-profit business, we also teach
cooking classes for adults with disabilities. We provide
services to underserved populations, veterans, other people
really could use this tool.
And then in conclusion, where could I see the government
really helping us? As my representative knows, I am not a fan
of huge government, but I am a big fan of entrepreneurs and
creative governing. I call it conscious governing. I am a big
proponent of conscious capitalism.
So I think helping our social enterprise, Planet Access,
would be an awesome way to begin. They have a fabulous model
where they have supported employment for adults with really
compromised disabilities, who then move into competitive wages
in the warehouse, and then they move out to the community as
they are able to, which I think is really innovative. They need
help with job coaches, resources. So many of my food artisan
friends are now packaging with them, and they need bigger
facilities. They are a great, great organization.
Another one would be the FDA. Is there a way we can create
online templates, things that are more simple for the small
entrepreneur. There are so many changes in compliance. We had
to pay someone $2,000 just to look over our new labels. While
that may not be difficult for a large company, for us it is
quite an expense. So is there something we can do about a
designer.
I guess a third thing would be incubators, as my
representative talked about. They are huge. We were in a small
business incubator, the second one in Lake Forest. That gave us
access directly to a consultant with the Small Business
Administration and helped with our first business plan. We are
also part of a big incubator in Chicago called The Hatchery. I
can go to classes for as little as $15, and it is great for all
small business entrepreneurs.
And my fourth one would be to recognize what is existing
right now. I don't know if you are familiar with B Corp. It is
a movement started in 2007. It is a very rigorous certification
to go through. It was difficult for us to get through it. We
have a small business. I highly recommend the government look
into B Corp. They already have a great certification process
encouraging all businesses to measure their social,
environmental, and economic impact. It is four for-profit
businesses. I would also consider the government using it as an
assessment if you want to create early-stage access to capital.
These are all companies that are not only going to be making
money but also making the world better. So I would highly
recommend looking at that.
Anyway, thank you for your time. I appreciate it.
[Applause.]
VOICE. I could not hear. If I may, would you please repeat
what kind of corporation you are talking about? You said----
Ms. BARNHART. The last one?
VOICE. Yes. B Corp?
Ms. BARNHART. It is called B Corp. There are about 2,500 in
the world, started by the founder of Patagonia, and it is for
companies who are for-profit businesses who measure themselves
in terms of their employees, how they are paying their wages. I
had to do a whole environmental study. It is a great, great
place to look.
Chairman BLUM. Mr. Borris, you are now recognized for 5
minutes.
STATEMENT OF DAVID BORRIS
Mr. BORRIS. Thanks. Representative Schneider,
Representative Blum, thanks for the invitation to testify
today. My name is David Borris and, as Brad said, I serve on
the Executive Committee of the Main Street Alliance, a national
network of over 30,000 small business owners. I have been a
small business owner for 32 years.
In order for small businesses to thrive in the 21st Century
marketplace, we need access to capital to start and grow our
businesses, vibrant local economies which create strong and
sustainable consumer demand, and a resilient workforce. Today,
I will focus on what Washington can do to ensure that these
basic vital conditions are met so new and current entrepreneurs
like me can succeed.
Small businesses are responsible for 49 percent of all
private-sector employment and 63 percent of all new private-
sector job growth. Despite this critical role, many small
business owners face challenges accessing capital to start and
expand their businesses. The share of total bank loans, as will
be discussed momentarily, going to small business decreased
from 50 percent in 1995 to 30 percent in 2012. Since the
financial crisis, small business bank loans have decreased by
20 percent, while loans to larger businesses have increased
over the same period. We need to fix that.
There is no current requirement right now to collect data
on credit application and terms. Public information on the
availability of credit to small businesses is inconsistent and
incomplete, and robust data is needed to provide a complete and
accurate picture of the small business lending marketplace.
Another thing that businesses like mine require from our
government are evidence-based policies to keep overall consumer
demand strong. The single most important thing I need to be
successful and create more jobs is more customers, not tax
breaks, not fewer regulations, customers. The strength of my
business is tied to a healthy local economy that has money
circulating in a virtuous cycle of rising wages, consumer
demand, and job creation.
The recently passed House and Senate tax bills would
explode Federal deficits by $1.5 trillion over the next 10
years in order to give tax cuts to the country's wealthiest
households and large, profitable corporations. These higher
deficits will undoubtedly result in deep spending cuts to
Medicare, Medicaid, education, infrastructure, and other vital
services. As families are forced to pay more out-of-pocket for
those vital services, they will have less disposable income,
meaning small business owners like me will see a decline in
sales.
According to the Joint Committee on Taxation and the CBO,
families earning $40,000 to $50,000 a year will pay a combined
$5.3 billion more in taxes over the next 10 years, while those
making $1 million or more would get a $5.8 billion tax cut.
This will devastate small business sales.
Another way to increase consumer demand is by raising the
Federal minimum wage. In our local economies, my fairly-paid
employee is my neighbor's paying customer. When people in my
neighborhood can't earn enough to keep up with the basics--
things like buying food, obtaining school supplies, or making
car repairs--the entire local economy threatens to become
unstable. It is bad for small business and bad for the economy
as a whole.
In addition to wages, the success of my business is also
tied to ensuring that my employees, my family, and I can access
quality, affordable health coverage. Hel's Kitchen began
offering health care in 1992 as we felt a moral obligation to
do right by the people who are making our life's work theirs as
well. Beginning around 2002, though, we began to experience a
series of annual, often volatile premium increases, forcing us
to finally ask long-time employees to reach into their pockets
to contribute more to their premiums, further reducing their
disposal income. The ACA came along and helped stabilize these
costs as insurance could no longer underwrite based on health
status and must adhere to minimum medical loss ratios. My
company has witnessed an unprecedented slowdown in rate
increases since then.
Since the passage of the ACA, our average annual increases
are a fraction of what they were before, averaging 4.6 percent
over the past seven years, allowing me to put those savings to
work through business investment and job creation.
Finally, sensible comprehensive immigration reform is
critical for an inclusive, healthy middle class. In the 10th
Congressional District alone, there are over 172,000 immigrant
residents paying $1.7 billion in taxes and spending over $4.5
billion into this economy. Since 2012, the DACA initiative has
provided 800,000 immigrant youth with temporary protection from
deportation and renewable work permits. Eighty-seven percent of
DACA recipients are currently employed, many in small
businesses. Ending DACA would cause these businesses to incur
$3.4 billion or more in turnover costs.
DACA has also had a significant positive impact on wages.
As people get out of the closet, the average hourly wage of
recipients covered by DACA increased by 69 percent after they
received DACA. As DACA workers earned higher wages, they
purchased more goods and services through small businesses and
fueled economic growth. Without DACA, U.S. GDP is likely to
shrink by $433 billion over the next 10 years.
On behalf of the thousands of Main Street small business
owners we represent, we urge you to pass the Dream Act into law
now.
In closing, I believe the role of Washington is to create
the basic market conditions that allow small businesses like
mine to thrive and compete on a level playing field with our
larger competitors. Access to capital, affordable and quality
health care, policies that fuel a strong middle class and a
strong workforce, that is the recipe for small business
success.
Thanks again for the opportunity to testify.
[Applause.]
Chairman BLUM. Thank you, Mr. Borris.
Ms. Besenjak, you are recognized for 5 minutes.
STATEMENT OF CHERYL BESENJAK
Ms. BESENJAK. Thank you. Good morning to Congressman
Schneider and also Chairman Blum, and everyone else here today.
I am excited to be here to talk about my entrepreneurial
experiences and hopefully find some answers for questions I
might have, but then also maybe find some ways that we have
created our business that might prove helpful for others.
My name is Cheryl Besenjak, and I am currently the
Executive Director of Growing Healthy People Not For Profit,
and a managing partner of the for-profit enterprise Grow Well
Farms LLC.
I have always had an entrepreneurial spirit, and I have
always asked questions like, well, what if, or why not, and how
can I meet a need? For example, in 1990 when I decided to leave
my job in educational publishing to stay home to raise my
newborn daughter, I sent out 40 resumes outlining my experience
and offering my services as a copyright and permissions
consultant to publishers around the country. From that one
mailing, The Permissions Group, or TPG, was launched. It
started around my dining room table, and TPG met a need for
publishers.
Quickly I started adding staff who were mostly stay-at-home
moms who wanted to work while their children were in school.
And so we would set the timer on my oven to let us know when we
had to end for the day so we could go meet the buses. This met
another need, obviously, in the workforce. I am really proud
and excited to say that TPG is still serving publishers today.
And when I thought about it, since 1990 to 2017, that is like
27 years. It is still in existence, and one of my first staff
members bought TPG from me in 2005 when I wanted to move on to
other ventures. So I was excited that it is still serving
today.
Fast forward to 2013. For nearly a decade I had been
developing my passion for growing food for those in need,
installing gardens around the food desert in south Waukegan and
teaching students of all ages how to grow food. I was thrilled
to bring harvests to food pantries and a free farmer's market
in Waukegan. I loved sharing my passion with others. I thought
a natural next step would be to find ways to create jobs,
especially in the low-income area.
When I read an article titled ``A Battle Worth Fighting''
in one of my favorite magazines, Organic Gardening, I knew I
had my next calling. The article explained that, according to
the USDA, there was a need for a million new farmers over 10
years because all of our farmers were aging out. So, of course,
I say what if, or why not, or how can I be a part of that? That
was very exciting. They said that especially veterans returning
from war could be the answer because they had skills and the
desire for a new mission, and creating food could be very
healing for those who have seen and experienced death and
destruction. I am a Vietnam-era Air Force veteran, I love to
grow food, and I want to grow farmers. That seemed like a
perfect match.
So there was a group of us that started Growing Healthy
People. One of the new members of our group was Kevin Westing.
He is a remodeler/construction guy with knowledge of plants and
gardening and a passion for raising fish. It wasn't long before
Kevin and I became Growing Healthy People and then started our
partnership, which is Grow Well Farms.
Kevin and I were particularly interested in indoor farming.
I had seen that at Disney World many years before and had said,
wow, if you can grow indoors all year round, the farmer's
markets don't end--I mean, you still eat after they end in
October. So we had been using alternative growing methods like
hydroponics and aquaponics, which combines hydroponics with
aquaculture raising of fish. So that is why Kevin and I have
really come together well.
Both entities, though, have had their challenges. Naively,
we thought it would be easy to find grant money to help
veterans. But as with any venture, be it not-for-profit or for-
profit, a track record is needed. Enthusiasm and expertise
alone is not enough to get funding. So through self-funding and
self-sacrifice and a few family loans, that was the path we
chose. There were many times along the way when we wanted to
call it quits, each of us at different times.
The challenges for any entrepreneur are funding, space,
time, and help. In the case of TPG, I could do it around my
daughter's schedule and in my home. That was a lot easier. I
got a small loan from my parents to get equipment, but it
hasn't been as easy with Growing Healthy People and Grow Well
Farms. We needed a space to create an indoor farm and where the
public could come visit and see the possibilities for year-
round food production which would provide healthy food and jobs
in the local food industry.
We rented a 1,600-square-foot space in Grayslake, but
quickly found that the rent and utilities were more than our
foundling not-for-profit could afford, and we had to at the
time leave there, and also that is when we started Grow Well
Farms--as you can see, these are our micro-greens here--because
we needed to generate income. So that is why the two entities
really work hand in hand.
I know my time is up, so I will just say that networking
has been an amazing way we have grown both entities. We have
had an executive MBA team from Loyola wrote a business plan as
part of their final project. We had an Eagle Scout contact
Growing Healthy People to see if there was a project that he
could do for us. So Kevin taught him how to create and build
aquaponic systems. The Scout also had a relationship. He had
gone to school at Lake Forest Country Day School in Lake
Forest, and that is where those aquaponic systems are thriving
and growing food.
We were able to secure a lease there with the school for
three years for $1. And in exchange, we offer educational
opportunities for their students to learn about the food
system, become their own farmers, and have a farmer's market.
It has been really fun.
But one of the biggest things that has kept us going is
through a lot of relationships. We were awarded a significant
grant from Abbott Fund to build a nutrition hub in two
greenhouses, one at the Thomas Jefferson Middle School in
Waukegan, and one in North Chicago at the middle school. We
installed aquaponics, aeroponics, towers, and hydroponic
systems, and it was very exciting to see students who may eat a
can of frosting for breakfast, or dumpster dive--good stories--
that they were learning about eating nutritious food and
growing it. So, we have done that.
I am excited to say we just have been awarded a grant from
the Grainger Foundation to refurbish a greenhouse at Bowen Park
in Waukegan. The greenhouse will be turned into an urban ag
lab, and the Waukegan Parks and Recreation, their team will
program classes.
We received a small grant from the Liberty Prairie
Foundation to fund a veteran intern for 120 hours at $15 an
hour. We hope to hire that veteran for the Bowen Park project.
We also have a connection. We are partnering with a farm in
Wadsworth, JAMEKS Farm, that they have submitted for a grant
from the Sustainable Agriculture Research and Education, the
farmer/rancher grant, to develop quackaponics, which is using
their ducks and their pond water to create nutrients to grow
food.
We finally, Kevin and I, finally started to get some income
from all our years of efforts. What is the future? We truly
believe in urban agriculture and that growing food using
alternative methods is an excellent future. It is a multi-
million, and Kevin says billion-dollar industry. Jobs are
created in food production.
We also have a greenhouse that we have been awarded, or I
have, from the Farmer Veteran Coalition, and we have tried to
find a space to put that up. The thing is that Kevin and I are
two people. We are the social media, we are the growers, we are
the transportation, and now we have been creating all these
amazing sites. I would say if anyone wants to come visit Thomas
Jefferson, the middle school, it is truly amazing what the
students are doing. We can grow over 1,000 plants in this one
greenhouse, and they can be harvested every seven weeks.
We are at the growth cycle of our business, and what we are
really looking for, we know that there are old buildings, there
are warehouses, there are ways that we can create an indoor
farm and provide jobs. So that is what we are hoping to do,
provide jobs. So I have been a 51 percent woman- and veteran-
owned business in the hopes of possibly getting some funding. I
look at the USDA website and the Small Business Administration
and I think possibly that feels too intimidating for me, so I
am not exactly sure how Congress can help. But we just think
that we are going to continue going because we haven't been
told to stop.
So, thank you for this opportunity to share my experiences,
and I hope that others may benefit.
[Applause.]
Chairman BLUM. I will recognize myself now for the first
round of questions for 5 minutes.
I am a serial entrepreneur as well, so I get this what you
are talking about, the passion. I sit here thinking, is this
the government version of Charmaine?
[Laughter.]
But seriously, I just love it. I just love all your
stories. Seriously, I do.
The first question I have--and I guess we can just go down
the line, starting with Mr. Whittington--is, you all started
your business because you had a passion for something, either
the marketplace or pride, or both. I get that. I had a passion
as well, for software. But the interesting thing is you have a
passion for whatever it may be, and you go from that to I
actually need to meet a payroll, I need to pay taxes, I need to
comply with regulations, I need to do all these things, that
business acumen part of the equation. Oftentimes entrepreneurs
have the passion but they don't have the business acumen to
take it to the next level, or even succeed to be in business
for five years.
Our Committee has jurisdiction over the Small Business
Administration. Administrator Linda McMahon is the new director
of the SBA, and Ranking Member Schneider and I want to make
sure the SBA is being responsive in helping small businesses as
much as we can.
So, it is a long-winded question. My question is, going
from passion to business acumen, where did you find those
resources? Did you have trouble finding those resources? Are
you still having trouble finding the resources that you think
you need?
I will take this back to the SBA, because I know that
agency exists to help small businesses in our country.
So, did you have trouble? Are you having trouble finding
those things on the business side of it?
Mr. WHITTINGTON. Yes. So I would say, bottom line, we are
blessed as a family. I started as an entrepreneur at 50 years
old after 20-plus years in corporate. Interestingly, what I
found from an SBA perspective is in some cases we took a risk,
100 percent funded our first location. SBA wasn't helpful to us
because of where we were from an income perspective. The risk
that we would have to actually take to get an SBA loan was
higher than we were willing to take, if that makes any sense.
Now, what is interesting is we are a co-working location
where there are many businesses that actually work and start up
there.
So what I do see--and this is where it comes a little bit
from a do versus tell orientation--is the businesses that are
in our location that in some cases are starting from scratch is
the serendipity of just running into somebody and saying, well,
I don't know how to make a business plan. Well, you will find
somebody that does. Or I don't know about the legal
ramifications of starting my business. Well, you can find
somebody that does.
But again, the ``do'' piece is I have sat in networking
events where you can open your notebook and you take notes on
the basis of social media, and you can go back about three
months and find it again because you had a 30-minute window to
sit down and have somebody tell you about what was going on
today. What is really, really helpful is the ``do'' side of it,
help me do it, sit down with me, who are the experts, and there
is a whole bunch in the community that can actually help me get
beyond. That is where I think really looking at--you know,
don't just set up a 30- to 60-minute exercise to tell me about
the basics. Put a workshop, put something in place that
actually brings the experts together. I think that is
important.
Chairman BLUM. And mentorship.
Mr. WHITTINGTON. Correct. That is very important. There are
a whole bunch of stars out there. If you look at the
contingents, it is growing. There is a whole bunch of
experience out there.
Chairman BLUM. Ms. Barnhart?
Ms. BARNHART. Can you restate the question again?
Chairman BLUM. Your company is a great example, from a
passion for slow cooking, the business side of this, the
business acumen, how did you find that? Where did you go to
find it? Are you still having trouble today finding the acumen
you need, the mentorship you need to go to the next level? And
I am going to take an interest in the SBA, the Small Business
Administration, if we can do more to help.
Ms. BARNHART. To help that going----
Chairman BLUM. Yes.
Ms. BARNHART. Okay. I am also a serial entrepreneur, so
this was not my first venture. I learned some critical lessons
along the way. One of the things I did early on--and I happen
to live in a community of excellent mentors--I formed a--I call
it my ``kitchen cabinet.'' I had ex-CEOs. I had an artist and a
communications specialist, and I picked people from different
industries, and I put pieces of white paper all over my house
that said I have an idea, help me think about it, and we just
spent a morning brainstorming.
So I pulled together those people really early, and that is
something you can do--you know, you don't have to pay anyone
for it. I still have that pro bono team, and they rotate.
Different people come in and out as I need different things.
I was lucky to have that, and I was also fortunate to be
part of a small business incubator that was started in my
community. I was the second member to join it, and that gave me
access to the Small Business Administration.
I think what Steve said is really important. They actually
gave me the consultant, did not charge me to write my first
business plan, and I had two interns work with me, two college
interns. I have interns all the time, and they helped craft the
plan.
So I think if you can just assign somebody, give someone a
shot, help fund it and get them going, that would be a great
resource to getting going.
So I think that probably the next thing is that the
regulations and the minutiae and all the things you have to go
through when you open any of these websites is so overwhelming
that you just want to close it down, as an entrepreneur, right?
Your brain is wanting to create, so it becomes sort of
overwhelming. So I think anything you can do to simplify and
make it really boilerplate would be really helpful. So that
would be my recommendation.
Chairman BLUM. Thank you.
Mr. Borris, you mentioned a sane immigration policy. I know
in my district in Eastern Iowa, most of the businesses, the
issue they have is they can't find employees. It isn't that
they can't find the revenue or the customers. They can't find
employees. I agree with you, I think a sane immigration policy
is important, or we will not achieve the economic growth rates
we want to achieve.
I know I am over time by 2 minutes, but could you give us
your thoughts on that?
Mr. BORRIS. Sure. So I would say that, with all due respect
to what is happening in Washington right now, we created an
abject culture of fear in immigrant communities with the
election of Donald Trump. I am just saying that out loud,
right? And I think what has happened is whether people were on
the margins or whether people were on the edge of their green
card expiring, or whether people were actually legal, the
culture of fear has been created for their extended families
and the concerns about--and this is what I think has dried up,
particularly in my industry. My industry lives on immigrant
labor, right? The restaurant industry lives on immigrant labor,
particularly in the Chicagoland area.
It has been a tremendous crippling year that has happened
in that marketplace. The broader access to the people that we
need to work in those $15-an-hour jobs, yes, it has been very,
very difficult. I don't know how it plays out in your district,
but I believe that it is a big problem for us to find----
Chairman BLUM. We have restaurants in Iowa as well.
[Laughter.]
We have meat packers and poultry processing plants.
I understand the President says we want the best and the
brightest, and sure, I would love to have immigrants come to
the United States and cure cancer, absolutely. But I know in my
district at least, we also need those people that do not have--
that today's employers cannot find.
Mr. BORRIS. It is part of the American Dream, right? I
mean, this is not a difficult conversation. And running
throughout all of this is a conversation about social mobility.
I love that my father was able to co-sign a loan for my
business back in 1989, the second loan that we took. Your
parents were able to give you a loan. What do we do about
really bright kids in the inner city who have fabulous ideas
and don't have that opportunity?
Thirty years ago this country was the most socially mobile
nation in the world. Now we are not even in the top 20, and
that is part of the immigration conversation as well.
Chairman BLUM. Thank you.
Ms. Besenjak, right? I will get it eventually by the end.
I will ask the original question about passion and getting
the resources and mentorship. Is the government in your way?
Are they helping? Are they hurting?
Ms. BESENJAK. I don't think that they are in my way or
hurting me. I have always--I go on the SBA website. I didn't go
that route, but I went to libraries and researched how to write
a business plan and did all of that. I didn't go on the SBA
website. It was probably not around as much in 1990.
So I would say that for me, the only thing that is
intimidating for me is that Kevin and I have worked very, very
hard, and self-funding to where I went through all my 401(k)
money to support an idea that I totally believed in, much to
the chagrin of my husband, who said why are you still doing
this? And I said because I still feel like we are supposed to
do this.
So what I am saying is I have self-funded. But is there a
way to get some kinds of funds? Because that track record that
we created, does that help us? I don't work and I don't have my
401(k) anymore, so what do I use for collateral? Perhaps my
house, I guess.
Chairman BLUM. I was working for a bank before I got this
job, and I was chairman of the credit committee. So when you
say does the track record make a difference? Absolutely. It
makes probably the biggest difference. When we look at
commercial loans, the first question is what kind of track
record does this individual or this company have, so that will
serve you well.
Ms. BESENJAK. We just felt really gun shy because we just
didn't want to take on any debt. And yet, in order to really
move forward and pay people, including ourselves, and
generating more business, it may take something like that.
Chairman BLUM. Thank you very much.
I am way over my time. I yield to the Ranking Member, Mr.
Schneider.
Mr. SCHNEIDER. Thank you. I think the one thing we have
learned about field hearings is time gets away, but that is
okay. That is what I like about them, the chance to get more
in-depth.
Again, thank you all for sharing your perspectives and your
stories, and your passion. I think that is really important.
Ms. Barnhart, you used the word ``calling'' in your
testimony. I think ``calling'' describes it for so many small
businesses and entrepreneurs. They have it in their heart. They
feel it in their guts. The issue is that a calling is not a
business plan. A calling may be the motivation. A calling may
be what gets you up in the morning to move forward. But without
that business plan, it is hard to get to the next steps.
Mr. Borris, you talked about the role government plays, and
I have a perspective. I think there are four things for
business success. The first thing is that vision, passion,
business idea. That is for the entrepreneur to develop.
The second is access to talent. I think the role of
government is making sure that we are educating our young
people, creating those opportunities.
The third is access to capital that we talked about and
making sure that we are not taking the rules for large
businesses that protect our economy and applying it all the way
down so we squeeze out local access to capital that is so
important.
And the fourth piece is a constructive, positive, dynamic
business environment. They are providing insight and long-term
stability.
I didn't mean to start with a speech, but I guess I have.
But I want to go back to the calling. I want to go back to the
idea that entrepreneurs have to have a calling. I will go
across, and I guess, Mr. Whittington, I will start with you.
Mr. WHITTINGTON. Okay.
Mr. SCHNEIDER. You have this co-working space. You talked
about the idea of people coming together. Everyone has their
distinctive calling, but how do they help each other go from
calling to business model to success?
Mr. WHITTINGTON. Well, to speak to calling real quickly,
that is a given, because sometimes that is the only way to get
through the day.
A picture of the why for me is I have a director of sales
of Fuji Film who is working in our co-working space. His wife
came in and is on video for us saying our relationship is
better because he is out of the house, right? Our relationship
is better. But they have lunch twice a week, and the best thing
he said, as he wrapped it up, he said, ``And my dad called, and
I was there in 5 minutes,'' right?
So from a calling perspective, it is that integration of
work and life. Our worlds are so complex, and what can you do
to make it a little bit more friction free? What can you do to
glorify the 360 that is us, in an environment that just changes
so rapidly?
Part of what happens, I mean, you call it serendipity. The
same professional has a lot of experience with photography
equipment. One of our Deerfield-based residents who came out of
their townhomes basically has a son that is starting in the
audio field and didn't have a job. So the offer was made by our
director of sales to go downtown to a conference, ``Why don't
you come down and we will go hang out and I will introduce you,
give you an idea of what is going on.''
So that is an example of--you can call that social, you can
call that business. I am not entirely sure what it is, but that
is how you give vision to someone--I'm sorry, you take it
beyond vision, and that is a great point.
The fourth point that you made I think is the most
critical. That is the operational piece. So, you have a great
idea, and you can have the best talent in the world. But if you
don't have an environment--and it is not a point-in-time
environment. It is every day, right? It is an environment that
allows me to get better. And what happens is you just get out
of the way. You create the environment and you just get out of
the way and let people bounce around, let the dots connect.
I am not sure if I answered your question, but that is
exactly why I do what I do, is to get out of the way and
connect dots.
Mr. SCHNEIDER. That is a good answer.
Ms. Barnhart?
Ms. BARNHART. That is a great question. I actually work
with a startup with someone who had a great calling and passion
and no business plan. And I spent a whole year trying to help
the business get off the ground, and I could see that without a
plan it was just going to be a fantasy. So that was one of the
first things I did, was really understand the value of the why
behind the business. I understood the passion and wanted to
create something for my son. I wanted to help people who were
struggling in their kitchen to feel a little success in their
lives. So that was where the heart was. But I knew that if I
didn't have a solid plan, it would never grow, it would never
have a solid foundation.
So I think that because of the incubator at Lake Forest,
because of my own personal connections, which are not always
accessible to other communities, which is why I feel incubators
are so critical--I see it in Chicago. I am working with a lot
of really great entrepreneurs in Chicago. One is trying to
create employment in Englewood, making these really cool T-
square snacks. They are just invaluable, I think, to
entrepreneurs, to give them the discipline to create the
business. I think that is really critical.
So if you can create--if the government could assign a
consultant to incubators, get the SBA to really help provide a
tool to create that solid business plan, I think that would be
invaluable to the entrepreneur, because then capital comes out
of that, and then customers come out of that. But if you don't
have a good plan--I think that is really critical.
Mr. SCHNEIDER. Mr. Borris?
Mr. BORRIS. I think that all of that, the help and the
expertise of how you can work the calling into a solid business
plan also revolves around conversations on capital, right? I
mean, if I get one more phone call from American Express or
Visa MasterCard offering me a cash advance that I don't have to
pay back for a year--we are codifying predatory lending in the
business environment, right? I mean, payday debt traps are one
thing for my employees. We don't allow that to happen for them,
because we loan our employees money so that they don't wind up
there. But how many merchants have been hammered by this? The
money feels great for 12 months until the debt comes due, and
most merchants who haven't paid back after 12 months, they
can't pay it back anyway, and then they are stuck at high
interest rates. It is disgusting.
But putting that piece together, that can all come
together. And I don't mean to harken back to 30- or 40-year-old
policy. But when you look at what we tried to do years ago in
the Community Reinvestment Act, if you do something like that
to fund community banks that provide capital, and then expand
that a little bit more to what you guys are talking about,
about feeding that into a consultant-type atmosphere, I mean,
yes, you could explode opportunities for people who are either
just entering the idea or have been working for 20 years, like
you were saying I want to go out and be entrepreneurial but I
don't really understand that business structure. Well, let us
coach you and mentor you and lay out for you the pros and cons,
and then you can make a valid decision.
But I would think there is a role for government to play
there.
Mr. SCHNEIDER. Cheryl?
Ms. BESENJAK. I really love the idea of the mentorship and
having local incubators. I did go down to the veteran
incubator, Bunker Labs, and for me as a small business owner, I
felt like that was bigger business than who I am. So while it
was exciting, these are people who are creating great big
companies, and I was just creating my little micro-green
business.
So it didn't feel like that was the place for me, even
though I was a veteran, and that is okay. So I was thinking
maybe some more local entrepreneurship groups. That would be
really great.
The one thing--yes, I have a fabulous business plan by the
executive MBA group, and the very first thing it says on the
business plan is that you need to get funding to fund a
vehicle. That is great. My car has been transporting all over,
everywhere. But the other thing is it said to get a
salesperson, and that meant you had to pay a salesperson to do
the sales.
I mean, I am good at it, but I am not great at sales. I am
great at presenting the passion, but I needed somebody who
would take all the greens to the various restaurants and then
follow up and follow up. I mean, people want to buy these, but
where is the follow up? I am also trying to grow wheat grass.
So if I could have a salesperson who was doing that, that would
be awesome.
So if there is a way to tap into some kind of group, maybe
going to the Lake Forest group and talking to them, are there
some people who might be interested in doing that to build a
business, to then have a percentage of the sales, creative ways
to fund help.
Mr. SCHNEIDER. I think you touched on a key point. When you
talk about the why, I think the challenge each entrepreneur has
is to know their respective own personal why. But more broadly,
the next step is to learn the how. The whys are unique. The how
is fairly consistent. You have to develop a market, get our
capital, teach your employees.
We have talked about this, Mr. Blum and I have talked about
this, creating communities of opportunity, creating communities
where there is the ability to learn, to inspire, to teach each
other. There are different communities. I know Bunker Labs
well. The founder is a friend of mine. They are targeting a
certain group, and that community is going to work very well.
That may be very different from what you saw with Lake Forest
and what you created there. Each community will be distinct,
but within those, where the government, I think, can play a
role is trying to promote ladders or stairs, whatever metaphor
you want to use, while at the same time making sure we have
guardrails and safety mechanisms.
I think our legal system provides that. Mr. Borris, you
talked about the protections. It is not just that we are
protecting small businesses. You may not have the
sophistication to know that there is transparency in lending,
and this is a constant ongoing process.
I will close with this, the idea of the three-legged stool.
The entrepreneur is always going to be the driving engine of
our economy. It has been throughout our history. But creating
the environment where the entrepreneur can get success and get
the people they need, the space to prosper, the capital to
grow, and the government provides those guardrails and
ladders--I think if all that comes together and you create that
stable place for the economy, it will grow and prosper.
And I want to emphasize this, that it is not a partisan
issue. It is not because I am a Democrat and Mr. Blum is a
Republican. It is because we know that the spirit of the
American people to achieve and produce their own success is
unleashed when we create these opportunities.
So, with that, I will yield back.
Chairman BLUM. Thank you, Mr. Schneider.
I will start the second round of questioning now.
Please tell me--and I am going to take copious notes here,
and I will take it back to Washington and put it in a letter
and send it up the food chain there--where is the Federal
Government hurting you in your business? And the second part of
that question is how can the Federal Government help you in
your business? I am going to take notes here, and I will get
your message back there.
Mr. Whittington?
Mr. WHITTINGTON. Yes, a fantastic question. So, I think one
area that has been talked about here is in health care. I would
tell you it actually could be a help to my business. I am
looking at how, for my members who are not my employees, we can
put something in place that would allow access--association,
group, whatever it might be--but would allow for a more stable
environment for you to make a choice to even dump into,
whatever. So that is a piece, to stabilize that and really
looking at flipping the script. It is not about freeing up
companies that are under 50 employees, but flip that script and
say how do you reasonably make a choice, because we see a lot
of small businesses, very small, where that is a risk for them.
It is probably stability. I am still learning. I have been
around for two years, open for a year.
I did mention, from a municipality perspective, I was not
aware of any focus on incubators and accelerators. I think
helping to foster that environment, again being the ladder.
There are so many needs out there for so many small businesses.
You have your passion, and you have a flat spot.
So I think I have had the SBA and the SBDC come in and
tour, love our place. They have their location as to things
that they do. I have not done the best job of better
understanding the opportunity there.
Chairman BLUM. Is the Federal Government hurting your
business or your efforts?
Mr. WHITTINGTON. It is not hurting me. I don't know how it
is helping me. It is not hurting me today. It is not hurting me
today, or maybe I don't know where it is hurting me, but it is
not helping me. It is not helping me at all. We figure it out
as we go along.
Chairman BLUM. Thank you.
Ms. Barnhart? The same question.
Ms. BARNHART. Yes, it is a good question. I think that
anything the Federal Government can do to simplify--I am in the
food space. Anything you can do to simplify the regulations. I
do think the Federal Government has a critical role in
overseeing the quality of the food that people are eating. I do
think the government could do a better job getting processed
food and non-GMO, I guess, in some ways the labeling could be
stricter, which would probably be counter-intuitive to say
that. Because my product is a natural product, I think people
need to understand what they are eating. So I think that is a
critical role.
But I think anything you can do to simplify, from the
startup perspective, what you need to do to be compliant, it is
very confusing. My partner is in the U.K., and they have a lot
less--of course, it is a different country, but they have a lot
less regulations for home food businesses, cooking classes.
There are things we have to jump through hoops for startups.
Chairman BLUM. I just have a follow-up question to that.
You mentioned you are in the natural food space. Is that what
you said?
Ms. BARNHART. I said what?
Chairman BLUM. Did you say you were in the natural food
space?
Ms. BARNHART. Spices, yes.
Chairman BLUM. I have been involved in hearings in
Washington where the definition of ``natural'' and how that can
be abused. I guess in 30 seconds, can you give me your thoughts
on that definition? Does it need to be tighter, or is it
ridiculously tight? What are your feelings about it?
Ms. BARNHART. Well, it is interesting. My product is just
spices. I don't have salt in them, I don't have fillers or
anything, but I want to put ``salt-free'' on the front of them
because they are salt-free. I now have to go through a whole
series of regulations to create a label that basically says
zero, zero, zero, zero on it, because I want to make that
claim, which seems ridiculous. So that seems ridiculous to me,
and I pay a consultant to help me do all that, which is
expensive.
But on the flip side, there are so many additives in our
food products right now. The American consumer really is, I
think, being poisoned, to be honest with you. You don't see
those kinds of additives in other parts of the world as what is
in our food. So there is a reason we have to go through all
these hoops now. It is both, actually, something for you all to
think about. If there is something you could do to clean it up,
that would be great.
And then I just think the other thing is just employment. I
would love to bring more people on, but with the taxes, and now
I have to get health care, and all the things you now have to
do, for me it is just better to have independent contractors.
So I don't know if there is anything you can do to simplify
that, too.
Chairman BLUM. You do independent contractors instead of
employees?
Ms. BARNHART. Yes.
Chairman BLUM. And the reasons again?
Ms. BARNHART. It is just more paperwork. I am a small
business, just trying to figure out how to make it work, and I
am a ``me'' corp. I am running it ethically.
Chairman BLUM. Thank you very much.
Mr. Borris?
Mr. BORRIS. I think there are three things right now the
Federal Government could do better in the way it is behaving
that is hurting small business in general. I think that this
passion--and I know you guys are up here presenting a wonderful
picture of bipartisanship, but this passion for politics over
policy is not ascribed to any particular party but is ripping
apart the ability of the United States Congress to actually do
things on behalf of the American people. I will give you three
quick examples of things the Federal Government is doing or not
doing.
One is this conversation about repealing health care--it is
unbelievable to me--without a valid conversation about what
replaces it. The 16 percent of the largest economy in the world
is tied to these conversations, and we are throwing around
concepts like they mean nothing.
``Let's get rid of the individual mandate.'' Okay. Well,
then how do you stabilize markets? ``Oh, don't worry, they will
self-stabilize.'' Well, they won't self-stabilize unless you
allow insurance companies to discriminate on preexisting
conditions. ``Oh, no, no, we are not going to do that.''
Watching the whole thing is ridiculous, right?
So let's come up with a really valid plan. Let's sit down.
We had eight years to talk about it. We did nothing about it
for eight years. That is a frightening prospect, I think, for
small business owners.
The second thing is the conversation about let's get rid of
the Consumer Financial Protection Bureau. Let's just let Wall
Street have at it, like they used to have at it. These problems
did not start under a Republican administration. These problems
started under Bill Clinton's administration when we deregulated
the Commodities Futures Trading Commission, when we deregulated
banks. We should have an economy that should have Wall Street
supporting the real economy. Instead, we have Wall Street
drawing money out of the real business owners' pockets, and I
would suggest out of consumers' pockets also.
So let's look at ways that the CFPB could actually work and
be meaningful in people's lives and in small business owners'
lives instead of saying let's just throw the baby out with the
bath water, we don't want any regulations; laissez faire
capitalism, it is going to work great. Except it never has
worked great, right? We need a healthy government to stand on
behalf of the common man, and I am not seeing that attitude in
Washington right now.
And the last thing--and we have been talking about this for
a long time. Unfortunately, because of some very courageous
activists and because of the way the market has worked, we are
actually seeing wages rise, and I would suggest that raising
wages is one of the most important things that we can do to
really fuel consumer demand, and we have seen it happen on its
own.
But to vilify unions on their own, and to say forget about
doing anything like that while unions really are a great
solution for raising wages--so some sort of valid conversation
in D.C. that doesn't say let every business owner pay one
dollar an hour; if people are willing to work for one dollar an
hour, let them work for one dollar an hour. We know people
will, because desperate people do desperate things.
So I would say those three areas: wages, consumer financial
protections, and health care. Those are areas that Washington
is freezing us right now with uncertainty and could really come
together if they would be willing to let policy trump politics.
Chairman BLUM. Thank you very much.
Cheryl?
Ms. BESENJAK. Thank you. Where does the government hurt me?
Currently, I don't feel like it does. Only one small little
regulation around wheat grass. These are all considered
agricultural products because they are growing in soil, so I
can sell them this way, and there is no regulation on micro-
greens right now. But wheat grass, if I cut it, I have now
processed it. I have tried to explain everything. So that is
just one little example. Sometimes regulations can get in the
way.
Where could it help me? In particular, I was just thinking
about the mentorship issue and thinking if there was a place
for me to come and say here is where we are, here is what we
have done, what we see next is we would really like to be able
to have better interns come and learn. Is there a program? I
don't know all the programs available, but is there a program
through the government that would fund us to train veterans? So
if I could go and just say here is where we are, is there
someone in government who knows all the ins and outs and has
ever looked into this, that would be very helpful.
We know how to train them, we know what to do, we have
facilities where we can take them to learn, but we need someone
to say here is how we can bring that together, the funding to
help veterans have a new job, is there a way, that would be
very helpful to us.
Chairman BLUM. Thank you very much.
Brad?
Mr. SCHNEIDER. Thank you. I want to be respectful of
people's time, so I will just thank you all for joining us.
Since you touched on veterans, there is a lot of work being
done on behalf of veterans. The first bill I introduced this
year was the Veterans Industry Program that would allow
veterans to work in businesses using the GI Bill dollars,
rather than going into a classroom, to go and get an internship
working with a business, internship credit. It is a very
frustrating thing for me that we have these veterans who are
trained in skills, whether it is someone who has learned all
the medical skills necessary to step immediately into the role
of a nurse, or someone who is operating a piece of artillery
that is every bit, if not more, complex than any piece of
equipment, and they can't necessarily say translated in
language ``Here is what I know'' so they can be hired. We can
do a much better job on that.
But what I heard across the board was a desire to reduce
complexity. This is something where I think we can make a
difference, something you touched on, the zero-zero-zero. You
kind of showed the tension, because we want our food to be
safe, we want to make sure that people are producing safe food
and getting it to us as efficiently and as effectively as
possible. So I think we can work to reduce complexity, increase
efficiency, and enhance efficacy. But again, that takes people
coming together and having the conversation.
Mr. Whittington, one of the most important points you made
in your prepared testimony, and you said it again in the
questioning, is the issue of health care, that people's health
care--and, of course, you were talking about the need for
health care, one-sixth of our economy. We need health care
reform or I know as a policymaker we will never get ahead of
the curve. It has been seven years, and now we are approaching
eight, before we have been able to do anything since the
passage of the ACA, while health care technology is moving. We
may never get ahead. We have to constantly work to move
forward. That is different than the policy.
So many people are afraid to go out and venture on their
own to give up the secure health care they have in a job that
maybe is holding them back, and I think that is one of the
things that is holding back our economy.
So we have to figure out a way to reduce, if not eliminate,
the friction of preventing people from taking their passion,
learning the how, and then venturing out and taking the risk of
doing it on their own, that entrepreneurial risk.
We touched today on immigration reform. We have to take
care of the Dreamers. That is an imperative right now. But
comprehensive immigration reform, the non-partisan
Congressional Budget Office says it will add $2 trillion to our
economy. Well, why? Because it pulls people out of the shadows.
It will address the issue of people working for bad employers
taking advantage of people who are afraid to come out of the
shadows. It hurts everybody, good employers and hard-working
people. If we have comprehensive immigration reform, I think
that is a key thing.
Then we have this tax debate. We need a reformed tax code.
We definitely need a reformed tax code, one that helps working
families and small entrepreneurs, businesses, businessmen and
business women across the country, to take the next step, to
buy that piece of equipment or hire that new employee, or
introduce that new product, or venture into a new market.
So there are a lot of things where I think we can come
together and make a difference.
I will just close, because I know we are past our allotted
time. But again, I want to thank the Small Business Committee
and my colleague, the Chairman, for coming here. I thought this
was a great panel. I will put it on par, as good, if not better
than, any panel we have in the capital. So, thank you for your
testimony.
It is always a great opportunity to have these one-on-one
conversations with business owners. Obviously, to the audience,
to those who came to listen, thank you so much for being here.
I did want to thank the Village of Deerfield, Mayor
Rosenthal, our Village Manager, for making this available to
us.
I look forward to continuing the conversation. This is not
a one-and-done. Our economy is constantly growing. The
challenges will be ever-present. But as we listen to the voices
of the people like you who are out on the front lines trying to
make a difference, trying to change people's lives, whether it
is veterans or people with disability challenges or people just
trying to make that mid-career what-do-I-do-next and find their
why and their next passion, that is how we make this economy
work.
So, thank you again. I appreciate you being here.
I will turn it over to the Chairman.
Chairman BLUM. Thank you very much, Brad. And thank all of
you for being here. I would like to echo that sentiment as well
in this beautiful facility today. Thank you to our great panel
of witnesses here today.
I was just saying to Daniel here that this is as good as
any hearing we have had at least in the last year that is for
sure.
Thank you to the veterans for serving our amazing country,
and also for caring about veterans still and trying to employ
them.
And I believe you are trying to employ people with
disabilities, and thank you very much for doing that as well.
I think Mr. Borris mentioned something about the
partisanship in Washington, D.C., and I couldn't agree more.
One of the nice things about being on this Committee, and I am
sure Brad would agree, is that if there is any issue that we
could be bipartisan on, it certainly should be and is small
businesses and our economy, so people can climb that ladder of
opportunity. I know I climbed it, and we want to see more
people climb it, the American Dream. That is why I ran, because
I want to make sure the American Dream is alive and well and
thriving, because I think it is what makes America unique in
the world.
It is a bipartisan issue, and I work well with Brad.
Sometimes during the hearings and afterwards I say, you know,
if it was up to he and I, we could sit down and probably solve
most of these problems, right?
[Laughter.]
Mr. SCHNEIDER. That's right.
Chairman BLUM. But somehow, with the leadership on both
sides of the aisle, I don't know what happens. But as a
business person myself, it is frustrating. I am there, and I am
sure Brad is there, to solve problems. You can't solve them if
you don't talk to each other. So I share that frustration. Many
of us are frustrated.
But this has been wonderful, it has been absolutely
wonderful. Thank you for your hospitality. And thank you,
everyone, for being here today.
Members have 5 legislative days to submit statements and
supporting materials for the record.
Without objection, so ordered.
This hearing is now adjourned.
[Applause.]
[Whereupon, at 11:11 a.m., the Subcommittee was adjourned.]
A P P E N D I X
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
House Committee on Small Business
Monday, December 11, 2017
Thank you, Representative Schneider and Representative
Blum, for inviting me to share my thoughts and my
entrepreneurial journey.
The origin of my business, the zen of slow cooking, began
many years ago, and the essence of it is captured in this
picture. These are my 3 children, and you can see that in those
years I had a very ``un zen-like'' life. In addition to the
three children being close in age, my middle son was diagnosed
as developmentally delayed when he was a baby, so as he entered
his school years it became a challenging time for our family.
I called my best friend one night in tears, asking for her
help and told her that I couldn't even get dinner on table. She
had 3 pieces of advice:
1) You aren't a failure
2) Get off the phone
3) Buy a crock pot
I understood the first 2 pieces of advice, but not the 3rd.
She then explained how a crock pot (now more commonly called a
slow cooker) worked, and I set out the following morning to buy
my first slow cooker.
I fell in love with this little kitchen appliance. It gave
me the opportunity to create a dinner hour similar to the one I
enjoyed as a child. My mother cooked from scratch each
afternoon and we enjoyed a very zen-like dinner hour when my
father came home from work.
I found that my preparing food in the morning using my slow
cooker, I could use the afternoon to take my young children for
walks, help with their homework, or otherwise effectively meet
the flurry of activity that comes at that time of day.
I cooked steadily with my slow cooker for 2 years. Then one
day my daughter came to me crying and said she couldn't eat any
more ``thick meat''. I knew what she meant. I only knew how to
make a few really good things in my slow cooker, such as pot
roast or beef stew. Fortunately, by that time I understood the
science behind the slow cooking process and was able to start
adapting some of my favorite recipes, so that they worked in
the slow cooker.
Fast forward to 2010. I decided to spend a year studying
what life would look like for my son who has language based
challenges, when he aged out of the school system, and found
that only 25% percent of young adults with cognitive
disabilities are employed. My son, Doug, who is here today, is
a shining light and I couldn't imagine a world where his light
couldn't shine. I began to believe that creating opportunities
for adults with employment barriers was my calling, so I
decided to take my entrepreneurial energy and create a business
where he, and others like him, could work.
I shared this vision with a friend, and said I wasn't
really sure where to begin. She asked a simple but truly
important question--``What makes you happy.'' I laughed and
shared how I loved slow cooking--how I used my recipe time as a
period for quiet reflection in an otherwise busy day, and how
much I enjoyed how the delicious aroma of the cooking food
filled my house all afternoon.
She said, ``I'm not sure what you are talking about, but do
that''. So those are the inspirations behind the zen of slow
cooking.
It took another year to find the right partner to help me
get the business off the ground, but I was fortunate to find a
young mom (Jane McKay) who was doing recipe testing and food
writing who had just moved from the UK. Together we co-created
the zen of slow cooking food blog in 2012. The blog published
recipes and inspirations for the home cook while putting a
contemporary twist on slow cooking.
Using the most popular recipes off our blog, we created a
line of premium spice blends crafted exclusively for the slow
cooker featuring flavor profiles from all over the globe. Our
spice tins included a recipe and shopping list to make it
convenient for the home cook. We packaged up tins containing
our first 3 spice blends and took them to our local Farmers
market. We were delighted when we sold out that first morning
until we realized that Jane, my business partner, would have to
blend 40 more spice blends for the next week.
Over the next year, we sold at Farmers markets, holiday
boutiques, and out of our home. In 2014, we were approached by
several customers who wanted to ship our blends out of state.
At that point, we opened our own online store and reached out
to Planet Access Company. PAC is a social enterprise that
provides training and employment for adults with disabilities.
Each week Jane would hand blend and heat seal our spices. I
would pick them up and bring them to Planet Access Company
where 4 adults with developmental disabilities would package
them up into individual tins. I would then return to gather our
finished product to be sold at various events or online.
In 2015, we opened our first wholesale account at a local
organic farm, and later that year we had the opportunity to
interview with Whole Foods, who loved our concept. They asked
us to make our packaging more merchandisable and then to come
on board.
In 2016 we steadily built our business with Whole Foods,
were picked up by a food distributor in the Midwest, and were
finalists for ``Chicago's Next Best Food Product''. This
contest was sponsored by Peapod which led to the co-creation
and launch of 2 meal kits for the slow cooker in the
Chicagoland area on Peapod.com that fall.
2017 has been equally exciting as we are now in over 50
stores around the Chicagoland area, Oregon and Northern
California. Distribution of the meal kits has expanded to New
York, New Jersey, parts of Connecticut, Maryland and Virginia.
We've expanded the number of adults with developmental
disabilities who work on packaging our products to over 30,
have become a Certified B Corporation, and our latest spice
blend won a Society of Food Industry (SOFI) Award for best new
product--which is the equivalent of winning an Oscar in our
industry.
In addition to building our for-profit business we also
teach complimentary cooking classes and have donated slow
cookers to adults in underserved populations, for slow cooking
is a safe and economical way to cook.
Representative Schneider knows I am a big believer in
Conscious Capitalism and feel that for-profit social
enterprises can help create solutions to challenges we face as
a society. And while I think it's small grass roots
organizations and small businesses that are the best pathway
for supporting underserved populations, I do believe that the
Federal Government could play a role in helping expand that
vision.
One way is in supporting social enterprises like Planet
Access Company. They have created employment within their
warehouse for adults who have severe intellectual disabilities,
and also provide employment in their fulfillment center for
adults who need less supervision. They need additional support
to grow their facility, provide additional job coaches and
resources. I feel that the government could play a role in
using them as a model, and also providing assistance in helping
them expand.
An area that would be helpful to my business is making it
simpler to navigate the constant change in food packaging
regulations. We had to pay close to $2,000 to have someone
independently review our labels to make sure they were in
compliance with the FDA. This would not be an issue for a big
CPG company, but there should be a less expensive way of
ensuring compliance. I would think a set of templates could be
placed online that our designer could download as a starting
point, making the cost of verifying that we meet the standards
much more economical.
When I started my business I became the second member to
join a new business incubator in my community. It provided
unbelievable support and access to mentors, markets and the
small business administration in Lake County. Today, I'm part
of a larger incubator in Chicago called The Hatchery. I believe
that anything the government can do to support the growth and
expansion of business incubators would be valuable to the
start-up community.
My final comment centers on B Corporations. We recently
became a B Corp, which is a rigorous certification process for
for-profit businesses that have a vision to be a ``force for
good in the world.'' I would encourage the Government to
suggest all businesses use their online assessment tool to
measure their social and environmental impact. I would also
consider using B Corp certification to as a way to determine
early stage companies who merit access to any benefits that the
government might help make available for early stage firms.
Thank you for the opportunity to shine a light on our work.
# # #
Prepared by: Meg Barnhart
Date: December 6, 2017
Statement of David Borris, Main Street Alliance Executive
Committee Member and Business Owner for House Committee on
Small Business Hearing on ``Bridging the Entrepreneurial Gap:
Addressing Barriers to Small Business Formation and Growth.''
Monday, December 11, 2017
Representative Schneider, Representative Blum:
Thank you for the invitation to testify today. My name is
David Borris and I serve on the Executive Committee of the Main
Street Alliance, a national network of over 30,000 small
business owners. I've been a small business owner for 32 years.
My wife and I opened a homemade food store in 1985, and over
the years have expanded it into a full-service catering company
with 33 full-time employees and 80 part-time and seasonal
workers. We take great pride in what we do.
In order for small businesses to thrive in the 21st Century
marketplace, we need access to capital to start and grow our
businesses, vibrant local economies which create strong and
sustainable consumer demand, and a resilient workforce. Today,
I will focus on what Washington can do to ensure these basic
vital conditions are met so new and current entrepreneurs like
me, can succeed.
CAPITAL ACCESS
Small businesses play a crucial role in local and national
economic growth, and are important engines of job creation. We
are responsible for nearly half, 49 percent, of all private-
sector employment, and 63 percent of new private sector job
growth.\1\ Despite this critical role, many small business
owners face challenges accessing capital to start and expand
their businesses. The share of total bank loans going to small
business decreased from 50 percent in 1995, to 30 percent in
2012. Since the financial crisis, small business bank loans
have decreased by 20 percent, while loans to larger businesses
have increased over the same period.\2\ According to a study by
the Federal Reserve Bank of Atlanta, nearly half of small
businesses owners, 44 percent, had issues in accessing
credit.\3\
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\1\ https://www.sba.gov/sites/default/files/
FAQ--March--2014--0.pdf
\2\ https://papers.ssrn.com/sol3/
papers.cfm?abstract--id=2470523
\3\ https://www.frbatlanta.org/research/small-business/survey/2016/
report-on-employer-firms.aspx?panel=2
We believe the numbers are much higher, but there is no
requirement to collect data on credit applications and terms.
Public information on the availability of credit to small
businesses is inconsistent and incomplete \4\ and robust data
is needed to provide a complete and accurate picture of the
small business lending marketplace.
---------------------------------------------------------------------------
\4\ https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/
201705--cfpb--Key-Dimensions-Small-Business-
Lending-Landscape.pdf
Just as the Community Reinvestment Act needed HMDA (the
Home Mortgage Disclosure Act) to reveal the roadblocks in home
ownership for people of color, similar data is needed for small
businesses. This will help build vibrant local economies and
contribute to national economic growth. It's critical that fair
lending laws are enforced, and the data will show where
enforcement is needed, because we need an economy that works
for all of us, not an economy that is rigged to benefit a
---------------------------------------------------------------------------
select few.
TAXES
The other thing that businesses like mine require from our
federal government are evidence-based policies that keep
overall consumer demand strong. The single most important thing
I need to be successful and to create more jobs is more
customers. Not tax breaks. Not fewer regulations. Customers
with enough disposable income to engage my services. The health
of my business is tied to a healthy economy that has money
circulating in a virtuous cycle of rising wages, consumer
demand, and job creation. Without strong consumer demand, my
business cannot thrive.
The House and Senate tax bills would increase federal
deficits by $1.5 trillion over 10 years to give tax cuts to the
country's wealthiest households and large, profitable
corporations. Republicans will then use the higher deficits to
justify trillions of dollars in cuts to Medicare, Medicaid,
Social Security, education, food and rental assistance,
infrastructure, and other vital services.
These deep spending cuts would cause healthcare, education,
food, and housing costs to skyrocket, which would have a ripple
effect on small businesses, who depend on strong local
economies with plenty of consumer demand and customers. As
families are forced to pay more for vital services, they will
have less disposable income, meaning small business owners like
me would see a decline in customers.
The cuts to vital services would also siphon trillions of
dollars out of state economies. That means that states like
Illinois, which are already grappling with austerity budgets,
will be forced to make up the difference, steeply cutting the
quality of services offered. As our state budgets contract,
employment would decrease and small businesses across the
country would decline. The Senate tax plan raises taxes on 87
million low and middle income families, including Main Street
small business owners and their customers to pay for tax cuts
for the wealthy and Big Business. According to the Joint
Committee on Taxation and the Congressional Budget Office, in
2027, families earning $40,000 to $50,000 would pay a combined
$5.3 billion more in taxes, while making those $1 million or
more would get a $5.8 billion cut.\5\ This will devastate small
business owners.
---------------------------------------------------------------------------
\5\ https://www.cbo.gov/system/files/115th-congress-2017-2018/
costestimate/reconciliationrecommendationssfc.pdf
---------------------------------------------------------------------------
JOB QUALITY
Another way to increase consumer demand is by raising the
federal minimum wage. Henry Ford understood the link between
well-paid employees and paying customers more than a century
ago when he recognized his business would only succeed if his
workers earned enough to buy the care they were building, and
doubled his workers' wages overnight.
In our local economies, that same link applies: my fairly
paid employee is my neighbor's paying customer. When people in
my neighborhood can't earn enough to keep up with the basics--
things like buying food, obtaining school supplies and making
car repairs--the entire local economy becomes unstable. That's
bad for small business, and bad for the economy as a whole.
Increasing the minimum wage also reduces costly employee
turnover and increases productivity. When the minimum wage goes
up, small businesses can reap such benefits without being
placed at a competitive disadvantage relative to large
corporations, because all companies in their field are required
to do the same, leveling the playing field for small
businesses.
HEALTH CARE
In addition to wages, the success of my business is also
tied to ensuring that my employees, my family, and I can access
quality, affordable, health coverage. Hel's Kitchen began
offering health care in 1992, as we felt a moral obligation to
do right by the people who were making our life's work theirs
as well. Employees contributed 50% in the first year, and
nothing thereafter. Beginning around 2002, though, we began to
experience a series of annual, often volatile, premium
increases. In 2004--21%; in '05, 10%; '06, 16%; '07, 17%; and
in 2008, yet another double digit increase forced us to ask
long time employees to reach into their pockets once again.
Just as confounding as the premium swings themselves was
the source of their unpredictability. For example, we had a
dishwasher, great at his job, but he suffered from a malady
that required kidney dialysis. When I met with my insurance
broker to discuss the steep rise in premium for the upcoming
year, he quietly acknowledged the spike was primarily due to
the illness of that one single employee.
The ACA has helped stabilize these costs as insurers can no
longer underwrite based on health status, and must adhere to
minimum medical loss ratios. This shields my business from
sharp swings in premiums based on the health of one or two
employees.
I see these gains in my bottom line. My company has
witnessed an unprecedented slowdown in rate increases. Since
the passage of the ACA, our average annual increases are a
fraction of what they were before, averaging 4.6% for the past
seven years. I am saving money on premiums, and can plow those
savings back into business investment and job creation.
IMMIGRATION
Sensible, comprehensive immigration reform is critical for
an inclusive, healthy middle class. In the 10th District of
Illinois alone, there are over 172,000 immigrant residents,
including 5700 entrepreneurs, paying $1.7 billion in taxes and
spending over $4.5 billion.\6\
---------------------------------------------------------------------------
\6\ http://www.newamericaneconomy.org/locations/illinois/illinois-
district-10/
Since 2012, the Deferred Action of Childhood Arrivals
(DACA) initiative has provided 800,000 immigrant youth with
temporary protection from deportation and renewable work
permits. The small business community in particular has
benefited from the contributions of DACA recipients, and work
authorization has enabled young immigrants to become small
business owners and employees, and higher wages have enabled
them to become small business customers, boosting local and
---------------------------------------------------------------------------
national economic growth.
Over, 87 percent of DACA recipients are currently employed,
and many have found employment in small businesses. Small
businesses thrive when they are able to hire skilled and
committed employees, regardless of immigration status, and many
of these employees are DACA recipients. Ending DACA would cause
businesses to incur at least $3.4 billion in turnover costs.
DACA has also had a significant positive impact on wages.
The average hourly wage of recipients increased by 69 percent
after receiving DACA. As DACA workers earn higher wages, they
purchase more goods and services from small businesses and
helping to fuel economic growth. Small businesses rely on a
strong economy to provide a robust and sustainable customer
base. Without DACA, U.S. gross domestic product would be
reduced by $433.4 billion over the following 10 years.\7\
---------------------------------------------------------------------------
\7\ https://www.americanprogress.org/issues/immigration/news/2017/
01/09/296125/ending-daca-will-cost-states-billions-of-dollars/
There is no question that ending DACA will destroy lives
and tear apart families and communities, but it would also
devastate the national economy and small businesses. DACA
recipients are small business owners, small business employees
and small business customers. On behalf of the thousands of
Main Street small business owners we represent, we urge you to
pass the Dream Act into law, ensuring legal protections for
---------------------------------------------------------------------------
800,000 young immigrants.
In closing, I believe the role of Washington is to create
the basic market conditions that allow small businesses like
mine to thrive and compete on a level playing field with our
larger competitors. We cannot continue to be the job creators
and innovators that America needs us to be without these basic
conditions.
Access to capital, Affordable, quality, health care;
policies that fuel a strong middle class and a strong
workforce--this is the recipe for small business success.
Thank you again for the opportunity to testify. I look
forward to your questions.
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Good morning and thank you for the opportunity to speak
this morning about my entrepreneurial experiences at the field
event, ``Bridging the Entrepreneurial Gap: Addressing Barriers
to Small Business Formation and Growth.'' I hope what I and the
others on the panel share and discuss will be a benefit to the
committee and future entrepreneurs.
My name is Cheryl Besenjak and I am currently the Executive
Director of Growing Healthy People NFP (an Illinois not-for-
profit corporation) and a managing partner of the for-profit
enterprise Grow Well Farms LLC.
I have always had an entrepreneurial spirit--asking
questions like what if, why not and how can I find a way to
meet a particular need? For example, in 1990 when I decided to
leave my job in educational publishing to stay home to raise my
newborn daughter, I sent out 40 resumes outlining my experience
and offering my services as a copyright and permissions
consultant to publishers around the country. From this one
mailing, The Permissions Group (TPG) was launched. Started
around my dinging room table, TPG met a need for publishers.
Quickly I started adding ``staff'', mostly stay-at-home moms
who wanted to work while their children were in school. This
met another need in the workforce. I am proud to say that TPG
is still serving publishers today. And one of my first staff
members bough TPG in 2005 when I wanted to move on to other
ventures.
Fast forward to 2013. For nearly a decade I had been
developing my latest passion--growing food for those in need,
installing gardens around the food desert in south Waukegan and
teaching students of all ages how to grow food. I was thrilled
to bring harvests to food pantries and a free farmers market in
Waukegan. And I loved sharing my passion with others. I though
a natural next step was to find ways to create jobs. When I
read an article titled ``A Battle Worth Fighting'' in one of my
favorite magazines, Organic Gardening. I knew I had found my
next calling. The article explained that according to the USDA
there was a need for a million new farmers over the next ten
years as our country's farmers were aging out. Then it said
that veterans returning from war could be the answer--they had
the skills and desire for a new mission and creating food could
be healing for those who have seen and experienced death and
destruction. I am a Vietnam Era Air Force veteran and I love to
grow food and I want to grow farmers. Seemed like a perfect
match. The author of the article Dulanie Ellis was also the
producer of the award-winning documentary--Ground Operations:
Battlefields to Farmfields. Several of us involved in the
Waukegan project decided to see what we could do with this new
mission and Growing Healthy People NFP was launched. One of the
new members of our group was Kevin Westing, a remodeler/
construction guy with knowledge of plants and gardening and a
passion for raising fish. It wasn't long before Kevin and I
became Growing Healthy People and then started our partnership,
Grow Well Farms.
Kevin and I were particularly interested in indoor
farming--growing year round, using alternative growing methods
like hydroponics and aquaponics which combines hydroponics with
aquaculture, the raising of fish.
Both entities have had their challenges. Naively we thought
it would be easy to find grant money to help veterans. But as
with any venture--be it not-for-profit or for-profit--a track
record is needed. Enthusiasm and expertise alone is not enough
to get funding. Self-funding and a few family loans were the
path we chose. There were many times along the way we wanted to
call it quits.
Challenges--for every entrepreneur the biggest challenges
are funding, space, time and help. In the case of TPG I was
able to start in my home and work around my daughter's
schedule. I did take out a small loan from my parents to pay
for equipment and start-up costs. With Growing Healthy People
and Grow Well Farms, it hasn't been as simple. We needed a
space to create into an indoor farm and where the public could
come visit and see the possibilities for year round food
production which would provide healthy food and jobs in the
local food industry.
We rented a 1600 square foot space in Grayslake, but
quickly found that the rent and utilities were more than our
founding not-for-profit could afford and quickly ran out of our
start-up funding we had secured. Kevin and I then formed Grow
Well Farms LLC and started growing microgreens to sell to
restaurants and at farmers markets to generate sales/income.
We have found creative ways to grow our not-for-profit and
business--networking, using social media and through
collaboration. Making connections and always accepting every
opportunity to share our vision and missions have been key. For
example--An Executive MBA team from Loyola University wrote a
business plan for Grow Well Farms' microgreen business as their
final project. An Eagle Scout contacted Growing Healthy People
to see if there was a project he could do for veterans. Kevin
taught him how to build aquaponics systems out of IBC totes.
Scouts under this leadership built three systems for us.
Through this relationship, we found a home for the systems and
Grow Well Farms' business in a greenhouse at the Lake Forest
Country Day School which we lease for 3 years for $1. In
exchange, we offer educational opportunities to their students
and grow healthy microgreens for their snack program.
This year we have been awarded a significant grant from the
Abbott Fund to build a nutrition hub in two greenhouses they
previously donated to two middle schools in Waukegan and North
Chicago. We installed aquaponics, aeroponic towers and
hydroponics systems. It is exciting to see the students who may
eat a can of frosting for breakfast or dumpster dive for meals,
now eating nutritious organic microgreens grown in their new
systems or growing lettuces to donate to food pantries or
community houses in their neighborhood all while learning
technologies and how to grow food.
We have just been awarded a grant from the Grainger
Foundation to refurbish a greenhouse at Bowen Park in Waukegan.
This greenhouse will be turned into an Urban Ag Lab with the
Waukegan Parks and Recreation team programming classes around
growing and cooking healthy food.
We also received a grant from the Liberty Prairie
Foundation to fund a veteran intern for 120 hours @ $15 who we
hope to hire for the Bowen Park project.
In addition, Grow Well Farms is partnering with JAMEKS Farm
in Wadsworth for a 2018 SARE (Sustainable Agriculture Research
and Education) Farmer/Rancher Grant to develop two quackaponics
systems--using pond water from JAMEKS Farm ducks to create
nutrients to grow produce using the same technology as
aquaponics.
It is all a start and this year Kevin and I have actually
received some income for all the many hours we have put in to
Growing Healthy People and Grow Well Farms.
The future? Kevin and I believe in urban agriculture and
that growing food using alternative growing methods is the
future. Healthy, local food can be grown almost anywhere and
urban agriculture is a multi-million dollar industry. Jobs can
be created in food production. For Growing Healthy People we
would like to add greenhouse projects and continue to grow Grow
Well Farms. We want to find ways to train veterans on local
food production and alternative growing methods. We believe
there are other collaborations we can develop. We would like to
find a space where we can create a headquarters and educational
center. We know there are old buildings or warehouses available
in low income areas that could be used for this purpose. We
want to find a way make this happen--whether through
partnerships, grants or loans. Additionally, we are looking for
a place to set up a greenhouse I purchased with a $5,000 grant
I was awarded from the Farmer Veteran Coalition. We have been
trying to locate a place to set this up and while we have
gotten close--beit at a school or other property--thus far we
have not found the location.
When I accepted the opportunity to be a part of his field
event, I was asked to think about ways Congress could help
entrepreneurs. I have looked at the Small Business
Administration website and found it to be a great resource for
entrepreneurs. I know there are opportunities through the USDA.
Why haven't I pursued opportunities? The only reason I can
think of is that I thought I wouldn't qualify for any loans or
grants. When you are starting out, you may not have income to
support a loan. Interestingly, I made sure that I owned 51% of
my business entities so they would qualify as both woman-owned
and veteran-owned--just in case I would go for a loan. In
addition, I suspect that government agencies like the SBA and
USDA seem too large, too intimidating for an entrepreneur to
navigate. Perhaps these are my own misconceptions. That is one
reason I am delighted to be here for this conversation. I'm
interested to share my experiences, hear from others and find
ways for entrepreneurs to tap into governmental opportunities
that exist or can be developed to spur on small business. Thank
you again for the opportunity to be here today.
[all]