[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]
MILITARY TO MAIN STREET: SERVING VETERAN ENTREPRENEURSHIP
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HEARING
before the
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
__________
HEARING HELD
JUNE 8, 2022
__________
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Small Business Committee Document Number 117-057
Available via the GPO Website: www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
47-738 WASHINGTON : 2022
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELAZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
Melissa Jung, Majority Staff Director
Ellen Harrington, Majority Deputy Staff Director
David Planning, Staff Director
C O N T E N T S
OPENING STATEMENTS
Page
Hon. Nydia Velazquez............................................. 1
Hon. Blaine Luetkemeyer.......................................... 2
WITNESSES
Dr. Michael Haynie, Executive Director of the Syracuse University
Institute for Veterans and Military Families, Syracuse
University, Syracuse, NY....................................... 6
Mr. Brenton Peacock, Director, Florida Veterans Business Outreach
Center at Gulf Coast State College, Panama City, FL............ 7
Ms. Laurie Sayles, President & Chief Executive Officer, Civility
Management Solutions, Greenbelt, MD, testifying on behalf of
the Women Veterans Business Coalition.......................... 9
Mr. Joe Shamess, Founder & General Partner, Flintlock Capital,
Great Falls, VA................................................ 11
APPENDIX
Prepared Statements:
Dr. Michael Haynie, Executive Director of the Syracuse
University Institute for Veterans and Military Families,
Syracuse University, Syracuse, NY.......................... 37
Mr. Brenton Peacock, Director, Florida Veterans Business
Outreach Center at Gulf Coast State College, Panama City,
FL......................................................... 42
Ms. Laurie Sayles, President & Chief Executive Officer,
Civility Management Solutions, Greenbelt, MD, testifying on
behalf of the Women Veterans Business Coalition............ 48
Mr. Joe Shamess, Founder & General Partner, Flintlock
Capital, Great Falls, VA................................... 53
Questions and Answers for the Record:
Questions from Hon. Donalds to Mr. Peacock and Answers from
Mr. Peacock................................................ 57
Questions from Hon. Donalds to Mr. Shamess and Answers from
Mr. Shamess................................................ 58
Additional Material for the Record:
CUNA (Credit Union National Association)..................... 59
Joint Letter from NAFCU (National Association of Federally-
Insured Credit Unions) and DCUC (Defense Credit Union
Council)................................................... 60
MILITARY TO MAIN STREET: SERVING VETERAN ENTREPRENEURSHIP
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WEDNESDAY, JUNE 8, 2022
House of Representatives,
Committee on Small Business,
Washington, DC.
The committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Nydia Velazquez
[Chairwoman of the Committee] presiding.
Present: Representatives Velazquez, Crow, Davids, Phillips,
Bourdeaux, Carter, Houlahan, Kim of New Jersey, Craig,
Luetkemeyer, Williams, Stauber, Meuser, Tenney, Garbarino, and
Fitzgerald.
Chairwoman VELAZQUEZ. Good morning. I call this hearing to
order.
Without objection, the Chair is authorized to declare a
recess at any time.
I would like to begin by noting some important
requirements. Standing House and Committee rules will continue
to apply during hybrid proceedings. All Members are reminded
that they are expected to adhere to these rules, including
decorum.
House regulations require Members to be visible through a
video connection throughout the proceeding, so please keep your
cameras on. Also, remember to remain muted until you are
recognized to minimize background noise.
In the event a Member encounters technical issues that
prevent them from being recognized for their questioning, I
will move to the next available Member of the same party and I
will recognize that Member at the next appropriate time slot
provided they have returned to the proceeding.
More than 200,000 service Members transition from military
to civilian life every day. These veterans take skills gained
during their service and go on to make a substantial impact
across many areas of American life. Some go to school, some
pursue new vocations in the private sector, and many go on to
start small businesses.
As Members of this Committee know, starting a small
business is not for the faint of heart. It takes courage, wits,
and leadership to achieve the American dream of owning a
successful enterprise. That is precisely why the men and women
that serve our country in the military are naturally suited to
become entrepreneurs.
Former service Members own approximately 1.8 million
businesses across the United States, most of which are small.
These businesses employ millions of workers, are responsible
for over $1 trillion in revenue, and do so much for their
communities.
That is why it is concerning to see that veteran self-
employment rates have declined from 16 percent in 1998 to 11
percent in 2018. To reverse this trend, we must do all we can
to reduce barriers to entrepreneurship for those that have
served our country.
Like all entrepreneurs, veteran business owners express
concern about their ability to access capital. They also cite
other issues such as not knowing how to get started, accessing
technical assistance, and finding a mentor.
Fortunately, the SBA has a range of counseling, training,
and lending options tailored to the needs of veterans and their
families. Today, I want to look closely at these programs and
discuss ways to improve these offerings to operate more
effectively and reach more veterans.
During the 117th Congress, we have taken steps to empower
veterans and military families who want to start or grow their
businesses. For example, last summer, our Committee passed the
Veteran Entrepreneurship Training Act of 2021, which was
introduced by Representative Brad Schneider and Vice Ranking
Member Williams.
The bill would codify the Boots to Business Program, which
offers transitioning service Members and military spouses
information about self-employment and business ownership.
The legislation passed the House last fall, and a companion
bill was recently reported favorably by the Senate Small
Business and Entrepreneurship Committee. We hope the bill will
pass the Senate soon.
This is a prime example of the actions that Congress can
take to make it easier for veterans to get their businesses up
and running.
Today, I look forward to hearing from representatives from
across the veteran entrepreneurial ecosystem about the
challenges veteran entrepreneurs face and how SBA programs can
continue to improve. I hope that your testimony will shed light
on how these offerings helped, where they fell short, and what
Congress can do to ensure these programs meet veteran
entrepreneurs' needs.
I would now like to yield to the Ranking Member, Mr.
Luetkemeyer, for his opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair, for calling
today's hearing.
Last month was Military Appreciation Month, and we
celebrate all who served our country and risked their lives for
our freedom. We also mourn the loss of those who gave their
lives in service to our country.
I want to start off by thanking all our nation's veterans,
service Members, and their families for their sacrifice to our
great country, including those testifying before us today.
As we all know, veteran-owned small businesses exemplify a
resiliency unlike any other. These brave men and women not only
served our country in one of the highest regards, but also came
home and continued to support their communities through
entrepreneurship and employing fellow veterans.
There are more than 350,000 veteran-owned businesses in
this country and they provide an estimated 4 million jobs. From
my interactions and conversations with veteran-owned business
owners, they give back to their communities, they hire and
support fellow veterans, and they greatly contribute to our
economy.
During National Veteran Small Business Week in November, I
was honored to host a veteran small business showcase and
roundtable. Over a dozen veteran entrepreneurs brought items
that represented their businesses to the capital and shared
their stories. So today I would like to take a moment to share
some of those amazing veteran-owned small business stories.
Four Brothers Mead, located in the great state of Missouri,
is a veteran-owned and operated family company bringing people
of all backgrounds and ethnicities together through Mead.
The four brothers, which also, by the way, includes
brothers-in-laws here, include Bryan Becker, a veteran combat
medic and sergeant; Chris Schulte, who is currently serving in
active reserve status as a military police staff sergeant; Joe
Luck, a U.S. Army veteran staff sergeant; and Dan Luck, an Air
Force veteran and former air transportation airman.
Valhalla's Forge LLC is a veteran and family-owned company
that makes custom tables, flags, shields, plaques, and more
with a focus on giving back to families of the fallen and
retirees. After 20 deployments and 15 awards for his service,
including a Bronze Star, Retired Navy Seal Chief Warrant
Officer James Hintzke is the CEO of this inspiring business.
Soulcial Kitchen was founded by Brigadier General (Ret.)
John Michel, who served 26 years in the Air Force and led
NATO's efforts to build the Afghan Air Force. He continues to
serve others through his hospitality park, which features
restaurants, bars, food trucks, and a dog park. He also
supports other veteran entrepreneurs and created the first food
truck entrepreneur program.
I would also like to recognize other veterans who attended
the showcase and roundtable and shared their stories.
Brian Bufka, United States Navy veteran and owner of 1st
Place Printing; Christine Lantinen, an Army veteran reservist
and president of Maude, Inc.; David Haydel, a veteran Marine
Corps reservist and owner of Haydel's Bakery; Donald Miller,
retired U.S. Navy veteran and assistant director of the
Veterans Business Outreach Center in Norfolk, Virginia; Jerome
Johnson, retired Army Lieutenant Colonel and a Dunkin' Donuts,
Baskin-Robbins franchisee; Joseph Lindenmayer, U.S. Marine
Corps veteran and CEO of California Closets Gulf Coast; Richard
Cope, a U.S. Marine Corps combat officer veteran and CEO of KGM
Technologies; Robert Holt, U.S. veteran and founder of Southern
Draw Cigars, LLC; Scott Matheny, a service-disabled Marine
Corps veteran and the president and founder of Semper Tek,
Inc.; Timothy Shirley, a veteran Marine Corps staff sergeant
and owner of Hive and Honeybee; and Wes Hester, a service-
disabled U.S. veteran and CEO of Foxhole Technology.
And we also have with us today Mr. Shamess, who will
testify here in a moment and was at that event as well.
As you can tell by the names of some of these companies,
their veterans still think in military terms.
In addition to these veteran entrepreneurs, there are
countless others who deserve our deepest thanks and applause.
Again, we will have Mr. Shamess here shortly, but he was an
Air Force Special Operations pilot and National Guard pilot. He
is the cofounder of Flags of Valor and a founder and general
partner of Flintlock Capital. Veteran entrepreneurs like Mr.
Shamess are the definition of American values, service, and
innovation.
It is incredible to hear the stories of how veteran small
business owners have used their experiences and skills they
have learned in the service to run a successful business.
However, I have also heard about the unique challenges that
veteran entrepreneurs face.
In addition to skyrocketing inflation, supply chain
disruptions, labor shortages and burdensome regulations,
veteran-owned small businesses face added challenges in
accessing capital and resources.
The SBA has counseling, capital, and contracting programs
that are designed to assist veteran entrepreneurs in addressing
these challenges. It is important that Congress conducts
oversight and ensures that these programs effectively serve
small businesses, including veteran-owned businesses.
For this reason I introduced the Improve the SBA Act, which
will increase accountability at the SBA, empower entrepreneurs
through counseling, enhance access to capital opportunities,
and improve federal contracting programs. Additionally, after
receiving feedback from veteran small business owners regarding
access to capital, I wrote a letter requesting the GAO to
conduct an analysis of the effectiveness and efficacy of the
SBA's Access to Capital Program, specifically as it relates to
veteran-owned businesses.
Further, Vice Ranking Member Williams and Congressman
Schneider introduced the Veteran Entrepreneurship Training Act,
which codifies the Boots to Business Veteran Training Program.
As Republican leader of the House Commitmtee on Small
Business, I will continue to advance policies that empower our
veteran entrepreneurs, ensure the SBA resource partners are
meeting their needs, and maintain the integrity of contracting
programs, and support access to capital. I look forward to
continuing to learn from our veteran entrepreneurs in how we
can support their growth and prosperity.
It should also be noted that Secretary Yellen has still not
been to this Committee and fulfilled her statutory duty which I
ask the Chairman to look into again.
With that, Madam Chair, I yield back.
Chairwoman VELAZQUEZ. Thank you, Mr. Luetkemeyer. The
gentleman yields back.
I would like to take a moment to explain how this hearing
will proceed.
Each witness will have 5 minutes to provide a statement and
each Committee Member will have 5 minutes or questions. Please
ensure that your microphone is on when you begin speaking and
that you return to mute when finished.
With that, I would like to introduce our witnesses.
Our first witness is Dr. Michael Haynie. Dr. Haynie is
Syracuse University's Vice Chancellor for Strategic Initiatives
and Innovation, and also the Barnes Professor of
Entrepreneurship. Dr. Haynie served 14 years as an officer in
the United States Air Force and in 2011, he founded Syracuse
University's Institute for Veterans and Military Families, the
nation's first interdisciplinary institute created to inform
and advance the policy, economics, and wellness concerns of
America's veterans and families. Welcome, sir.
Our second witness is Mr. Brenton Peacock. Mr. Peacock is
the Director and Business Analyst for the Veterans Business
Outreach Center (VBOC) serving the State of Florida. Mr.
Peacock was awarded Regional Certified Business Analyst of the
Year in 2009 and again in 2012, then Regional Consultant of the
Year in 2014. A successful entrepreneur himself, Mr. Peacock's
work experience includes 14 years in business counseling and
teaching. Welcome.
Our third witness is Ms. Laurie Sayles. She is the
President and CEO of Civility Management Solutions and
AmeriCorp veteran. After serving 10 years in the Marine Corps,
Ms. Sayles founded Civility Management Solutions in 2012 to
optimize the performance and productivity levels of customers.
Civility Management Solutions is an SBA certified 8(a). VA
verifies the service-disabled veteran, economically
disadvantaged woman, and women-owned small businesses. Welcome
back, Ms. Sayles.
I will now yield to the Ranking Member, Mr. Luetkemeyer, to
introduce our final witness.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I am honored to introduce our witness, Mr. Joe Shamess,
American entrepreneur and hero. Mr. Shamess began his military
service as a cadet at the United States Air Force Academy and
served 11 years as an Air Force Special Operations pilot and 7
years as an Air National Guard pilot. During his service, he
flew an impressive 168 combat missions and was one of the first
pilots to stand up operations in East Africa against al-Qaeda
to fight the War on Terror. In addition to his notable military
service, Mr. Shamess has been an entrepreneur since he started
his first business at age 15. In 2015, he cofounded Flags of
Valor with U.S. Army paratrooper veteran Brian Stoerts. Flags
of Valor is the example of the American dream. They started out
as a two-person garage operation and have transformed into a
successful American-made, veteran-owned manufacturing small
business known across the country for their craftsmanship. To
fulfill their commitment to give back, Flags of Valor reports
that they have created more than 70 veteran jobs and raised
$1.7 million for veterans and first responder charities. Mr.
Shamess is also the founder and general partner of Flintlock
Capital, an investment management company with a focus on
investing in veteran-led companies. I first had the privilege
of meeting Mr. Shamess during National Veteran Small Business
Week when I hosted a Veteran Small Business Showcase and
Roundtable. He is a true patriot and a champion of America's
small businesses and manufacturing. Mr. Shamess, we are glad to
have you back on Capitol Hill before the Full Committee. Your
extensive experience and passion for empowering veteran
entrepreneurs will benefit this conversation immensely. Again,
thank you for your service. Thank you for joining today.
I would also like to thank our other witnesses for their
service and thank you for being here with us as well.
Madam Chair, with that I yield back.
Chairwoman VELAZQUEZ. Thank you.
Thank you all for being here. I would like to begin with
recognizing Dr. Haynie for 5 minutes.
STATEMENTS OF DR. MICHAEL HAYNIE, EXECUTIVE DIRECTOR OF THE
SYRACUSE UNIVERSITY INSTITUTE FOR VETERANS AND MILITARY
FAMILIES, SYRACUSE UNIVERSITY; BRENTON PEACOCK, DIRECTOR,
FLORIDA VETERANS BUSINESS OUTREACH CENTER AT GULF COAST STATE
COLLEGE; LAURIE SAYLES, PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CIVILITY MANAGEMENT SOLUTIONS; JOE SHAMESS, FOUNDER AND GENERAL
PARTNER, FLINTLOCK CAPITAL
STATEMENT OF MICHAEL HAYNIE
Mr. HAYNIE. Chairwoman, Ranking Member, and Members of the
Committee, thank you so much for the opportunity to be here and
share my experiences relative to the military-connected
business ownership community.
First, I want to express my appreciation to this Committee
for your longstanding history of support to veteran-owned
business in the United States. I have been engaged with the
veteran business ownership community for more than 15 years and
over that time this Committee has been a consistent and
thoughtful partner to those of us who have been working to
advance veteran business ownership in the United States. Your
support to service Members, veterans, their families has been
instrumental to the well-being of the veteran community. And as
a veteran myself, I would like to say thank you for that.
Over the past decade, Syracuse University's D'Aniello
Institute for Veterans and Military Families, or IVMF for
short, has applied a data-driven lens to the challenge of
understanding the opportunities and the pitfalls associated
with the transition from military to civilian life. And one
consistent finding of that work has been the strong pull to
business ownership common among many veterans.
This is not something new. Over the past 75 years, veterans
have been over indexed to business ownership in the United
States relative to other segments of American society.
For that reason alone, public and private sector champions
should continue to collaborate on pathways appropriate to
realize the potential inherent in empowering veterans to serve
this nation yet again now as America's next great generation of
business owners and leaders.
In fact, that potential will be on display Friday, right
here at an event in Washington, D.C., when the Institute for
Veterans and Military Families, in partnership with the team at
Inc. and the Inc. 5000 will announce and honor the 2022 Vet100,
the 100 fastest-growing, veteran-owned businesses in America.
This year's Vet100 includes changemakers like Venus Quates.
Venus is an Air Force veteran who founded her firm LaunchTech
in 2016 to provide technology and mission support solutions to
customers in the space and health care and financial services
sectors. Venus participated in the IVMF's Veteran Women
Igniting the Spirit of Entrepreneurship Program back in 2018
and after that her business took off. On Friday, Venus will be
recognized by Inc. and the IVMF as the number three fastest-
growing, veteran-owned business in America, and as one of the
10 fastest-growing, women-owned businesses, veteran or not, in
all of the United States.
We will also recognize United States Marine Corps veteran
Chris Dambach and his business, Industry Standard. Chris
separated from the Marine Corps in 2010 and launched a small
residential lawncare business with some used lawnmowers and a
truck he borrowed from his brother-in-law. In 2012, an SBA
advisor recommended that Chris participate in the IVMF's
Entrepreneurship Boot Camp for Veterans with Disabilities
Program, and in quoting Chris, ``That program changed my
approach to running and growing my business.'' After that
experience, Chris expanded to hardscaping, and then janitorial
services, then to construction, and like Venus, today, Marine
Corps veteran Chris Dambach is the founder and owner of one of
America's fastest-growing, privately-held firms.
I share these stories only to make the point that working
together we have a collective opportunity to transform the same
leadership and ingenuity that served our military so well on
the battlefield into an engine of new venture creation in
America. And that opportunity is strong and compelling,
certainly and in part due to the good work of this Committee.
The resources and supportive services enabling a transition
pathway for service Members to business ownership, both across
the public and private sector are vastly, vastly improved
relative to what they were a decade ago.
That said, we know from the community we serve that there
is more work to do. Each year, our institute conducts a
national survey of military-affiliated entrepreneurs. This is
the largest primary data collection of military business owners
outside of the federal government in America. And our intent is
to better understand the barriers of economic, social, cultural
barriers to business ownership for those who have served in the
military.
We just released the 2022 version of that study, and I just
want to highlight one thing that came from that study of many
things. And that relates to women veterans and female military
spouses. Today, women are pursuing military service at an
unprecedented rate, and their service often equips them with
unique skills and abilities that are aligned with the civilian
labor market. However, too often our women veterans have faced
unique challenges bridging those skills to traditional
employment. If there is an upside to that troubling story, it
is that many of them turn at very high rates to business
ownership. Small business ownership enables military connected
women to pursue professional opportunities and careers in the
face of some of those barriers. Consequently, collective action
to create inclusive pathways to business ownership for
military-connected women should be a national priority. If we
do this, all Americans will benefit.
With that, I will end my formal remarks.
Chairwoman VELAZQUEZ. Thank you, Dr. Haynie.
Now we recognize Mr. Peacock for 5 minutes.
STATEMENT OF BRENTON PEACOCK
Mr. PEACOCK. Good morning. Thank you for having me today.
Thanks for your support of veteran-owned small businesses.
The Florida Veterans Business Outreach Center is one of 22
Veterans Business Outreach Centers or VBOCs serving the United
States. Each VBOC is assigned geographical territory. Our
territory is Florida. We are hosted by Gulf Coast State College
in Panama City Florida, home to Tyndall Air Force Base and
Naval Support Activity Panama City. We report to the North
Florida SBA District Office in Jacksonville and the South
Florida SBA District Office in Miami, Florida. We provide
business consulting services to active duty military Members,
veterans of all eras, and all branches of the U.S. Military
including National Guard and Reservists, U.S. Coast Guard
Members, military spouses, and widows of veterans who wish to
start a business.
The Florida VBOC is the initial VBOC established following
a successful proposal to Public Law 106-50, cited as the
Veterans Entrepreneurship and Small Business Development Act of
1999. Our competencies include teaching Boots to Business
classes, start-up instruction, assisting first-time business
owners as they transition or retire from military service, and
assisting veterans and military spouses with the process of
government contracting. We are currently in the last year of
our 5-year program cycle before rebidding on the project for
the next funding cycle.
I will share with you statistics on Boots to Business
classes, numbers of consulting sessions, and the number of
clients we have assisted, as well as veteran business startups,
and accomplishments made by our veteran clients in winning
government contracts.
Boots to Business. There are 14 Florida Military
Installations that participate in the Transition Assistance
Program (TAP) with Boots to Business (B2B). The Boots to
Business classes are managed by TAP Personnel and the SBA
Office of Economic Development specialist/veteran
representatives, who coordinate the logistics of the program
for the North and South Florida District Offices for
scheduling. The Boots to Business classes are taught at each
base on a quarterly basis or more often if the number of
separating or retiring military Members requires it.
Since May of 2018, the Florida VBOC Office has taught 165
Boots to Business classes and has instructed 909 Boots to
Business modules to over 3,200 separating or retired military
Members and spouses.
Nathan Pollock is an Army veteran who completed the Boots
to Business class. His plan was to open an upscale cigar lounge
with his spouse. He worked at a cigar lounge after his
separation to learn best practices before relocating to New
Port Richey, Florida. The VBOC office assisted Nathan with
business plan research from IBISWorld, business plan revision,
assistance with applying for business licenses, and eventually
assisting him with finding a lender and closing on an SBA Loan
to open Patriot Stogies, LLC in March 2022. Nathan proudly
served our country for 20 years as an Army helicopter pilot.
Nathan said, ``The VBOC was able to find me a lender who could
support my business, and they quickly got me a commitment
letter. Additionally, the VBOC was able to set me up with a
free consultation with an attorney to discuss a zoning issue
with my building's sign. I appreciate the advice and counsel I
have received from the entire VBOC team with the assistance
they have provided me along the way.''
Start-Up Counseling. We have provided over 13,000
counseling sessions to 11,000 veterans and military spouses
during the current program. We assisted in the creation of 498
businesses by assisting with feasibility studies and helping
develop business plans during the program period. Veterans and
military spouses with our guidance have started businesses
ranging from drone-operated home inspection companies, to
retail candy stores, and purchasing franchises. Jo Kegley, a
U.S. Navy veteran, reached out to the VBOC as a resource to
help grow her weight-loss business. The VBOC staff guided her
in registering her LLC, provided information on becoming Woman-
Owned Small Business (WOSB) Certified, and provided a letter of
recommendation to apply for funding. Jo is the founder of Flip
Flop Diet, a sustainable eating and scheduled cheating diet and
weight loss maintenance plan. After separating from the
military, she documented and tested the Flip Flop Diet using
her proven strategies to help family and friends lose weight
and now plans to offer her diet to the public. ``I am so
grateful for all of the assistance and ongoing support that I
receive from VBOC. The VBOC has certainly contributed to the
development of the Flip Flop Diet and to my success in
receiving initial seed funding to launch my business. I
recommend their services to any veteran that is in business or
is thinking about starting one.''
Government Contracting. The Florida VBOC has a unique
strength in assisting veterans and military spouses by being
competitive in government contracting at the federal, state,
and local level, as well as bidding on and winning subcontracts
to prime contractors.
The Florida VBOC story is one of 22 unique stories defined
by local economies and the veterans and military spouses who
reside therein. They are bound by their common desire to own
and operate successful veteran-owned small businesses. Thank
you.
Chairwoman VELAZQUEZ. Thank you, Mr. Peacock.
Now Ms. Sayles, you are recognized for 5 minutes.
STATEMENT OF LAURIE SAYLES
Ms. SAYLES. Yes, ma'am. Chair Velazquez, Ranking Member
Luetkemeyer, and Members of the Committee, thank you for the
opportunity to testify today.
My name is Laurie Sayles and I am a United States Marine
Corps veteran and the founder of Civility Management Solutions
located in Greenbelt, Maryland.
CivilityMS is a professional consulting services firm
working in both the government and the commercial space.
Currently, I serve as Chair of the Women Veterans Business
Coalition (WVBC) and I am testifying today on their behalf.
The WVBC brings together diverse stakeholders to provide a
strong, collective voice for policies that will strengthen
businesses owned by women veterans. While federal actions are
designed to be helpful to all veterans, women carry an
important and respected voice on behalf of those who have
served.
Currently 2 million women veterans live in the United
States and comprise nearly 20 percent of serving military
personnel and 10 percent of the veteran population. As the
number of women serving in the military has increased, so has
the number of women veterans who start businesses.
Entrepreneurship has always been in my blood. Raised in the
1960s in a low-income household from Chicago, I have always
known and learned the need to earn my own way. Starting a
business has been an extremely rewarding part of my life and I
attribute many of my business successes to the lessons I
learned serving in the United States Military.
Once I was introduced to government contracting in my
civilian career, I knew I had found my destiny in
entrepreneurship as I saw it as the wealth transfer. There are
numerous SBA resources that helped me along the way. When I
first considered starting my business, I sought out SCORE
Mentor. My mentor, a retired General of the United States Army,
gave me incredible guidance on the steps of developing my
company. Navigating our federal contracting system can be
difficult, and resources from my local PTAC focused on how I
could successfully do business with the federal government.
As a woman Marine, I know the importance of training. The
CivilityMS team has taken advantage of the SBA's 7(j) training
and found it valuable. However, I would encourage the SBA to
consider having two tracks in 7(j), one for businesses who are
in the beginning phases and one for the program for advanced
companies that are small, to continue to thrive throughout
their business lifecycle and the SCORE mentors offer us.
One additional training program that has crucial to the
success of my business is the Veteran Institute for Procurement
(VIP). I am thrilled to see the expansion of the program,
especially at no cost to veterans.
While I speak highly of many of the SBA's programs, I also
know that there are many veteran-owned businesses unable to
access these resources because of their location. For example,
I applaud the expansion of VBOCs, which play an integral role
in supporting veteran-owned small businesses throughout their
entrepreneurial journey. However, I did not utilize VBOC
because there was not one in Maryland, and I am glad to say
that our state will be adding one soon.
One area of particular concern as a Black woman that is a
service-disabled veteran is the fight to access capital. Women
still receive only 4 percent of commercial dollars that are
loaned. Like many small businesses, I initially tried working
with the large businesses, large banks, but like many, I gave
up quickly. I sought out alternative lenders. I was fortunate
to connect with an SBA 7(a) lender to obtain a small loan and
then later take advantage of the Paycheck Protection Program
during the pandemic.
While these funding streams have been helpful, government
contractors face unique challenges. It would be helpful to the
veteran business contracting community if SBA was able to come
up with a line of credit methodology for companies that have
federal customers.
To address some of the particular challenges faced by women
veterans, WVBC suggests the following recommendations:
One, first, increase incentives for prime contractors and
the federal government to award more contracts to women
veteran-owned small businesses.
Two, second, change the restrictive re-marriage eligibility
requirement for Survivor Benefit Plan (SBP) beneficiaries.
And third, allow veterans to use the GI Bill benefits to
start a business. All veterans, and particularly women
veterans, are an important sector of our economy. By 2040,
women veteran population is projected to grow to 18 percent.
Our businesses face unique challenges that require unique
support to grow and thrive. We applaud the SBA and this
Committee for continuing to support veteran business owners.
And thank you for holding this important hearing. And I look
forward to any questions.
Chairwoman VELAZQUEZ. Thank you very much.
Now we recognize Mr. Shamess for 5 minutes. Welcome.
STATEMENT OF JOE SHAMESS
Mr. SHAMESS. Thank you, Chairwoman Velazquez, Ranking
Member Luetkemeyer, and the Members of the Committee,
especially you, Ranking Member Luetkemeyer for hosting the
events that you have hosted and then the events also in
conjunction with Leader McCarthy. They have really highlighted
not just veteran entrepreneurs but also the challenges facing
small business in America. So thank you for that.
As a founder and general partner at Flintlock Capital, in
addition to my work owning and operating other businesses, I
can tell you that I have gotten a sample, a wide swath of what
it is to be a business owner in America, from manufacturing to
tech, to also empowering future entrepreneurs to grow the
businesses of tomorrow. And looking at all the things that I
get to witness today, the outlook is still positive but it is a
very challenging environment. What inspires me is what I have
seen in the way that these small businesses are managing
inflation just as an example. They are ringing out everything
they possibly can in their businesses to be able to stay ahead
of it and to be able to continue to operate. And the small
business community despite all of that continues to move
forward. And I think that speaks volumes about the American
spirit of free enterprise. And that is something I am very
proud of.
Looking at the veteran ecosystem in business, access to
capital is certainly something that has come up multiple times.
There is absolutely a challenge there, and there are 7(a)
options you can get through the SBA and other programs.
I worked with the last Congress with Representative Tulsi
Gabbard's office on H.R. 4991, a bill specifically designed to
address this issue. And to your point, to create an opportunity
to access capital through your Post-9/11 GI Bill as an option.
And so one of the things that we worked on was how you
could shape that. And there are already funding limitations
associated with the bill of what the earned credit, the earned
amount is based on what state you live in. And if the spirit of
the Post-9/11 GI Bill is to create education opportunities, to
create an opportunity for economic upward mobility for example,
there are very few things that create more opportunity for
economic upward mobility than business ownership. And so that
is not just for the individual. That is the family. That is the
community. That is everybody that is involved in that.
And so I would ask that this Committee look at bringing
that bill forward in a bipartisan way. I know that on her
departure it was handed to Representative Panetta's office in
California, but to this day it still has not moved forward. So
to have that reintroduced I think would be fantastic for the
small business community, especially the veteran small
businesses.
Additionally, I think you can hear today about all the
resources that are out there but what happens is there is a
disconnect between those resources and the veteran that needs
that information, whether it is access to capital or just how
do I do this? And the compliance alone, whether you are looking
at it from a federal statute or a state statute level, I do not
care if you are a one man falafel stand or you have a 1,000
employee manufacturing company, compliance is a lot. Right? And
so there are a lot of resources that can help entrepreneurs,
especially veteran entrepreneurs navigate that. But they are
spread out across so many organizations and so many public-
private partnerships that are doing good work but they are all
doing it in their own pocket. Syracuse University, for example,
has become a great resource and one that I have looked to over
the years, but that is because I knew about them and what they
were doing. A lot of people do not.
And so what I would ask is that you task the Government
Accountability Office with doing a total review of the programs
that are currently available, whether it is SBDCs, the Small
Business Administration, SCORE, the VA, DARPA, the non-dilutive
funding that is available for business startup that is
absolutely outstanding for a lot of these businesses, public-
private partnerships, and provide a report that is actionable
for TAPs programs and other things, whether it is the VA or DoD
to be able to bring this to bear for the veteran community.
The last thing I want to say is there is a bigger issue
here and it is not just related to small business ownership.
And I think it is what I would regard as a little bit of a
higher calling when it comes to supporting veteran
entrepreneurs. And that is we have a voluntary military, right?
And so how does the military grow and how does it recruit? And
one of the best ways it does that is by seeing people that have
served and the impacts they make in their communities.
So, as the number of military service Members as a
percentage of society continues to go down, there is no better
way to demonstrate their impact, both from a national level,
national security level, but also inside their communities by
seeing them start and run businesses. Because they are
employing their neighbors. They are a great example. And the
values that made them successful in uniform, those same values
transfer back to the community. And that is a win for everybody
involved. Thank you.
Chairwoman VELAZQUEZ. Thank you, Mr. Shamess.
Now I recognize myself for 5 minutes.
Mr. Peacock, last November the House passed H.R. 3469, the
Veteran Entrepreneurship Training Act of 2021. The bill will
codify the Boots to Business Program for the next 5 years. Why
should we codify the Boots to Business program for our veterans
and their spouses as they transition out of the military
service?
Mr. PEACOCK. The business program provides a good pathway
to entrepreneurship by showing kind of a top of the waves
introduction to opening and starting their own business. Also
now as we think veterans maybe signed up, joined the military
at age 18. Maybe you worked a part-time job packing groceries,
maybe delivering papers, but you certainly probably have not
owned a business.
The Boots to Business program which helps military service
and things that were learned in military service to owning a
small business and being the founder of your own company. It is
a good resource. I think it helps that veteran, that military
spouse to be able to see what they have learned through their
military service and apply that to business ownership and
operations. And I think it should be required for anyone to be
separating or retired from military service as well as the
spouse to attend the complete program to get a full
understanding of what is available from the SBA.
Chairwoman VELAZQUEZ. Thank you. Thank you. Thank you.
Dr. Haynie, prior to the pandemic, veteran entrepreneurship
had been declining. However, in a recent hearing, SBA
Administrator Guzman testified that there have been 9.1 million
new business applications since the beginning of 2020. What
trend have you seen since the beginning of the pandemic with
regard to veteran entrepreneurship?
Mr. HAYNIE. You know, throughout history, you can see
trends in startup and entrepreneurship in general for all
Americans that are aligned with economic conditions also as a
function of access to the traditional labor market. I think one
of the things we saw with the COVID pandemic was restricted
access to the traditional labor market as a consequence, again,
for all Americans, business ownership and self-employment
became a path to a career and an income and stability in the
family. You will see all the way back to World War II, you can
align trends in business ownership specifically for veterans.
But also for other segments of society that may be are shut out
sometimes of the normal traditional economic model up and down
over time. It is the case that throughout that 75 year period,
veterans have been over indexed.
There was a study done by the federal government 7 years
after World War II. Fifty-four percent of the 12.5 million
veterans that returned from World War II, 54 percent within 7
years had launched a small business in this country. So I think
it is absolutely the case that this community will continue to
be pulled to and drawn to small business ownership over time.
Chairwoman VELAZQUEZ. Thank you.
Ms. Sayles, you have utilized many of the SBA resources
throughout your entrepreneurship journey. What are the benefits
of SBA's entrepreneurial ecosystem, and where can improvements
be made to better meet the needs of veteran entrepreneurs?
Ms. SAYLES. Thank you for the question.
Well, I would say that having more offerings throughout the
country, because there are certain areas where people are
denied that ability. Now, thanks to the world of technology now
there is more potential of getting some training and things of
that nature but being able to access that without any cost is
also a major thing. Because you are starting a business so your
cost is low, of course, and to be able to go get the training
necessary and be taught. And as a veteran, one thing that makes
us the greatest in the world, right, military, is because of
training. So we understand the ability to get it. We just need
to have access.
Chairwoman VELAZQUEZ. Dr. Haynie, SBA announced this year
that nonprofit entities are eligible to provide Boots to
Business courses at military installations outside of the
continental U.S. Can you speak to the importance of providing
Boots to Business training to military service Members and
their spouses where they are stationed no matter the geographic
location?
Mr. HAYNIE. I can. I particularly have a bias here I will
admit right up front. I wrote the original Boots to Business
curriculum when it was first proposed. Very passionate about
that pathway. I think pure and simple, just because you happen
to be a service Member who is transitioning from serving this
country in uniform to civilian life stationed overseas, you
should not have a different set of opportunities afforded to
you because of that fact. You can look at, for example, we are
flying training teams to U.S. Navy ships at sea to conduct
Boots to Business training because those sailors, many of them
when their ship comes into port, their contracts have expired
and they are on their way out the door. It is the same for
those overseas locations.
Chairwoman VELAZQUEZ. My time has expired. Thank you so
much.
Now I yield to Mr. Luetkemeyer for 5 minutes.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Mr. Shamess, in your testimony you challenge us to, and I
quote, ``Do no harm and avoid policies that may erode the
resilience of the entrepreneur.''
I appreciate that challenge. Do you believe increasing
taxes or adding more regulations would cause harm to the
American entrepreneur?
Mr. SHAMESS. Without a doubt it would cause harm to the
American entrepreneur. I made slight mention of this in my
introduction about just how difficult compliance is. And then
when you add state compliance, it is really a tenuous
situation. Additional taxes erode the incentives for small
business ownership in the first place. And so creating a tax
policy that incentivizes business formation, incentivizes
business growth, these are all things that not just affect the
entrepreneur but affect the entire community and we have seen
that play out. So I would absolutely agree with that statement.
Mr. LUETKEMEYER. Can you make that more personal? How has
this affected your business itself?
Mr. SHAMESS. Well, as an example, when operating Flags of
Valor, when the tax policy changed during the last
administration, we were able to use some of the additional tax
benefit we had or additional income that we had to invest in
our equipment. And so that single thing allowed us to go from
being a largely handheld tool operator to being able to use
truly high-tech laser and CNC equipment in a full commercial
suite that was offset by the benefits we received. And now
today, fast forward, that same organization is now employing a
whole new team in technical manufacturing; right? So what does
that mean for the employee? Well, now they are getting higher
level skills, skills that are transferrable through additional
industries, and it is allowing us to produce more things here
in the United States that is very unique; right? I mean, Made
in America still matters. And so anything that we can do to
support that I think is going to be beneficial to our
communities.
Mr. LUETKEMEYER. Your comment was that it provided you with
income. They allowed you to keep your income is what that tax
cut did. You got to keep the money that was yours that you made
and be able to reinvest it. I thank you for that comment.
You made mention of the jobs that you created. Can you tell
me how you structure your hiring process to attract veterans
just specifically? Or I assume you attract a lot of other
folks, but I am sure you try to go after veterans in
particular.
Mr. SHAMESS. We do. We certain have and continue to do. But
what is really unique about the veteran community compared to
many others is there are certain bonds that are created in
military service. There is an esprit de corps that exists that
makes veterans want to be around other veterans. And so veteran
entrepreneurship means veteran jobs. Veteran jobs is not quite
the problem it was 10 years ago, 15 years ago when we were in
the heat of the post-9/11 conflicts. Nonetheless, we still want
to create opportunity for those men and women in uniform as
they depart. And so the culture that exists inside a veteran-
run company is something that is very difficult to replicate
outside of a veteran-run company. And it is a natural
attraction for veterans that want to continue to be a part of
that culture while changing their life and serving outside the
uniform.
Mr. LUETKEMEYER. Ms. Sayles, you mentioned that there are 2
million women vets. This morning I spoke to the Women's Small
Business Coalition I guess it is, and all the ladies in there
were very vociferous in some of their concerns. But it was
great to be speaking with them. But there is a whole new subset
when you are talking about women veterans. Do they have some
unique issues that we need to be concerned about, or is being a
veteran is being a veteran?
Ms. SAYLES. Well, sir, yes. Being a women that served in
the military, because it is such a small amount of us in
general when you look at the broader base, there are just
certain things that we are challenged with as a woman being
surrounded by men all the time. So you have to gauge yourself
up for that and continue to go through the course of serving in
your uniform. But some of the challenges that come out of that
leave the women in a different type of mindset when they return
to civilian lifestyle. Some were to the point that I know many,
way too many, that do not desire to go to the VA just because
they do not like the idea of not being considered a veteran,
you know, first of all. And then secondly, just some of the
attention that they receive that they do not request. So they
have learned at the VA hospitals throughout the country to make
some adjustments for women that are coming that are women
veterans to be serviced there. And yet, some of that same kind
of information that they are receiving though actually affects
their entire life. So yes, those are extra challenges that we
have to deal with as women that served in the military.
Mr. LUETKEMEYER. Thank you.
Dr. Haynie, you alluded to some studies or some information
that you were aware of. Prior to the pandemic versus after the
pandemic, are you seeing more veteran-owned business startups
or less?
Mr. HAYNIE. So I think the best data for this actually
comes out of the Kauffman Foundation. In the index, they have
focused on startups for all Americans. And then they break that
data out by different demographic markers. Veterans at the
start of the pandemic it was a very, very steep and dramatic
increase in the pool to self-employment and business ownership.
What we are seeing now is I think a slight decline as a
function of reopening of society and reopening of traditional
jobs and careers. That said, the numbers are still high
relative to other segments of American society.
Mr. LUETKEMEYER. I thank you for that. And again, I thank
each of you for your service to our country. Thank you very
much.
Madam Chair, I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Georgia, Ms.
Bourdeaux, for 5 minutes.
Ms. BOURDEAUX. Thank you, Chairwoman Velazquez, for holding
today's hearing.
For the American service men and women, the transition to
civilian life can be difficult, especially so if they struggle
to find a purpose upon return. One estimate is that 53 percent
of veterans do not know what career they want to pursue when
they transition back to becoming civilians.
Because of this, one of the community projects that I have
secured funding for is an organization called Hire Heroes in my
district and it would dedicate $720,000 to help veterans find
gainful employment. However, through their service, veterans
are unequipped with many of the skills that mark a successful
entrepreneur, including high performance in stressful
situations and natural leadership abilities. And as a professor
of public policy who has taught many veterans coming out of
service, I can testify that they are often the best students.
They are very focused and very disciplined in their work.
Having these veterans and understanding this experience, I am
very, very interested in making sure that they make this
transition appropriately and have access to the resources that
they need if they want to pursue small businesses.
So this leads me to my question. One of the things I have
also found as I have met with small businesses around my
community, they often do not know all the resources that are
available to them. And some of that came up in some of the
testimony.
So starting with Dr. Haynie, we have all sorts of great
resources available to people--VBOCs, SBDCs, WBCs, SCORE, among
many others. These are resources of free, low-cost counseling
and training for small businesses. How do we go about doing
better outreach to letting small businesses, and particularly
these veteran-owned small businesses know what resources are
available to them?
Mr. HAYNIE. Thank you very much for the question. And I
think, as my fellow panelists alluded to, I fully agree that
the number one, as a matter of fact, the data supports the
number one challenge that folks express getting out of the
military is not off the top employment or healthcare, et
cetera. It is actually navigating the resources available to
them. And it is not just what is available. It is also what
they are eligible for. What they qualify for. There are so many
qualifications and restrictions and limitations on what you can
access as a function of combat veteran or not, post-9/11
veteran or not. I think we have to do, and why I think a
hearing like this is so important is we have to elevate the
conversation related to veteran business ownership in the
country in a way where those who are in a position to serve or
serving now this community become networked in what I would
describe as akin to a healthcare network. And that we sort of
manage the coordination and the navigation of veteran-owned
businesses through this network of resources that starts at the
local community level, extends at the state level, and to
federal resources primarily from the SBA.
Ms. BOURDEAUX. This is a follow-up to that. I am curious
about Syracuse University's institute and who you have
partnered with in the community. I know you have a Community
Navigator Pilot Program, something very important to my
community as well, a diverse community with a lot of immigrant
small businesses, as well as minority veteran businesses. And
one of the things I have been encouraging the SBDC and other
small business-serving institutions to do is to partner with
unique community partners to get the word out. I was just
curious about these kinds of partnerships and what you might
have built in Syracuse.
Mr. HAYNIE. Yes, ma'am. The partnerships are key to
everything we do. As a matter of fact, the nonprofit that you
mentioned, Hire Heroes, in your district is one of our
partners. A program unrelated to veteran business ownership but
that we run called Onward to Opportunity, which is a
credentialing and certification program for those leaving
military service. Our employment partner in that effort is your
local nonprofit Hire Heroes.
Ms. BOURDEAUX. That is great to hear. I think that is about
all the questions.
I just actually want to raise one more thing that is an
interesting partnership that I have come across which is the
Centers for Medicaid and Medicare Services, which does a lot of
advertising around the Exchange which is health insurance, and
that is also very important, health insurance for small
businesses. I have been talking with them about doing better
outreach through organizations like our Community Navigators,
our SBDCs, some of these different small business organizations
so that we could get out word about how people can purchase
insurance on the Exchange and I found a lot of small businesses
needed that help as I talked with them. And so I just one of
many efforts to try to put together creative partnerships to
serve.
Thank you so much. I yield back the balance of my time.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the Vice Ranking Member of the Committee,
Mr. Williams, from Texas, for 5 minutes.
Mr. WILLIAMS. Thank you, Madam Chairwoman, and Ranking
Member Luetkemeyer, and all the witnesses today. I think it is
fantastic that you are here and our country cannot thank our
veterans enough for their extraordinary courage, patriotism,
sacrifice. And I have the honor of representing Fort Hood in
Texas. It is a great place. And when we hire veterans,
employers do not need to teach them about discipline or work
ethic. Veterans just need to be provided with an opportunity
and they will succeed.
I have been in business 51 years, small business owner, and
one of the neat stories I have is in Texas we had severe
flooding last year and I went by to thank the National Guard
for being first on the scene. And I was shaking hands of some
of our Members and I come to one young man and I shook his hand
and I thanked him. And he looked at me and said, Congressman,
my family is starving. He said, I have three children. We
cannot eat. I said, What do you do? He said, Well, I work on
Humvees. And I said, Can you fix them on the fly? He says, I
can. Well, as it would be, I am an automobile dealer. I own car
dealerships. So I said, if you can fix a Humvee on the fly, can
you fix a Dodge pickup on a lift? And he said he could. And we
hired him and he started out very little training. We started
out at $12 per flat rate hour and he got up to $35 per flat
rate hour and started his own business. So this is the kind of
thing that can happen with veterans that are just really a
little cut above. And I employ several hundred people in Texas,
and a huge majority of my employees are veterans that have
stayed with us. So that is a little story that just again
reiterates how great our veteran workforce is and always can
be.
Mr. Shamess, good to see you again. Thanks for your story.
In your testimony you stated that more government involvement
tends to lead to more compliance and more spending. And if
Democrats continue to push for massive tax cuts--that is all
they talk about, let's raise taxes, raise taxes, and they push
for increased government regulations which will harm main
street businesses. They do. And American families. I see it
every single day in my business. The federal government should
not be overwhelming veteran entrepreneurs with excessive red
tape.
So can you, and you have touched on it, but this is
important because this is what we talk about and this is what
the debate is, but can you elaborate on what higher taxes--
higher taxes and more regulation burdens will impact your
ability to plan as a small business owner because you are
coming out of the greatest tax cuts we have ever had which
created a lot of jobs and now you are having to play defense on
possible tax increases and more government involvement. So how
does that affect how you plan for the future?
Mr. SHAMESS. That is a great question. And great to see you
again as well. It is like you are operating on shifting sands
is how it feels. And I will use an example from Flags of Valor
just to kind of paint a picture of this.
When you are dealing in a high inflation environment and
all your raw materials are going up and you are a manufacturer.
And your labor costs are going up which in some cases is a good
thing because you are taking care of your people. And then you
are paying payroll taxes. And then you are paying personal
property taxes. And then you are paying your state licenses and
fees that you have. You are taking that $1 of income and you
are carving big chunks out of it, almost like with a sledge
hammer you are carving that dollar up. By the time that dollar
gets down to being a bottom line dollar in profit, you have
lost so much of the power of that dollar that you earned from
the very beginning. And now take that as a business owner and
that same, whatever is left you are paying your federal taxes.
You are paying your state income taxes. You are paying your
personal property taxes. It goes on and on. By the time it is
all done, you are looking at less than 50 cents on the dollar
of profit. And inside the business you are looking at maybe a
10 percent bottom line margin if you are lucky. And right now I
can tell you, small businesses are not getting 10 percent
bottom lines. And so you are just eroding all the incentive in
the system for you to continue to grow and hire.
Mr. WILLIAMS. Well, tax cuts do work and hey need to be
made permanent. And we are going to be fighting for that. And
then you have Mr. Inflation running around which so sky high.
So it is real problems.
It is a great privilege, as I said, to work for Fort Hood
and our veterans. And our veterans made great sacrifices to
protect and defend this country. And it is our responsibility
to ensure that they are equipped and pursue their business
goals once they transition into civilian life. And earlier this
year, Congress did pass the Veteran Entrepreneurship Training
Act which helped codify the Boots to Business program. And
also, I think we must assist in providing opportunities to
build a career ahead of time, and at this time, significant
changes in these brave individual lives.
So real quick, can you tell us the major hurdles veterans
face while trying to break into the private sector and start
their own business? The challenge is to say I am going to be a
business person. What is the biggest challenge?
Mr. SHAMESS. I will be as fast as I can. When you take that
oath of office, and I did it on my 18th birthday, it is not
just that you are going to risk for your country. You basically
put everything else off for that entire period of time. So
there is no preparation whereas most people in the private
sector, they are working in a company. They are getting
exposure to an industry. They are learning an industry so they
can start a business. In the military, you do not have that.
And so you need that exposure. You need that transition program
like we are talking about, bringing those resources together.
Mr. WILLIAMS. Thank you. I yield back.
Chairwoman VELAZQUEZ. Time has expired. The gentleman
yields back.
Now we recognize the gentlelady from Pennsylvania, Ms.
Houlahan, for 5 minutes.
Ms. HOULAHAN. Thank you, Madam Chair. And thank you to
everyone here for your testimony and for the conversation.
I am an Air Force veteran myself, and I am an entrepreneur
as well having built a variety of different businesses from
scale to sale. I am very excited to participate in today's
experience and to talk about the local veteran-owned businesses
in my community which is just outside of Philadelphia,
Pennsylvania.
Last month, I had the opportunity to participate in a
roundtable discussion with Secretary Mcdonough who visited my
community and several veteran entrepreneurs as well at the
Coatesville VA Center, which is also in my district. I was
particularly struck by the story of Robin Gilmore, an Air Force
veteran himself and a service-disabled veteran as well. He is a
small business owner of a media production business. With his
passion for producing video content, Robin established and grew
his small business following his years of military service. And
as his business grew, Robin was able to adapt the company's
online presence but he needed technical assistance and
expertise with regard to website design, optimization, and
social media.
So as with many small business nationwide, the COVID
pandemic also brought him a number of opportunities and
challenges, including a significant drop in his business. So
Robin sought assistance and reached out to Kutztown University
Small Business Development Center, which helped him to
revitalize his website to attract customers, to build new
clients, and to increase his appearance on all platforms. In
short, with the help of the SBDC, Robin was able to take his
business online and to the next level. So to this day, he
continues to refer other local businesses and local owners to
these valuable resources.
Robin's story certainly demonstrates the effectiveness and
importance of SBA's free and low-cost resource partners and
entrepreneurial development resources, especially in times like
these when a business owner may not have the tools or expertise
in certain areas to pivot or to grow or to navigate through
this complex environment.
My question is for you, Dr. Haynie. With Robin's story in
mind, what more do you think that the Small Business
Administration can do to increase awareness of the SBA resource
partners and entrepreneurial development resources amongst
particularly our veteran community? And what else can we do
here in Congress to be able to increase attention to these
services?
Mr. HAYNIE. Well, thank you for the question. As someone
born in Doylestown, Pennsylvania, I appreciate the first
question coming from you to me.
You know, I think one of the things is we have to continue
to focus on expanding the scope and scale of those services.
You know, the service you heard from Ms. Sayles about the fact
that there was not a VBOC in the State of Maryland until just
recently is a good example of what I think is missed
opportunity. In aligning those resources in a way where there
is a look at sort of veteran population density, that is easily
done and understood. But also, you know, one of the things that
we learned from COVID is that our use of technology expanded
access to services to veterans that live in rural communities,
veterans that live, you know, so balancing that focus of hard
physical infrastructure with an expanded opportunity to bring
virtual services and resources to veterans in rural communities
and other places where they cannot access that physical
infrastructure I think would be important.
Ms. HOULAHAN. That is a fascinating lesson learned from a
really bad situation with COVID is that I think all of us had
to very rapidly become much more technologically adept and kind
of comfortable using technologies.
Mr. HAYNIE. That is correct.
Ms. HOULAHAN. And that is something worth pursuing.
With what remains of my time, my question is for Mr.
Peacock. I am also really interested in exploring how the SBA
can increase assistance for not just women veterans but also
for female military spouses as well. I grew up in a military
family and my mom was possibly the most talented of all of us
and really struggled with her opportunity to grow and flourish
as a small business owner and operator as we moved around.
Would you be able to help us understand what are the needs for
women veterans and female military spouses and how can we help
them in adapting their businesses?
Mr. PEACOCK. I think a greater emphasis on attending Boots
to Business with their veteran partner would help. Every
business is going to be a family-owned business. And maybe you
have traveled around with your spouse all over the country, all
over the world, and after 20-something years that family is
going to retire. And you kind of think that you are going to
maybe buy an RV, see the 50 states, whatever, but he wants to
open up a motorcycle repair shop in the garage. You have got to
have a come-together meeting to make the business work. So if
the veteran is starting a business or the spouse is starting a
business, one of them is going to be the support personnel for
the other. So having the spouses attend the Boots to Business
program will be a great way to orient them to business
ownership, a business that will support the veteran or for
their own business as the spouse. I think that would be a great
way to introduce them, get them tied in.
Ms. HOULAHAN. My time has expired. I appreciate your time,
everyone, and I yield back.
Chairwoman VELAZQUEZ. The gentlelady yields back.
Now we recognize the Ranking Member of the Subcommittee on
Economic Growth, Tax, and Capital Access, Mr. Meuser, from
Pennsylvania.
Mr. MEUSER. Thank you very much, Madam Chairwoman. And
thank you all. You are really a great group of witnesses. And
thanks for being here. And certainly, thank you for your
service and for your entrepreneurialism and being job creators.
Joe Shamess, Mr. Shamess, we met last November as well, so
certainly very good to see you again. And I really appreciate
what you had to say about putting, entering into service, into
the military, putting everything else on hold. And that is why
it is so important once you come back into civilian life,
having some support in transitioning for business. That just
makes a tremendous amount of sense. So this hearing is
important and we want to learn as much as we can to improve
such support services.
So Mr. Shamess, let me start with you. As a veteran
entrepreneur, what do you find, what has been the most helpful
resource for veterans for the transition? Which department,
which set of resources has been in your view most helpful to
you and maybe most helpful to other veteran entrepreneurs that
you speak with?
Mr. SHAMESS. I would imagine it would be true for everyone
on this panel but it has been mentors or network. It has been
the people. And so having access to people. The resources in
terms of access to capital or just general information is
really important, too. But having someone that you can actually
talk to is probably the single-most important thing.
Mr. MEUSER. Interesting. And is there a formal network or
is it----
Mr. SHAMESS. Well, most people end up building it
themselves but there are programs, like SCORE, as Ms. Sayles
mentioned.
Mr. MEUSER. Right.
Mr. SHAMESS. There are programs out there. It is the
communication. It is not that the resource is absent per se; it
is that is misunderstood or it is not properly communicated to
the person that needs it.
Mr. MEUSER. Okay. So that could probably be improved, the
level of outreach and access to information. Access to capital,
on a scale of one to 10, how much of a challenge is that?
Mr. SHAMESS. Statistically, it is listed as number one. And
I would agree with that for most people. I think if you are
pursuing a 7(a) and they are going to collateralize everything
that you have, being SBA backed, it helps but most people do
not have much. So you are going to collateralize everything
that you have and then you can get your SBA 7(a). Having access
to capital through something like H.R. 4991, the Post 9/11
Veteran Business Acceleration Act, right, so getting your Post-
9/11 GI Bill benefit to use towards business ownership, I mean,
that would be a rocket ship. That would be absolute explosive
capital for a lot of small businesses.
Mr. MEUSER. Okay. Well, we will definitely look to pursue
that.
For all the witnesses, and Ms. Sayles, you mentioned your
list of three including expanding access or support for women
entrepreneurs, veteran entrepreneurs, as well as the GI Bill,
making that available for small business. Do you have a
suggestion in that regard?
Ms. SAYLES. Yes, sir. Since we have earned those funds to
come to us, it would be awesome, like for example, I was an
entrepreneur before I joined the Marine Corps. So when I got
out I was not so much focused on the college degree. And
nowadays, let's be honest, many are staying 25-30 years so they
have their master's degree when they get out. So what are they
going after with a GI Bill now at 40 years of age? But being
able to take those funds and now distribute them between
starting a business with capital, as well as using some of
those funds for a place like Syracuse, for example, to be able
to get the education that they need. Because as much as we get
great leadership skills and resilience and tenacity, we are
never taught how to negotiate. So it is things like that that
are simple for a lot of people that are civilians that as a
military person that we need to be educated on. And so real
core training would be ideal.
Mr. MEUSER. All right. Great. And I know, Dr. Haynie, you
brought that up as well, more support services for women
entrepreneurs. So I am glad to hear that.
Just on more of the aggregate issues facing small
businesses, veteran and nonveteran, dealing with the high cost
of gasoline, dealing with the rise of inflation, dealing with
the prospect of higher taxes, you know, all of that, supply
chain disruptions. You know, I talk with small businesses. I
have been a small business person for over 20 years as well. It
is very, very challenging in general. Does anybody just want to
comment on some of the challenges? We spoke about taxes at bit.
And Mr. Shamess, you spoke about your level of margin; right?
Two or 3 percentage points makes a big difference. I mean, that
in cases is 30 to 40 percent. If you are working off of 8
percent net income, right, 3 or 4 percent goes right from the
bottom line.
Mr. SHAMESS. Yes. It will wipe out small businesses.
Certain small businesses entirely because they are reluctant to
pass the increased costs on to the consumer. And especially if
you are in a consumer discretionary industry, the last thing
you want to do is raise your price. And so you wait as long as
you can and then finally you have to. And if you are struggling
that much, the consumer is probably also struggling because of
all the same things you just mentioned. And it will lead to
disruption of a lot of small businesses.
Mr. MEUSER. Thank you all very much. And very much, thank
you for your service.
I yield back, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Kansas, Ms. Davids,
Chairwoman of the Subcommittee on Economic Growth, Tax, and
Capital Access, for 5 minutes.
Ms. DAVIDS. Thank you. Thank you, Chairwoman Velazquez, and
thank you to both you and to our Ranking Member for holding
this very important hearing today.
The transition from military service to civilian life can
be challenging in many ways for veterans and their families.
And then especially when it comes to finding a new career path.
And we have heard that over and over again today. I tis
actually one of the reasons why in the last Congress I
introduced the SERVE Act, which was a bipartisan effort that
passed the House to support entrepreneurship endeavors for
veterans and also reservists. And this bill would require the
SBA to develop a plan for outreach and promotion of the variety
of programs available to veterans, reservist, and their
spouses. It also requires a report on the ability of our
veteran small business owners to access credit which is one of
the bigger challenges for any entrepreneur starting and
maintaining a business. The 2021 National Survey of Military
Affiliated Entrepreneurs found that 49 percent of the
respondents to that survey had a difficult time acquiring
initial capital to start their businesses and that 41 percent
continued to find financing to be a challenge. I would love Dr.
Haynie for, you know, you to explain or tell us why might
veterans and military-affiliated entrepreneurs have such a
difficult time accessing capital?
Mr. HAYNIE. So it is a great question. It is a very complex
question to answer because there are many factors that play
into it. I think some of my fellow panelists have addressed
some of this. You know, this idea of putting everything on hold
when you raise your hand and volunteer for service, that means
that you are not building. You know, my service, I was an Air
Force acquisition contracting officer. When I would look at who
I was going to award a contract to, the first thing I would
look at is past performance and past history. Without past
performance, past history, it becomes difficult then. It is a
catch-22. You cannot build that history, build that experience
until you get that work. And so I think part of it is you are
starting from scratch, to answer the question. I think part of
it is you also, and this is why I think it is so important the
work this Committee does and related for supportive services
and resources, starting a business is not the same thing as
transitioning to a traditional job where if you do not like
that job you quit that job and find a different one. Because of
what small business ownership is, you know, and particularly as
it relates to capital, often it is your own capital. The
resources that you have and that you are collateralizing, if
you will, to make this business work. You have to have the
supportive services and resources like Boots to Business and
other programs available to those service Members such that
they are prepared for this experience to the extent to which
that is possible.
So I think all of that plays into, you know, some of these
challenges. But not even the tip of the iceberg in terms of the
whole story.
Ms. DAVIDS. Yeah, thank you.
And then Ms. Sayles, I would love to hear you kind of
follow up maybe on some of the challenges that you faced when
accessing capital as an entrepreneur. But also, there is
another piece to this which I kind of talked about earlier with
the SERVE Act. I am curious whether or not you were aware of
the programs like Boots to Business or the Entrepreneurial
Development Programs. Like, how early were you aware of those
and maybe what do you think we can do better on that?
Ms. SAYLES. I am glad I do not look my age. But actually,
when I got out, TAP did not exist and Boots to Business did not
exist. I had to go to the newspaper and find a job. Today, you
have the access to the Internet and that is very much so a
great way of educating all of us on getting information but it
is still such a lack of information that is shared within the
veteran community as a whole.
And so when it comes to those programs, I found myself
learning about them once I became diligent about becoming a
veteran entrepreneur in government contracting. Then the door
swung open with the SBA SCORE mentor telling me about
everything.
But when it comes to capital--to address that, even if you
have a decent credit score, and I got the being the minority, I
got the being a woman, and then I'm also a service-disabled
veteran. I hit all three of those categories. And it is not
that you may not be able to get lending, but it is the amount
of money they are going to charge me to obtain it. So, the
margin as he did so well in breaking down how you take that
dollar and the different chunks that come out of it, and so
there is just a lot of lenders that are taking advantage of the
fact of you being a new business. And they come up with all
these wonderful alternative ways to give you money but it is
just that you pay a very, very high price for them.
Ms. DAVIDS. Thank you. And I think a lot of folks recognize
that that service can sometimes be a huge barrier to growing
and maintaining your business as you look at your capital
spent.
All right. Well, thank you all so much. I appreciate your
service to our country, and of course, the entrepreneurial
spirit that you are showing up with. Thank you all. I yield
back.
Chairwoman VELAZQUEZ. Time has expired.
Now we recognize the gentleman from New York, Mr.
Garbarino, for 5 minutes.
Mr. GARBARINO. Thank you, Chairwoman. Thank you to the
Ranking Member for holding this hearing.
I first want to start with Mr. Joe Shamess. Your testimony
mentions multiple resources for veteran entrepreneurs. As a
Member of the veteran entrepreneur community, can you share
with us what you believe is the most helpful resource for
veterans looking to transition from service to starting a
business? And can you also address, you know, and this is
something I heard from my Veterans Council from veterans
returning home that the ability and the knowledge and the
access for veterans to the actual programs and whether or not
you think there is easy access to them.
Mr. SHAMESS. Sure. I briefly mentioned this earlier about
the network. And when you put everything on hold and you
compare that, let's just say you do a 4- or 6-year enlistment
or 5- to 10-years as an officer, whatever you're doing. Your
counterpart in the private sector has 5 years, 10 years of
building the network in the industry that they are interested
in. Or maybe it is a sister industry. But the point where they
get to launch that business, they are well equipped. They may
even be well capitalized. They have all of these assets
available to them. And number one is people. And so using the
SCORE as an example, having access to mentors, that is one
channel. But it is not necessary enough. And so bringing all
those resources together in a way that is digestible,
understandable, that can be communicated to the veteran
community at the right time, or earlier even possibly, would be
an optimal 1:19:13xxx solution.
Mr. GARBARINO. So I am just doing a better job at reaching
out. What is there right now that the veterans can go to when
they come home and they want to transition into a small
business? Do they go to their local small business development
center? I mean, do they go to their local SBA region director?
I mean, or are there programs, does the SBA reach out through
the VA? Through the VA or through the American Legions or the
VFW Posts? Are any of those options out there and do you think
that would work or not?
Mr. SHAMESS. Well, what you are describing is exactly the
problem. Is that there are all of these pieces of information
held by specific entities and they are all essentially good
things. But the inability to get all of that in one place that
is usable by the entrepreneur is the problem. There are a ton
of resources. It is not about necessarily creating additional
resources. It is about synthesizing them in a way that is
digestible and understandable that the veteran can have access
to them.
Mr. GARBARINO. I appreciate that. That is exactly what I
heard when I held my meeting with my Veterans Business Council
or my Veterans Council and we talked about the SBA. They said
there might be information out there and programs out there but
we do not know about them and it is very hard for us to find
out about them. So, I think that is something that we need to
work on with the SBA and Congress.
Just maybe for the panel, where should Members of Congress
focus? We are hearing a lot of small business leaders right now
are coming to us and, you know, some of them are saying it is
hard to get capital. Some of them are saying it is hard to get
workers who are trained or have the education to do what they
need them to do. Where should be focusing most, especially when
dealing with veterans? And anybody can jump on this. Is it
access, more access to capital? Is it more access to education
or training? What should we do? Anybody can jump in.
Mr. HAYNIE. So I will take a swing at this. So I think the
access to education and training for me is a necessary
condition. It is not sufficient. It is a necessary condition.
I will bring up one thing that I think the Committee could
focus on and potentially start asking some questions. We
mentioned the unemployment crisis of the 2009, 2010, 2011,
2012, you know, was brought up earlier in the hearing.
Unemployment related to veterans. And the private sector did
some remarkable work stepping up and stepping forward and
creating veteran employment programs in this country, really
not seen since World War II. The next horizon, if you will, is
to open up the supply chains of private sector companies,
particularly Fortune 500 companies to veteran-owned businesses.
I think we often look at government and government contracting
as the objective for veteran-owned businesses. But the reality
is if you look at the supply chains of this country's largest
private sector businesses, they represent a remarkable
opportunity to grow and catalyze veteran-owned business in this
country. And I think that could be a unique opportunity to
begin engaging with the private sector on how it is that they
can be part of this effort to grow this community.
Mr. GARBARINO. Great answer. I appreciate that. And I know
I am running out of time. I have ran out of time. So I yield
back. But thank you, Doctor, for that answer.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Colorado, Mr. Crow,
Chairman of the Subcommittee on Innovation, Entrepreneurship,
and Workforce Development for 5 minutes.
Mr. CROW. Thank you, Chairwoman.
For Ms. Sayles, I just wanted to get a sense from you. I am
a fellow veteran as well. I just wanted to get a sense from you
as to how we can better prepare our service men and women while
they are still in uniform for that next step in their career.
So, for so long, and I know Mr. Shamess probably shares
this view, too, the military says, well, our job is not to
train people for when they leave the service. But you know, not
every private becomes a general. This is not our system. And if
we send people back out, maybe we should set them up for
success. So how can the military better do that? I know the
United Association has this Veterans in Piping program where it
is an 18-week program to train them to have skills when they
come out. Are there any other examples or ideas that you might
have?
Ms. SAYLES. The only thing I will definitely address would
be knowing that more recent veterans, and they talk about the
TAP program. But in the end, it added no value to them. Many of
them do not feel like they really received anything that helped
them with the transition. Because the transition is very broad.
It is just basic communications. You know, when do you stop
saying I am going to the head? So there is a lot of things that
are part of that transition that are very, very real to the
veteran community. So I would really go for the fact of
lengthening the amount of time of the TAP program because if
they have made a decision to get out, then offering them the
opportunity to assist them in that transition would be hugely
beneficial with just the basics of communication.
Mr. CROW. That is a great point. I am an infantry officer
so we called it a latrine, not a head. But, you know. I get
your point.
Mr. Shamess, a fellow Afghan veteran, you are in the
capital business; right? Private equity or hedge fund, is
that----
Mr. SHAMESS. Venture.
Mr. CROW. Yeah. So, venture capital. So you invest in
businesses to help promote them; is that accurate?
Mr. SHAMESS. That is correct.
Mr. CROW. Okay. So, the businesses that you invest in, so
you are not, you do not hire the employees directly. You are
not hiring machinists directly; right? Other people are doing
that?
Mr. SHAMESS. I have done that but not now.
Mr. CROW. Yeah, not now. And you are not shipping product.
It is the other companies that are doing that; right?
Mr. SHAMESS. Correct.
Mr. CROW. And you are not manufacturing things. It is the
businesses you are investing in; right? So do they use roads?
Yes or no?
Mr. SHAMESS. Absolutely.
Mr. CROW. Do they use bridges?
Mr. SHAMESS. Sure.
Mr. CROW. Do they use broadband?
Mr. SHAMESS. Absolutely.
Mr. CROW. Do they have to hire people out of apprenticeship
programs?
Mr. SHAMESS. Yes.
Mr. CROW. How are those things paid for?
Mr. SHAMESS. Are you saying this from a tax----
Mr. CROW. Yeah, where do roads and bridges and broadband
and apprenticeship programs and K through 12 schools, how do
those things get paid for?
Mr. SHAMESS. Well, naturally with taxes.
Mr. CROW. Yeah. So, I mean, I appreciate your point that
nobody likes high taxes. I do not like high taxes. But there is
more that goes into running a business than just the level of
the taxes.
I talk to manufacturers all the time in my community and
they say workforce is actually the biggest thing. They cannot
find qualified employees because our education system is
defunct, because our apprenticeship programs do not work. Our
bridges are falling apart. We do not have broadband.
So, we need to have a more nuanced conversation than just
taxes are bad or taxes are too high. My point is, let's have an
actual conversation with my colleagues about what is the right
level of tax to provide the service that we need for a robust,
competitive environment that can help your businesses succeed?
So I am willing to have that conversation.
Thank you, Chairwoman. I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Minnesota, Mr. Stauber,
for 5 minutes.
Mr. STAUBER. Thank you, Madam Chair.
Dr. Haynie, real quick. You had made a comment just moments
ago about supply chain. Would the supply chain issue be reduced
if it was manufactured and made in the United States, a
product?
Mr. HAYNIE. So I am clearly a big supporter of bringing
manufacturing back to the United States. I believe that, you
know, what I was referring to is how can veteran-owned
businesses play a role in bringing that manufacturing back in
part. But also, how can our U.S.-based large companies think
beyond their traditional process to open their supply chains up
so that veteran-owned businesses can be suppliers to those
companies.
Mr. STAUBER. But if it was made in the United States and
manufactured in the United States, would the supply chain issue
be reduced?
Mr. HAYNIE. I absolutely believe so. Yes.
Mr. STAUBER. Thank you.
And to the veterans, thank you for your service. I will be
very blunt. I get to spend the rest of my life with what I
think is the greatest veteran, my wife of 25 years, an Iraq War
veteran. So thank you for your service, and that comes from the
bottom of my heart.
Mr. Shamess, I have a question for you. First off, it is
great to see you again. We saw you last November with the Flags
of Valor and what have you. So I appreciate what you do.
A couple things. How have the gas prices impacted your
business and inflation?
Mr. SHAMESS. Good question. And thank you for the question.
Regarding that in relation to what was also just asked, I do
also have Flags of Valor, which is an operating business that
is making stuff in the United States for the record. And so
inflation is terrible. It is crushing. It is high. And
everything, it is not just hiring the workforce. It is the
gasoline. It is the wood cost. It is adhesives. It is
everything. And then, of course, the cost for us to get a
product to the end user is also higher. And so at every turn
the prices are going up.
Mr. STAUBER. What would be the additional cost to the end
user from let's say 2 years ago?
Mr. SHAMESS. If we were to have raised prices in a linear
way with inflation, we would be needing to raise prices
probably by about 20 percent at this point, which is not
reflected in the actual inflation numbers. But if we were to
take in all the total cost increases.
Mr. STAUBER. Right.
The Biden administration, these are their own numbers. The
Biden administration has added in the year 2021, an additional
$201 billion of regulatory costs and 130 million in compliance
hours on small businesses. How does red tape hold your business
back from achieving even greater success?
Mr. SHAMESS. Well, one, it is time. And this was a big
issue in the early stages of COVID pandemic was the amount of
compliance that went into the Paycheck Protection Program, for
instance. Some people took advantage of that, unfortunately.
But for the people that were trying to do it the right way, and
it improved over time, but it was very confusing. And so if you
are talking about just filing your monthly sales and use tax to
filing your 941s for payroll, to even just following local code
if you are a restaurant or whatever you are. It took a
tremendous amount of time. And to the entrepreneur, they have
both financial capital and they have time capital. And those
both have a value associated with them.
Mr. STAUBER. Right.
Mr. SHAMESS. And so when you are sucking that much time
capital out of their ability to do their job, it is a huge
cost.
Mr. STAUBER. So with the regulatory costs and the burdens
put on small businesses across this country, would you say that
you would be best keeping that money in your own pocket to
invest in your employees and technology and capital?
Mr. SHAMESS. Without question because it is an also risk
related. And so if your incentives continue to go down, your
appetite for risk will also go down proportionately. Or maybe
even more so. And so to invest the extra dollar in your
company, it becomes less and less certain. And therefore, less
and less likely.
Mr. STAUBER. I think as a small business owner of 31 years
myself, certainty is what we need. Certainty. And I think that
is important.
Again, thanks all of you for your testimony. And as the
veterans you are, thank you again for your service from the
bottom of my heart.
And I yield back, Madam Chair.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from New Jersey, Mr. Kim,
for 5 minutes.
Mr. KIM. Thank you. Thank you, Madam Chair, for recognizing
me. Thank you for the panel here to talk through this important
issue. We certainly have been better focused in New Jersey on
what we can do for our veterans there. And as someone who is on
this Small Business Committee, this has been a big part of what
we focused on.
The one angle that we tried to go at this from is, you
know, we were looking at this infrastructure, the Investment
and Jobs Act signed into law, all these different opportunities
that are going to be available to the buildup across our
country. I introduced some bipartisan legislation called the
Bill to Veterans Business Act which would set a 3 percent
veteran-owned small business contracting goal for federal
transportation projects, including construction, manufacturing,
and professional services like architecture and engineering.
This falls under the Department of Transportation, not SBA.
But I wanted to ask this panel here. What can SBA and other
federal partners do better to support veteran-owned businesses
that want to complete for federal contracts? I feel like this
is an opportunity that we have no been able to dive in as deep
on and wanted to get your perspective.
Mr. HAYNIE. Again, I will take a first swing at that one.
You know, I think the set aside incentives that exist already
now at DoD and VA and at many state levels, I think those are
important opportunity creators. I also know from my past
experience as a DoD procurement official that one of the
challenges is many small business and veteran-owned businesses
as well face real barriers to, it is why for many years DoD
never met its set aside goal because they could not find
qualified, in their definition, qualified veteran-owned
businesses to engage in procurement actions. The opportunity to
get this right, you have to also engage prime contractors. You
know, you have to extend those set aside goals as an obligation
to the large prime contractors and create an apprenticeship
kind of relationship between small and growing ventures and
those large prime contractors so that there is an opportunity
to sort of cultivate and nurture these small businesses as they
begin to take on federal contracts. Because if not done well,
you actually could do more harm to those small businesses than
opportunity creating. That is my view.
Ms. SAYLES. May I add something, please? The VA is now
releasing the verification for service-disabled, veteran-owned
small businesses is going over to the SBA. So ensuring that all
federal government agencies now adhere more to the law of that
whereas at the VA they tend to have 20 to 25 percent of their
dollars spent with service-disabled veterans. However, they
have been able to not meet the women requirement at 5 percent.
So it clearly shows that they are not awarding as much or
looking more into the women service-disabled veterans as far as
even at the VA. But the value of now going across the SBA is
going to be great because now every agency should be adhering
to the law of the new rules coming out of SBA for the veterans.
Mr. KIM. Yeah. No. Thank you for that.
Ms. SAYLES. And also, we should increase it to 5 percent.
Mr. KIM. Sure.
One thing I wanted to kind of connect the dots on here is,
you know, a lot of how we have been trying to get small
businesses to understand some of these opportunities, you know,
has been about some of these different organizations. You know,
for instance, the U.S. Coalition of State Veteran Chambers of
Commerce has Members in 20 different states, including New
Jersey. We have been able to work with this group on the ground
in New Jersey to help a lot of these veteran-owned businesses
understand some of these different opportunities available.
So I guess I just wanted to end on asking, you know, do any
of your organizations partner with the state veteran chambers?
And how can they better work with you to be able to maximize
their opportunities here?
Mr. HAYNIE. So I think, sir, the short answer is yes. You
know, as the saying goes, business is local. And one of the
things that we are constantly advising veterans that go through
our business ownership programs is to connect locally. Make
connections with local Chambers of Commerce, state level
Chambers of Commerce, particularly as it relates to entities
that have been created around underserved Communities, the
Hispanic Chamber of Commerce, for example.
So I think, you know, one of the themes that has come
across I think this panel is the importance of networks. And we
drive that home at every opportunity. And the extent to which
local networks can be cultivated is extremely important.
Mr. KIM. Thank you. I will yield back to the Chair.
Chairwoman VELAZQUEZ. the gentleman yields back.
Now we recognize the gentleman from Wisconsin, Mr.
Fitzgerald, for 5 minutes.
Mr. FITZGERALD. Thank you very much for being here. I am
over here in the corner if you can see me over here.
I spent 27 years doing ADT and Army Reserves and National
Guard. Retired as a lieutenant colonel. And I think this kind
of today is typical for the way things are oftentimes framed up
which is somebody enlists, they do their first 4 years, 6
years, whatever it might be. And then if they for some reason
want to transition out of the military they kind of figure out,
okay, what am I going to do now? And can I find a job that is
related to the MOS that I had
During my time. I will just say during my time in the Army.
But what has not been discussed, which I had a ton of contact
on over my years in both the Guard and Reserve was that many of
these active duty soldiers transition into the Guard or
Reserve. And along with that, obviously, it is kind of the
problem is right before you and that is they also have a
civilian job; right? So they are doing their 2 weeks of AT
every year and they are doing their regular drills. And during
that period of time, a lot of people are either going to tech
college or some of them are in a 4-year institution and
ultimately end up in ROTC or some other avenue.
Has there been any study or any kind of 30,000 foot lock
on, you know, it is like people solve this problem on a daily
basis. What am I going to do in the civilian world? And they
use the Guard and Reserve a transition piece for them sometimes
because they do not want to leave the military. They love being
in the military. Or, you know, it is another way to supplement
their income while they are out there doing something like
this.
So I am not sure, Mr. Shamess, do you want to, or anybody
that might have some experience with that Guard and Reserve
piece? Because I think it is kind of something right before us.
And I do not know that it is really being explored or analyzed
at all.
Mr. SHAMESS. No, that is a great question. I would be happy
to answer it.
Mr. PEACOCK. I can answer that one. Okay. Go ahead. I had
something I wanted to say but please go ahead.
Mr. SHAMESS. So the Guard and Reserve I think is a great
transition point. In fact, I have been in the Guard for 8 years
and 11 years on active. And so I absolutely appreciate the
opportunities that the National Guard, the Air National Guard
in my case present. And in some states there are great
partnerships that exist between the Guard and the private
sector.
So, for example, in the State of West Virginia, if you join
the Guard, they will pay for you to go to college outside of
your normal GI Bill benefits you may earn if you attend school
in state. And then that creates opportunities for private
companies to work with the Guard and the State to basically
create a funnel, a hiring funnel, which is a really powerful
thing if it is properly developed.
And the other thing I would consider, and I have been a
skill bridge partner in various companies, where we have
created skill bridge opportunities for military personnel in
their last 6 months of service to come work inside the company.
It is a great thing. And I do not know the answer to this, if
it is allowed to be used for entrepreneurship. And if it is
not, that would be an interesting suggestion to possibly look
at where can you use a skill bridge program for you to spend 6
months with a partner, with a mentor working to develop your
business, especially if you have built-in access to capital
associated with that.
Mr. FITZGERALD. Yeah, I mean, other than combat arms, I
mean, there are so many other MOS in the Army that it is a very
direct and easy transition. I mean, if you are a mechanic in
the Army, there is a good chance you could open up your own
garage in the civilian side and also be an active Member of the
Guard or Reserve. So, and I watched this happen. I mean, there
are all kinds of Members that did this on a regular basis, so.
Any other comments on that point?
Mr. PEACOCK. I can say that the EIDL loan, the Economic
Injury Disaster Loan was originally set up for Guard and
Reservists who deployed. They own a business and they are
called out to deploy. They can get the EIDL loan as a bridge
loan. It was used during COVID because it was already in
existence. So if you have a business and you are called up to
active duty, you can get an EIDL loan, which is like a bridge
loan to cover you until the time you get back, low interest
rate, and it is a good program for those business owners who
are in the Guard and Reserve. So that is something as far as
access to capital that is available now. Thank you.
Mr. FITZGERALD. Yeah, just in the couple seconds I have
left, the other thing is just, you know, a lot of my experience
was in training divisions or are techs themselves. So
oftentimes, you know, the focus on that is how do you create an
Army trainer, and then how does that trainer train troops? So
there is this transition where it is really you are creating a
classroom environment. And it is another place I think where we
kind of miss the boat in that all that experience is just kind
of, you know, as soon as a person leaves the military it is
just gone. And it has always been frustrating to me to kind of
see people that are just very good at that and suddenly they do
not qualify kind of on the civilian side. It is another place I
hope there is emphasis and I hope there is a place where we can
find a way of utilizing those skills because it is unfortunate
when they are just kind of gone overnight, so.
Thank yo for being here today. I yield back.
Chairwoman VELAZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Louisiana, Mr. Carter,
for 5 minutes.
Mr. CARTER. Madam Chair, thank you very much. And let me
thank you all for your incredible service. We can never say
thank you enough for the sacrifices that you make for our
country, and the least we can do is to create a smooth and
seamless path for you to enter into the world of
entrepreneurism.
I happen to be the proud husband of a wife who is a career
general officer in the United States Army with multiple tours
of duty to Afghanistan and Iraq. So I know the pressure of a
family left behind when their spouse goes to war or to service.
So hats off to you.
Ms. Sayles, the issue that we hear often with veterans of
small businesses period is access to capital. Obviously, you
overcame that. Would you mind sharing how and what
recommendations you would give to service Members who are
looking to perhaps enter the world of business?
Ms. SAYLES. Earlier someone brought up the transition.
Right? So TAP going for a longer period of time could be a very
good area to start training them about the importance of having
good credit. Because, again, that is kind of the information
you do not learn while you are serving. And they do have a lot
of, of course, companies right outside the gate that like to
charge you a ridiculous amount of money to purchase anything
while you are actually in uniform. So you do not get trained up
in that area.
And then secondary to that would be even with having good
credit, the options of not having to pay more, much more than
you should to receive that credit in order to start your
business and have the capital I think is a big problem. And I
brought that up earlier in my testimony. The SBA should really
consider even more options of working with the existing lenders
that are out there, the larger banks, the alternatives,
whomever, but just kind of lead the way of actually
establishing abilities for people to get access to capital
where it does not cost them a lot of money in interest and
fees.
Mr. CARTER. What about even maybe a little bit of leniency
on credit scores for service people?
Ms. SAYLES. I would actually support that thought, sir, as
well because, again, we were not taught when we were serving in
the military about certain aspects. Finance is one of the
areas.
Mr. CARTER. Or even the ability to manage affairs when
perhaps going abroad or serving. Many times as I think Mr.
Shamess indicated, did you indicate that you took your oath of
office at 18?
Mr. SHAMESS. I did.
Mr. CARTER. So, you know, a very young man relatively to
begin and so some of those things are a matter of the ball
comes really fast. And again, in our effort to provide as much
resource and as much leniency and as much appreciation for your
incredible service, I think that is one of those things that we
should look at through the various committees of the Congress.
Thank you very much.
And one question for Mr. Shamess. The training you received
through Boots to Business Program obviously prepared you. Can
you share a little bit more? And I was late so this has already
been asked. I will add a second part to that. Could you share a
little bit about that experience and what advice would you give
to young service people--young or old service people that are
looking to access resources like Boots to Business or others?
Mr. SHAMESS. So I was not a consumer of the Boots to
Business program. But I would encourage all of them to work
within basically everything we are describing today to find
these resources. And hopefully, they will be provided in a more
seamless way to them in the future. And I would encourage them
to also rely on their military training because there are some
very unique skills that come from military service. And I would
tell them to absolutely not discount those as they embark on
their entrepreneurial journey.
Mr. CARTER. So as my times winds down I will ask a silver
bullet question. You are sitting here before this Committee and
if each of you had one request that could be honored from this
Committee or any other Committee of the U.S. Congress that
would make your business experience smoother, more accessible,
more profitable, what would that be?
Ms. SAYLES. Access to capital, sir. Because as a woman that
has a business in government contracting and as an 8(a) firm, I
am unable to just say I can take on any contract from the
relationships I have built with no lack in trust within the
federal government. Because if I do not have the capital to
support good months of paying those salaries to those
individuals, I can be challenged with being successful with it.
Mr. CARTER. Okay. Mr. Shamess?
Mr. SHAMESS. Make it easier on us from a compliance
standpoint. Stop changing rules. Allow us to operate and enjoy
the benefits but also struggle on our own to be entrepreneurs.
Mr. CARTER. Dr. Haynie?
Mr. HAYNIE. Create the ecosystem. You know, back to the
navigation challenge. How is it that we put in place and
sustain a network of resources on behalf of veterans such that
when they make that transition they understand what resources
are available, not just initially but at various stages of
business venture creation and growth.
Mr. CARTER. My time has expired. Thank you all very much. I
greatly appreciate it.
Chairwoman VELAZQUEZ. Time has expired.
The gentlelady from New York, Ms. Tenney, is recognized for
5 minutes.
Ms. TENNEY. Thank you, Madam Chairman. I appreciate this.
Thank you so much to you for coming here and giving us some
insight. And I obviously thank you for your service. I get a
lot of unsolicited advice from my son who just left active duty
in the Marines and is now a Reserve officer about just the
transition period. How to help and mentor young service
Members. And you have all sort of touched on access to capital
as being one of the biggest issues. And one of the things I see
in the military and as a small business employer as well, and
you touched on it a little bit, Mr. Shamess, is the skill set
that many do not understand that comes from military service.
It is the commitment to service, the ability to operate and
complete tasks in sometimes a very stressful environment. The
work ethic, obviously. Task completion, ethics, and all those
rules that go with being a good service Member and to receive
the kind of step up. And also with some creativity and
ingenuity.
In talking about access to capital though, I was going to
maybe sort of go down the line. You talk about access to
capital. One of the issues I have, and I come from a rural
area. And Mr. Haynie knows I am just around the corner. But it
is actually, even though Syracuse is big and I love your orange
by the way.
Mr. HAYNIE. And I live in your district.
Ms. TENNEY. Oh, that is great. But we are all Syracuse
fans. Anyone that is in the vicinity. So, although I went to
Colgate, so my brother and my nephew are Syracuse graduates and
we love all our upstate schools. And we love our military. We
have great military opportunities, but a lot of it is in rural
areas.
So when you talk about access to capital, you know, the
opportunity to create jobs and get the types of jobs--no
everyone in the military is going to do a high tech job. How do
we do jobs that are maybe more capital intensive in industry
that would take a little more time to get up and running but
would last longer. And so maybe I would say is that something
that you are seeing? Just because of that skillset that people
in the military would bring, how do we get that type of long-
term investment in making things again which would be great,
you know, as part of the Made in America, reshoring our jobs
back here is something our military would be so excellent at,
how would we handle, how can we make better laws to give you
access to capital to make that happen?
Mr. SHAMESS. Thank you for the question.
Mr. PEACOCK. Can I take this one?
Ms. TENNEY. You can all chime in whatever order you want to
do.
Mr. PEACOCK. Sure. One thing that has been not mentioned is
the USDA. They are very strong supporters of rural businesses
and any type of farm business. They have got guaranteed loan
programs as well at the SBA. And I am in a rural area as well
and they will do most any type of rural business, provide
funding for that. So I wanted to mention the USDA, as well as
the SBA as another funding possibility to capitalize small
rural based businesses. Thank you.
Mr. SHAMESS. So I love the idea of creating jobs and
businesses where you are. And I think that is very important,
especially in rural communities in Small Town America. And so
when you think about the landscape of small business, it is
incredibly diverse. You have entrepreneurs that are sole
proprietors that buying that truck can be the business. That
can be it; right? There are other businesses that can be
started with $10,000. And so when I think about the Post-9/11
GI benefit for example being used as a capital tool for
business ownership, you can do a lot with that amount of money
for most of these businesses. And so you are talking about,
depending on the state you are in, that can be $80,000 over the
course of 3 years. That is a tremendous amount of money to
start, whether it is something that is going to be an employer
or something that you are going to be a sole proprietor and
that can stay local to where you are. And so I think that would
be one of the best tools is that H.R. 4991 being brought back
in a bipartisan way.
Ms. TENNEY. And I think investing from not just one source
but you are saying investing whether it is a car loan. We have
taken a lot of reindustrialization in our region and it is
interesting that a lot of these people tend to be former
military or dairy farmers. I find that those are the most
resourceful people I know. They get the job done. They know how
to fix things. They do not complain. They work long hours and
that is why I just think this is just a goal mine to be able to
access the skill set that you have all learned by being in the
military to be able to use that to industry and growing our
regions again, especially in Upstate New York. We have this
beautiful area of the country but we are not getting the
capital we need. And we have people who have proven records and
I would just love to be able to highlight that. And I do not
know if Mr. Haynie or Ms. Sayles want to weigh in on that as
well, quickly. I have 20 seconds.
Mr. HAYNIE. If I could just add one more thing to that
point. You can buy a commercial laser for $20,000 with
installation, ready to run. So you could be a laser
manufacturer in the United States for $20,000 getting started.
That is incredible.
Ms. TENNEY. See, I do not even know that.
Mr. HAYNIE. But that is incredible; right? You can do that
anywhere.
Ms. TENNEY. I am low tech.
Mr. HAYNIE. Anywhere in the country you can do that.
Ms. TENNEY. That is fantastic.
Anything else quickly before I run out of time? Again, I
cannot thank you enough for what you do and your service, and
helping our veterans is really important. Thank you.
Chairwoman VELAZQUEZ. Thank you.
Thank you to our witnesses for testifying today and for
your service on behalf of our country. Those that have served
in our Armed Forces are often natural entrepreneurs as has been
discussed here. The skills they develop in the military like
leadership, perseverance, resourcefulness, and discipline make
them ideal business owners. These veteran-owned businesses play
a key role in supporting the American economy and communities
across the country. Our country stands to benefit immensely by
making it as easy as possible for veterans to start and run
their businesses.
Today, we heard invaluable testimony about what is and is
not working when it comes to SBA veteran programs. I hope that
we can apply these lessons moving forward as we work to advance
policies that empower veteran business owners.
Without objection, Members have 5 legislative days to
submit statements and supporting materials for the record.
If there is no further business to come before the
Committee, without objection, we are adjourned. Thank you.
[Ms. Sayles did not subimt her responses to questions in a
timely manner.]
[Whereupon, at 11:51 a.m., the committee was adjourned.]
A P P E N D I X
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