[Senate Hearing 118-233]
[From the U.S. Government Publishing Office]
S. Hrg. 118-233
VETERAN ENTREPRENEURSHIP:
FROM SERVICE TO SMALL BUSINESS SUCCESS
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HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 15, 2023
__________
Printed for 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
63-160 WASHINGTON : 2026
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COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED EIGHTEENTH CONGRESS
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JEANNE SHAHEEN, New Hampshire, Chair
JONI ERNST, Iowa, Ranking Member
MARIA CANTWELL, Washington MARCO RUBIO, Florida
BENJAMIN L. CARDIN, Maryland 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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November 15, 2023
Opening Statements
Page
Jeanne Shaheen, U.S. Senator from New Hampshire.................. 1
Joni Ernst, U.S. Senator from Iowa............................... 2
Witnesses
Col. Tim Green, USAF (Ret), Acting Associate Administrator,
Office of Veterans Business Development, U.S. Small Business
Administration, Washington, DC................................. 4
Prepared Statement........................................... 7
Dr. Mike Haynie, Vice Chancellor, Syracuse University, Director,
Institute for Veterans and Military Families (IVMF), Syracuse,
NY............................................................. 12
Prepared Statement........................................... 14
Ms. Lisa Shimkat, State Director, America's SBDC Iowa, Ames, IA.. 19
Prepared Statement........................................... 21
Mr. Chris Guerrette, Owner and CEO, Lickee's & Chewy's Candies &
Creamery Dover, NH............................................. 25
Prepared Statement........................................... 27
Mr. Dustin Rhoades, CEO and Owner, Ability Tech, Sioux City, IA.. 29
Prepared Statement........................................... 31
Additional Letters/Statements for the Record
National Association of Federally-Insured Credit Unions..........
Letter Dated November 14, 2023............................... 52
Senator Jeanne Shaheen...........................................
Opening Statement............................................ 54
Questions for the Record
Col. Tim Green, USAF (Ret).......................................
Responses to questions submitted by Senators Booker and Risch 57
Mr. Chris Guerette...............................................
Responses to questions submitted by Senator Booker........... 65
Dr. Mike Haynie..................................................
Responses to questions submitted by Senators Booker, Hirono
and Risch.................................................. 67
Mr. Dustin Rhoades...............................................
Responses to questions submitted by Senator Booker........... 72
Ms. Lisa Shimkat.................................................
Responses to questions submitted by Senator Booker........... 75
VETERAN ENTREPRENEURSHIP: FROM SERVICE TO SMALL BUSINESS SUCCESS
WEDNESDAY, NOVEMBER 15, 2023
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The committee met, pursuant to notice, at 2:38 p.m., in
Room 428A, Russell Senate Office Building, Hon. Jeanne Shaheen,
chairman of the committee, presiding.
Present: Senators Shaheen [presiding], Cardin, Hirono,
Duckworth, Rosen, Hickenlooper, Ernst, Young, and Hawley.
OPENING STATEMENT OF SENATOR SHAHEEN
Chair Shaheen. Good afternoon. The Senate committee on
Small Business and Entrepreneurship will come to order.
I am really honored to welcome everyone today. And of
course, because it is Wednesday and we are having a hearing, we
have votes. So, we have finished the first one, so I expect
members to--Senator Hickenlooper hasn't voted yet.
Okay. So, as you can imagine, people will come and go while
they finish this vote. Hopefully, we are only going to have one
before the hearing ends, so we should be able to hear from all
of you and have a chance for questions.
Today, the committee is going to conduct a hearing on the
state of veteran entrepreneurship and how we can work together
to support our nation's veterans and their small business
goals. I want to welcome our witnesses.
Thank you for joining us today. I am really anxious to hear
about your experiences and what you can share with us about
what we need to do to better support veterans and their small
business aspirations. I want to extend a special welcome to
Chris Guerrette and the folks from New Hampshire who are here.
I have been to Chris's shop, so I know what great candy he
provides.
We are going to introduce all of our presenters in just a
few minutes, but I want to begin just by making some brief
points about veteran owned businesses and their impact on the
U.S. economy. There are approximately 1.8 million veteran owned
businesses in the United States. They produce an estimated $1.2
trillion, with a T, in revenue.
They employ approximately 5.2 million people, and they
support over $232 billion in annual payroll. And through their
military service, veterans often have the can do approach that
makes them really good entrepreneurs.
Their discipline, tenacity, and leadership abilities may be
the reason that veterans are more likely to pursue
entrepreneurship compared to their civilian counterparts. But
of course, veterans are not immune to the struggles that face
civilian small business owners. Access to capital, mentoring
networks continue to be a challenge, regardless of military
service.
I think there is more we can do to support our veterans,
and that is part of what this hearing is about. I am committed
to working with Ranking Member Ernst and my colleagues on the
committee to provide the support, including access to capital,
counseling, technical assistance to the tens of thousands of
veterans who aspire to start their own businesses.
I have a longer statement that I will introduce for the
record without opposition and look forward to the witness
testimony. And now, I will yield to Ranking Member Ernst for
her opening statement.
STATEMENT OF SENATOR ERNST
Senator Ernst. Oh, thank you. And good afternoon to our
witnesses. Thank you very much for being here.
And thank you, Chair Shaheen. Coming out of our Veterans
Day weekend, and I hope everybody was able to celebrate that
day with their loved ones, I am grateful for the opportunity to
examine how the Small Business Administration can better serve
our 1.7 veteran owned small businesses.
As a combat veteran and a retired Lieutenant Colonel in the
Iowa Army National Guard, I want to take a moment to thank our
country's veterans for their selfless service. I also want to
recognize the families of those who have served.
In the Senate, I focused on ensuring our veterans have
access to critical mental health services, and I am committed
to holding the VA and other agencies accountable for recent
telework practices that have created major department failures
and have left calls from our veterans unanswered.
As a Ranking Member of this committee, I am charged with
ensuring our veterans' small businesses, especially in our
rural areas, have access to the more than $25 million in
technical services and resources provided by the SBA's Veterans
Business Development Office. Veteran entrepreneurs are found in
every segment of our economy.
According to the U.S. Census Bureau's annual business
survey, over 99 percent of all veteran owned businesses are
small businesses. In 2019, my home State of Iowa had over
16,000 veteran owned businesses. It is critical rural and
Midwestern veteran owned small businesses have a fair shot
accessing SBA resources.
My bill with a fellow veteran, Senator Duckworth, to
reauthorize the SBA's Boots to Business Program is pending
Senate passage. It also includes language that will ensure
every service member population, including the National Guard,
is equally weighted when SBA determines where to place new
veteran business outreach centers.
In addition, I have fought to reduce fraud and stop stolen
valor in the SBA's service Disabled Veteran Owned Small
Business Contracting Program by including in the National
Defense Authorization Act a provision that encourages agencies
to award more Federal contracts to certified veteran owned
small businesses, discouraging awards made to self-certified
firms.
Veteran entrepreneurs and small business owners are an
important piece of our communities, and I am looking forward to
hearing from all of you about the challenges faced by veteran
small business owners and exploring how SBA can better meet
your needs. So, thank you, Madam Chair. It is great to be with
you again today.
Chair Shaheen. Thank you very much, Senator Ernst. And I
will now introduce our five witnesses. First is retired Colonel
Timothy Green. He is the Acting Associate Administrator of
SBA's Office of Veterans Business Development, or OVBD.
We always love acronyms here in Washington. As Acting
Associate Administrator, Colonel Green is responsible for
leading the OVBD team. We like them because that way we can use
them instead of the full name afterwards.
And formulating, implementing, promoting policies and
programs that equip veterans, service members, and military
spouse owned small businesses with counseling and training,
access to capital, and contracting opportunities. Colonel Green
retired from the U.S. Air Force in June of 2012 after serving
on active duty for nearly 28 years.
He holds a BBA, an MBA, and a master's degree in National
Security Strategy from the National War College. Thank you for
being here. Next, we have Dr. Michael Haynie, who is the Vice
Chancellor for Strategic Initiatives and Innovation and Founder
and Executive Director of the Institute for Veterans and
Military Families, or IVMF.
An Executive Director, Barnes Professor of Entrepreneurship
at Syracuse University, Dr. Haynie is one of the foremost
experts on veteran entrepreneurship in the U.S.. Prior to
joining Syracuse University, Dr. Haynie served as an officer in
the U.S. Air Force for 14 years.
Chris Guerrette is the owner of Lickee's & Chewy's Candies
& Creamery, located in Dover, New Hampshire, which is also
right next to where I live, so I know it well. He is an Air
Force veteran who grew up with a love for candy, which has only
increased as he has tried treats from around the world.
His candies and creamery store, Lickee's & Chewy's, is an
homage to an old military slang term for sweets. Senator Ernst
obviously knows that--yes. [Laughter.]
Chair Shaheen. Within months of retiring from the Air Force
and taking a civilian consulting job with the military, the
candy bar and creamery in his hometown was for sale.
Mr. Guerrette's wife bought the shop, added hundreds of
items, and experienced over 50 percent year over year growth in
the first four years.
Mr. Guerrette has utilized several SBA resources and
products throughout his business development and expansion, and
we look forward to hearing more about his firsthand experience.
I also want to welcome the two witnesses who have been
called by the minority and we will yield to Ranking Member
Ernst for the introduction.
Senator Ernst. Once again, thank you, Madam Chair. And
welcome to Colonel Green, Dr. Haynie, and Mr. Guerrette. Thank
you very much for joining us. I will now introduce my fellow
Iowans who have joined us today.
And the first is Ms. Lisa Shimkat. And Lisa serves as the
State Director for the Iowa Small Business Development Center.
SBDC provides business counseling for entrepreneurs and small
business owners at 15 centers across the State of Iowa.
Ms. Shimkat currently serves as the Board Chair of
America's SBDC National Association Board and has served on the
Iowa Economic Development Authority Board since 2019. Ms.
Shimkat has also served on the Securities and Exchange
Commission Advisory Committee on Small and Emerging Companies.
She has earned several awards and recognitions for her
outstanding service to Iowa small businesses. Ms. Shimkat
earned her Associates of Arts at Iowa Central Community College
before going on to earn her bachelor's degree and MBA from the
most excellent university in the universe, Iowa State
University.
So, thank you very much for joining us, Lisa. Next, I will
introduce Mr. Dustin Rhoades, and Dustin is the Founder and
Owner of Ability Tech, which creates custom adaptive technology
for individuals with disabilities. He founded Ability Tech
after creating a device enabling his son to play baseball.
And I first met Dustin and his son a number of months ago
up in Northwest Iowa, where I actually was able to play
baseball. I was catching a baseball thrown by his son with this
device that he created. It was just a truly wonderful evening,
and Dustin, I am so glad to have you here.
So, Dustin also leads the Ability Tech Foundation, a
nonprofit organization supporting families and caretakers of
individuals with disabilities. A veteran of Operation Iraqi
Freedom and Operation Enduring Freedom, Mr. Rhoades served four
years in the United States Marine Corps. He earned a degree in
Computer Science and Cybersecurity Engineering from Colorado
Technical University.
Thank you to both of you for making the trip to Washington,
D.C. to share with this committee how we can better support our
veteran entrepreneurs and business owners in Iowa, as well as
across the country. So, I yield back, Madam Chair. Thank you
for convening this committee. I appreciate it.
Chair Shaheen. Thank you very much, Senator Ernst. Now we
will turn to our witnesses. We ask each of you to try and keep
your testimony within five minutes.
If you have longer that you would like to submit for the
record, we would be happy to take those as well. And, Colonel
Green, we are going to begin with you and go straight down the
line.
STATEMENT OF COL. TIM GREEN, USAF (RET), ACTING ASSOCIATE
ADMINISTRATOR, OFFICE OF VETERANS BUSINESS DEVELOPMENT, U.S.
SMALL BUSINESS ADMINISTRATION, WASHINGTON, D.C.
Colonel Green. Chair Shaheen, Ranking Member Ernst, members
of the committee, thank you for the opportunity to testify
today on SBA's efforts to empower veterans, service members,
National Guard and Reserve members, and military spouses with
the tools to start, grow, and build resilience small
businesses.
We are grateful for this committee's continued support of
SBA programs that provide training and counseling, access to
capital, and Federal contracting opportunities to our nation's
heroes and job creators. In 2019, I joined the SBA as a Deputy
Associate Administrator in the Office of Veterans Business
Development.
Prior to SBA, I worked at the Department of Labor in their
Veterans Employment Training Service, where we focused on
military spouse and veteran employment issues. I retired from
the Air Force in 2012 after serving active duty for about 28
years.
SBA is dedicated to serving and highlighting the impact of
America's nearly 2 million veteran owned small businesses.
To honor them, we recently celebrated our 10th anniversary,
National Veterans Small Business Week, where we hosted about
250 events across the nation. These events highlighted and
empowered veteran and military spouse business owners in their
local communities and connected them with local SBA resources.
Within our office, veteran business outreach centers, or
VBOC, are the cornerstone of our service delivery model. Last
year, VBOC served over 55,000 clients, and thanks to the
support of this committee, our network has expanded from 22 to
now 28 VBOCs. SBA is also charged with assisting transitioning
service members as they prepare to leave military service.
SBA teaches the Boots to Business Program, which is an
introduction to entrepreneurship, as part of the Department of
Defense Transition Assistance Program. We teach it at 195
installations worldwide.
Last year, we had over 21,000 individuals attending to
Boots to Business classes. And since that program was
established in 2013, with the help of IVMF, we have trained
over 196,000 service members, veterans, Guard and Reserve
members, and military spouses.
We also have a version of Boots to Business called the
Reboot, which is taught to veterans, and Guard and Reserve
members that maybe have already separated in their local
communities.
And we also recently launched a military spouse Pathway to
Business Training Program to help military spouses looking to
start their entrepreneurial journey. SBA facilitates access to
capital for veterans and small businesses through three loan
programs, the 7(a), 504 micro loans.
And thanks to this committee, the SBA is able to waive the
7(a) express loan upfront guarantee fee for veteran and
military spouse owned small businesses. SBA also helps veteran
firms gain access to contracting opportunities.
In Fiscal Year 2022, the Federal Government awarded 4.6
percent of its prime contracts to service disabled veterans
owned small businesses, exceeding the 3 percent goal. In
January, we implemented the Veterans Small Business
Certification Program directed by Congress in the National
Defense Authorization Act, transferred the responsibility from
the Department of Veterans Affairs to SBA.
SBA Administrator Guzman refers to VetCert as the gold
standard for veterans certification programs. We now have a
streamlined process that makes it easier to apply and get your
certification, and it is just not easier, it is faster. To
date, we have certified well over 8,500 new veteran owned and
service disabled, veteran owned small businesses.
To ensure we are effectively serving veterans and small--
small business community, we convened two Federal advisory
committees, both of them looking at how we can improve services
for our veteran clients.
I want to thank you today for the opportunity to testify
and highlight our mission in SBA's Office of Veterans Business
Development and our continuing efforts to empower veterans,
service members, National Guard, Reserve members, military
spouses.
We want to give them the tools to start, grow, and build
resilient small businesses. Thank you very much.
[The prepared statement of Colonel Green follows.]
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Chair Shaheen. Thank you, Colonel Green. Dr. Haynie.
STATEMENT OF MIKE HAYNIE, VICE CHANCELLOR, SYRACUSE UNIVERSITY,
DIRECTOR, INSTITUTE FOR VETERANS AND MILITARY FAMILIES (IVMF),
SYRACUSE, NEW YORK
Dr. Haynie. Chairwoman Shaheen, Ranking Member Ernst,
members of committee, thank you very much for the opportunity
to be here today. I have worked to advance the cause of
military spouse and veteran home business ownership for now
close to 20 years.
And over that period, I deeply appreciated this committee's
commitment to supporting entrepreneurial opportunity for our
service members, our veterans, and our military families. Your
past actions have directly served to empower those who have
served to meaningfully leverage business ownership as a
strategy to successfully transition from military to civilian
life.
And as an example, I would like to commend Chairwoman
Shaheen's bill, the Heroes Business Opportunity Act of 2023.
Access to capital is consistently year over year the top
barrier to venture creation and growth that is identified by
both research and by veterans directly.
And I think this bill is positioned to enhance access to
capital, and both growth and startup capital by waiving the SBA
guarantee fee for 7(a) loans made to veteran small business
businesses.
It is a commendable step, and I think if may law, will have
an enduring impact on the community that I serve. It is
important context, I think, for any discussion about veteran
business ownership to acknowledge the challenges associated
with navigating that transition from military to civilian life.
And given that challenge, research also clearly
demonstrates that multiple pathways to post service jobs and
careers are critically important for our transitioning service
members. And for a great many veterans driven by an
entrepreneurial spirit that I think is cultivated through
military service, the path they choose as business ownership.
And demand for business ownership training and resources in
this community is strong and is increasing. You know, you heard
Tim mentioned, you know, my number was 194,000, but I just
learned 196,000 transitioning service members, veterans, and
spouses now through the Boots to Business Program, and that is
tremendous.
And while the SBA does stand at the forefront of our public
sector efforts to empower veteran entrepreneurs through funding
programs, mentorship opportunities, it is also true that the
SBA can't do this alone.
I think public, private partnerships really have evolved to
become central to serving veterans via what is a proactive and
really needs driven ecosystem to ensure that the tailored
solutions to the many and diverse challenges that transitioning
service members and veterans face in the pursuit of
entrepreneur opportunity are addressed.
And, you know, as an example, the organization that I am
here to represent today, the D'Aniello Institute for Veterans
and Military Families at Syracuse University, we have been a
longtime and close partner to the SBA and currently operate a
portfolio of business ownership initiatives that include 11
different national training programs and 3 tailored information
hubs, each of those designed to meet veteran entrepreneurs
where they are in the venture creation and growth lifecycle,
and all offered at no cost to veterans and military families.
And like for the SBA, demand for these training
opportunities and navigation services is strong and continues
to grow.
Over the past decade, the Institute for Veterans and
Military Families has provided entrepreneurship training to
just over 70,000 transitioning service members, veterans, and
spouses, and just over 35,000 of that community have leverage
the navigation services that we offered--that we offer to help
them identify resource partners in their own communities to get
them to help they need when they need it.
You know, importantly, I am an academic and I would be
remiss if I didn't mention that we also each year conduct a
national survey of military affiliated entrepreneurs, which is
the largest data collection outside of Government of the
veteran business ownership community. And that research really
does help us identify opportunities to do better.
And I think one of those, back to this issue of capital
access, there is an opportunity for us to do more and better.
If you look at our findings, what we realize is veteran
military connected entrepreneurs are about 3.5 times more
likely to encounter access to capital barriers than their non-
veteran counterparts pursuing business ownership.
So, on this front, we do need to do more. And I think
hopefully our discussion will tease out some of those
opportunities. I will close just very quickly by stating
something that I think everyone in this room recognizes. The
value proposition for doing this work is very, very high.
Chairwoman Shaheen, you mentioned the economic contribution
that this community makes in terms of sales, and revenue, and
employees.
I think there is also this idea of this community
contributing now that they have taken the uniform off to the
economic freedom of this country is clear and compelling, and
it serves the values of citizenship that really are the
underpinnings of our all-volunteer military. With that, I will
close.
[The prepared statement of Dr. Haynie follows.]
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Chair Shaheen. Thank you. Very well said. Ms. Shimkat.
STATEMENT OF LISA SHIMKAT, STATE DIRECTOR,
AMERICA'S SBDC IOWA, AMES, IOWA
Ms. Shimkat. Chairwoman Shaheen, Ranking Member Ernst, and
distinguished members of the committee, thank you for this
opportunity to testify today on the topic of veteran
entrepreneurship.
I want to speak to the opportunities and the challenges
faced by veterans when starting their own business,
particularly in Iowa, the Midwest. As you already know about
America's Small Business Development centers, we are
continually trying to work with each of our 15 regional
centers, and we are an outreach program of Iowa State
University, Ivy College of Business, and the Office of Economic
Development and Industry Relations.
The State of Iowa is committed to serving and empowering
veterans in their post-military career pursuits. We work
closely with Home Base Iowa, HBI, to enhance employment
opportunities for veterans, service members, and their spouses.
The HBI program has made significant strides in assisting
veterans.
The collaboration spans 29 certified higher academic
military partners, the Champs Program, 129 designated
communities, and over 2,000 HBI businesses statewide. One of
the programs to assist veterans that we have started is the
annual Iowa Veterans Entrepreneurship Conference.
These are commendable and successful initiatives. They are
critically important as veterans encounter unique challenges
when attempting to transition into entrepreneurship. There is
certainly more work that needs to be done, though. Another
challenge for veterans is a lack of adequate resources.
It is imperative to understand and to address the resource
disparities faced by veterans in rural areas. The SBA data
reveals a shortage of resources impacting the ability of
veterans to access essential support for their entrepreneurial
endeavors. Veterans who live in rural areas often lack access
to resources, broadband challenges, etcetera.
While the vitality of rural communities is a priority,
serving those rural areas costs more due to travel and time.
Increased funding for programs performing significant rural
outreach will translate to expanded coverage in rural areas.
But I want to also note, sometimes it is not always more
money, but it is about encouraging different Federal agencies
to work together and utilize the existing resources on the
ground to extend their own efforts at minimal cost to the
taxpayers.
Veteran businesses employ more than 70,000 people and
generate over $3 billion in annual sales in Iowa alone. Iowa's
thriving veteran owned businesses underscore the resilience of
veterans who pursue entrepreneurial ventures. Despite the
challenges, the success rate of veteran owned businesses
demonstrates the significant contributions they make to
economic growth and impact.
We are committed to maintaining this positive trajectory
and increasing the number of successes for our veteran
entrepreneurs. To do so, we do offer several considerations.
Access to comprehensive data.
Mirroring the U.S. Army Soldier for Life Initiative.
Occupational licensure reciprocity. Seek DOL approval to serve
additional populations through the Jobs for Veterans State
Grant Program. Early access to entrepreneurship resources to
get in front of servicemen and women before they are on their
way back home--to get in front of them so we can talk about
those resources earlier.
Streamline information organization. And the biggest one
that I wanted to point out specifically today was streamlining
SBA programs and leveraging the SBDC network that is already on
the ground and has been a proven resource for small businesses.
To maximize the impact of SBA programs and reduce
duplication of services, there is a critical need for closer
alignment and collaboration among the initiatives. The SBDC
network, with its extensive reach and expertise, can serve as a
robust base for various resources and programs. Leverage the
strength that is there.
Now, these suggestions aim to enhance the efficiency of
existing programs and partners. We partner with the APEX
Program, which is a DOD initiative that has been crucial for
the success, and it is about working together with those
partners to help those entrepreneurs and see them thrive more
quickly and have a stronger business moving forward.
Ultimately, we want to create a more favorable environment
for veteran owned businesses to thrive. While Iowa and other
States have made substantial strides in supporting veteran
entrepreneurs, challenges do still persist, exacerbated by
resource disparities.
By addressing these challenges, we can create an
environment where more veterans thrive as successful
entrepreneurs. Thank you for the opportunity today.
[The prepared statement of Ms. Shimkat follows.]
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Chair Shaheen. Thank you very much. Mr. Guerrette.
STATEMENT OF CHRIS GUERRETTE, OWNER AND CEO, LICKEE'S & CHEWY'S
CANDIES & CREAMERY, DOVER, NEW HAMPSHIRE
Mr. Guerrette. Chairwoman Shaheen, Ranking Member Ernst,
committee members, thank you for inviting me to testify today.
It is an honor to provide testimony on veteran entrepreneurship
and the Small Business Administration's role in assisting
veteran small business owners.
I am a retired Air Force officer and the owner and creator
of Lickee's & Chewy's Candies & Creamery in Dover, New
Hampshire. It is a 5,000 square foot candy, ice cream, and
chocolate shop that hosts an average of 40,000 guests per year,
employs 20 people, 6 of which I am proud to say are full time,
and we currently are expanding into an additional 5,000 square
feet of space to build a chocolate factory and warehouse as
well.
None of this would have been possible without the support
of the SBA, the Small Business Development Center, my mentor,
and the programs that support veteran small business owners
such as the Boots to Business Program.
My journey began shortly after I retired from the Air Force
in 2014, when a small shop in the town I lived in came up for
sale. Seeing as I love candy and because I always wanted to
work for myself, I decided to meet with the current owner just
to see if there was any reason not to buy the shop.
Needless to say, it was an easy choice, and in late 2014,
my wife and I took ownership of a small 500 square foot candy
shop. At the time, I was also working full time as a GS-13
Government employee at Hanscom Air Force Base.
So, my wife ran the shop during the day, and at night I
would come in and place orders, make chocolate, and work till
midnight taking care of things and putting out new displays.
Long story short, our sales grew and grew, and in September of
2016, I was able to leave my Government job, which, you know,
was a pretty big surprise to everybody I worked with, and go
full time candy, as I like to call it, with grand plans to
build a new, much larger store.
My plan was to expand and build a new 5,000 square foot
shop that would become a destination. And thankfully, I was
working with an advisor from the New Hampshire's SBA Small
Business Development Center, and we worked for months on the
business plan, funding options, and business design.
He helped to match me with banks in the area, apply for and
secure SBA loans to provide the capital necessary to get things
going that I needed to borrow. It turns out I borrowed about
$250,000 for construction expenses, equipment purchases, and
inventory. Now, granted, the 250,000 was a best guess-estimate,
and as you can imagine, there are often several unexpected
expenses that come up during the early stages of starting and
growing a business, and our actual startup costs ended up being
closer to $350,000.
We paid for that with our own cash and credit, and those
extra expenses included construction costs, higher equipment
costs, and several other items, including an SBA loan fee. It
can be frustrating and challenging to pay for fees and expenses
for items that do not directly result in creating profits for a
small business when they are starting.
It is one thing to pay for tangible items such as equipment
or construction that can lead directly to a result in increased
business, or at least in creating smoother business operations.
But those fees tend to deplete the capital and put a new
business further behind the eight ball, or further in the hole,
before they even open their front door.
Thankfully, our business took off and we were able to pay
back our loans and continue to grow. As a matter of fact, we
have borrowed other amounts from the SBA, another $55,000 a
couple of years ago to purchase more equipment, and that was
done using the SBA Express loan, where thankfully the fee was
waived because cash flow is tight.
That was right in the middle of the COVID pandemic. The
frequent and multiple unexplained expenses when starting or
growing a business can be high and can definitely create
barriers to starting a business or even create a financial
hardship under which a new business will not succeed.
And in the event that is a veteran with perhaps 4, 6, or
maybe 10 years of service who is relying on their new business
to be successful in order to make ends meet, then they will
need all the help they can get.
And I believe it is legislation such as the Heroes Business
Opportunity Act that will waive the SBA guarantee fee for loans
made to veterans, that creates another tool to make it easier
for veteran owned businesses to access capital, and it will
quietly but powerfully help veteran owned small businesses
succeed. Thank you.
[The prepared statement of Mr. Guerrette follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Shaheen. Thank you very much. Mr. Rhoades.
STATEMENT OF DUSTIN RHOADES, CEO AND OWNER, ABILITY TECH, SIOUX
CITY, IOWA
Mr. Rhoades. Chair Shaheen, Ranking Member Ernst, and
members of the committee good afternoon and thank you for the
opportunity to testify today about the challenges and
opportunities facing veteran owned small businesses.
With profound gratitude, I stand before you as the CEO of
Ability Tech, a company committed to revolutionizing
accessibility through innovative technology solutions. Our
journey is deeply personal and began with my son, who was born
missing 97 percent of his brain.
In 2019, I created a piece of adaptive technology to enable
him to play baseball. That inspired us to start Ability Tech
and created adaptable technology for individuals from all walks
of life. This, coupled with a sincere aspiration to impact the
lives of individuals with disabilities, is what got us here
today.
On our mission at Ability Tech is both simple and profound,
to serve each unique individual, to support the disabled
community, and importantly, to alleviate the financial burdens
faced by families dealing with disabilities. We understand that
fixed income limits that many of these families confront.
We believe that families and caregivers shouldn't have to
choose between medical treatments, bills, therapies, or quality
of life inventions that could transform their world. At Ability
Tech, we do our best to build affordable, adaptive tech, and
work with families on a budget to ensure they can get the
technology that they need. Pursuing entrepreneurship as a
veteran has its unique challenges.
To transition from military service to the unpredictable
nature of business world was a constant challenge. During the
early days of our venture, access to capital emerged as a
hurdle, compounded by our rural location and our niche nature
of the adaptive technology industry.
Convincing traditional lenders of the societal impact of
our business model became a mission in itself. Given the
smaller percentage of the population composing our demographic,
our journey has been enriched by local resources, such as the
Chamber of Commerce, the Small Business Development Centers,
and the Iowa State University Pappajohn Center for
Entrepreneurship.
These entities have played a pivotal role in our growth,
providing essential guidance, networking opportunities, and
resources. Yet challenges persist, particularly in accessing
capital and navigating the intricate landscape of Government
contracting. Government contracting emerged as a pivotal part
of our growth strategy.
Events like Senator Ernst's Entrepreneur Expo in Iowa and
Iowa State University Pappajohn Center for Entrepreneurship,
Iowa Veterans Entrepreneurship Conference, opened our eyes to
the possibilities within the Government contracting. However,
the bureaucratic landscape, particularly dealing with the
language and the time commitment involved, demanded a steep
learning curve.
We commend the efforts made to ensure that the taxpayer
funds are allocated to American companies, but the process
requires further simplification and support, especially for
smaller businesses. The current economic inflation has impacted
our business.
Rising costs across the board have led us to adapt our
strategies to navigate these economic challenges. Our
operational costs, encompassing everything from raw materials
to utilities, have increased and directly impacted our bottom
line, prompting a review of our budgeting and expenditure
strategies.
We have had to explore cost effective alternatives without
compromising the quality of our products or our services. Our
engagement with the Small Business Development Center has been
positive, facilitated by strong relationship with our local
SBDC director. However, we emphasize the need for more local
tailored resources for veteran owned businesses.
Initiatives like the Pappajohn Center Veteran
Entrepreneurship Conference have started addressing this gap,
but at a State level, but require further support and
expansion. Our journey has been enriched by the guidance and
mentorship of other small business owners who have walked a
similar path.
Entities like the Siouxland Chamber of Commerce has played
a pivotal role in holding networking events and local business
forms, fostering connections within the business community.
Again, Senator Ernst's Entrepreneurship Expo and the
Pappajohn Center Veterans Entrepreneurship Conference provided
invaluable opportunities for engagement, sharing experiences,
and receiving advice.
However, the ongoing challenges lies in finding seasoned
mentors who are more experienced or established business
leaders who understand the need for support. Looking ahead, our
biggest priority is access to funding.
As an early stage small business operating out of our
garage, still the demand for our products outpace our capacity.
In conclusion, I urge the State--or the State--the Senate
committee on Small Businesses and Entrepreneurship to explore
opportunities for better supporting veteran entrepreneurs.
Strengthening small business, particularly those led by
veterans, require multiple approach, streamlined communication,
tailored training programs, flexible funding options. I hope,
as we collectively work together towards these goals, we pave
the way for more vibrant and resilient entrepreneurial
landscape.
Thank you for your time and consideration.
[The prepared statement of Mr. Rhoades follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair Shaheen. Thank you all very much for your very
compelling testimony. We will now have a round of five-minute
questions each. And Mr. Guerrette, I am going to start with
you, since you are from New Hampshire.
And you and Dr. Haynie did such a nice job of providing a
commercial on my legislation, the Heroes Business Opportunity
Act. I have to ask you about that.
You talked a little bit about this in your testimony, but
talk about why waiving the fees up front for 7(a) loans are
really important for entrepreneurs just starting out?
Mr. Guerrette. Yes. When I started the company, it was a
kind of a dream, and it was very much amounting to we are just
going to make it happen.
But at the same time, I did have kids still in high school
and we had to consider the fact that, you know, they were going
to be things to pay for down the road like college, and we
didn't know how that was going to work out.
So, when I had to pay for fees and things that I just
didn't even know existed--I will be honest, I didn't know until
a couple of weeks ago when I did a little bit of research and
found out I had actually paid those fees.
You know, that is just more capital that went away. That
fee was almost $3,000. And when you are already borrowing
$250,000 on a hope or a dream, then that extra cost really made
it, you know, risky because, like I said, those are fees that
are just being paid to someone. They are not paying for a piece
of equipment or inventory that I can sell.
And in my business, when I am selling something that is $2,
I am keeping about $0.15 out of it. So, it is really tough to
make up that $3,000. That is a lot of things that have to be
sold to make up that--you know, that profit difference there.
So, I think if they were waived, especially if you are a
smaller company--and I would like to focus on the fact that a
lot of veterans owned businesses are folks that are not
retired. I had the lux--I say the luxury, you know, but I did
do 25 years of military service, of being somebody who had a
retirement to back up my personal expenses and use a little
extra capital if necessary.
But if you are coming out of four, six years, you don't
have an income and you are going to jump into a business, the
last thing you need is to have another $3,000 bill or $2,000
bill that doesn't go directly to getting that business off the
ground.
Chair Shaheen. Thank you. We will use that endorsement as
we are moving the legislation. Colonel Green, virtually
everybody who has spoken has talked about the need to be aware
of what resources are available if they are thinking about
starting a business.
You talked about the 100--and I think 196,000 people who
had been through the Boots to Business Program. Can you talk
about what percentage of people that is who were eligible for
the program? And how do we get the word out to more veterans
about what is available to them?
Colonel Green. Chair Shaheen, that is a great question.
Thank you very much for the opportunity. So, in our office, we
want to make sure that all of our customers are aware and make
informed decisions about entrepreneurship.
So, what really, we really try to do is make sure there is
an awareness of programs available, and--first of all, and then
accessibility of those programs, whether it be virtual or in
person, and then the ability to navigate those resources.
And the resources we are talking about, we are part of a
network, an ecosystem I could say, which includes small
business development centers, our veteran business outreach
centers, women business centers, and SCORE chapters. That is
just part of the SBA connected ecosystem.
We also have organizations like the Institute for Veteran
and Military Families that actually helped us develop the Boots
to Business curriculum back in 2013. Now, the Boots to Business
Program for active duty is pretty well laid out in the
Department of Defense's Transition Assistance Program.
They are very aware of it as they go through. You know, it
is an optional, two-day course, but they are supposed to be
providing them opportunity to take that. The Reboot Program,
where we teach in the communities, that is where we really need
the help of our SBDCs, because we only have 28 VBOCs.
We need help of our resource partners to get the word out
of those opportunities of the, you know, taking that Boots to
Business Reboot. And then the military spouses, that Pathway to
Business Program I mentioned, that is a program that was
rewritten to focus--military spouses weren't really feeling
like Boots to Business was for them, the naming convention, the
graphics.
So, we redesigned that course to make it feel more military
spouse centric. And then, we just started teaching those
classes in August. And now, we have probably had 10 or 12
classes so far with a few hundred military spouses signing up.
So, we are looking to slow rollout, but we are reaching out
for every opportunity to get the word out.
Chair Shaheen. Thank you. I know the timer says I have more
time, but I think I got additional time. So, I am going to stop
and turn it over to Senator--[technical problems].
Senator Ernst. Thank you, Madam Chair. And a big thanks to
all of our witnesses that are here today. We really appreciate
your testimony.
Mr. Rhoades, we will go ahead and start with you. Thanks
for joining us again. I really appreciate your testimony and
thanks for sharing your experience with Federal contracting as
well. And you mentioned a couple of times how the
Entrepreneurship Expo and the Pappajohn Center's Veterans
Entrepreneurship Conference were helpful.
But what are the main deterrents or barriers to entry
facing small businesses seeking to break into Federal
contracting, in your experience?
Mr. Rhoades. Ranking Member Ernst, thank you for that
question. From my experience, it is the process to get started
is very--for small businesses, our biggest resources is our
time.
And when you have to sit there and understand the language,
and what is needed, and gather those resources to apply, it is
very hard on our time. And that is where we have benefited a
little bit with the APEX accelerator.
We had somebody that was able to eventually sit down with
us and walk us through that process. But to be honest, if I did
not have that person, I believe that I would have probably
given up on the Government contracting side at that time. So, I
think that is the biggest barrier.
And then the other one is, once you get into it, is the
bidding process. It is very unfamiliar what happens next, what
the steps are to do next. And if you are awarded a contract,
where to go from there and things like that.
So clear direction or somebody to kind of--to point you in
the right direction.
Senator Ernst. That is really good. And it is probably not
surprising to you that I have maybe heard those same comments
before, so. And I know I saw Colonel Green nodding his head as
well. And Tim, if you have additional comments that might build
upon what Dustin had shared as well.
Colonel Green. Thank you, Ranking Member Ernst, and thank
you for your service. Federal contracting is really, you know,
challenging, I can say. One of the things that were written up
in Institute for Veterans and Military families report was the
challenge with certification.
We took that one ahead on. We simplified the VetCert
Program to make it easier, faster. So that is one small piece.
The other thing is training. We do have a little bit of a
cumbersome. It is a learning curve that, you know, is a
challenge.
And we do provide some funding to the Veteran Institute for
Procurement. And Mr. Cardin, or Senator Cardin is very aware of
this program, but they do have training for those that are
looking to, you know--existing businesses that are looking to
grow into Federal contracting, increase their businesses.
And I know after the first year of their program, they are
looking at about a 50 percent--56 percent growth after one year
in the Veterans Institute for Procurement. So, I think that
program has been very successful for us, and we have been
investing in promoting that program across the country, and I
know they have had attendees from every State participate in
that.
Senator Ernst. Great, great. No, thank you. We need more of
that. And for Ms. Shimkat as well, thanks again for being with
us.
And in your testimony, you had highlighted the resource
disparities impacting veterans, small business owners, and
entrepreneurs in Iowa and across the Midwest. So, two part
question.
What can SBA do to better provide outreach and support our
veterans? And would you be supportive of enabling SBDCs to host
veterans business outreach centers? Because you mentioned the
sharing of capabilities.
Ms. Shimkat. So, let me answer the second part first.
Having an SBDC host VBOC, absolutely. And for many reasons, we
spend a lot of money on databases, for example, to be able to
get information.
So, when somebody does start their business, we are
minimizing that risk. We are helping them figure out, is there
a market? Is there somebody that is going to buy it after my
family and friends buy it?
Will there be somebody else? And that is what--we already
have access to those databases. We are already paying for it.
And so, to be able to start right there, that is saving some
money on that aspect. Another one is we are already out in the
communities. And for anyone who has lived in a rural area or
from a real estate, it is trust.
And in the rural areas, having somebody, that local person,
because you could have like a VBOC where they come in, they
work with them, and then they go back to where they are housed.
But the SBDC and other resource partners are living in that
community, and that is crucial.
For SBA, for better outreach, a couple of things that we
could look at is, and Colonel Green, retired Colonel Green
spoke earlier, and I offered to speak with him after this so we
could talk about let's pull some of these resources together
instead of having so many programs in silos. We do this and
here is our metrics. Guess what? We are doing the same thing.
Now, there are many entrepreneurs out there that we need to
still get to. We can't do it all in small business development
centers. They can't do it all as VBOCs. But working together,
we can have a larger impact and really reach more of those. So,
I hope that answers your question.
Senator Ernst. It does. Thanks so much, and I yield back.
Thank you.
Chair Shaheen. Thank you. Senator Cardin.
Senator Cardin. Thank you, Madam Chair. Let me thank all
five of our witnesses. Ms. Shimkat, I am going to follow up on
the SBDC and the VBOC.
Maryland is one of the newer veterans business outreach
centers, and it is co-located at College Park where the SBDC is
located and thank goodness they were co-located because they
needed--the new VBOC needed help and the SBDC was there to
help.
And is that type of shared resources that I think give us
the best value for the dollars, so I just really want to
underscore that. Colonel Green I want to follow up on the point
that you said. I am concerned that we have under-resourced our
services to our veterans. 28 centers in the nation to me is not
enough, just--with the number of veterans we have, the
geographies of our nation, we need more resources.
So, one of my concerns is how do we get more resources into
the program? And thank you for mentioning the Veterans
Institute for Procurement. For the members of our committee,
this was a program started in maybe 15 years ago by the
Montgomery County, Maryland Chamber of Commerce. No public
funds, private funds.
And this is a Montgomery County local chamber, they set up
an institute to help veterans with procurement and accepted
veterans throughout the entire country. So, it was a commitment
to give back to the community for those who have served our
nation.
And it was a very successful model, and I thank the SBA for
picking it up, and becoming a partner, and providing some help.
And in this past cycle, Senator Van Hollen and I--it is helpful
to have the chairman of the subcommittee that has the SBA.
With Senator Van Hollen, we were able to get some help to
the program. And you are right, they are now going to double
their capacity as a result of it, and the waiting lists are
there, the needs are there.
So, I guess my question to you is, how do we get more
resources into these programs? Don't throw back on me you need
more money. But how do we--we need to do a more effective job.
You talked about how you handle certification in a more
efficient way.
In the women's business center legislation that I authored,
we set up standards to improve quality through the process. Do
we need to do that with the VBOCs also? Or how do we expand the
capacity of the veterans centers to help our veteran community?
Colonel Green. Senator Cardin, that is a great question. We
are, you know, we are extremely proud of the work that the V-B-
O-Cs, or the VBOCs, are doing across the country, but there are
28 of them.
If I had 54 of them, it would take a little pressure off,
obviously. But they--I think the key to that is really
collaboration and partnerships. Many of the veteran business
outreach centers have to serve multiple States, so we have to
figure out technology solutions to make sure we are reaching
our customers, especially our rural customers, underserved.
But I think we do that through partnerships, leveraging the
resources of the Small Business Development Center. We have 68
district offices, and within those district offices at SBA, we
have veteran business development officers that coordinate
directly with our veteran business outreach staff.
So, we leverage them, as well as other partners. We provide
some grant funding. Again, the Institute for Veteran and
Military Families has the entrepreneurial boot camp for
veterans. We have--they help us teach our Boots to Business
overseas. So, collaboration, partnership is crucial. We do have
a really strong relationship with the American Legion.
We have a working agreement with them. The American Legion
helps us reach some of the rural communities, because if you
drive around any small town, you will see an American Legion
post.
We partner with VFW, Disabled American Vets, anybody that
will help us get the word out. So, we try to leverage other
organizations and--so we can get the word out about our VBOC
Program.
Senator Cardin. And I think you are doing a very effective
job with the resources that you have. But there are underserved
communities that it is very difficult to reach if they don't
have a partner that you can partner with.
It makes it challenging for those communities, for veterans
in those communities to get the services they need. I think we
need to work together to figure out how we can fill up those
gaps. Thank you, Madam Chair.
Chair Shaheen. Thank you, Senator Cardin. Senator Hirono.
Senator Hirono. Thank you, Madam Chair. Thank you all for
testifying. Colonel Green, I am glad that you noted how
important it is to leverage the resources of the SBA and
partner with a lot of other community resources, especially
probably in some of the rural areas where access to the kind of
support that a veteran needs to start his or her own business
might be more challenging.
So, that is a good thing. I did want to ask you. Recently,
the West Maui town of Lahaina burned to the ground, and I know
that there were veterans there. The SBA administrator, Guzman,
who came very shortly after the horrendous wildfire there, said
that there were about 700 or so small businesses registered, I
suppose, there that she was aware of.
Some of them had to be veteran owned. Do you--after
disasters like that, is there a way that SBA tracks the
veterans in that area who may have small businesses?
Colonel Green. Senator, that is a great question. We have
been--at SBA, we have been spending a lot of time focused on
the tragedy that took place in Hawaii.
We do have a veteran business outreach center in Honolulu,
and they have an extensive database that--they actually know
all the businesses that they have worked with, all the business
that they currently work with, and they are sharing that
information through--I guess they call it a BRAC, a disaster
recovery assistance center.
And so, there is participation there. SBA, they have taken
a whole of SBA approach. All of our offices meet on a regular
basis. We meet daily for a while now, on a weekly basis, to
figure out how we can really support those businesses as they
recover from the tragedy that took place.
Senator Hirono. And I think that as we are experiencing
more of these kinds of natural disasters, and wildfires, and
hurricanes, there are a lot of these kinds of events that
happen. That there are probably lessons learned and ways that
SBA can, you know, make sure that you know which businesses are
veteran owned, and to have that in your database before a
horrendous event like the Maui wildfires occur.
And so, good. We noted that you have recently streamlined
your business certification process. Can you just give me an
example of something that was more complicated than necessary
and how you streamlined that? And what--I would like to hear a
description of what you consider streamlining.
Colonel Green. Yes. So, they did reduce the amount of forms
you had to fill out. And what is really exciting is under the
Administrator, she has gone with my SBA program, which includes
a loan portal, as well as our certification program so far, and
she is going to add more.
So, as you go through other certification programs within
SBA, you will be able to use the same information. You won't
have to fill it out each time you go through. Recently, we had
a roundtable of business owners hosted by the SBA
Administrator, and we talked about the certification program.
We went around and around. And the lesson they learned that
they told us they learned from that was the communication and
the marketing and the information provided to all the business
owners was outstanding.
So, they hadn't seen that before in a lot of rollouts for
Federal Government, and they were able to--they knew what was
going on with the certification. They knew when it was going to
take place and when they had to recertify, so.
Senator Hirono. For any of the panelists, are there some
unique differences when you are dealing with a woman veteran
versus a male veteran? Are there any unique elements that, for
example, women veterans need? And are you meeting those needs?
Anybody? Yes, Ms. Shimkat.
Ms. Shimkat. Thank you for that question. The answer is it
depends, truthfully. There could be additional needs when it
comes to transportation, childcare. We could have different
needs when it comes to just the form of communication as well.
And the biggest thing that we do is focus on that
communication, figure out what is the root of what we need to
work on first, put a clear plan together, and then step by step
working with veterans of, you know, both genders so that we can
figure out what do you need.
Because sometimes coming into a conversation, here is what
I think I need, but in actuality, this is where we need to be.
And I think for us, having veterans on our staff is step number
one. And that has been huge for us to really take a step
forward in the right direction.
Senator Hirono. And when you noted that, I think that for
women, since childcare still falls mainly on the woman, to have
specific ways that you are going to assist female veteran with
childcare. I just want to mention, Mr. Guerrette, I really love
hearing your candy story. My best to you. Thank you, Madam
Chair.
Chair Shaheen. Yes. Imagine Willy Wonka and you have got
Lickee's & Chewy's. Senator Hickenlooper was here earlier, so
we will go to him next.
Senator Hickenlooper. I am ready. Thank you all for being
here. Madam Chair, thank you for calling this. And, Chris, why
don't we start with you? When I opened my first business, which
was a restaurant that brews its own beer.
I was a geologist, had been kicked to the curb. We had to
explain our business to banks that had never seen it before.
And as is often the case with a good idea for--an entrepreneur
might have, it is hard to put just in words what something--
something people haven't experienced yet.
And that is why it is a good economic opportunity because
no one else is doing it. I think in a funny way, veterans face
a similar challenge in communicating to banks how their past
military experience is going to translate to a successful
business, right?
I spent a fair amount my time trying to describe in words
what the brewpub was and why a geologist would be especially
suited for that. So, what obstacles did you face when securing
capital to start the candy shop?
Mr. Guerrette. Thank you for that question, sir. We were a
little bit lucky, and that is because the first shop that we
opened was very small and we were able to purchase it with
cash.
And when we continued to grow that, and thankfully my wife
worked there for a year while I was still a Government
employee, we were able to see growth there. And because of that
growth and the financial data we were able to show the banks
from the growth at the first store, they were happy to move
forward with a small loan.
Thankfully, the next location I was going to build wasn't
in the millions of dollars. And, you know, so the $250,000 we
needed to borrow was reasonable relative to our current sales
at our tiny location.
That being said, I did have to go to a couple of banks and
provide extensive amount of data on not only what we had for
cash, but collateral as well. And thankfully we had accumulated
a little bit of equipment.
But at the end of the day, probably the scariest thing was
when I had to sign on the bottom line saying I was personally
responsible for that $250,000 if things didn't go well. So,
that was the scariest part for sure.
Senator Hickenlooper. Yes. No, I did--I mean, I got turned
down by 33 banks and we had a commitment from the city and
county of Denver to give $125,000 if we could get $50,000 from
a bank.
And I got turned down by 33 banks, and we offered them--we
signed our houses. They tied the deeds to our house. They had
about 120--the stock, when I got laid off, I had some company--
my retirement benefits were in stock, and I had a partner who
had some stock. We had like $250,000 plus they got first right
of all the brewing equipment, the kitchen. They still wouldn't,
you know.
Mr. Guerrette. Exactly. Sure, I had the same situation.
They had--you know, I had to sign over basically everything I
owned.
Senator Hickenlooper. Yes, exactly.
Mr. Guerrette. My wife, she was really scared about the
house.
Senator Hickenlooper. Yes.
Mr. Guerrette. Well, I am retired, so we still have some
income, you know. They can't take that.
Senator Hickenlooper. Yes. Exactly.
Mr. Guerrette. It was a little scary, but thankfully, the
banks were very helpful, and it all worked out.
Senator Hickenlooper. Dr. Haynie, upon leaving military
service, veterans with security clearances are sometimes led to
believe that their clearance is a sure ticket to success.
However, if prospective contracting opportunities that
require security clearances are not advertised well, then
veteran entrepreneurs new to the contracting world may not know
about the opportunity, even though they would qualify for it.
So, can you share your thoughts on ways that we could
better connect recently, newly become veterans, newly separated
from the military that still hold a--how can they still hold a
security clearance with classified contracting opportunities to
put their qualifications to work?
Dr. Haynie. Thank you, Senator, for the question. It brings
back in listening to Mr. Rhoades' response earlier.
I was an Air Force contracting officer while I was in
service, so I understand the pain uniquely. And if I am being
very candid here, I don't recommend--you know, 70,000 veterans
or so through the programs that we run to help them become
small business owners, and I don't recommend that they start
with Government contracting.
I would instead, and as a way to answer your question--that
security clearance, however, is valuable. And, you know, my
counsel, my mentorship in a situation like that would be
actually leverage that clearance in the context of a firm that
already has Government contracts.
Build some experience such that you can leverage that past
experience to then subsequently launch a business. But I
wouldn't recommend they start there, candidly.
Senator Hickenlooper. That is good advice. All right. I am
out of time somehow. It is impossible, but I have----
[Laughter.]
Senator Hickenlooper [continuing]. I have other questions I
will submit in writing, and you will get them some time and
hopefully you can answer them--more at your leisure, right.
Yield back to the chair. Thank you.
Chair Shaheen. Thank you. We will do a second round of
questions for anybody who was able to stay. Senator Duckworth.
Senator Duckworth. Thank you, Chair Shaheen and Ranking
Member Ernst for holding this hearing today. Dr. Haynie, I
would like to direct my questions to you. Given your role in
overseeing the Institute for Veterans and Military Families at
Syracuse University, and its work administering the Boots to
Business Program.
As you may know, for the past two Congresses, I have
introduced bipartisan legislation with Ranking Member Ernst
called the Veteran Entrepreneurship Training Act, which would
codify the Boots to Business Program into law.
I have long supported this program because of its
successful track record helping service members, veterans, and
military spouses to build critical small business development
skills and prepare them for professional success after military
service.
Dr. Haynie, from your experience administering the Boots to
Business Program, how has the program contributed to the
entrepreneurial journey of the more than 194,000 veterans,
servicemembers, and spouses that have gone through the program
since 2013?
And can you share any positive outcomes you have witnessed
in your work?
Dr. Haynie. I can----
Senator Duckworth. There is no better softball than that.
And that is like slow pitch--coming in off plate----
[Laughter.]
Dr. Haynie. And Senator, I will say if there is-- there are
few people on the planet that are bigger evangelists for your
legislation than me. And it is a good way to start answering
your question, because when I started doing this work all the
way back in 2006, 2007, there was no pathway out of the
military for business ownership.
As a matter of fact, service members transitioning from
military to civilian life were discouraged on a regular basis
from pursue--for pursuing entrepreneurship. And you know, so
much has changed since then.
And I think Boot to Business, what it does is it makes for
an informed consumer, is how I like to describe it. I think
that is the power in Boots to Business. And not just an
informed consumer for those that eventually go on to pursue
business ownership, but an informed consumer of those who,
through Boots to Business, learn that business ownership maybe
isn't a good fit for them, for their families.
Those are metrics we don't collect, and I wish we did,
because I think that there is real power in the program in
helping individuals also see that this isn't a good fit for me,
my family situation. And because business ownership is not like
going out and getting a traditional job, if it doesn't work
out, you leave that job and find another one.
You are putting, as you heard these stories, you are
putting personal capital at risk, and you do want to be an
informed consumer of making that choice. That said, when you
look at what has come from Boots to Business, it is beyond
powerful.
You know, about six years ago, my institute partnered with
Inc. Business Media and in the Inc. 5000 to create something
called the VET 100. This is an annual listing of the 100
fastest growing veteran owned businesses in America.
The 2023, that 100 just came out, and there are--of those
100, there are 25 veterans this year that are--that went
through this ecosystem. That their businesses were birthed
through this Boots to Business to partners, whether that is in
procurement or programs at the IMF.
You know, and they are now running four, five, six years
later, the fastest growing, privately held veteran owned
businesses in America. You know, I think that is the power of
the program and the model and making informed consumers of
those leaving military service.
Senator Duckworth. Thank you. Do you believe cementing the
program into statute would bring increased ability to program
administrators and future participants? And what more can SBA
and Congress do to expand opportunities for veterans,
servicemembers, and their spouses who are interested in small
business entrepreneurship?
Dr. Haynie. So, I absolutely do. I couldn't even wait for
you to finish asking me the question to say that I think the
stability that you describe is critical.
I think it also, you know, a question that Colonel Green
was asked earlier about getting the word out. I think one of
the challenges, and it is not fair for me to say this, DOD
isn't in the room, but it really is for DOD and, you know, the
sergeants and captains to make sure that folks transitioning
are aware of the--that is the first point of contact and first
point of awareness.
And regularizing, if you will, Boots to Business will
signal to DOD that this is not something that year in and year
out could go away. It is a commitment of the country to the
program, and I think that would make all the difference.
Senator Duckworth. Thank you. Thank you, Chairman.
Chair Shaheen. Thank you, Senator Duckworth. Senator Rosen.
Senator Rosen. Well, thank you, Chair Shaheen, Ranking
Member Ernst. Thank you all for being here. I am going to
submit a question for the record building on this. If you are
seeing trends in particular sectors in your top 100, maybe that
is something that veterans should know about, too.
So, we will submit that for the record, because I want to
talk about something near and dear to my heart, which is the
Veterans Business Outreach Center. Obviously, we can maybe talk
about those trends and what sectors, as we are getting the
first ones in Nevada. Because we are home to more than 200,000
veterans, over 23,000 veteran own small businesses.
That is actually one in eight small businesses in our
State, which 99 percent of businesses are small businesses. So,
despite this, we have been without a dedicated in-state
veterans business outreach center that is just for Nevada.
And so, the absence of an in-state VBOC, a one stop shop
providing small business support to veterans, transitioning
servicemembers, and their families has really meant limited
information and resources for Nevada veterans looking to start
or grow a business.
And so, earlier this year, I called on the SBA to establish
a VBOC in Nevada to ensure that tailored support is provided to
our veterans and transitioning service members to address their
unique needs and concerns.
And I am so thrilled to report to the committee here today
that in April, the SBA authorized the establishment of a VBOC
in Nevada. There will be multiple locations, one Northern
Nevada, one Southern Nevada.
So, Colonel Green, can you speak to the importance of the
veterans business outreach centers and helping to ease the
transition from active duty to civilian life for veterans who
want to start a small business? And how can the VBOCs support
the existing veterans businesses and help them grow?
Colonel Green. Yes. Senator, thank you for the question. I
know we are excited about the Nevada VBOC. We did open one in
Colorado as well, so we are excited about those opportunities.
They were chosen because of data. When we looked at areas
where there was, you know, a lot of installations or there was
a lot of tap classes. There was--you know, we historically
Boost to Business.
So, there was a very thorough, data driven decision there
to put one in Nevada. And because there are a lot of veterans
and veteran owned small businesses, it will make a big impact
in there.
Again, I think we have one in Nevada office with a
satellite office in Reno, and they are going to be able to
expand their reach into some of the rural areas. But again, you
know, they are going to be providing training and counseling,
and partnerships is going to be critical for them with the
small business development centers.
Our district offices are already there. So, they have a
great opportunity. And their primary role for a VBOC there,
number one role is teaching the Boots to Business Program at
the installations, at the National Guard and Reserve bases, and
in other areas.
So, we are really excited to have one there. I think the
Administrator is excited about it. She will be out as well.
Senator Rosen. Yes, I am very excited. We are going to be
doing that soon. And you kind of led me into my next question,
which I will kind of shorten up a little bit because a lot of
our businesses, just like I see Colorado and Indiana, in our
rural areas, and a third of all of the veterans owned
businesses in Nevada are in our rural communities.
So, they are extremely frontier. They are very mountainous.
They face unique challenges, and they have much less access to
in-person resources. So, to Dr. Haynie and then Ms. Shimkat,
what is your experience reaching the veterans owned small
businesses in the rural areas? What can Congress do to help you
fill in any of those gaps so those folks who can't just get to
the city easily, how do we support them?
Dr. Haynie. Just very briefly, it is again, from the
research we do, it is a significant challenge. Veterans looking
to start and grow a business in rural areas are significantly
under resourced from the perspective of those supportive
services.
One of the things that we have done is create partnerships
with community colleges. Community colleges in many instances
are in those rural areas. They are great partners to us.
So, we took a program that we have been running for a long
time called the Entrepreneurship Bootcamp for Veterans Program,
and created a version of that that we are now offering through
a consortium of community colleges around the country.
Ms. Shimkat. I will start by echoing my colleague with the
community colleges. We utilize the community college network
for training. That takes it off of our plate so then we can
focus on the direct one to one counseling.
We have 15 centers across the State. What we do, though, is
we also have 50 satellite offices that we have in partnership
with the Main Street Iowa Program, with the Chambers of
Commerce. And a struggle that we have, as you had mentioned,
broadband. You know, people say, well, you go to the rural
areas, just do it online.
That doesn't work. And so that is why we have to get out
there. We have to have that windshield time for our advisors to
be one on one with them. That is the biggest impact for us, is
just being able to utilize other partners and other resources,
and that is probably the biggest answer I can give you.
Senator Rosen. Well, thank you. We love our community
colleges, and I can tell you we have been investing in
broadband and we are going to get it to every single home and
every single community because we can't function as a nation
without it. So, thank you--to Madam Chair----
Chair Shaheen. Thank you, Senator Rosen. Senator Young.
Senator Young. I thank our Chair and Ranking Member for
holding this important hearing, and thank you all, for our
witnesses, for serving our veterans in important ways. I have a
limited amount of time, so I am going to try and focus on one
distinct barrier that many of our veterans are facing today. It
is called a contracting cliff.
Some of you may be familiar with this dynamic. If you look
at the current rules for Federal contractors, there is this
clear challenge, when small businesses grow into mid-sized
companies. They suddenly find themselves ineligible for crucial
set aside contracts, and instead they face competition from
major global firms.
This is the contracting cliff. It is not just a hurdle, it
is a barrier that is stopping small businesses from growing,
and it is reducing the diversity of our Federal marketplace at
the same time.
So, Colonel Green, I ask you that, you know, based on your
experience, given your understanding of veteran owned
businesses, can you discuss the specific challenges that the
firms have identified, encounter in retaining current
Government contracts, and scaling their operations for larger
contracts?
And then additionally, how is the SBA currently equipped to
help these businesses navigate and overcome these obstacles?
Colonel Green. Senator, it is a great question. Federal
contracting is complicated. And I think you are referring to
probably to the 8(a) program that runs about----
Senator Young. That is right. Yes, I am.
Colonel Green [continuing]. Nine years. We do have--we do
run across a lot of businesses that after they get to a certain
size or they run out of time, they do have challenges with
getting other contracts. That is a lot of the reason we refer
them to like programs like the Veteran Institute for
Procurement to help them grow and expand to the next level. So,
we know it is a challenge and we will be taking--take it back
and take even more of a look at it.
Senator Young. Well, I appreciate that. We see these sorts
of cliffs in other areas of public policy, and they always seem
to lead to various distortions, and they oftentimes lead to the
opposite of what you want to happen.
So, you know, you see them with respect to benefits cliffs.
People stop working so they can be eligible for certain Federal
benefits. The vast majority of my colleagues don't want people
to stop working. In this case, you don't want people who
establish a small veterans owned business to be disincentivized
from growing that business. It is just sort of asinine.
And I suspect all of you agree. And I know you didn't
develop all those provisions, but I am not coming to offer a
mere lamentation, though I have done that. I introduced a piece
of legislation that I think would fix this perverse anomaly.
It is called the Success Act. Senator Hickenlooper has also
joined me on this, and our aim is to tackle this contracting
cliff dynamic. To be brief, my bill would create a seven year
off ramp to allow growing businesses in the construction and
engineering sectors to keep competing for set aside contracts
during their transition to mid-size status. I am open to other
solutions.
I think this one does the trick and is worth a try. And I
want to see, Mr. Green, though you may not be familiar with the
specifics of the Success Act, I respect that, could you give us
your thoughts on how policies like an off ramp program could
influence growth in Federal contracting opportunities?
Colonel Green. Yes. Thank you again for the question. It
does seem like a reasonable approach to getting them off the
program. I know the program was designed to be a certain length
of time, to give them an opportunity to grow into their next
level.
So, I--sir, I respectfully would have to take this back
with my Government contracting business development office. And
that is, the individual that runs that used to run our office,
so he is very familiar with veterans and veteran programs, and
he is taking a lot of these challenges head on.
So, we will take that back and give you a better answer.
Senator Young. Please do. Thank you for that. Offer your
constructive feedback, your critical feedback, whatever. And I
am hoping that together, perhaps, if you if you think there are
deficiencies in our approach, you can offer another approach,
and maybe we could tackle this issue.
So, thank you again to all of our witnesses for your
service. And Madam Chair, I yield back my two seconds, I think.
Chair Shaheen. Thank you. We will make good use of your two
seconds. Dr. Haynie, virtually everybody there has testified to
the challenge of accessing capital for veteran owned
businesses. Are there additional policy recommendations you
have for the committee to help address access to capital?
Dr. Haynie. You know, so, yes. You know, I think, one, we
need to study the problem more than we have. We need to truly
understand the barriers from not just the perspective of
veterans and servicemember, but, you know, for lenders.
We need to understand this from the perspective of lenders.
We need to understand--and I think maybe more actionable in the
near term. You know, one of the big barriers we identify is the
credit history or lack of, of those leaving the service.
And, you know, a lot of folks like to jump to it is bad
credit history, therefore they can't get a loan. It is not
always bad credit. A lot of times it is just no credit history.
You know, so the extent to which on the DOD side, we can
continue and emphasize financial readiness and programs
designed to support a credit history when someone transitions
from military service.
You know, the stories that have been shared by my fellow
panel members about, you know, background and experience. The
reality is when someone puts on the uniform, they put the rest
of their life on hold to serve.
And their peers are out there gaining relevant experience
and in industries where they are looking to start a business,
therefore, they can tell a different story to a lender than
someone coming out of the service that doesn't have that same
experience.
So that also speaks to, you know, programs like DOD Skill
Bridge and continuing the opportunity for folks that do
apprenticeships, if you will, as part of their transition so
they can gain that experience.
But it is a very complex problem, this problem of access to
capital, for veterans and servicemembers.
Chair Shaheen. Well, your point about more study, I think
is a really important one. And this committee ought to look at
that and see how we can be helpful.
And, but one of the things that veterans do have are skills
that you have learned in the military, that you bring to a
business, if you start it. So, I don't know, I thought Mr.
Guerrette, Mr. Rhoades, both of you talked about some of the
challenges of getting into business.
But can you talk about what skills you brought from the
military that you think were helpful as you were starting up
your business? Can start----
Mr. Rhoades. Yes, ma'am. Actually, I can speak to two
things. What I did bring--what I am actually missing.
So, leadership and management, definitely. As an officer, I
had been trained in multiple ways and I have been able to
actually transfer some of that leadership and management
training to my managers and teach them about leadership and
management.
And so, that as well as just kind of the discipline that
you get after being in the military for 25 years about kind of
that work ethic and knowing that sometimes you are going to
work 12, 14, 16 hours and that is just the way it is.
And so, it is like they say, you quit your 40-hour job,
start your own business so you can work 100 hours a week. And
so, that happens sometimes, whether it is because I have to
cover a shift or just because that is the amount of work we
have to do.
What I am missing and what I think I would like to go and
search out is marketing, you know, business management, some of
that. I have actually considered hiring somebody with a
business management degree because sometimes you get to the
point, yes, you are running this little business, but it has
gotten a little bigger than just a little business.
You know, it is a seven-figure business all of a sudden and
you are like, what should I really be doing right now? What
should I be focusing on?
And so, I think I would like to find avenues where I could
learn a little bit about marketing. I have taken classes at
college on finances. But, you know, marketing and business
management are a couple of things I would like to search out in
the future.
Chair Shaheen. So, Ms. Shimkat, can't the SBDCs help with
that? Yes, I want Mr. Rhoades to answer, too, but I just
thought----
Ms. Shimkat. Absolutely. That is one of the things that
especially--you know, we have 15 directors plus counselors out
there that have a lot of knowledge.
And one of the things that we have really tried to do
internally also is I have a director that is really focused on
marketing, another one that has the finance depth. Another one
who is an attorney, a CPA.
And guess what? They can work together. Similar to what I
have been talking about with some of the SBA programs. So yes,
that is definitely something we can help you out with. And I
know for a fact the folks in New Hampshire can do it as well.
Chair Shaheen. Yes, I know you know the SBDC at UNH. So, I
am sure you are familiar with that. Mr. Rhoades, do you want to
answer the other question?
Mr. Rhoades. Yes, I agree a lot here. You know, one of the
skills that wasn't mentioned that I believe that I came out
with was, you know, the ability to adapt to change.
Because in the business world you may be thinking you are
going one way, then all of a sudden something happens and you
got to pivot, which I think is huge. But one of the biggest
things, like it was mentioned before, I don't remember who said
it was, when I was getting out of the military, it was pretty
frowned upon to want to start your own business. And I hope
that is starting to change.
And then, the other aspect of it is, is having somebody
help you translate the skills that you may have, that you just
don't know that you have or gained in your military service,
and how those can help you outside, I think would be very
beneficial as well.
Chair Shaheen. Yes, really important. Thank you both. I
want to--with the Ranking Member's tolerance, I will ask a
final question of Colonel Green, because Senator Ernst and I
both serve on the Armed Services committee and one of the
things that we hear a lot about are the challenges that spouses
of members in the military have as they are supporting their
spouse in their service.
And talk about, if you will, some of the ways in which SBA
is thinking about helping families and the spouses of veterans
as they are transitioning to civilian life.
Colonel Green. Chair Shaheen, this is probably one of the
most important subjects in my mind for us. With military
spouses--[technical problems]. My daughter, I will never
forgive her because she married a Marine. [Laughter.]
Colonel Green. She was a contractor for Ernst & Young in--
[technical problems]. Like, it was great money. So, she married
and--[technical problems].
So, what she did--part of the reason she is doing
successful now--[technical problems]--telework. She does
financial stuff and it kind of made sense. So, her story is
good. Seven months on the job. I told--before, I was 28 years
in the military--[technical problems]--my wife was a teacher.
[Technical problems]--so all of those challenges hit home
to me. So, what we did recently was all about the military
spouses. The Halfway to Business Program I talked about
earlier. The curriculum is on spouses--[technical problems].
Partnerships are critical. We partner with the Department of
Defense, the Military Spouse Education and Career Opportunity
Office.
And they have a great network of military spouses that can
either mentor, and you can go there for employment, or--
[technical problems]--includes entrepreneurship. We also
partner--we are trying to get the word out on all of our
programs.
So, we try to partner with the Chamber of Commerce, has an
Amplify Program. Department of Labor has a transition program
for military spouses called Teams. We got our curriculum in
there.
So, it is really important, I think. Military spouses are
hard to reach, and we are doing everything we can to reach
them. And when we do reach them, try to make it as effective as
possible. But it is still, it is a big challenge and will be a
big challenge for the future.
Chair Shaheen. Thank you very much. Senator Ernst.
Senator Ernst. Thank you. And if I could go back to you,
Mr. Rhoades, I really again, appreciate it. You mentioned the
importance of networking and in-person connections, as well as
the need for seasoned mentors.
And, in your view, would you find it helpful to get
mentorship from just anyone? Or is it better for that veteran,
small business owner who understands the landscape you are
navigating be a little more helpful than just anyone?
Mr. Rhoades. Ranking Member, thank you. It is somebody that
has gone through it. Because I have done a lot of networking
and my problem that I have ran into is from being in a small
rural area, you have amazing business leaders, but all of them
may not know the landscape of--a veteran's owned business may
need. So, it is finding that right mentor for your business
structure, I would say.
Senator Ernst. Thank you. I appreciate that. I do believe
in having someone that has walked in your boots, provide that
counseling and mentorship. I think if you can relate with
someone that has been there, done that, I do think it is
important.
And that is whether it is veterans owned business or women
owned small business, whatever it might happen to be. Yes, so
thank you. I appreciate it.
And Colonel Green as well, and this has been tricky, and I
have heard it mentioned a little bit from some of the others
here, but I have been concerned about the Administration
stripping our States of the SBA district office support, but
they are growing staff here in Washington, D.C. headquarters.
And in Iowa alone, we have gone from 12 personnel down to 4
in a very big rural State, and that was 12 in 2015 and 4 today.
The ongoing remote work policies at headquarters further
reduces the SBA's ability to serve small business owners.
So, we have seen this in many States. How does the
Administration justify stripping Iowa, New Hampshire, and other
States of district office support while moving the positions to
Washington, D.C., and further complicating this, having folks
here in D.C. oftentimes teleworking, so they are not even in
the office. Then, how does that help our rural areas?
Colonel Green. Ranking Member Ernst, I appreciate the
concern you have with--I am really focused on serving veterans
through our programs. I can't really speak to the district
offices and how they are managed.
We do have--we do get extremely strong support from the
administrator and for our programs serving veterans, and for
the VBOCs, and for the Boots to Business Program. So, I really
can't comment, but I can take that question back for our
Congressional staff.
Senator Ernst. Yes, I appreciate that. Let's--I will submit
that for the record. I just want to voice the concerns because
we have heard many times over from so many of us that are in
rural areas and how we have lost staffing in rural communities.
It is not just going to impact, you know, everyday Joe on
the street, but it is most certainly going to impact our
veterans as well. States like New Hampshire, States like Iowa.
A lot of our veterans members are also National Guardsmen and
Reservists.
And oftentimes those numbers are not rolled up into the
metrics that SBA is looking for when they are placing VBOCs.
So, we do need to make sure that we are adequately
representing veterans, regardless of whether they were an
active duty service member or whether they are a veteran that
is coming home from a deployment and needing to start a new
experience--whether that is owning their own business or
starting into a new job.
I know that many of the soldiers I served with had those
complications, coming home from those rapid deployments through
the global war on terrorism. So, we do need to make sure we are
representing all veterans to the best of our ability.
So, Madam Chair, I appreciate this panel. Wonderful
service. Thank you all so much for what you have done, and for
being with us today. And I am so glad that we have been able to
focus really on our veterans community.
And thanks for everything that you do for our veterans, and
congratulations to our business owners as well. Thank you for
joining us.
Chair Shaheen. Well, thank you very much, Senator Ernst.
And just for the record, let me point out that I share those
concerns about a reduction in staff in district offices,
because our district offices, our SBDC, our VBOCs, all of those
centers that serve small businesses are really critical and it
is critical to be there in person to have somebody that people
can talk to.
To all of you, thank you so much for being here today, and
for the work that you do on behalf of our nation's small
businesses and on behalf of the veterans community. We look
forward to staying in touch as we try and take some of the
ideas that you have given us today and think about how to
translate those into legislation or into better service for our
veterans.
The record will remain open for two weeks because of the
holiday, for additional questions and statements. And with
that, the committee stands adjourned. Thank you.
[Whereupon, at 4:15 p.m., the hearing was adjourned.]
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