[Senate Hearing 118-90]
[From the U.S. Government Publishing Office]
S. Hrg. 118-90
PATHWAYS TO WOMEN'S ENTREPRENEURSHIP:
UNDERSTANDING OPPORTUNITIES AND BARRIERS
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
JULY 26, 2023
__________
Printed for the use of the Committee on Small Business and
Entrepreneurship
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
________
U.S. GOVERNMENT PUBLISHING OFFICE
53-226 WASHINGTON : 2024
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED EIGHTEENTH CONGRESS
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BENJAMIN L. CARDIN, Maryland, Chairman
JONI ERNST, Iowa, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
JEANNE SHAHEEN, New Hampshire JAMES E. RISCH, Idaho
EDWARD J. MARKEY, Massachusetts RAND PAUL, Kentucky
CORY A. BOOKER, New Jersey TIM SCOTT, South Carolina
CHRISTOPHER A. COONS, Delaware TODD YOUNG, Indiana
MAZIE K. HIRONO, Hawaii JOHN KENNEDY, Louisiana
TAMMY DUCKWORTH, Illinois JOSH HAWLEY, Missouri
JACKY ROSEN, Nevada TED BUDD, North Carolina
JOHN W. HICKENLOOPER, Colorado
Sean Moore, Democratic Staff Director
Meredith West, Republican Staff Director
C O N T E N T S
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OPENING STATEMENTS
Page
Benjamin L. Cardin, Chairman, U.S. Senator from Maryland......... 1
Joni Ernst, Ranking Member, U.S. Senator from Iowa............... 3
WITNESSES
Ms. Adrienne M. Somerville, CEO, Somerville Consulting Group,
LLC, Talent & Technical Solutions Corporation.................. 6
Prepared Statement........................................... 8
Ms. Patrice Onwuka, Director of the Center for Economic
Opportunity, Independent Women's Forum......................... 14
Prepared Statement........................................... 16
Ms. Nik Sweeney, Founder/CEO, Amani Nicol Wellness............... 23
Prepared Statement........................................... 25
Ms. Catherine Koch, President & CEO, K-Tec Systems, Inc.......... 32
Prepared Statement........................................... 34
ADDITIONAL LETTERS/STATEMENTS FOR THE RECORD
Engine
Letter dated August 3, 2023.................................. 52
Rose, Kathryn
Statement dated August 9, 2023............................... 56
QUESTIONS FOR THE RECORD
Ms. Catherine Koch
Responses to questions submitted by Ranking Member Ernst..... 58
Ms. Patrice Onwuka
Responses to questions submitted by Ranking Member Ernst..... 60
PATHWAYS TO WOMEN'S ENTREPRENEURSHIP: UNDERSTANDING OPPORTUNITIES AND
BARRIERS
----------
WEDNESDAY, JULY 26, 2023
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The committee met, pursuant to notice, at 10:00 a.m., in
Room 106, Dirksen Senate Office Building, Hon. Benjamin Cardin,
Chairman of the Committee, presiding.
Present: Senators Cardin [presiding], Hirono, Rosen, Ernst,
Hawley, and Hickenlooper.
OPENING STATEMENT OF SENATOR CARDIN
Chairman Cardin. Well, good morning, everyone.
[Chorus from Audience.] Good morning.
Chairman Cardin. Senator Ernst and I are not used to this
type of attendance at our hearings. [Laughter and applause.]
Chairman Cardin. We really welcome you to this hearing. We
know that America is in great shape when we see the spirit
that's in this room. The entrepreneurial spirit of women has
really carried us into an unprecedented growth in small
businesses during this period of time.
So we applaud your entrepreneurship and we welcome you to
our committee. We are looking forward to this particular
hearing as we talk about how the Small Business Administration,
how all of us work together to remove obstacles that have been
in the way for women entrepreneurs.
So we welcome you to the hearing and we look forward to the
distinguished panel of witnesses and their testimony.
I particularly--and I'll introduce the two witnesses that
happen to be here from Maryland in a few moments, but whenever
I have Marylanders in the room--I got some more Marylanders in
the room--they get special attention. So I'm going to have
special words to say about Ms. Somerville and Mrs. Sweeney.
Every day I'm inspired by the tenacity and innovation of
small businesses across the country, especially women-owned
small businesses. Today, we are witnessing an historic rise in
women's entrepreneurship under the Biden-Harris Administration.
It has lifted individuals and communities across the country to
prosperity.
As Chair of the Small Business and Entrepreneurship
Committee, one of my highest priorities is to ensure that our
nation taps into the entrepreneurial spirit that is sweeping
our nation to build a fair and more just economy for all.
Women-owned small businesses, particularly black women-
owned small businesses, are leading the charge post-pandemic
with historic numbers of new small business startups but
unfortunately still face systemic barriers to success as
entrepreneurs.
In a committee staff report released prior to this hearing,
we outline how access to capital, gaps in mentorship, under-
utilization of women-owned firms in federal contracting, and
under-investment in childcare all make the job of operating a
small business unnecessarily harder for women, and I want to
compliment my staff for the production of this report.
I encourage you all to please take a look at it because it
provides a chronology of the challenges that we face today for
women entrepreneurs and I hope this will be a guidepost for us
moving forward in trying to deal with some of the changes in
the Small Business Administration's tools that are in their
toolkit that will help our women.
That's why throughout my tenure in Congress I have been
laser focused on comprehensive legislation to reauthorize
several important programs that support American women-owned
small businesses.
Last month, for example, I introduced the Women's Business
Center Improvement Act, which would increase federal support to
women's business centers or WBCs by doubling the maximum annual
grant to $300,000. [Applause.]
Chairman Cardin. Both Senator Ernst and I appreciated your
initial response. That was great. But I have to exercise the
responsibilities of the Chair and ask that you allow our
testimonies to go forward without response from the audience.
The bill appropriates--even though I like the response.
[Laughter.]
The bill appropriates $31.5 million for each fiscal year
from 2024 through 2027 and requires an annual report on the
program.
WBCs provide free or low-cost counseling and training
focusing on addressing the unique challenges facing women who
want to start, grow, and expand their small businesses.
Just last year, I was able to secure a new Women's Business
Center at Bowie State University, Maryland's oldest
historically black university. The SBA awarded a grant to
Rockville Economic Development to launch the center. The new
center is the fourth WBC in Maryland, joining a WBC in
Rockville, a WBC operated by Morgan State University, and a WBC
in Salisbury operated by Maryland Capital Enterprises.
American women-owned small business owners and
entrepreneurs deserve the very best tools and resources to keep
them growing. It's the right thing to do as for the values of
our nation. It's also important for America's growth.
Congress must do more to ensure women and particularly
traditionally underserved women have access to the same
opportunities as their male counterparts.
I look forward to the testimony of our witnesses and I'm
eager to learn more about what Congress can do to further
advance the interests of women entrepreneurs.
And now let me recognize the distinguished Ranking Member
Senator Ernst.
STATEMENT OF SENATOR ERNST
Senator Ernst. Thank you, Mr. Chair, and thank you to all
of our guests here today, as well.
I walked in the room and I was incredibly impressed by
having so many just wonderful strong women entrepreneurs. So
thank you for joining us.
I also want to welcome the Association of Women's Business
Centers and thanks for all the work that you are doing and it's
incredibly important that you're out there supporting women all
across our great United States, and a special shout-out to T.J.
Daniels of the Iowa Women's Business Center who is also----
Chairman Cardin. You can respond to that.
Senator Ernst [continuing]. With us. Yeah. [Applause.]
Who is with us here today. So thank you so much.
Today, we will examine ways to help women-owned small
businesses succeed. There are more than 12 million women small
business owners contributing $2.1 trillion in total sales to
our national economy.
While women entrepreneurs are creating jobs and igniting
local economies, according to the National Federation of
Independent Business, the Small Business Optimism Index remains
below the 49-year average for the 18th consecutive month.
Inflation and rising interest rates are top concerns.
Unfortunately, small businesses continue to suffer under
Bidenomics. Despite the White House attempting to paint an
optimistic view of the economy, small business owners aren't
buying the narrative.
President Biden has issued nearly $360 billion in new
regulatory costs on our small businesses. Rather than focusing
their time and energy on strengthening and growing their small
businesses, many have to spend time figuring out how to comply
with burdensome government regulations.
In an effort to address this, I'm working on the PROVE IT
Act to ensure small businesses have a voice in federal
agencies' rulemaking process.
Another challenge I hear from businesses and families is
the lack of access to affordable quality childcare options. In
Iowa, 53,000 women have left the workforce since 2020 due to
lack of childcare options.
While the Iowa Legislature and Republican Governor Kim
Reynolds have made progress, there's much more work to be done
specifically at the federal level.
That's why I'm proud to say my bipartisan Small Business
Childcare Investment Act with Senator Rosen passed out of our
committee just last week. The bill allows nonprofit childcare
providers, including religious nonprofits, to access the SBA
loans. This legislation will create a greater number of
affordable childcare options, especially in rural areas, like
mine, and I will continue to advocate for this bill to be
signed into law.
Furthermore, accessing quality business training and
coaching is critical to our women small business owners. By
modernizing the Small Business Administration's SCORE Program,
we will be giving entrepreneurs, especially our women
entrepreneurs, access to quality mentorship.
My SCORE Act of 2023, which revitalizes SBA's Mentorship
Program by adding a team of women business leaders called the
National Women's Business Coaches, will work alongside SCORE
coaches and pair them with aspiring and existing entrepreneurs.
These coaches will work to recruit individuals with
expertise across all job industries to join the SCORE Program.
This will help guarantee our young entrepreneurs receive the
relevant and productive assistance to support their path to
success.
Lastly, I want to highlight a critical bill I introduced to
close loopholes that enable fraud in the Women-Owned Small
Business Contracting Program.
The Accountability in Women-Owned Small Business
Contracting Act eliminates self-certification in the program
and holds federal agencies to task by forcing department and
agency heads to testify before Congress when they fail to meet
their own women-owned small business contracting goals.
Since much of the discussion today will focus on the SBA's
Women Business Center Program and I'm glad for that, I am
thankful that we're able to focus on this, but I want to be
very clear about my priorities as we consider any potential
reauthorization of this program.
The distribution of program resources must be made more
consistent across all states, especially in our rural areas.
Mr. Chairman, I do commend you for having four women's
business centers in Maryland, but I'm sure you can understand
my frustration that in Iowa we only have one, one center to
service the entire state and our state is very large.
Many of my colleagues on the Republican side share my
frustration that as the Administration has added additional
women's business centers to the program, they haven't seen the
benefits in their own states, many of which like mine have only
one service center.
The placement of new centers and the allocation of taxpayer
dollars by the SBA must be distributed broadly in the future.
Again, I want to thank all of you very much for being here
today and I look forward to our discussion on how we can best
serve our women entrepreneurs.
Thank you for being here. Thank you, Mr. Chair.
Chairman Cardin. Well, Senator Ernst, thank you for your
opening statement.
I share your concern. I want to make sure the resources are
fairly distributed in all parts of our country and you have a
big state and it's difficult with just one center. So I
recognize your concerns and I assure you I want to work with
you to make sure that women entrepreneurs are served throughout
the entire country.
I'm now going to introduce our panel of distinguished
witnesses. I'll be introducing you in the order in which you
will be presenting--we'll rotate between my introductions and
Senator Ernst's introductions.
But I'm very pleased to introduce Ms. Adrienne Somerville,
the CEO of Somerville Consulting Group, LLC, and Talent &
Technical Solutions Corporation, located in Hughesville,
Maryland.
You have an impressive background of academic achievements
from Norfolk State University, Florida Institute of Technology,
Georgetown University, and Harvard University Kennedy School
Executive Program.
I was very impressed in your background that you were
partnering with Apple and Google and developed and produced a
Mobile Career Guidebook that is downloadable to smart phones
and tablets. So we thank you for that service that you have
provided to the community.
And now for the introduction of Ms. Onwuka, I'll turn to
Senator Ernst.
Senator Ernst. Thank you, Mr. Chair.
Ms. Patrice Onwuka, Director, Center for Economic
Opportunity, Independent Women's Forum. The Independent Women's
Forum is a nonprofit organization whose goal is to develop and
advocate for common sense policy solutions that enhance
people's freedom, opportunities, and well-being.
The Center for Economic Opportunity specifically seeks to
promote and develop policies that expand workplace choice,
flexibility, freedom, and opportunity.
Prior to her career at IWF, Patrice served as the Senior
Fellow at the Alliance for Charitable Excellence and before
that she worked as the Communications Director for Generation
Opportunity.
Thank you for joining us, Patrice.
Chairman Cardin. We then have Mrs. Nik Sweeney, the Founder
and CEO of Amani Nicol Wellness in Baltimore, Maryland. We're
pleased to have you with us.
In the spring of 2019, Nik was unemployed, recovering from
surgery. She then decided to take her experience as a Zumba
instructor and put that to entrepreneurship. In the fall of
2019, she made the big jump to become a full-time entrepreneur.
She opened the first and only of its kind holistic wellness spa
integrating self-care with lifestyle medicine and programming
to meet the needs of women in under-resourced communities.
Lastly, we have Mrs. Koch, Koch. Sorry.
Senator Ernst. Thank you, and thank you, Mr. Chair.
We have Ms. Catherine Koch and she is the President and CEO
of K-Tec Systems. K-Tec Systems was founded by Koch in 1989 in
Southeast Michigan. This small business is a global
manufacturer of advanced control and automation technology,
specializing in accurate and reliable temperature flow and
pressure measurements.
As a female entrepreneur in a male-dominated industry,
Catherine is passionate about helping other women start their
own businesses. As a Global Forum committee Member of the
Women's Business Enterprise National Council and the Board
Member and Vice President of--and it got cut off there. So we
welcome you but thank you, thank you, Ms. Koch, very much for
being here.
Chairman Cardin. To our witnesses, your entire statements
will be made part of our record without objection. You may
proceed as you wish. We ask you to try to summarize your
statements in about five minutes and leave a little time for us
to ask you some questions.
So we'll start with Ms. Somerville.
STATEMENT OF ADRIENNE M. SOMERVILLE, CEO, SOMERVILLE CONSULTING
GROUP, LLC, TALENT & TECHNICAL SOLUTIONS CORPORATION,
HUGHESVILLE, MARYLAND
Ms. Somerville. Good morning and thank you, Chair Cardin
and Ranking Member Ernst and Members of the Committee on Small
Business and Entrepreneurship, for this amazing opportunity to
share my experience as a female business owner and government
contractor in Maryland.
My name is Adrienne Somerville and it's an honor to
highlight my incredible benefit of how technical assistance
helped me in my pursuit of business ownership.
I am the Founder and CEO of two small businesses. I am
Consulting Adrienne Somerville Consulting Firm and we
collaborate with diverse leaders to ensure the success in
providing ethical, transparent, repeatable, and affordable
talent management solutions focused on improving accountability
and ownership at all levels to build strong performance within
each company to ensure strong profit margins.
In addition, Talent & Technical Solutions, we focus on
building IT solutions that result in a plethora of data
analytics to help build companies that manage their talent
portfolios.
Throughout building a business, I experienced many
challenges that I later learned are similar to those of other
women across the nation.
Today, I will highlight a few: accessing sources of
funding, navigating available information and tools available
for business owners, and identifying effective mentorship.
By far, the biggest barrier, of course, to any business is
resourcing. I was faced with difficulty identifying capital
opportunities to support the purchasing of business development
tools and resources which were expensive and needed to enable
the success of my business and scale accordingly.
Ultimately, it was my work with resource partners that
helped me identify these avenues for private and philanthropic
capital which took my business to the next level.
As we identify opportunities to support women business
owners like me across our nation, I ask this committee to
consider capital solutions to incentivize both public and
private avenues to capital.
Additionally, another challenge I was met with was
navigating resources available for entrepreneurs. SBA resource
partners provided me with the tools and strategies during my
entrepreneurship journey that set me up for success,
sustainable success.
The resource partners I worked with uniquely supported my
needs throughout my entrepreneurship journey. I worked with
four different small business resource partners in various
capacities: the Baltimore-Metro Washington Business Center, the
Virginia Women's Business Center, SBDC, and SCORE, all of which
helped me as a business owner in different ways.
I have firsthand seen the uniqueness and the value and the
impact each resource partner has had in offering me various
opportunities through the stages of my development.
SCORE supported me with my pre-business establishment. This
organization provided robust access to tools and training
materials early in my process. I was able to leverage the
tutorials, the manuals, the books, the algorithms, and the
structural outlines. They helped me with the groundwork and the
creation of my business.
Once established as a business, I connected with the
benefits of SBDC, the network in Maryland, as well, which
helped me develop the application of the tools, the
identification of resources, the establishment of mentorship.
Through this resource I was able to identify local
opportunities in my community in which I could have the
greatest targeted impact. As my business infrastructure was
built, the Baltimore-Metro WBC and Women's Business Center of
Virginia enabled me through a Guide of Designated Programs that
were very targeted and rich for my business.
This resource was critical in providing assistance to
support my needs as a woman business owner. Through initiatives
like UpScale, certification, training, digital training,
conferences, networking events, and specialized finance
sessions, I was able to build a true access plan.
Through this program, I was able to apply for the WOSB
Certification for the State of Virginia which will also open
doors for my business and increase opportunity in terms of
visibility in my network.
As a business owner with only six employees, the WBC helped
me provide a one-stop shop when approaching this certification
process. When considering additional solutions that will
support women entrepreneurs like me in pursuit of ownership, I
ask that you consider the following: expand reach to
economically-disadvantaged regions, equal encouragement for
resource partners to collaborate with other agencies and
organizations, focus on technology adopting in this hybrid work
environment, focus on streamlining reporting.
We heard a little bit of that today in terms of the
administrative requirements. Designated marketing specifics for
resource partners, the reauthorization of the WBC Program along
with other resource partners, and also support increased
appropriation and funding for the WBC.
I thank you for your time today and I look forward to
answering any of your questions. It's truly an honor to be
here.
[The prepared statement of Ms. Somerville follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Cardin. Thank you very much. [Applause.]
Chairman Cardin. And you did it exactly in five minutes.
That's really good.
Mrs. Onwuka.
STATEMENT OF PATRICE ONWUKA, DIRECTOR OF THE CENTER FOR
ECONOMIC OPPORTUNITY, INDEPENDENT WOMEN'S FORUM, WASHINGTON,
D.C.
Ms. Onwuka. Good morning. Thank you, Chairman Cardin,
Ranking Member Ernst, and the Members of the Committee, for
having me to appear today.
I work for the Independent Women's Forum and, as mentioned,
we want women to value free markets and personal liberty and so
we advance policies that enhance people's freedom, opportunity,
and well-being.
I've got to say entrepreneurship has created ladders of
opportunity for women of all ages, backgrounds, and races. So
it's critical to ensure that government policies do not erect
barriers to opportunity for women.
Now the growth of female entrepreneurship over the past few
decades has been tremendous. As the Ranking Member mentioned,
women own 12 million businesses, small businesses, or 43
percent of them.
Interestingly, only about one in 10 actually employ
workers. Most women that own businesses are one-woman shops and
they tend to be concentrated in sectors that track closely with
where women's labor force participation is.
Most female business owners strike out on their own because
they're looking for independence, flexibility, and the ability
to fulfill their passion. This actually sets them apart from a
lot of their male counterparts.
Now despite many bright spots, women's businesses face
struggles. Some challenges are universal to men- and women-
owned businesses, such as labor shortages. We've seen this in
the national economy. Inflation, unfortunately, still has not
gone back down to pre-2021 levels. Regulations, taxes, and
uncertain economic conditions.
Average women's revenue for women-owned businesses are
rising but they lag behind those of firms owned by men, a lack
of capital. I'm sure we're going to hear a lot about that.
Interestingly, men start their businesses with six times as
much capital as women do.
Women also lack robust networks and that particularly is
true in rural environments. Almost half of female founders cite
a lack of available mentors or advisors as an impediment and so
it's important that government programs where private programs
are not available be a support to them.
Two additional challenges to starting businesses that I
actually think are directly the result of government-imposed
barriers to building human capital, Number 1, overly
restrictive occupational licensure at state levels, and Number
2, restrictions on independent contracting.
I'll skip a little bit on the occupational licensure since
that tends to be a state level issue.
But on independent contracting, many women have found the
flexibility and the freedom to balance work-life-careers by
being an independent contractor, and unfortunately we see some
congressional legislation currently pending that would impose
restrictions on the nation's 65 million freelancers in this
country.
I bet you we have some freelancers right in this room
today. They're not traditional employees. They work for
themselves. They define when, where, and how they work, and for
women flexibility is what allows them to continue to raise
their families, to take care of aging parents and sick family
members, and, frankly, just to fulfill their passions.
So it's important that Congress does not needlessly
reclassify independent contractors across this country. We
would lose thousands of jobs, millions of jobs, frankly, and
raise business costs on small businesses by anywhere between
$18 to $64 billion each week.
So Congress should not be nationalizing independent
contracting. A piece of that, though, a piece of the
entrepreneurship and what makes it so interesting is that it
allows for flexibility for care-giving and I dropped my kids
off right at daycare before this, so I understand how important
it is.
That's why we should make childcare options more
affordable, plentiful, and diverse. Diversity is key. Not every
parent wants a formal childcare center. Some informal childcare
options that are home-based care, for example, or, frankly,
staying with relatives is really important and, unfortunately,
unnecessary regulations that don't have anything to do with the
quality of care in childcare centers is increasing costs by up
to $1,800 per child each year.
So there's opportunity for us to look at legislation that
would make it easier for small businesses to be able to offer
quality childcare for their employees and I thank Senator Ernst
for mentioning the Small Business Childcare Investment Act
because I think that's one of those opportunities.
Congress needs to consider also just reducing the burden on
small businesses. On average, regulatory costs amount to
$11,700 per employee each year, and small businesses, they are
the ones who bear the brunt of those increased regulatory
costs.
So there are lots of measures that are floating around that
look at how do we ensure that the Small Business Administration
is ensuring that every new piece of regulation that is passed
by Congress does not impose new compliance costs on small
businesses.
I have lots of other ideas but I will stop right there.
Thank you.
[The prepared statement of Ms. Onwuka follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Cardin. Thank you very much for your testimony,
appreciate it very, very much.
Ms. Sweeney.
STATEMENT OF NIK SWEENEY, FOUNDER/CEO, AMANI NICOL WELLNESS,
BALTIMORE, MARYLAND
Ms. Sweeney. Good morning, Chair Cardin, Ranking Member
Ernst, and Distinguished Members of the Committee.
It is a pleasure to be here and I'm honored today as a
business owner in Baltimore, Maryland, sharing my experience
with the Baltimore Metropolitan Women's Business Center.
I'll first start with Amani Nicol Wellness, where we are
today and how we would not be in the position that we are if it
was not for the support of the WBC.
So in 2019, unemployed with this big mission and only
$2,000 in my pocket and an opportunity to make this dream
happen, we developed an innovative approach to help disrupt the
health care system when it comes to prevention and management
of diabetes.
But how are we able to do this? Well, at this time we are a
for-profit social enterprise which means there are two sides to
our business model, one specifically for women who are looking
to get well while we're able to leverage those resources to
fund our programs for women in underserved and under-resourced
communities.
We are a CDC-recognized prevention program with the highest
rank that the CDC delivers which is 4+ recognition because of
our ability to sustain our impact.
We partner with Notre Dame School of Pharmacy as an
accredited diabetes self-management provider to support women
specifically with Type 2 diabetes.
We were accepted to Innovation Works and Accelerated
Program that helped us to raise our first six figure capital
raise and we have partnered with the Office of Women's Health
to help support self measuring of blood pressure, our Blood
Pressure Program.
In 2021, in the midst of the pandemic, we were fortunate
enough to be able to relocate from a top office to a
professional office park that more than doubled the size and
helped us to become ADA-compliant so that we could benefit from
becoming Medicaid-approved, contracted with six managed care
organizations from Aetna to BlueCross, as well as Medicare.
Why is that significant? Because in Baltimore City alone,
one of the cities with the highest disparities in terms of
diabetes, we are one of only four Medicare providers when it
comes to diabetes prevention.
We're happy to note that we're also the only diabetes
prevention program for the deaf and hard-of-hearing in the
entire country and yet we're facing many challenges and
barriers.
While all that success if notable, it would not be possible
without the support of the Baltimore-Washington WBC where as
soon as we closed doors in March of 2020, within a week we
received a mentor, Carmen Braxton, who for nine months walked
us through strategically to keep us on point so that those
goals that we just outlined could become realized.
So as a result of that, we were able to contract federally.
We were able to expand access, including to the Hispanic-Latino
community. Our Diabetes Prevention Program that was launched in
2022 was the first one launched in the state of Maryland next
to Johns Hopkins.
So while all that sounds great, what about these barriers?
Well, interestingly, we had just provided access to women and
the deaf community and three months later, April 2022, I was
diagnosed with breast cancer. With capacity constraints,
revenue suffering, and trying to figure out how to keep working
because there was no option to close, what mattered most would
be the resources and the ecosystem like that provided by the
WBC.
You see, it goes full circle with support. Being able to
access other resources like additional funding would not have
been possible. Being able to benefit from Morgan State
University who is a partner for us because we are able to
benefit from interns and a Master's of Public Health Program
and Doctorate Programs.
We are excited because that program is the reason why Amani
Nicol Wellness did not become one of those businesses that
failed. In less than four years in the heart of a pandemic, we
are supporting the health in Baltimore and Maryland as a whole
because of their efforts.
So reauthorizing that program, sustaining the money that it
needs in order for it to continue is not just about helping the
women entrepreneurs like myself to feel good about the dream
that's been realized but it is a powerful impact on the
community as a whole and not just for today but we're talking
about the ability to affect generations to come.
Thank you. [Applause.]
[The prepared statement of Ms. Sweeney follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Cardin. Thank you very much for your testimony,
but thank you for what you have meant to our community in
Baltimore. We appreciate it as a fellow Baltimorean.
Mrs. Koch.
STATEMENT OF CATHERINE KOCH, PRESIDENT & CEO, K-TEC SYSTEMS,
INC., ST. FERNDALE, MICHIGAN
Ms. Koch. Chairman Cardin, Ranking Member Ernst,----
Chairman Cardin. Your mic's not on.
Ms. Koch. Chairman Cardin, Ranking Member Ernst,
Distinguished Committee Members and guests, good morning.
My name is Cathy Koch. I am the Founder and Co-Owner of K-
Tec Systems, a Detroit area manufacturer of temperature
sensors, wire harnesses, and control systems. We serve diverse
industries, including automotive, aerospace, food, medical, and
chemical.
I am also an alumni of the Goldman Sachs 10,000 Small
Business Program.
It is an honor to be here today. I appreciate your
invitation and your attention to leveling the playing field for
female small business owners.
I would like to begin by thanking the committee for its
bipartisan work last week to pass a series of bills to
modernize the Small Business Administration.
I'm here today to share my personal experience and the
unique barriers I have faced and, importantly, what can be done
to create equity and leveling the playing field.
Let me start from the beginning. It was 1989. I had a one-
year-old daughter. I was a recently divorced single mother and
I was working in sales in a male-dominated auto industry. '89
was a different time. I loved sales and I loved being a mom,
but I was told by my male boss that a woman couldn't do sales,
let alone a new single mom. I disagreed.
I knew my value and my talent. So I went to a competitor.
While things were better, I was still held back. Eventually, I
realized the only way I could reach my true potential was to
start my own business. I put together a business plan. I sought
a loan from a traditional lender but because I was a woman, I
couldn't get one without a co-signer. In fact, I hadn't been
able to secure a loan without a co-signer until three years
ago, even though I've been profitable in business every year.
Do you think male small business owners face similar
circumstances?
I can honestly say the women I speak to are not aware of
the Women's Business Centers and I don't know the programs they
offer. Wow! Since I couldn't get a loan to start a business, I
bought a house with a land loan. I used $10,000 from the loan
to finance the start of K-Tec. I had succeeded in overcoming
the first challenge female small business owners face, far more
limited access to capital than their male counterparts.
Starting a business is hard. I made sacrifices. I brought
my daughter to work with me regularly because like many female
small business owners access to affordable and reliable
childcare was another barrier I faced.
Eventually my hard work paid off. We were doing business
with every major automobile manufacturer and had broken into
other industries. Then COVID-19 changed everything. I didn't
think my company would survive. Thanks to PPP, EIDL Loan, seed
loan from Great Lakes Women's Business Council, and my amazing
employees, K-Tec pulled through COVID and is thriving again.
In fact, we are doing some of our most meaningful work yet
with the new contract to supply temperature sensors for the
transportation of a new cancer drug.
Here's the truth. My story, while troubling, is a success
story. The challenge that I faced and still face didn't stop me
but they persist. The extra challenges female women businesses
face in our nation's economy output.
Think of the charge we could put into our economy if we
weren't wasting time and energy breaking through these
barriers. As this committee continues to work, I offer these
perspective where Congress and the SBA can focus to give us a
fair shake.
First, make mentoring and coaching opportunities more
accessible and tailored to the women they serve. I wish I had
more female mentors who understood my situation and could help
me navigate the challenges of starting a business. That is why
I mentor female entrepreneurs.
I can honestly say that women I speak to are not aware of
the Women's Business Centers and don't know the programs they
offer.
Second, reform the procurement process. It is nearly
impossible for small business owners to sell their product to
the Federal Government. Even though I am a WOSB, I've
effectively given up and I'm far from not alone. It's no wonder
the SBA regularly misses its five percent contracts awarded to
female small business centers.
Here's a true story that should resonate. My products are
currently purchased by the U.S. Air Force. They aren't bought
from me. They're purchased from a larger male-owned business
who quite literally is the middle man because he can afford the
resources to navigate the procurement process. If that doesn't
trouble you, consider this.
The Federal Government is paying more for them than they
would be purchasing directly from me because he marks up the
price. The only reason for this is because the procurement
process is too difficult and resource-intensive to navigate.
And third, continue to modernize the SBA to address the
challenges of today's small businesses. A lack of access to
childcare is a workforce issue and a small business issue and
it must be treated as such.
I'd like to thank this committee and Senator Ernst for
working to address the childcare challenges small owners face.
We must also examine how the SBA Federal Government can
increase access to affordable capital for small businesses.
I could share more as this is a real passion for me.
However, in the interest of time I would conclude by thanking
the committee. I look forward to answering any questions you
have and stand ready to work with you to find solutions.
Thank you.
[The prepared statement of Ms. Koch follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chairman Cardin. Well, thank you very much for your
testimony. [Applause.]
I must tell you we've always been impressed with the
Goldman Sachs 10,000 Small Businesses. We now see a face for
one. So thank you very much for your testimony.
Well, I just want you to know, Senator Ernst, I know, will
agree with me, we hold many hearings during the course of a
Congress. The four of you, very impressive testimony, very
helpful to us, and each one of you stayed exactly within the
five minutes. That's the type of--that's right. It is unheard
of here. So thank you very much for the input that you've made
to our committee.
I just really want to underscore a couple points. I'll
start with Mrs. Sweeney. We had a hearing that I chaired in the
Senate Finance Committee last week on transplant needs which
basically we do a lot of kidney transplants because people are
not taking care of their diabetes and hypertension.
So what you're doing is critically important for the
individual, but it's also important for our health care system
because dialysis and transplants are extremely expensive,
necessary but expensive, but if you do the maintenance and
prevention of diabetes or management of diabetes and dealing
with hypertension, you reduce significantly the number of renal
diseases, particularly end stage renal disease.
So I just want to thank you for that, and you're focusing,
which I thought was really extremely impressive, on underserved
communities.
So how did you get into that commitment and does the system
reward you for reaching out because, as Mrs. Koch said, a lot
of people don't know about the services. You have to do
outreach. So how did the SBA tools help you in reaching this
very vulnerable community?
Mrs. Sweeney. Well, thank you.
With the WBC, we were able to focus on prevention right at
the heart of the pandemic. That has always been our focus, but
with the impact of COVID, that's where we narrowed down on
prevention as the primary focus.
One out of three adult Americans have pre-diabetes which is
the precursor. So what is the support that we have? Well, (1)
we are reimbursed through Medicaid and Medicare. Those are
small numbers. Where the barrier comes is that there's a lot of
administrative responsibility on our staff and medical
reimbursement does not cover it all.
We're also a for-profit. So that limits our ability to get
a lot of the funding that's in place. Maryland alone has
received millions just these past few years related
specifically to diabetes prevention and management, but we're
rarely ever in those conversations. So that's one of our goals,
but we do a lot of outreach in the community and a lot of that
is done with our outreach team and that is primarily because
that is the only way we're going to keep the conversation going
about these preventable illnesses.
Chairman Cardin. Thank you.
The report that I referenced in my opening statement points
out the disparities with women-owned small businesses. The
number of loan rejections are higher than the male businesses.
The number of women-owned businesses that have to use their own
savings and resources and family resources versus their male
counterparts is much, much higher and the list goes on.
The number of 7(a) loans, the number of 504 loans are much
lower than the demographics would have you think would be
right, and then you go to venture capital which is almost
nonexistent in women-owned small businesses.
Then on the contracting side, you mentioned this, Mrs.
Koch, the government has reached all of its goals on small
business set-asides, except for women. We have not reached the
five percent which is not acceptable.
So, Ms. Somerville, you mentioned the use of the Women's
Business Centers, the SCORE Program for mentoring, and we
talked about the need for mentoring, and it seems to be working
well for you.
Mrs. Koch, you had some concerns as to whether we have
women mentors available which I think is a really strong point
in the SBDCs.
How do you put together the tools that are there today and
how can we make them more effective?
Ms. Somerville. I had a really good experience in terms of
outreach and exposure to the different tools that are available
at each of the SBA resources and one of the greatest take-aways
was the building of the networks that are offered that allowed
me to have access to other ways to generate revenue.
For example, with the Women Business Center, I was
introduced to philanthropic opportunities in which I was able
to compete at a pitch competition, if you will, to gain
additional resources.
I was able to win about $14,000 and it enabled me to buy
the IT tools I needed, my computers, licenses to build my
company and so I think it's the outreach and it's the resources
that they exposed me to that were also in the community
available.
I simply would never have been aware had they not granted
me the opportunity, access, and exposure.
Chairman Cardin. Senator Ernst.
Senator Ernst. Thank you, Mr. Chair.
Patrice, I'll start with you. In your testimony, you had
highlighted findings from the U.S. Chamber of Commerce that
demonstrated businesses with 50 employees or fewer incur
regulatory costs that are nearly 20 percent higher than for the
average firm.
Earlier this year, I introduced the PROVEIT Act which will
hold federal agencies accountable when they overlook important
due diligence requirements as they impose sweeping regulations
that maybe aren't right for small businesses.
Do you think that businesses with 50 employees or fewer
should be subject to the same regulations as businesses with
over 500 employees?
Ms. Onwuka. Well, Ranking Member Ernst, I mean, I think
that they are unfair. A lot of mom and pop shops, they don't
have the same resources as large companies do, particularly
when it comes to compliance costs and legal experts that they
have. So that they can dive into the minutia of all of the
federal code and figure out what regulations are new and how
they can, you know, abide by them.
When we think about women entrepreneurs, I mean, the
members here, the panelists here have talked about it, but I've
also talked about the research that, you know, you're starting
with a capital deficit to begin with and so you're trying to
build your business and at the same time trying to figure out
what the regulatory burdens are at the federal level, not to
mention state and local regulations that add a new layer of
challenge.
So, absolutely, I think your bill and there are other bills
on the House side that look at, you know, every piece of new
regulation coming out from every single agency, from Energy all
the way to Labor, to ensure that there's going to be zero costs
on small businesses and then to ensure that at least small
businesses understand what those regulations are so that they
can figure out how they can comply with them.
Senator Ernst. So the regulatory burden is pretty heavy on
our small businesses.
What about those broader economic challenges, like the high
interest rates, workforce challenges, how do those affect our
women entrepreneurs, as well?
Ms. Onwuka. Sure. Well, labor shortages are obviously not
new. For decades some industries, like construction, have had
them, but we're seeing them in industries where women are
concentrating their businesses.
In the retail industry but particularly in caring
industries, whether it's home care services and in AIDS,
whether it's, you know, daycare centers, childcare, a lot of
businesses, small businesses find it hard to find people to
compete with larger companies that can offer greater pay and
benefits and so, you know, all of these make it difficult for
you to be able to hire and retain your folks and then add to
that the regulatory costs that can come with keeping people
employed.
Senator Ernst. Thank you.
As I mentioned in my opening statement, women in rural
communities lack the same resources available to those that are
living in more densely populated areas and as I mentioned,
there are four WBCs located within a 50-mile radius of
Washington, D.C. and yet there's only one that is located in
the entire state of Iowa.
So how can we better assist women in those rural
communities?
Ms. Onwuka. Well, interestingly,--thank you, Ranking
Member. Interestingly, there are a couple of different pieces
that I think rural female entrepreneurs--challenges that they
face.
I mean, women, they tend to have lower incomes to begin
with. Obviously that means less capital to start their
businesses. They have higher poverty rates, interestingly, and
then there are the infrastructure gaps and particularly when it
comes to technology, we're seeing that rural women have--
they're the least likely group to have internet access at home.
So when we look at the information system today and how
many new entrepreneurs are starting their businesses simply
with this little gal right here in their hands, if you don't
have access to internet at home, then it's going to make it
very difficult for you to be able to sell your wares on the
internet and to find folks.
So I think looking at how we build infrastructure, make
sure that infrastructure is particularly high-tech
infrastructure is available, it's going to be important, and
then, you know, I think the mentoring and the peer-to-peer
coaching is very important and so while it may be hard to find
mentors, there may be peers in your area.
You mentioned the fact that there are so few women business
centers in rural areas, but maybe there are peer networks that
can be built up and utilize technology to tap into all of the
other women centers that are in other states or in other
regions. That can be a way of helping to ensure that our rural
female entrepreneurs have access to the resources that they
need.
Senator Ernst. Yes, and I appreciate you mentioning how
much work we do on our phones, and I think a lot of women do
actually start by using this type of technology and in Rural
Iowa I know of one woman that lived in Southern Iowa. She did
not have internet access at her home and she lived on a farm
and so she would drive into her little tiny rural community in
the evenings and sit outside of the Iowa State Extension Office
and draw off of their Wi-Fi and do all of her ordering and
distribution on her phone. So we've got to figure out better
ways of doing business.
So thank you very much, really appreciate that. Thank you,
Mr. Chair.
Chairman Cardin. Senator Hirono.
Senator Hirono. Thank you, Mr. Chairman.
Welcome all of the panelists and you brought your cheering
section, I see. So welcome to all of the women in the audience.
Aloha. [Applause.]
So for our entire panel, how many of you had trouble
getting access to capital? Raise your hands.
[Show of hands.]
Senator Hirono. So obviously and I bet, yes, I see some
hands from people in the audience, that that is one of the
often-cited very practical concerns is access to capital.
Is there anything more that Congress can do to enable small
businesses, especially women-owned businesses, to have access
to capital? Any of you have very specific ideas about what
Congress can do? Anybody? Go ahead.
Ms. Koch. Thank you.
They could access more--the greater loans. They have a
micro loan that SEED has in our local community. It's only
$50,000. It's been the same for, as I know, the last 15 years.
Nothing's changed.
Then also look at second stage companies. As myself, you
know, you start out at one point, you need different needs as
you grow. Let us continue to grow.
Senator Hirono. Anybody else? Yes, Ms. Sweeney.
Ms. Sweeney. Yes, thank you.
The beauty of the WBCs is their ability to provide
additional resources. There has to be an opportunity to include
access to capital internally. From micro grants, other private
funding within Baltimore, there's a huge resource, so an
ecosystem built on nontraditional funding. Being able to tap
into those resources and leverage those opportunities within
the WBC so that it increases access to capital for mentees.
Senator Hirono. Anyone else with other ideas?
Ms. Onwuka. Yes, Congresswoman. I would just add that and
underscore particularly small business in the childcare sector
that are nonprofits being able to have access to the for-profit
SBA loans and then broadly I think it's important that women
are able to keep as much income coming into their households as
possible and that gets into tax policy but also gets into
regulatory sides, but that's what I would suggest.
Senator Hirono. Ms. Somerville, did you want to add
something?
Ms. Somerville. Yes, ma'am. Thank you for the opportunity
to share.
I'd also like the recognizing of larger business and the
strengthening of the partnerships between the larger business
and the small business in terms of mentorships. That's another
way to continue to enable our success.
Thank you.
Senator Hirono. I know some of you, I think at least two of
you have benefited from the mentorship opportunities that were
provided through the Women Business Centers.
So was that a very critical aspect of your ability to start
your businesses, the mentoring? What can we do to increase
those mentoring opportunities, Ms. Somerville?
Ms. Somerville. It was truly a significant supporter. I
think the biggest thing was with the WBC and applying for my
women-owned certification as a small business was the
handholding aspect. The flexibility, as the Ranking Member
Ernst mentioned, that we do a lot of things in the evenings.
I think they were relentless in being accessible on
weekends and late evenings and literally enabling me line by
line, step by step because the process can be extremely
challenging navigating through that. The support was unyielding
and I think the flexibility that the program offers in terms of
accessibility was bar none.
Senator Hirono. I have visited the Women's Business Center
in Honolulu and I know that it makes a really big difference.
One of you mentioned the need to access broadband. I think
that's very true and that is why some of the funding that we
provided for this purpose, especially for rural areas, through
the Infrastructure Bill and others, I think that's going to be
really critical to enable entrepreneurs in the rural areas of
our country to be able to sell their products.
So I think that was Ms. Sweeney who mentioned that. So
thank you very much.
I think one of the challenges is the need for affordable
childcare and our country provides less support for early
childhood education and childcare than just about any other
developed country, probably the least, and so there are some
bills that would provide additional support for access and
affordability to childcare.
Would you agree that for the panel that that is an
important element of enabling business women to--yes, to have
successful businesses?
Ms. Koch. It is hard. I lost most of my female workers. It
was hard for them. We have a training program that we started
because we partnered with a local organization called COTS.
They are a nonprofit that helps take women off the street with
children. They teach them skills and we bring them in and teach
them how to make wire harnesses and provide a place for them to
work. If we don't have work, we sub them out to our
competitors.
Senator Hirono. And, frankly, the only three countries that
do worse than us in terms of supporting childcare affordability
and availability, Ireland, Costa Rica, and Turkey.
So we need to do a heck of a lot better and there are a
number of bills that would enable the affordable access to
childcare, and I think that's something that we need to do for
the women in our country and I say about time. Do you agree in
the audience? Go ahead and clap. [Applause.]
Senator Hirono. All right. Thank you. Thank you, Mr.
Chairman.
Chairman Cardin. Certainly.
Senator Hawley.
Senator Hawley. Thank you very much, Mr. Chairman. Thanks
to the witnesses for being here.
Ms. Koch, could I just come on to you? I'd like to talk a
little bit more about your manufacturing background as well as
about women in the industry.
Can you just give us a sense of what some of the biggest
constraints are to success in manufacturing in particular for
women-owned businesses?
Ms. Koch. There's not enough women-owned manufacturers to
get mentorships from, but the things that are hurting us today
are the employee rates, the finding the good talent, learning--
I didn't have a manufacturing background. I had a marketing
background. I just had a passion on making things. So I did.
But there's a lot of--we need help with capital, being able
to get to that next step. I've been presented to companies that
wanted to do work with us but I couldn't get the funding or
they thought we were too small and we do work with all the
automotive companies, but, you know, to get to the next level
is difficult, especially in this field of manufacturing.
Senator Hawley. Absolutely. Let me just ask you about an
issue in your industry, in the manufacturing industry, which is
offshoring, particularly with regard to China.
I'm just curious if the offshoring of our manufacturing
capacity to China over decades now has created any challenges
for you that you see, whether that's in the educational
pipeline as it were that we used to have in this country that
we've now lost in many instances because now those jobs have
gone overseas and so now we don't have the education to train
workers any longer or whether it's other things.
I'm just curious about your firsthand experience.
Ms. Koch. Okay. I can talk about the education piece.
Senator Hawley. Please.
Ms. Koch. STEM. Okay. I'm heavily believing that STEM is
very important right now. It's where the future of
manufacturing is. It's where the future of the jobs are. So we
have to start early in our schools partnering with
manufacturing companies, letting us bring them in early, at an
early stage, also have mentoring and good programs to start
with children at early ages, even in elementary, to show how
important STEM is.
Today, even just in the female sector, 29 percent of women
of the whole STEM industries are holding those positions.
That's still very low in this day and age.
Senator Hawley. Yeah. Yes, thank you for that. You talked
about the need to cut red tape and reform the procurement
process, and I'm just wondering if you have any specific
recommendations for this committee that maybe we could help
with when it comes to that.
Ms. Koch. Navigating the system is difficult. You can get
certified as a WOSB through our local chapters and our local
thanks to WBENC and our local Great Lakes Women's Business
Council.
However, once you get certified, then you go to the system
and there you just get a runaround. If you ever try to go get
into their--you have to go hunt and find the contract and then
when you get the contract, the language is so difficult to
understand because it's a military language, it doesn't break
it down to what we're used to in the industries.
So I think that the other thing is that having more of a
networking group where you bring your procurement agents to
some of our events to find us, help connect those procurements,
the purchasing to see what we do, that would really help. They
have events all the time through WeBack where women bring and
show their products. Why isn't the military, why isn't the
government there?
Senator Hawley. Very good. Thank you very much. Thanks to
all of the witnesses for being here.
Thank you, Mr. Chairman.
Chairman Cardin. Senator Hickenlooper.
Senator Hickenlooper. Thank you, Mr. Chair, Madam Ranking
Member.
I thank all of you, the entire audience for being here, but
especially you being on the firing line here.
I had the great fortune. I was an entrepreneur that had a
very hard time raising money to build my first brew pub, a
restaurant that brewed its own beer. I got turned down by 33
banks and I was just trying to get $50,000. You know, no one
knew what it was back then, but the process, the bank that
finally took the risk on me was a women's bank, which I thought
was ironic. [Applause.]
Senator Hickenlooper. But they understood the concept of
doing something that someone hadn't done before and they also
understood the challenge of having to deal with the bureaucracy
that we often find.
I think we're in a global competition in terms of
technology and innovation. I think whether you're talking about
climate change, whether you're talking about quantum computing
or artificial intelligence, we need all hands on deck and we
cannot leave a large portion of our population not part of the
effort, and I think it's going to have to be a national effort.
I think you're all working in different aspects of this that
really are important and going to bear fruit.
It's not a question of fairness and making sure people get
good jobs. That's great. That's very important. But the nation
needs everyone to be committed to this effort because we are in
this incredible competition.
So, Ms. Somerville, let me just ask and, you know, roughly
25 percent of all our innovation firms are led by women. I
think that's a generous estimate. How can the SBA better
implement education programs among its resource partners to
provide young women with the hands-on training to develop tech
businesses and to support innovation?
Ms. Somerville. Thank you for that question, sir.
One of the things I think we focus on in my company is
internships, partnering with academic institutions to develop
curriculum that will enable individual students from high
school and college to apply the academic piece in the real
world, so looking at what those technical competencies are
needed in the real world and infusing them in the academic
curriculum, and then offering those internships sponsorship,
ally ships, mentorships, if you will.
We also integrate in terms of being keynote speakers to
tell many students what it's like in the real world. We sponsor
a lot of STEM events which is also good in terms of IT because
one of the things we've been able to do is to with the
resources we receive from WBC and other partners was to build
out our IT infrastructure so we can employ people and educate
people throughout the nation.
We even have an employee in a teeny tiny home in the middle
of Colorado somewhere, very rural area, and so it actually
works, but exciting, our youth, about the opportunity and
giving them opportunities to demonstrate that and partnering
with academic institutions, podcasts, being very relevant and
relatable with today and STEM is definitely, as mentioned
earlier, it's key in terms of our IT infrastructure.
Believe it or not, that mentorship goes both ways because
we learn from the amazing bright future leaders of women and
young men in our communities. So the future looks bright and
when we get out there and have that outreach opportunity, but
it starts with the academic institutions, sir.
Senator Hickenlooper. I love your emphasis on
apprenticeships and partnering with those. I think you all at
various times in your materials support that and, you know, the
Department of Labor has apprenticeships. I mean, Commerce has
apprenticeships. Everyone's got apprenticeships but no one's
really focusing on making that a national movement because I
think especially for people that are from lower income
backgrounds apprenticeships allow them to have those models.
In Colorado, I was partners in a project with a woman named
Joyce Meskis who started the Tattered Cover Bookstore which was
the most amazing bookstore any of us had ever seen, and she
told me one time, she said the hardest thing was I didn't have
any role models as a woman entrepreneur. There was no one I
could go and hang out with and she said, you know, if I hang
out with the guys, they didn't treat me as a guy, you know, and
I think that's something we too often overlook.
Ms. Sweeney, research shows that women are less likely to
choose being entrepreneurs and that there's a resistance there,
largely it is because they don't encounter other women
entrepreneurs.
So what type of public/private partnerships should we think
about expanding to foster an environment where we create an
ecosystem where women have more access to mentors?
Ms. Sweeney. Well, a good example of that is actually the
Baltimore Metro Women's Business Center because they are
connected to Morgan State. So they are right there amidst other
programs that have already launched. Their entrepreneurial
programs are designed for college students and they have
extended beyond that to high school students.
For us particularly, we're a partner. We take on summer
youth workers and now we're moving into taking in youth workers
throughout the entire year starting in the fall.
So it goes back to some of those partnerships that was
mentioned earlier that we get into not just the high schools
and colleges but we start working our way through middle
schools and we can build from the WBC because of all the
partners that they're leveraging so that we can begin to have
real world experiences and I'll say I'm a 10K SB alum, as well.
So that partnership already there has a built-in system to
help us to continue to help the next generation of
entrepreneurs.
Senator Hickenlooper. All right. Well, I'm out of time but
not out of heart and I love what you guys have all done. I
think it's inspirational and delighted to see ways we can help
expand and accelerate the progress you all have made.
Yield back to the Chair.
Chairman Cardin. Senator Rosen's timing is just perfect.
Senator Ernst has already mentioned, several of you have
mentioned one of the initiatives that we have taken to expand
the tools of the SBA for childcare businesses, nonprofits, and
I want to congratulate Senator Ernst for her leadership on that
and Senator Rosen for her leadership on that, and we're now
joined by Senator Rosen.
Senator Rosen. Thank you, Mr. Chairman. Thank you, Ranking
Member Ernst, for your patience. We were in a Homeland Security
markup. We just finished and I ran over. So I appreciate your
timing and thank you all for being here today.
Obviously we're here talking about women-owned businesses
and I'm going to talk, of course, about my state Nevada and in
Nevada, women make up 45 percent of all businesses throughout
the state which is equivalent to more than 80,000 small
businesses that are women-owned.
In fact, Nevada has led the nation in women-owned
businesses for the last decade and so I'm so proud of all the
women entrepreneurs and I want to see women-owned businesses
increase in the years to come and so one way to ensure that
increases is to prioritize, of course, the proper resources for
women and other underserved communities and so it's why I
introduced the Minority Entrepreneurship Grant Program with
Senator Tillis and this legislation would establish a minority
entrepreneurship grant program at SBA.
It's going to award grants to minority-serving
institutions, historically black colleges and universities to
promote and increase opportunities for minority student
business ownership and entrepreneurship.
So, Ms. Sweeney, can you speak to the resources that you
utilized to start your business and how did you hear about them
and what do you wish you had known or had available to you so
we can maybe potentiate that? Ms. Sweeney?
Ms. Sweeney. Thank you, Senator.
I've benefited greatly right at the start of the pandemic
from the Baltimore Metro WBC. That connection was pivotal for
us being able to be able to strategize what our next step would
be at a time of great uncertainty.
So I was thankful that I knew about the WBC, but what wish
I knew before, before I jumped into entrepreneurship that I had
a mentor prior to. So a lot of our initial meetings was to
clean up some of what needed to be cleaned up.
So the first step, of course, is how important it is when a
woman is ready to start a business, how connecting with the WBC
is so important from the entrepreneur education perspective.
Thank you.
Senator Rosen. Thank you. I do agree. Mentors make all the
difference in so many things, so many things.
Next, I want to move on to reducing burdens for our small
business owners, something that I think you all know about, as
well, and because there's many factors, as we know, that go
into starting a small business, develop your business plan, you
register your business, you have to understand perhaps your
compliance requirements, and, of course, so much more,
depending on what type of business it is.
I've heard from Nevadans about the complex process of
starting their businesses and not fully knowing every operating
requirement to ensure their business is up to par for their
state standards.
So it's important that the Federal Government creates a
streamlined process for Americans to work through the
oftentimes bureaucratic red tape to start a small business more
easily. It's why I introduced The One Stop Shop for Small
Business Licensing. It's going to require the SBA to create a
central website for licensing and business permit information.
All these materials kind of in the wish you had known before
you started category.
So again, Ms. Sweeney, can you speak about your experience
in getting the proper licensing and permit requirements and how
difficult was it and what else do you think we can do to
streamline a little bit?
Ms. Sweeney. Thank you. Because we are medical, we are part
medical, so there's a lot of compliance around Medicaid,
Medicare. The biggest piece, as you mentioned, is not just
being able to go to a website because you have access to the
site.
Senator Rosen. Right.
Ms. Sweeney. So what has helped me specifically has been
mentorship within the State of Maryland and that mentoring has
actually come through some of our managed care organizations,
our direct contact with our partners, like Aetna, like Notre
Dame School of Pharmacy.
So what I think of and in my experience, wouldn't it be
awesome, especially with the burden of health care right now,
if there was actually a committee in place or an infrastructure
in place that would help people who are interested in tapping
into health care to be able to navigate the compliance much
better and we know then we would see a huge increase in
especially small business owners that would be willing to tap
into Medicaid and Medicare reimbursement which means more
support for communities that need it the most.
Senator Rosen. Well, thank you. I appreciate especially
working on the workforce, skilled nursing, long-term care, all
of those things, we're all going to need it.
Thank you again, Mr. Chair and Ranking Member, appreciate
it.
Chairman Cardin. Senator Ernst.
Senator Rosen. Okay. Yes. I just want to expand upon that
because so many members of the committee have asked about
mentorship and I want to make sure that once again I highlight
The SCORE Act of 2023 which is seeking to strengthen mentorship
and coaching opportunities for women, especially in our rural
communities.
Cathy, Ms. Koch, in your experience, what obstacles do
women small business owners face when it comes to accessing the
mentorship program and especially maybe in some of the rural
communities?
Ms. Koch. Well, I did not know where to find one. Access to
female mentors that understand my challenges, my challenges
from the time I started my company to the challenges that I
still face today as a growing manufacturer.
I need mentors that are more like someone said earlier. I
had a lot of male mentors early on because that's all there
were and I didn't even know there was such a thing as a coach.
I didn't have access to that. Today I do.
Senator Ernst. So did you--I'm sorry to interrupt, Ms.
Koch. Did you have experience with The SCORE Program?
Ms. Koch. Yes, I did early on and it was--so then it was--
they paired me up with an engineer that was, you know, a
retired engineer. I was young in my career. He didn't
understand anything about running a business and he didn't
understand anything I was trying to ask or say. It was so
embarrassing for me that I just gave up.
Senator Ernst. Okay. And that's unfortunate and I think
it's important to point out when we do have failures in the
system and then how do we correct those failures and I think
that's why it's important that we continually take a look at
The SCORE Program and make sure that we're meeting the right
fit with the needs of the individuals that are accessing the
program.
I want to close with just a final question about childcare
and maybe you can just share your story, as well, because I
know probably a number of you have struggled with childcare and
many in our audience and even as a young worker, I would take
my daughter to work after hours because we didn't have access
to nontraditional times and I think we need to modify the way
we think about childcare because not everybody works a 9 to 5
position and having access afterhours or before school, a lot
of that is really important.
But as a single mother with a young toddler when you were
working, what obstacles did you face when you were starting
your business?
Ms. Koch. Finding the affordable childcare, so that's why
she came to work with me. After school programs that I felt
were good for her, not just a daycare, you know, options,
something that she could still excel and learn in. Even though
bringing her to work with me, I felt like, you know, now I
learned later in life because my daughter is now a--she's a
chemical engineer and she is now a partner at one of the
largest consulting firms and a young mother and she's a female
partner.
So to me, it was probably bringing her here was--now I look
back and think it was probably good for her to see a role
model. However, you know, I felt guilty when I was at work and
she was with me working and I was not paying attention to her.
So having those programs are so important and they're also
important for my employees. I said earlier we partnered with
this program to bring women off the streets and teaching them.
Part of the problem is when we pay them a salary and we pay
twice the amount of our local Michigan wages to start with no
experience and they still can't afford childcare.
Senator Ernst. Wow! That is incredible.
Patrice Onwuka, you had mentioned earlier, as well,
thinking about childcare differently. If you could just help
close us out on how we should think differently about
childcare.
Ms. Onwuka. Absolutely. Thank you, Ranking Member.
Childcare is so important to women and women small business
owners because many small business owners have children and
they're trying to balance how they can raise their kids but
they're also employing, as my colleague here mentioned on the
panel, they're employing workers who need childcare and so,
Number 1, I think we want to be careful about suggesting that
there should be a one size fits all solution to childcare.
I think daycare centers are one form of childcare. You also
have in-home-based childcare that a lot of parents would rather
have someone in a home that they trust than, you know,
necessarily a daycare center. So we want to make sure that
there is many different types of options as possible and I
think you can do that through the Tax Code. I think you can do
that through, you know, different acts.
We talked about the Small Business Childcare Investment
Act. I think that's a really smart way of looking at it and
then ensuring that the SBA provides those resources as a
clearinghouse to where employers can find information about
different childcare options and resources to offer at their
centers.
Senator Ernst. Thank you very much. Thank you very much,
Mr. Chair.
Chairman Cardin. I want to thank again our four witnesses
and thank those that are in attendance for what you do every
day to help entrepreneurship in America.
Senator Ernst and I recognize we have a responsibility as
the Chair and Ranking Member of the Small Business Committee to
modernize and update and oversight the small business laws of
our nation and unfortunately that hasn't been done for a long
time.
So some of the issues that you are referring to, such as
micro loan caps or some of the issues concerning oversight of
The SCORE Program, Congress has not acted on these areas for a
long, long time. The same thing with the financing tools, we
haven't done that.
Well, we're determined to exercise our roles as legislators
in that regard and we've already started that process. We
started that process with the passage last week of 12 bills.
One of those bills dealt with the financing issues by
recognizing we need permanency with mission lenders, with the
Community Advantage Program, and modernizing the 504 Program.
So we are taking steps to try to respond to many of the
concerns that you have already expressed.
We talked a lot about childcare. Childcare is absolutely
essential for women to be able to enter the workforce and
become entrepreneurs and so we have taken steps to remove the
disqualification of childcare businesses from participating in
the SBA financing tools.
So we are taking those steps and there's several others
that we've already looked at.
You've made a lot of really good suggestions that we are
going to absolutely take a look at. The SCORE Program, we need
to make sure that we have mentors that are contemporary with
the needs that are out there and your example points out that
there's improvement that needs to be made. We need a mentoring
program, as some of you have pointed out, extremely important
to your successful start up of business, but let's make sure
that the program is done correctly.
Women's Business Centers are absolutely essential and
you've pointed out that, yes, there is a difficulty in figuring
out how to deal with the tools that are available through the
SBA, but then when you get to the private sector, which is
another important source for help for small businesses, women
are at a tremendous disadvantage and the Women's Business
Centers can make a big difference.
I just want to point out to my Ranking Member four years
ago we had no Women's Business Centers in the Baltimore Region
and Baltimore was our largest city in Maryland. We now have a
center located at Morgan State University and it makes a huge
difference.
We also have one at Bowie, I might say. They happen to be
HBCUs, but connecting to a college campus allows us to connect
to mentors. It allows us to deal with some of the technical
needs that businesses need by connecting the dots and having
the programs available.
So it's important to update the Women's Business Center
laws to make sure that we have the resources to take care of
the people of Iowa as well as the people of Maryland.
So it's past time that we look at how we can exercise our
responsibilities as legislators to update these laws.
I might tell you the Administration took steps in the
Rules. We think we have responsibilities to make sure that
there is legislative oversight and so we also want to make sure
that we don't go a long period of time without us reviewing and
we also want to make sure that as we allow lenders into our
program that there's protection for the public from
unscrupulous-type lending practices.
So all of that is part of our responsibility and we think
we are making progress.
Contracting reform is desperately needed. Many of you have
mentioned that. I understand the DoD has a foreign language in
their rules and we really do need to be able to allow the
access from small businesses, women-owned small businesses to
be able to access government contracting in an easier way.
You don't have the large staff that can get you through
those types of challenges. The resource partners help you, but
we also have to make sure that the agency helps you. So these
are all part of what we're trying to do on contracting reform.
The bottom line is the suggestions that you have made here
will help us in our process in our reauthorization of these
programs and we thank you very much, the four witnesses plus
the people that are in the room. You're invited back again.
[Applause.]
Chairman Cardin. Thank you all very much.
The Committee stands adjourned.
[Whereupon, at 11:20 a.m., the hearing was adjourned.]
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