U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

20–074 2016

INSPIRING ENTREPRENEURS: LEARNING FROM THE 

EXPERTS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MAY 11, 2016 

Small Business Committee Document Number 114–059 

Available via the GPO Website: www.fdsys.gov 

SBREP-219A with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

RICHARD HANNA, New York 

TIM HUELSKAMP, Kansas 

CHRIS GIBSON, New York 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

CARLOS CURBELO, Florida 

CRESENT HARDY, Nevada 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

YVETTE CLARK, New York 

JUDY CHU, California 

JANICE HAHN, California 

DONALD PAYNE, JR., New Jersey 

GRACE MENG, New York 

BRENDA LAWRENCE, Michigan 

ALMA ADAMS, North Carolina 

SETH MOULTON, Massachusetts 

MARK TAKAI, Hawaii 

KEVIN FITZPATRICK, Staff Director 

JAN OLIVER, Chief Counsel 

MICHAEL DAY, Minority Staff Director 

SBREP-219A with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Steve Chabot ................................................................................................... 1 

Hon. Nydia Vela ́zquez ............................................................................................. 2 

WITNESSES 

Ms. JJ Ramberg, Host, MSNBC ‘‘Your Business’’, New York City, New York .. 4 

Mr. Ramon Ray, Editor, Smart Hustle Magazine, Elizabeth, New Jersey ......... 6 

Ms. Susan Solovic, The Small Business Expert & Advocate, St. Louis, Missouri ....................................................................................................................... 8 

Ms. Melinda Emerson, Founder & CEO, Quintessence Group & Melinda 

F. Emerson Foundation, Drexel Hill, Pennsylvania .......................................... 10 

APPENDIX 

Prepared Statements: 

Ms. JJ Ramberg, Host, MSNBC ‘‘Your Business’’, New York City, New 

York ................................................................................................................ 32 

Mr. Ramon Ray, Editor, Smart Hustle Magazine, Elizabeth, New Jersey .. 36 

Ms. Susan Solovic, The Small Business Expert & Advocate, St. Louis, 

Missouri ......................................................................................................... 38 

Ms. Melinda Emerson, Founder & CEO, Quintessence Group & Melinda 

F. Emerson Foundation, Drexel Hill, Pennsylvania .................................. 46 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

SBREP-219A with DISTILLER

SBREP-219A with DISTILLER

(1) 

INSPIRING ENTREPRENEURS: LEARNING 

FROM THE EXPERTS 

WEDNESDAY, MAY 11, 2016 

HOUSE OF REPRESENTATIVES, COMMITTEE ON SMALL BUSINESS, Washington, DC. 

The Committee met, pursuant to call, at 11:00 a.m., in Room 

2360, Rayburn House Office Building. Hon. Steve Chabot [chairman of the Committee] presiding. 

Present: Representatives Chabot, Hanna, Luetkemeyer, Gibson, 

Brat, Hardy, Kelly, Radewagen, Vela ́zquez, Hahn, Adams, and 

Lawrence. 

Chairman CHABOT. Good morning. The Committee will come to 

order. I want to thank all the witnesses for being here and we will 

get to you very shortly. 

Last week, our country recognized National Small Business 

Week, a time when small businesses and entrepreneurs are celebrated for the tremendous impact they have on every community 

all across America. Setting aside a week to highlight the importance of small businesses services is a reminder as to how crucial 

they are to our national prosperity and economic security. Here at 

the Small Business Committee we are reminded of this every day. 

It is often said that when small businesses succeed, America succeeds. At the very heart of small businesses, what allows them to 

succeed, are the people, the men and women of this country who 

set out with an idea and the desire to turn that idea into a reality. 

It is this enduring spirit of American innovation that continues to 

breathe life into our economy and create the jobs no government 

program can. 

Today, the Committee is excited to have before it what is truly 

an expert panel. Our witnesses today are prominent and passionate 

voices in the small business community all across America. Each 

of our witnesses have taken the lessons learned from building their 

own businesses and provide guidance to small business owners and 

aspiring entrepreneurs. The difference between a good idea and a 

good business is execution, and who do America’s small businesses 

turn to for help developing and executing a business plan? They 

turn to J.J. Ramberg, to Ramon Ray, to Susan Solovic. 

Ms. SOLOVIC. Solovic. 

Chairman CHABOT. I apologize. They pronounce it correctly and 

they turn to her, and to Melinda Emerson, and today, so do we. 

Through their work, our witnesses have helped to inspire and 

shape countless small businesses all across America. They have 

their fingers on the small business pulse and can offer unique perSBREP-219A with DISTILLER

2 

spectives as to the challenges small business owners face every 

day. This Committee is eager to hear more about the great work 

our witnesses are doing to help small businesses and grow the conversation of small business success stories. 

I would like to thank all of the witnesses for coming here today. 

We will stop talking soon and turn to you all, and we will listen, 

but at this point I would like to yield to our ranking member, Ms. 

Vela ́zquez, for her opening remarks. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. 

Our nation’s culture, character, and economy have always been 

defined by entrepreneurship. Today, 28 million small firms drive 

growth and create opportunity in major cities, rural areas, and 

every community in between. Small businesses employ over half of 

all private sector employees. Their hard work, innovation, and ingenuity to create new products and open new markets contributes 

to all economic sectors. 

However, forming a new business is an inherently risky undertaking, and there are many obstacles entrepreneurs face when getting started. From accessing capital to navigating an uncertain tax 

code, to managing operations, to understanding their regulatory 

landscape, it is not as simple as it once was to start a small business. As a result, we have seen the face of small businesses change. 

Small businesses have always been dynamic, but in today’s world, 

that rate of change is accelerating. Many entrepreneurs no longer 

choose the traditional brick-and-mortar business model. Instead, 

they opt for sole proprietorship and online models that provide 

greater flexibility. These structures allow many entrepreneurs to 

launch a new venture while avoiding risks, like sales revenue or 

cash flow, that are primary concerns for more traditional firms. 

We have also seen the face of entrepreneurship evolve to more 

accurately reflect our nation’s diversity. The rate of minority- and 

women-owned small business growth continues outpacing other 

business growth. Released last year, the 2012 Survey of Business 

Owners found that the percentage of minority-owned firms increased from 22 percent to 29 percent over a 5-year period. Meanwhile, the number of other businesses declined by 1.1 million. 

Women-owned firms also experienced higher growth rates than 

their male counterparts as their market share increased by more 

than 2 million firms. 

These are positive trends, but minority- and women-owned firms 

continue facing barriers to formation and growth. They find it 

harder to secure financing and often face unfair treatment in the 

marketplace from potential customers and vendors. 

If the economy is to benefit from the high rates of business formation and the job creation that follows, more must be done to ensure hurdles like these are removed. One role for this committee 

is ensuring these firms can access resources to overcome those barriers and expand opportunities for all Americans. 

In more than two decades on this committee, I have seen firsthand the ingenuity and resilience of small business owners, not 

only in my district, but across the nation. These firms can accomplish great things if they have the right tools. 

During today’s hearings, some of the country’s leading small 

business experts and advocates can provide us with useful guidSBREP-219A with DISTILLER

3 

ance on how to better accomplish that goal. In that regard, I want 

to thank all the witnesses who traveled here today for their participation and valuable perspective. 

Thank you again, Mr. Chairman, and I yield back. 

Chairman CHABOT. Thank you very much. The gentlelady 

yields back. 

Now, before I introduce the panel, no more speeches, but I would 

like to just kind of inform you all about our lighting system. You 

all have probably been informed that you have 5 minutes each to 

testify. The lights there will help you to stay within that if at all 

possible. The green light will be on for 4 minutes. The yellow light 

comes on to let you know you have about a minute to wrap up, and 

the red light comes on and we ask that you try to stay within that 

if at all possible. We will give you a little flexibility, but not a 

whole lot, so try to stay within it. I do have a gavel up here. 

We would now like to introduce our very distinguished panel. We 

are pleased, as I said, to have a really fantastic group of folks here. 

First, we have Ms. J.J. Ramberg. Ms. Ramberg is the host of Your 

Business, a program on MSNBC that is dedicated to issues affecting small business owners, as well as the author of the best-selling 

book, It Is Your Business. She is also an entrepreneur herself, cofounding Goodshop, an online platform that has forged a connection 

between retail savings and nonprofit and school fund-raising. We 

welcome you here this morning. 

Our second witness will be Ramon Ray. Mr. Ray is an entrepreneur, keynote speaker, author, journalist, and publisher of 

Smart Hustle Magazine. This magazine is dedicated to telling the 

journey of entrepreneurs and small businesses. Mr. Ray’s specialty 

is in working with small businesses to help them grow by better 

utilizing technology and marketing. Mr. Ray has traveled the Nation speaking at and hosting events designed to help small business owners and entrepreneurs grow their business. 

Our third witness today is Ms. Susan Solovic. Ms. Solovic is an 

entrepreneur, best-selling author, media personality, speaker, and 

she is known as ‘‘the’’ small business expert. No offense to the 

other witnesses here today. Ms. Solovic has served on the National 

Women’s Business Council, and is a past board member of the 

Women’s Leadership Board at Harvard University, the Women 

Presidents Organization, Women Impacting Public Policy, and the 

Institute for Economic Development of Women. We welcome you 

here this morning as well. 

I would now like to yield to the Ranking Member for the introduction of our fourth and final witness here today. 

Ms. VELA ́ ZQUEZ. Thank you, Mr. Chairman. It is my pleasure 

to introduce Ms. Melinda Emerson. Ms. Emerson, also known as 

the SmallBizLady, is the leading expert in all things small business. She is the creator and host of Small Biz Chat, the longestrunning live chat on Twitter for small business owners, which 

reaches more than 3 million entrepreneurs each week. She was 

named by Forbes magazine as the number one woman for entrepreneurs to follow on Twitter. In addition to being a regular columnist for the New York Times, Ms. Emerson is the founder and 

president of the Quintessence Group, an award-winning marketing 

consulting firm based in Philadelphia, Pennsylvania, as well as the 

SBREP-219A with DISTILLER

4 

founder of the Melinda Emerson Foundation, which provides mentoring and business training for minority and women entrepreneurs. Welcome. Thank you. 

Chairman CHABOT. Thank you very much. We are done talking, 

so we will now start our panel. Ms. Ramberg, you are recognized 

for 5 minutes. 

STATEMENTS OF J.J. RAMBERG, HOST, MSNBC, YOUR BUSINESS; RAMON RAY, EDITOR, SMART HUSTLE MAGAZINE; 

SUSAN SOLOVIC, THE SMALL BUSINESS EXPERT AND ADVOCATE; MELINDA EMERSON, FOUNDER AND CEO, QUINTESSENCE GROUP AND MELINDA F. EMERSON FOUNDATION 

STATEMENT OF J.J. RAMBERG 

Ms. RAMBERG. Thank you. Good morning, everyone. Thank you 

so much, Chairman Chabot and Ranking Member Vela ́zquez, and 

everyone, for inviting me to testify today. It is a true honor and I 

really appreciate having the time to speak with you all. 

For the last 10 years, I have had a really unique vantage point 

when it comes to small business and entrepreneurship, because 

during this time I both founded and have grown my own company 

called Goodshop, and I have been the host of Your Business on 

MSNBC. Through that I have been able to interview thousands of 

small business owners and investors and experts to really understand best practices when it comes to small growth survival and 

expansion. We were around in 2008, so we did a lot of stories on 

survival in those days. 

This show was originally supposed to be on air for just 6 months, 

but we quickly learned that there was such a strong appetite by 

small business owners for advice and inspiration, and I think most 

importantly, just a sense that they are not alone on this journey. 

Now we are the longest-running show on MSNBC. We have been 

on for 10 years. 

Entrepreneurship is in my blood. I am a third generation entrepreneur on both sides of my family. My paternal grandfather 

moved here from Mexico, and his first job here was as a peddler 

selling pots and pans and blankets door to door. He then went on 

to open a furniture store which my dad took over, and then my dad 

opened a storage business, a document storage business, and a real 

estate development firm. 

On my mother’s side, my grandfather was sort of a typical entrepreneur, always starting companies from a tropical fish company to 

he was the first person to bring frozen pizza to California, and he 

had a tire distribution company. My mom got the bug. When she 

was in her late forties, she partnered with my brother to start a 

company called JOBTRAK, a very bootstrapped company. I spent 

many of my summer hours making cold calls for that company 

when they first launched, and 12 years after they launched they 

sold that company to Monster.com. 

I had a really special place by the time I started my company in 

2005, because I had a front row seat to watching things go from 

idea to a business multiple times. As I look at my own experience, 

and I have talked to so many small business owners around the 

country, I know that having that experience and having a group of 

SBREP-219A with DISTILLER

5 

people around me who are advisors, who I can ask questions of 

very informally, really provides a shortcut to small business 

growth. It can be the difference between failure and success. 

I do believe nothing really prepares you, even though I witnessed 

all these businesses, for doing it yourself. I certainly went in with 

my eyes open and I had a good group of people around me. My 

company Goodshop, which I founded with my brother Ken, was 

conceived upon a foundation of socially responsible business. We 

wanted to do good and do well. We have partnered with more than 

30,000 retailers, and we provide the best coupons and deals for 

those retailers. If a user selects their favorite nonprofit or school, 

a percentage of what they spend goes back to that cause. Now we 

have saved people about $100 million in savings when they are 

shopping, and we have donated more than $12 million to organizations, large and small, across the country. 

We now have about 60 employees and we continue to grow. We 

have a number of jobs that are still open right now that we are trying to fill. The company started just like many other bootstrapped 

businesses, with me working in my one-bedroom apartment in New 

York City, 24 hours a day, basically making calls in my pajamas, 

and my brother working at home at his place in Los Angeles, and 

just working hard. It took a lot of work to get to where we are 

today. 

A few months after we launched Goodshop, I had the honor of 

being called by MSNBC and being brought on to launch the program, Your Business. On this show, once a week, we tackled common small business issues through profiling small businesses. 

These are issues that we hear consistently across the country regardless of industry and regardless of geography. 

To give you some examples, we profiled a beauty salon in New 

Jersey, which was having trouble navigating the layers of regulations, local regulations, that kept them away from focusing on their 

growth. We told the story of a company that turns your T-shirts 

into blankets, and they could not find funding, despite very initial 

success that they had. We interviewed a woman whose clothing 

business was having trouble until she met an advisor from the 

SCORE organization. Simply having his perspective changed everything and her company started growing. Finally, we have done a 

series of stories on Main Streets across America, from Brundidge, 

Alabama, to Natchez, Mississippi, and I have seen the change that 

government grants can make—how money given to pave streets, 

help with signs outside of stores, get streetlights, flowers—can 

transform a Main Street and transform a city. Finding champions 

in those areas who are able to find those grants and get the businesses to work together can transform everything. 

Now, I believe we are at a very exciting time for small business 

and entrepreneurship. I have with me, as I said, true champions 

who have worked with small businesses to help them grow and 

transform the economy of different cities around the world. Technology companies, particularly in the FinTech world and the 

EdTech world are just beginning to address these issues of small 

business funding and getting an educated workforce. I am excited 

to see what happens as these companies and these industries grow. 

SBREP-219A with DISTILLER

6 

Now, there is no doubt, as we all at this table know, that owning 

a small business and entrepreneurship is no cakewalk. It can be 

hard. There are many people who struggle, and even for those who 

are very successful, there are a lot of pain points along the way, 

which is why I really want to thank you again for taking the time 

to talk about small business success stories. Because the more attention we can pay, the more focus we can put on both the challenges on small businesses and the success of small business and 

the contributions of small business owners, the more we can support this very incredibly important part of our economy. Thank 

you. 

Chairman CHABOT. Thank you very much. We appreciate it. 

Mr. Ray, you are recognized for 5 minutes. 

STATEMENT OF RAMON RAY 

Mr. RAY. Thank you very much. I would also like to acknowledge 

my wife of 22 years, who is there, and my daughter. I am sorry. 

Thank you. I would like to acknowledge my wife of 22 years and 

my daughter Charity, who is over there to my left as well. It is 

good to be amongst friends and experts who I have learned from 

over the years. 

Chairman Chabot, Ranking Member Vela ́zquez, thank you for inviting me to represent America’s small business owners and entrepreneurs at this Committee hearing. 

I would also like to extend a great warm greeting to the representatives from New Jersey, where I live near Newark Airport, 

and those from New York, where I grew up in Brooklyn. It is nice 

to see you all here as well. 

Starting and growing a business, as we have talked, as you all 

know—— 

Chairman CHABOT. You are making a lot of friends. 

Mr. RAY. Oh, great. Starting and growing a business is fraught 

with challenges as many of us know. I have started four businesses, and I have been blessed to be able to sell one of them and 

am on the way to selling the second one. I am an entrepreneur who 

is currently growing two companies, and one of those companies is 

Smart Hustle Magazine. 

The day-to-day challenges of business ownership includes, of 

course, hiring the right staff, obtaining financing, trying to get new 

customers, and maybe keeping the ones we have. Also, of course, 

navigating government regulations and so much more. 

Business ownership, it is not, of course, just about the challenges, but as many of us here on this panel know, it also comes 

with the sweet taste of independence, the freedom to chart our own 

course, the privilege of helping others with our income and, earning 

profitable rewards from the risks that so many small business owners and entrepreneurs take day to day. I think the greatest reward 

is the awesome responsibility of providing for our families and supporting our communities, which I know all of us here do. 

Chairman Chabot and fellow Committee members, more important I think than any of us in this room, of course, are the thousands and thousands of small business owners who I am privileged 

to speak to across the country on a yearly basis, and the millions 

SBREP-219A with DISTILLER

7 

of small business owners that I am able to touch through events, 

through conferences, being on J.J.’s show, Twitter chats, et cetera. 

Based on the input from this community—and I did ask, what 

should I tell the Committee?—there are three recommendations 

that they would like me to express to you today. Many of them you 

have heard, but I hope this helps to underline them. 

I think first is definitely a continued reduction of burdensome, 

and I would say unnecessary, regulation at the Federal level, but 

let’s also try to work and help at the local and State level as well. 

We need regulation, absolutely, for our safety. Please make sure 

the plane I am flying on tomorrow is safe. But, we do not need burdensome or unnecessary regulation. I think as an example that we 

have seen, in my opinion, the treatment of Uber. It is now a very 

big company, but I think that aspect at a very local level of stifling 

innovation and limiting growth is an example of what I think small 

businesses do not need. 

Second, I would say the reduction and simplification of taxes. I 

count it as a privilege that I can pay taxes which, from my hardearned income, helped to fund our awesome government. However, 

I would dare say, is there a limit to what taxes and tax laws are 

fair versus which ones are excessive and burdensome? Every year 

I pay thousands of dollars. Now, not as much as J.J. and Melinda 

and Susan pay, because they have a lot more money, but every 

year I pay thousands and thousands of dollars in taxes, and I 

would rather reduce the taxes I pay and instead use those funds 

to grow my business and invest in my community. 

Thus, as we said, investing in America. 

The third thing that my community has said, please tell the 

House of Representatives, please tell the congressmen and women, 

to foster small business education. I applaud the great work of the 

Small Business Administration, of SCORE, that I benefitted from 

many years ago; 26 Federal Plaza, that is where I went to. SBDCs 

and other government-supported organizations, they support and 

educate small business owners. I think the more we can invest in 

the education of business owners, the more we ensure that less 

businesses will fail and more will succeed. In particular, I applaud 

the great work of the New York City Department of Small Business Services. It happened to be in my backyard, but a great model 

I think that many local governments can follow. 

Private and for-profit education efforts, such as the Goldman 

Sachs 10,000, Google’s Get Your Business Online, Microsoft’s Small 

Business Academy, Kaufman Foundation, and many more, these 

are examples of not government organizations, but still in the 

whole sphere of educating small business owners. 

I was recently speaking with Robert Herjavec of Shark Tank and 

we discussed how all businesses hustle. They all work hard. They 

grind. We all work hard. However, it is those who are educated— 

and I think education is so important—who have smart hustle, who 

succeed. Educating business owners is essential. 

As I conclude my statement, I think of a company like 

Infusionsoft, which was started by three friends in a strip mall, or 

a company like SumoMe, started by someone who was fired by 

Facebook. They are in Austin, Texas. These companies, my comSBREP-219A with DISTILLER

8 

pany, and millions of other small businesses, they need to be encouraged to start, grow, and thrive. 

Let’s think about the husband and wife who have just started 

their business today, what can we do to help them? Or a high 

school graduate who is now working on an invention right now to 

put me out of business, unfortunately. Or the laid-off 50-year-old, 

who is forced to begin their own business. The best thing our government can do for small business owners, as I conclude, is to limit 

regulation, lower and simplify taxes, and continue to invest in the 

education of small business owners at the local, State, and Federal 

level. 

Thank you very much for the opportunity to share about the 

hustle—as I also like to say, the Smart Hustle—of entrepreneurship in America. Thank you so much. 

Chairman CHABOT. Thank you very much. It is not very often 

that we get called awesome around here. But thank you. 

Ms. Solovic, you are recognized for 5 minutes. 

STATEMENT OF SUSAN SOLOVIC 

Ms. SOLOVIC. Good morning, everyone, Chairman Chabot, 

Ranking Member Vela ́zquez, members of the Committee. I thank 

you so much for giving me the opportunity to be here with you 

today to share my insights and experiences as a small business 

owner and as an instructor to small businesses around the country. 

It is truly an honor to be here. 

Let me begin by sharing a little bit about my entrepreneurial 

background. You see, I had a great mother. She became an entrepreneur right after she lost her first husband in World War II out 

of necessity, but she sure learned a lot. She had a number of businesses along the way. 

When she married my father and moved to the town he lived in, 

they opened up their own funeral home. A very small, rural Missouri town, 3,000 people, now 2,999 since I have gone. I grew up 

working in a family business from the time I could barely even 

walk, and I started my own personal journey when I was 15 years 

old. After waiting tables and getting blisters on my feet, I realized 

there had to be a much better way to make a living. I realized I 

could teach little girls how to twirl a baton every Saturday morning, 75 of them in the high school gym, for $1 each. I thought, this 

is pretty good, better than working for tips. I opened up a small 

dance studio in my basement and taught little girls how to do ballet, tap, and jazz. Then, of course, college comes along and I moved 

on. 

I followed a traditional career path for a while. I had a lot of success there. I was one of the first female executives in a Fortune 50 

company in their financial services division. I am also, Chairman 

Chabot, like you, an attorney, and I got to work with many small 

business owners setting up their legal entities and structures. I 

also did quite a bit of franchise law during that time. 

I have worked with small businesses in many capacities, but my 

heart has always been in my own entrepreneurial endeavors. I 

truly enjoy being my own boss. I like making deals happen. I like 

making money, and I like seeing it all come together, birthing 

those entrepreneurial activities and watching them grow. I, too, 

SBREP-219A with DISTILLER

9 

have had the opportunity to sell a business, in 2009, right toward 

the end of the recession. I was very fortunate; my business continues to prosper. 

Unfortunately, as I talk to small businesses around the country, 

many of them are saying they are discouraged and disheartened. 

They are struggling. We know now that the number of small business closures is exceeding small business startups. That is a critical issue for the recovery of our economy. The Capital One Spark 

Business Barometer just noted that small business confidence is 

down almost 10 points from where it was this time last year. Businesses are struggling. They tell me their business dreams have 

now turned into nightmares, and that is sad. 

I have created a process I call the 1 percent edge. It is a process 

to get small businesses growing again. It is to help them become 

and place innovation into the DNA of their companies because we 

all know now what is cool and hot today is obsolete tomorrow. If 

you are doing business the same old way you have always done it, 

you are falling behind when you get started. 

I got the idea when I was teaching an MBA class on entrepreneurial growth strategies, and I had a co-professor because I travel 

quite a bit. The co-professor would stand there and talk about case 

studies. He would put big formulas on the board. And then I would 

stand up to the class and say, now, let me tell you how it really 

works. If you are studying case studies in today’s marketplace that 

is changing so rapidly, you are behind the eight ball. As someone 

once said, if you are just now jumping on the bandwagon, you are 

too late. You already missed it. 

We have to give entrepreneurs the opportunity to be innovative, 

not just in their product and service delivery, but in their internal 

processing systems as well. Technology is certainly changing, leveling the playing field for small businesses, yet we need to get 

them to embrace it. I love to see small businesses using social 

media because it gives them an opportunity to broadcast their 

brand. I had an advertising agency at one point in time and people 

used to say to me, I do not have money to market my business. 

Now they say to me, I do not have time to market my business. 

The world is changing. 

Before I run out of time, I do want to deliver another personal 

story. Ramon talked about regulations. I know you hear it all the 

time. In today’s news we are talking about the increase in the overtime pay. My parents, in that little funeral home, had an ambulance service for many years. It was not a profit center; it was a 

service to the community. The Department of Labor sent an auditor in and audited my parents, and decided whenever a hearse had 

a stretcher in it, it was covered by the wage and hour law. Whenever it was a hearse, it was not. Well, what happened is he extrapolated all the back pay my parents owed their three or four employees, told them they had 2 years to sue, and told them how to do 

it. Unfortunately, because it was not a moneymaker for my parents, they did not pay, no one sued, but they, like many funeral 

homes, quit the ambulance service. My little small-town community in rural Missouri had no service for many years until the hospital decided to take it over. 

SBREP-219A with DISTILLER

10 

While I think that policies and regulations, as Ramon said, are 

good, and they are always passed with the best intentions at heart, 

sometimes we do not take time to understand the effects and the 

far-reaching effects that it has, not only on small businesses and 

jobs, but on our communities as well. I do believe that today we 

are living in a world where entrepreneurship is still great. This 

country was built on the spirit of entrepreneurship, and God love 

us all, it is still the greatest country in the world. Thank you all 

to the wonderful public service you do to help us and grow our 

businesses. 

I also want to applaud you for your bipartisan efforts, to get 

some victories through in terms of legislation. You are helping us, 

we appreciate what you do, and I look forward to our discussion 

today. 

Chairman CHABOT. Thank you very much. With the way I mispronounced your name, you have every right to call me Cabot or 

anything else you want. 

Ms. SOLOVIC. I am sorry. 

Chairman CHABOT. It is quite all right. Quite all right. 

Ms. SOLOVIC. Why would we not be simple like Smith or Jones, 

you know? 

Chairman CHABOT. There you go. That is right. 

Ms. Emerson, you are recognized for 5 minutes. 

STATEMENT OF MELINDA EMERSON 

Ms. EMERSON. Thank you Committee Chairman Chabot and 

Ranking Committee Member Vela ́zquez, and the rest of the Small 

Business Committee. I truly am grateful for this opportunity to 

share with you what I think is the status of small business in the 

United States. 

My name is Melinda Emerson, but my nickname worldwide is 

SmallBizLady, and my mission is to end small business failure. 

Every single thing I do, every blog post I write, every book I have 

written, every interview I give, is about giving people nuggets that 

they may not even know will potentially befall them as they start 

a small business. 

You know, the funny thing about being a small business expert 

is I rarely hear bad business ideas. Unfortunately, however, I see 

poor business execution everywhere. It is like the cold and the flu, 

it is everywhere. I have to agree with my colleagues that there are 

four major things that I think we need to help small business with. 

Number one is access to credit and capital. A lot of the reasons 

why small business cannot get capital is because they have poor 

credit. I also think they need training. They need education. We 

need to talk about the best ways that the government can help do 

that. Certainly, there is SCORE. There is the SBA. There is the 

Small Business Development Centers. There are P-TECH centers, 

and there are some great work going on in these centers. However, 

there is some quality control issues. Depending on what city you 

are in depends on how good the services are in your city, and I 

think we need to do more with that. 

I also think that we need to look at how we can help entrepreneurs get access to networks, particularly minority and women 

entrepreneurs. We did not go to the business schools that other 

SBREP-219A with DISTILLER

11 

people got to, so when the major decision on whether or not you 

get private equity funding has to do with whether or not you went 

to the same B school as the people doing the funding decision, I 

think we need to look at different ways that equity can be done. 

I am aware of programs that, you know, sort of like how SBIR 

grants and things are done. There are organizations, nonprofit organizations that have been given funds from the government to do 

equity investment, so it is not just about going in with a pitch 

board and having the right deck and the right idea and the right 

management team. I mean, there are other ways to get private equity capital in the hands of businesses that so desperately need it. 

I also think we need to look at mentorship. Mentorship is essential. The work that SCORE does is God’s work as far as I am concerned. I believe that SCORE has made the difference in so many. 

I am from Philadelphia, so I do have to give a shout out to SCORE 

Philadelphia. They have done an amazing job, and any time I can 

help them, I do. We do know that there are differences in other 

markets, so I do think that mentorship, networking, access to capital, and then just access to opportunities. I think if we look at the 

work that the government does and all the things that the government spends, I do think we need to enforce the set-asides, and it 

is not just enough for people to make a best effort; I think we need 

to start holding people accountable for missing their goals for setasides for minorities, women, veteran-owned, as well as 8(a) setaside contracts. 

I also think that when these contracts are given or when people 

are partnered with prime contractors, we need to make sure they 

get paid, because one of the biggest issues that befall small businesses of all types, creeds, and colors, is getting paid. That is, 

whether they are doing business with corporations or doing business alongside a prime for a government contract, or, frankly, 

doing business directly with the government. Getting small businesses paid net 30 or faster through electronic funds transfer needs 

to become the standard and not something that if you have the 

right relationship you can make happen. 

I think if we look at some of those things, I think that we will 

go a long way in making sure that we grow America’s small businesses. 

Now, Committee Member Vela ́zquez, I wanted to address your 

excitement about the numbers of minority- and women-owned businesses that have been started over the last 5 years. While those 

numbers have grown, the revenues of those businesses have not. If 

you look at just women-owned businesses, for example, AsianAmerican women businesses, on average their revenue is $330,000. 

African-American women businesses on average start revenue is 

$38,000. What is the poverty number? Do you know what I mean? 

So when you look at what is really going on, a lot of these people 

are starting businesses because they got washed out in the recession. They still have not been able to find a job, so they are starting 

what I call side hustle businesses for cash. They are not really 

starting businesses that are going to scale. They are not starting 

businesses that are going to be able to hire employees if we do not 

give them some infrastructure. 

SBREP-219A with DISTILLER

12 

I also think that when we look at models of things that we want 

to do to help small businesses, we need to look internationally. I 

have had the opportunity to travel as the SmallBizLady around the 

world, and I see other countries approach entrepreneurship as 

their strategic advantage in their country. If you look at Singapore, 

for example, they invest $50 million a year in youth entrepreneurship. They have a mall in the heart of their equivalent to Rodeo 

Drive just for youth entrepreneurs. Young entrepreneurs as young 

as 10 years old can get a stall in this mall and sell their products 

and services. They consider youth entrepreneurship up to 35 years 

old. They are strategically funding entrepreneurs and training entrepreneurs that young. 

If you look at China, I had the opportunity to travel in October 

to Hung Jo, which is the Silicon Valley of China, they have a place 

called Dream Town. If your business qualifies to get into Dream 

Town, you get office space in there for 3 years. They have a $300 

million fund to put equity into these businesses. Other countries 

are taking entrepreneurship very seriously. If you look at Start-up 

Chile, for example, Start-up Chile will give you $40,000 and a place 

to stay for a year if you are willing to go to Chile and start your 

business. 

Start-up America is a PR campaign that at best you might network with some people if you go to one of their events. I think we 

need to get serious about entrepreneurship and these programs because I do believe it is a competitive advantage. I have a 10-yearold son who tells me all the time, Mommy, I do not need to go to 

fourth grade. I already know how to make money. I am like, well, 

sweetheart, I need you to know how to count money, so I need you 

to go to school. 

My point, simply, is that I think we need to bolster programs like 

Junior Achievement, like the National Foundation of Teaching Entrepreneurship, particularly in our urban decaying schools that are 

struggling anyway. When we look at our ex-offender population 

coming out, we need to teach these people how to start businesses 

because they are not going to be able to get jobs anyway. I do believe that entrepreneurship is the difference, and it is my passion. 

I really appreciate the opportunity to come here today to talk to 

you about what we need to do to help America’s small businesses. 

Chairman CHABOT. Thank you very much. 

I have to say, as chair of this Committee, if this is not the best 

testimony we have had from a panel, it is certainly at or near the 

top. Well done. All four of you were good. I kept thinking, that was 

great. That was maybe even better, and even better. This is really, 

really good. Well done. Maybe we should just not ask questions and 

let you all talk. We would not do that. We are politicians after all. 

I will recognize myself for 5 minutes and we will move around 

here. I will begin with you, Ms. Ramberg, if I can. 

What are some of the top questions that you are asked by small 

business folks who ask you for advice, either on the street or on 

your TV program? What do they ask you and what do you tell 

them, a couple of things? 

Ms. RAMBERG. We get questions. It runs the gamut. Right? 

How do I find money? How much money is it going to take for me 

to start my small business? How do I find good employees? We get 

SBREP-219A with DISTILLER

13 

very granular, so it could be how do I fire my first employee? I 

think, how do I get an IP lawyer, right? Where do I find a company 

to develop my Web site? I get questions across the board. What it 

speaks to is the fact that all of us have mentioned, there needs to 

be small business education. We are not reinventing the wheel. 

Any problem that you, as a small business owner, are dealing with, 

someone else has. 

For instance, I belong to this organization called YPO, Young 

Presidents Organization, and we meet once a month where we talk 

about our business issues. It is an extreme shortcut for me to get 

to an answer about an issue that I am facing. So we need to create 

these networks, again, as Melinda just said, for everyone. 

Chairman CHABOT. Thank you very much. Thank you. 

Mr. Ray, I will go to you next. I had a prepared question but I 

thought of something I thought would be more interesting, so I am 

going to ask you something maybe a little off the wall. 

I had the opportunity to meet not only with you in my office before this, but also with your beautiful wife and your daughter 

Charity. I do not know if Charity is interested in going into small 

business someday. But, if you had to give her advice on how to be 

successful down the road, how to prepare herself and what kind of 

things she ought to be thinking about if she want to be successful 

in life, or in small business, what would you tell your daughter? 

Mr. RAY. I do advise her quite a bit to her angst, unsolicited. I 

think there are a few things. It is interesting you asked that because that is a question that many people ask me. You know, they 

see me on stage and et cetera, and it is very simple. 

I think, one, and this is not really small business advice, but for 

me, I find just being nice to people and making connections. Because there are some people who you come in contact with—I am 

sure we have all met them—there are some slimebucket nasty people out there. You cannot succeed unless you have a smile or are 

nice. That is one. 

Chairman CHABOT. That is kind of similar to the field that 

most of us are in up here, too. We would never say which ones are 

in that category. 

Mr. RAY. I understand. 

Chairman CHABOT. People usually figure that out on their own. 

Mr. RAY. Absolutely. The second thing I share with my daughter, you can ask her, I share with her and my son as well, make 

connections. Because the only thing different from me being here 

today, and we are all on the panel, and anybody else, is the connections I have made. Being nice, making connections, looking for and 

taking advantage of opportunities. 

The third thing I would say is that going back to the grit or the 

hustle, the hard work, is love to be punched in the face, get back 

up, ask for more, but learn. My point is being able to innovate. You 

are not going to get it right the first time. Those are the three 

things I would say. 

Chairman CHABOT. Thank you very much. 

Mr. RAY. You are welcome. 

Chairman CHABOT. Ms. Solovic, I will go to you now. You mentioned you had 75 kids that you taught years ago. I do not know 

if you have kept in touch with any of those or not, but did any of 

SBREP-219A with DISTILLER

14 

those young ladies ever become small business people or end up in 

careers that might be of interest to folks? 

Ms. SOLOVIC. You know, it is interesting. The little town I grew 

up in is very depressed and, unfortunately, most of the young people do not get out of that town. Very few people from there go to 

college. In fact, when I was growing up there it had the highest illiteracy rate of any area in the State of Missouri. So it is a very 

depressed community. 

I do keep up with some of them on Facebook. They seem like 

they are doing well. They are married with children of their own. 

I realize I could easily be a grandmother. Not a problem. But they 

are doing well. 

While we are talking about young women, though, I want to 

dovetail on something Melinda said, and that is growth capital for 

women-owned businesses. I know the Title III regulations go into 

effect on Monday. I think that is great for the crowdfunding source, 

but to really grow a large organization and scale it, you have got 

to get venture capital. It is very tough for most small businesses 

to get VC money. It is particularly difficult for women-owned businesses. 

I started one of the first video-based Internet sites, and I did 

raise venture capital. I did not go to a pedigree school, an Ivy 

League school. I was not from one of the coasts. I was from the 

Midwest, and the fact that I was a woman was a big hindrance. 

I will tell you, the first venture forum I ever participated in, one 

of the men said, well, you are the only woman who is presenting, 

who was asked to present here, but we sure are glad you are good 

looking. And I wanted to say, seriously? Who would have said that 

to a man? It was so inappropriate, but there is tremendous bias 

and it is something that needs to be addressed. 

Chairman CHABOT. Thank you. I am almost out of time. Ms. 

Emerson, very quickly, most of the folks here on the panel mentioned SCORE and how important that has been. Would you want 

to comment on SCORE and what you have seen? 

Ms. EMERSON. I am a huge fan of what SCORE does, and I 

have participated many times as a presenter for SCORE webinars. 

Chairman CHABOT. For the people that are watching this, 

would you tell those folks what SCORE is? 

Ms. EMERSON. SCORE stands for the Society of—Service Corps 

of Retired Executives. Thank you. It is an organization of folks that 

mentor and help, and they work with businesses face-to-face or online, and they have an amazing Web site full of resources at 

score.org. It is a really treasured, valuable resource here in the 

United States for small business owners. 

Chairman CHABOT. Thank you. Just for the record, we have 

heard the same thing from lots of folks, too, about how important 

SCORE has been to them. 

Ms. SOLOVIC. Can I make one comment on that? 

Chairman CHABOT. Yes. 

Ms. SOLOVIC. She mentioned their online training, which is 

very well-developed. The feedback I have gotten from some people, 

though, who have gone to SCORE is it is very diverse, sometimes, 

the quality of mentoring you get. 

Chairman CHABOT. You can get somebody really good. 

SBREP-219A with DISTILLER

15 

Ms. SOLOVIC. Right, or something—yeah. 

Ms. EMERSON. It depends on what city you are in. I think there 

are some hits-and-misses there, and that is what I was alluding to 

earlier about some quality control challenges, but you know, 

SCORE Philadelphia is awesome. 

Chairman CHABOT. All right. Thank you very much. Again, 

great panel. My time is expired. 

The Ranking Member from New York is recognized for 5 minutes. 

Ms. VELA ́ ZQUEZ. Yes. I would like to add that the SCORE reauthorization was reported out of our committee and it was Ms. 

Adams who authored that legislation, so I am glad to hear how you 

really cherish the contribution that they do, as they are a resource 

partner with SBA, the Small Business Administration. 

I would like to hear from Ms. Ramberg and Ms. Emerson, you 

mentioned that the face of small businesses is changing. We have 

more women, more minorities, and younger people, right? Not everyone experiences the same struggles when starting or growing a 

business. This day, entrepreneurs are not only facing general startup challenges, but also student debt. How can we best help them 

overcome both of those challenges? 

Ms. EMERSON. Well, when it comes to student debt, I think we 

should make public universities free in America. I think that that 

might be a very good thing to do because I do not believe that the 

amount of money folks go to get higher education could at all possibly equate with the value of that education after they get it. 

Now, in terms of how can we help more minority small businesses, it goes back to what we talked about earlier. We have to 

have different diverse pools of equity funding available. We have 

to encourage public-private partnerships. There are major corporations with foundations who have entrepreneurship as a goal. They 

could partner with major cities in America and run business plan 

competitions. 

One of the things that I benefitted from in my business was the 

third year I was in business, I won the Minority Business Plan 

Competition in Philadelphia. I won $20,000 and free office space for 

1 year in a business incubator called the Enterprise Center in 

Philadelphia, and that was a game-changer for me. That allowed 

me to hire my very first employee, and I have been in business for 

17 years. So there are all kinds of things that can be done to help, 

but everybody has got to be on the same sheet of music to make 

sure that people are getting money to seed their ideas. 

Ms. VELA ́ ZQUEZ. Thank you. Ms. Ramberg, can you comment 

on what are the greatest obstacles facing students and recent graduates as they try to get their companies off the ground? 

Ms. RAMBERG. Money and education. It is as simple as that, 

right? You need to have an idea for a company and you need to 

know how to grow it. I cannot tell you how many companies I have 

gone into and I ask something about their financials—and this is 

not just the youth, actually, this is everyone—and they cannot 

quote them to me. They cannot cite their financials. They do not 

understand. I say, what is your revenue? They cannot give me a 

number. If you do not have that, you are not going to be able to 

go into someone, whether that is an angel investor, a bank, any 

SBREP-219A with DISTILLER

16 

kind of funder, and get money. It starts with education. Once you 

have that—and people understand—and also, an education around 

testing. To understand that there is a true market for their business out there. Right? 

We are dreamers. We sit around and we come up with ideas and 

we just believe that it is going to work. Understanding how to test 

whether there is a true market, someone is going to pay you for 

that, is something that every small business owner, entrepreneur 

needs to understand. Once they have tested, then you need to build 

out their networks and help them get face to face with funders. 

Ms. VELA ́ ZQUEZ. Thank you. 

Ms. EMERSON. Congresswoman Vela ́zquez, can I add something 

to that? 

Ms. VELA ́ ZQUEZ. Yes. 

Ms. EMERSON. One of the other things I think would benefit, very early on when I started my first business I got a $25,000 loan 

from a SBA-backed fund called the Competitive Edge Loan Program. In addition to the $25,000 I got, I got 25 percent of that loan 

in technical assistance. My first accountant and my first marketing 

consultant came from those resources that were paid for through 

that SBA loan fund. We need more programs like that because it 

is not just the money, it is the technical assistance folks need. 

Ms. VELA ́ ZQUEZ. We do have microlending under SBA, and it 

is both. It is access to capital, right, and it is technical assistance. 

By the way, when we look at the default rate, it is the lowest of 

any of the loan programs that we have in place. And 62 percent 

of those borrowers are low-income women. 

Mr. Ray, for those businesses without large operating budgets, 

word-of-mouth advertising is all they have. What more can be done 

to bring together small businesses and end users of their products? 

Mr. RAY. Thank you for asking the question. One of the things 

I talk about a lot is personal branding. I do not have a lot of 

money, did not have a lot of money. I do not know if I have a lot 

of money or not. I have to ask my wife. But my point is I did not 

have a lot of money. 

Chairman CHABOT. Just for the record, his wife is shaking her 

head no, they do not have a lot of money, or not enough. 

Mr. RAY. Ranking Member Vela ́zquez, I think the biggest thing 

is building their personal brand. I think you need money. That is 

actually helpful. But those who do not, if you network like heck, 

if you build your personal brand, leverage the power of social content, video, you can rock it and do quite a bit. I have built my 

brand quite a bit with just a video camera, a smartphone, and just 

Tweeting. 

Ms. VELA ́ ZQUEZ. Ms. Solovic, would you like to comment? 

Ms. SOLOVIC. I totally agree with what Ramona is saying. As 

I said, people say to me, I do not have time to do it. You do not 

have time not to do it. It is a great way to build your brand. I was 

an early adopter of social media, and I remember after I sold my 

business and I was starting out again all over and I would sit there 

and Tweet things out and post things on Facebook, and my husband would say to me, you are wasting your time doing that. That 

is just silly. You should be making sales calls. Well, today, I do not 

have to do any outbound marketing. Everything comes to me and 

SBREP-219A with DISTILLER

17 

walks in the door simply because, as Ramona is saying, I have 

built my personality brand. I have a huge following. I am always 

listed in the top five of small business experts to follow on Twitter. 

It takes some time. It takes authenticity. You cannot job it out 

to anybody else. They want to know it is you. They want to talk 

to you. It is a great advantage for small business because large 

companies who are out there, it is great. They are building their 

brand, too, but they are not humanized. They need people like us 

to talk to the small business market, and that is what we do best. 

Chairman CHABOT. Thank you very much. The gentlelady’s 

time is expired. 

The gentleman from Missouri, Mr. Luetkemeyer, who is the Vice 

Chairman of this Committee, is recognized for 5 minutes. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Ms. Ramberg, I was interested in your comments a minute ago. 

Somebody who sits across the table from a lot of people who are 

aspiring entrepreneurs and trying to find ways to help them, what 

you said is really quite accurate from the standpoint that entrepreneurs quite oftentimes are people with big ideas or the folks 

who can dream and think outside the box, can see a niche, can see 

an opportunity, or sometimes they may be left-brained, but their 

right brain part of it, they do not understand the business part of 

this, how to set up a financial plan. You just said a minute ago 

that they could not give you the statistics off their P&L. That is 

where it is important for them to have access to that education to 

be able to understand there is a flip side of this, or be able to go 

find people who can help them do that. Your comments are very 

apropos here from the standpoint that in order for entrepreneurs 

to grow, they have got to have the ability of people to help them 

through the myriad of rules, regulations, access to capital. A number of you have talked about that this morning, and I think you 

mentioned it a minute ago. 

What do you propose to people who have access to capital problems? What is your advice to those people on how they can go find 

money or present themselves in a way to be able to access themselves to the kind of money it takes to be able to get a business 

started? 

Ms. RAMBERG. I do work with a number of people who are 

going to talk to angel investors. We have a number of angel investors who come on the program, and so help them in sort of organizing their thoughts down so that they can present their elevator 

pitch in a way that will at least pique somebody’s interest. We also 

talk a lot about just alternative financing. Right? So all these 

FinTech companies, OnDeck Capital, the Lending Club, and thinking about factoring. Think beyond a traditional bank loan, if you 

are not in a position to get one, and look into some of these other 

ways to get money. 

I also talk a lot to people about bootstrapping. My company was 

bootstrapped. My mom’s company was bootstrapped. The company 

that I mentioned, which turns T-shirts into blankets, was also 

bootstrapped. If you can get yourself to a certain position where 

you have a little bit of success, it will be much easier to get money 

on down the road. 

SBREP-219A with DISTILLER

18 

Mr. LUETKEMEYER. Ms. Solovic, where in Missouri are you 

from? I am a Missourian. 

Ms. SOLOVIC. Fredericktown, Missouri. 

Mr. LUETKEMEYER. Oh, yes. Very good. I was guessing southeast Missouri from the comments you made, but okay, very good. 

Nice little town, been there many times. Not in my district, but it 

is still a good place. 

Ms. SOLOVIC. Thank you. It is a good place to be from. 

Mr. LUETKEMEYER. Good place to be from. Well, that is okay. 

It is nice to go back home there, too. 

You talked quite a bit about some of the—again, going on some 

of the comments I addressed to Ms. Ramberg here, what do you see 

with the folks that you talk to with regards—to me, access to capital is really key to being an entrepreneur off the ground. You have 

to be able to get the money to make it work. It is what greases the 

skids and what makes it all—what is your advice to people to be 

able to get them to be able to take that idea to the next step? 

Ms. SOLOVIC. I am going to respectfully disagree with you on 

your comment because I think that when people come to me and 

they want to know where is the money, show me the money or I 

am just going to go out and get a SBA loan, and I am like, well, 

good luck with that, because most of us bootstrap. We use our own 

personal assets, credit cards, and go to family and friends for loans. 

So when people tell me, well, I have this idea and I would be able 

to make this business really go if I could just get some money. I 

want to say to them, you know what? You do not want to do it very 

badly. Because if you really have a passion, as my mama used to 

say, where there is a will, there is a way. If you really want to 

make it happen, you can start and make it happen. With technology today, the barrier to entry is so minimized, and you have 

got information and resources right at your fingertips. 

The one thing that I get a little alarmed about is the professional 

advice from attorneys. I have seen a lot of mistakes that come offline from going to those kinds of resources. But, it is there, it is 

available. You might not be able to start as big as you want. You 

may have to shrink your plan a little bit, but by golly, if you are 

willing to have that passion and put forth that sweat equity, you 

can make it happen. 

Mr. LUETKEMEYER. Okay. Mr. Ray. 

Mr. RAY. Yes, sir. 

Mr. LUETKEMEYER. One of the things that you were talking 

about here is reduction and simplification of taxes. Can you give 

me an example of where you would like to see some reduction and 

simplification? How it would work and what the advantage would 

be to small businesses? 

Mr. RAY. Sure. Having said that, I am not a tax expert by far. 

I am a personal branding expert. 

Mr. LUETKEMEYER. Again, we want your ideas. You are the 

entrepreneur here. 

Mr. RAY. Yes. 

Mr. LUETKEMEYER. We are the guys who are supposed to 

make this all happen. 

Mr. RAY. I went through a tax audit a few years ago. When the 

IRS called me, she had a southern accent so I assumed that she 

SBREP-219A with DISTILLER

19 

was my friend and she was the best person in the world. She said, 

Mr. Ray, we would like to come to your home and all this. The IRS 

is great, they do great work, we need to pay our taxes. But my 

point is that I wish half the problem was my own. I wish that I 

had better advice and taken better advice as many of us said. So 

that is one. 

But point two, just going through that process, the arduous process of the letters and the writing and the audit, it was exhausting. 

Thankfully, I had my tax attorney. We had to go through it. What 

I mean is that my industry is just content, but imagine the industries that deal with other things, manufacturing, et cetera. There 

are a lot of things they have to go through just to pay taxes. If they 

do not do it right, then there are things they have to go through 

to get it right. That is an example of what I mean by making it 

a bit easier for small businesses to pay taxes and to rectify if something goes wrong. 

Chairman CHABOT. The gentleman’s time is expired. 

Mr. LUETKEMEYER. Thank you, Mr. Chairman. 

Chairman CHABOT. Thank you. 

The gentlelady from California, Ms. Hahn, is recognized for 5 

minutes. 

Ms. HAHN. Thank you, Chairman Chabot and Ranking Member 

Vela ́zquez, for holding this hearing. 

Small businesses truly are the backbone of this nation. I represent a district in Los Angeles County, and I see firsthand the 

hard work of thousands of small businesses take to achieve that 

American dream that so many of you are speaking about today. I 

think this Committee is really one of the most important committees in Congress because 99 percent of all businesses in the United 

States are small business. During my time on this Committee, one 

of the things I focused on is women- and minority-owned businesses, because that is the makeup of my district back in Los Angeles. We brought many women and minority small business owners together for roundtables and SBA workshops, and we have in 

my hometown a number of successful women-owned businesses. 

Some of the San Pedro favorites are the Omelet and Waffle Shop, 

a new coffee shop called Sirens, and a clothing store called 

Dramatique. While these businesses have been flourishing in my 

district, I was a little bit disheartened to learn that the percentage 

of women starting small businesses has been declining over the 

past 20 years. A recent study by the Kaufman Foundation found 

that the share of women startups fell from 43 percent in 2010 to 

36 percent in 2015, which is close to a two-decade low. The decline 

is even more evident among younger women where the average 

number of businesses started by young women has decreased by 27 

percent since 1996. 

I think there is a variety of reasons for the decreasing number 

of women starting businesses. According to one Wall Street Journal, women have less access to capital, are erroneously perceived 

as less competent than men, and have less confidence when it 

comes to their success and potential failure. 

I was going to ask those of you who are here today, how can we 

get more women to start businesses? What should this Committee 

and SBA do to address a problem that you might see happening 

SBREP-219A with DISTILLER

20 

out there? I would be interested in hearing all of your responses 

to this. 

Ms. EMERSON. Well, I would say that if you want to target 

more women business owners, particularly younger women business owners, we have to start talking about entrepreneurship much 

earlier in their educational cycle. I believe that elementary school 

is not too early to start teaching principles of entrepreneurship, 

and thus, we make it so that they understand that it is a potential 

idea as a career option, and it is not just about going to college and 

getting some good job. That does not exist anymore. So I think it 

is about helping people learn skills that are valuable much earlier. 

I also think it is about more targeted programs. We need an incubator for women entrepreneurs. We need funding specifically targeting minority and women entrepreneurs, and we also need to 

make sure they are not fronts for their husbands. There is a lot of 

stuff going on around folks self-certifying that they are womenowned, and we need to make sure that it is actually; for a womanowned business, it is actually run by a woman. 

But, if we start doing targeted programs, targeted business plan 

competitions, that kind of stuff will help get the numbers up and 

really give them a boost because it needs to have money attached 

to it. Five thousand dollars is enough money to get in trouble. That 

is not enough money to run a business. We need to make sure that 

when we do business plan competitions and stuff like that, the 

prize money is $20,000, $25,000, $50,000, that it is real money that 

is going to make a difference in these people’s businesses. 

Ms. HAHN. Thank you. 

Ms. SOLOVIC. I would like to note that I think it is education, 

because I think a lot of women start businesses because they are 

good at what they do. It is a little craft. It is a little something, 

but they are really not educated on how to build a scalable and 

sustainable enterprise. 

Also I mentioned I raise venture capital. After I did that in 2006, 

I wrote a book called The Girls’ Guide to Building a Million-Dollar 

Business, because I figured if I could do it, anybody ought to be 

able to do it. It is not brain surgery. At that time, only 3 percent 

of women-owned businesses were grossing over a million dollars a 

year. According to a recent Forbes Magazine article, only 2 percent 

of women-owned business gross over a million dollars a year. A 

million dollars is not very much when you are talking about revenue. 

In working with some women’s organizations, too, when I talked 

about making money and business, if you are not going to make 

money, go volunteer. They say to me, well, I do not want to make 

a million dollars. I do not need that much money. And they do not 

want to talk about the money part. You know what? You have got 

to talk about the money part, that is what it is about. 

I think there are stereotypes that still say to women in this country that making money, being aggressive, being successful is not 

feminine. We should not worry our pretty little heads about money, 

honey, and we have go to change that psychology. It is an undercurrent that still ripples through this country. 

Mr. RAY. I would add two things being the minority on the panel 

here of women, no pun intended. I would say two things. I would 

SBREP-219A with DISTILLER

21 

say, one, the focus could be not only on starting businesses, but I 

would encourage my women friends, also those who have already 

started, how can we encourage them to grow? You know, the number of who is starting, but let’s say starting or not, those who are 

in it, what can we do to succeed? 

Two, I would say working with small business owners in large, 

many of them women entrepreneurs, there has to be some element 

of, without putting my foot in my mouth, getting out of the bubble 

of just being for women, if that makes sense. Meaning, I talk to 

many women entrepreneurs. I am a women-owned business. It is 

four women. Four women. Where this world is beyond just women. 

Do you know what I mean? So it is kind of reverse. It is in a bubble. 

Ms. HAHN. It is? Are you sure about that? 

Mr. RAY. Does that make sense what I am trying to express? 

Chairman CHABOT. I am not going to touch this debate here. 

Ms. RAMBERG. Can I just add one thing? 

Chairman CHABOT. Ms. Ramberg, go ahead. 

Ms. RAMBERG. It is examples. Right? When you see a successful woman, you see that you can do it. And so the more, I mean, 

it is amazing that there are three women on this panel, but the 

more we can show that women are successful. I am in New York, 

and in New York City there is a burgeoning and very exciting community around female entrepreneurship and there are lots of conferences and lots of mentorship. I think that is what it takes. 

Again, it is about a community. 

Chairman CHABOT. Thank you. 

Ms. SOLOVIC. Could I add one more comment? 

Chairman CHABOT. Go ahead. 

Ms. SOLOVIC. All right. So—— 

Chairman CHABOT. I have lost complete control. Go ahead. 

Ms. SOLOVIC. So I have to share this story. 

Chairman CHABOT. As long as you pronounce my name right. 

Ms. SOLOVIC. What was that again? Cabot? 

I did some consulting for a very, very large financial services 

firm—and I will not mention their name here—on how to reach the 

women business owner market. They sent me all around the country to talk to their regional sales forces, and I was giving the statistics that we just discussed here and women growing businesses and 

all of that. I happened to have been south, and I will not say what 

state it was either, but we broke for lunch, and one of the investment counselors came over and he said, oh, there, pretty lady. You 

know, you did a nice job, but I just do not believe those numbers. 

And I said, really? He said, well, I know the only reason a woman 

goes into business for herself is because her husband wants to give 

her something to do or he needs a tax write-off. 

Well, thank you, Mr. Chairman. I know my time is expired. I appreciate the indulgence on this question. 

Chairman CHABOT. Long ago. But that is okay. This was great. 

The gentleman from New York, Mr. Gibson, is recognized for 5 

minutes. 

Mr. GIBSON. Thanks, Mr. Chairman. I must say this is an awesome hearing. I am learning a lot and I am really inspired. I appreciate that very much. I know our middle daughter, who is interSBREP-219A with DISTILLER

22 

ested in going into business, she is going to find this link very informative and inspiring, and I think she will probably be looking 

up some of your shows and everything like that going forward. 

Mr. Ray, I was very interested to hear your comment. You were 

using Uber as an example, really as sort of a counter example. 

What I would like to hear is your thoughts on if we had a do-over, 

how might federal and state, perhaps even local, governments approach that issue in a manner that would certainly make sure that 

justice, safety, and public health is preserved, but at the same 

time, facilitates a good idea that is something that is really being 

demanded in the market. 

Mr. RAY. Being the travel expert that I am not, from my observation, as one who has used Uber before, and taking them as an 

example and then I will move quickly to another point, but as one 

who has used Uber and as one who has used taxis. There are two 

sides of this equation. We know it is a public debate, good and bad 

and et cetera. 

Regulation, obviously, is important. But, what I found, at least 

in New York, being a few minutes from Newark Airport, is that 

you have the taxi industry that was one bemoaning and complaining about it, which has a valid point. New York City has a lot 

of big taxi industry. But, I saw that with Uber, this is a small innovative company. This is a car-sharing service. Small business owners, when I go to Newark Airport from my home, there are guys 

who say I am using Uber to make more money. From my simple 

observation, clearly it is a company that is helping in some way. 

And we could do more. Mayor Baraka, I think in Newark, he made 

a deal with them, so I think we can do more to ensure citizens are 

protected, but while having innovation go as much as it can until 

it becomes a danger, like the airlines or something that has to have 

some, if that makes sense. 

Mr. GIBSON. Yes, that is helpful. Do any other panelists want 

to make any comment on that before I go on to the next? 

Ms. EMERSON. I think whenever we get in the business of trying to protect one industry to prevent another one from growing, 

that is a slippery slope for us to get on. In Philadelphia, there was 

also a nightmare fight with the taxi authority and the city with 

Uber, and I felt like if the taxi drivers had done a better job, Uber 

would not have a chance. They should be like any other business, 

and they should face competition like anybody else. 

Mr. GIBSON. I really appreciate those remarks. The last question I have has to do with access to credit and capital, which you 

all hit on in one form or another. Ms. Solovic’s comments about 

being self-starters and finding ways and working with family, 

agreeing with all of that, I am also interested in hearing your assessments as to Dodd-Frank, as to how well it is going or challenges that have emerged as it relates to access to capital and credit. 

Ms. SOLOVIC. What we have seen as a result is that the level 

of lending, traditional lending, has really decreased to small business owners. There was a time, I think, during the recession that 

we heard a lot, or at least I did, from small business owners that 

they were not even applying for the loans because they did not 

want the debt. But also, there was that fear factor that their finanSBREP-219A with DISTILLER

23 

cial statements were not as strong as they had been and that they 

would not qualify, so what did it matter to try? But here we are, 

now, with some recovery going on in the economy, and you would 

think we would see a change in that, but we have not. As we said 

earlier, the crowdfunding platforms, the Title III regs, I think all 

of that is a positive step for small businesses. I do think that having more education, so that people understand, and more examples 

of how you can get a business off the ground without going out and 

putting yourself into debt with a bank or a lending program. 

Personally, when I started my Internet company, I took out a big 

credit line on my house, and we were totally self-funded originally. 

I remember going to the venture capitalist. We were in front of Sequoia and they looked at my numbers and they said, well, you need 

more eyeballs on your Web site. And I said, but we are profitable. 

Look at my financial statements. They said, we do not care about 

that. I said, if you were funding it out of your own pocket you 

would, by gosh. I think education is important. 

Ms. EMERSON. If I could add, when it comes to access to credit 

and capital, the first indication, small businesses knew the recession was coming before the recession hit everyone else because 

banks started rescinding people’s lines of credit and they started 

turning them into term loans. People have not recovered from that. 

The people that were able to hang on and stay in business, they 

are not creditworthy. What has happened is now we have these 

cash loan lenders that have popped up and who are preying on 

businesses who cannot get capital anyplace else. They are happy to 

fund you if you have got a 600 or a 620 credit score at 24 or 25 

percent interest. If there is any place where you guys do need to 

start regulating is those people. These cash flow lenders out there, 

to me, are snake oil salesmen, preying on people who need cash. 

They are only willing to do loans for ecommerce businesses that are 

doing 10 grand or more a month. 

Also, too, one thing about crowdfunding. Crowdfunding is great 

if you have got a great product business and some sharp marketing. But the average crowdfunding campaign makes $10,000. 

That is a hard way to make $10,000. I do think Title III is going 

to help more people be able to get into that business, but I also 

think that is a little bit of a panacea. Right? The deal is, if you 

want to start a small business in America, your money is going to 

come from your right or your left pocket, so you better have taken 

care of your savings, protected your credit. Hopefully, you own 

property that you can take out a home equity loan against because 

that is really what it is going to take because banks do not loan 

money to startup businesses until you can prove you do not need 

it. So that is it. 

Ms. SOLOVIC. I am also very concerned about the new calculations, and I am not an expert on this, but where someone leaves 

a company, they take a 401(k) plan, and then they flip it and make 

it a 401(k) in their company, and then they deplete those funds to 

start their business. We have got more baby boomers. I am a baby 

boomer, and we have retirement issues in this company. I am so 

fearful that people go out and bet the family farm and then what 

happens? Because you know what? Your challenges of starting a 

SBREP-219A with DISTILLER

24 

business, your likelihood of success, you might as well go throw the 

dice out in Las Vegas. It is just about as good an odds. 

Mr. GIBSON. Well, unfortunately, my time is expired. I want to 

congratulate each and every one of you on your personal successes 

and also thank you for sharing those stories for inspiring so many 

others. 

Chairman, I thank you for your indulgence. 

Chairman CHABOT. Thank you very much. The gentleman’s 

time is expired. 

The gentleman from Mississippi, Mr. Kelly, is recognized for 5 

minutes. 

Mr. KELLY. You know, I am starstruck with this panel. Thank 

you guys for being here. Mr. Chairman, thank you for bringing 

such a distinguished panel, and it is great to hear from—first of 

all, you are all excited about what you do, and I think enthusiasm 

is one of those things that any business, or whatever you are doing, 

that you have to have enthusiasm. To see people like you, you are 

all role models for people out there. So, thank you for being here, 

and for what you have done for small businesses in our industry. 

Mr. Ray, I want to briefly touch with you, and I had not intended 

to ask you a question, but I am so appreciative that you brought 

your family, because it is much like serving in the military or anything else. Whether you are a small business or anything else, it 

is a family deal. You are all involved and engaged. Not using someone else’s name, like other people have mentioned, but to have people who are involved and are part of that, and you gave your 

daughter some great advice. I found in life, relationships and 

leveraging those, and understanding those is one of the greatest 

things you can ever have is the capital in people. So do you want 

to comment any more on that, Mr. Ray? 

Mr. RAY. No, just to thank you for having us and I think that, 

yes, family is important. I think the two things education, as we 

have said, education solves many problems, but definitely family. 

And I thank God for my wife. Not that she is always right, but 

she—— 

Ms. SOLOVIC. Well, it is going to be a long ride home. 

Mr. RAY. However, however, she is right most of the time, and 

I am very happy that she is giving me advice in business, but also 

the things around business that make it successful. So I am very 

thankful for her. 

Mr. KELLY. And then Ms. Ramberg, although not in my district, 

Natchez, Mississippi, is in Greg Harper from my state’s district. 

You noted in your testimony several consistent themes that you 

found in various cities that were part of the Main Street series. 

First, for those who may not be familiar with the series, will you 

briefly share about the series and particularly about the Natchez 

visit? 

Ms. RAMBERG. Absolutely. We have gone around the country 

and visited Main Streets across the country—Natchez, Mississippi; 

Galena, Illinois. We were just in Daytona; Brundidge, Alabama, to 

just try and get kind of a temperature check on what is going on 

on Main Street. What we found consistently at the Main Streets 

that were revived, over and over we heard the story of big box 

stores moved in, our factories closed, Main Street shut down. It beSBREP-219A with DISTILLER

25 

came lots of shutdown businesses, crime. The Main Streets that 

were able to revive almost to a Main Street was because of one person or one organization that organized everyone. Because the fact 

is, running a business is hard and it takes all of your time. So you 

have to concentrate on running your business and also reviving 

Main Street. These Main Streets have had a person or an organization who did that for them. It was pretty interesting. 

Another interesting and important thing to note, about what we 

learned on Main Street, I have done a very informal poll of companies that I interview and just say, do you feel like anyone is looking out for you? We almost always hear no. I know this Committee 

does a lot, I know the SBA does a lot. I know there are a lot of 

organizations that are out there trying to help small business. But 

somehow it is not trickling down, so small businesses across this 

country often feel very alone and unsupported. I think there needs 

to be some education and some public relations around the resources that are available to them. We all know SCORE here. A 

lot of people do not. 

Mr. RAY. May I make a comment? 

Mr. KELLY. Be quick because I have one more question I want 

to get to. 

Ms. Solovic, and I hope I pronounced that right, in the South, we 

do not do over one syllable usually. But first of all, I want to thank 

you for your mother, and again, it goes back to family, and your 

father’s service to this great nation. That is very important to me, 

and I think that our veteran-owned businesses, which we have not 

talked about a lot, I would like to give these guys and girls opportunities to proceed forward because they paid their debt to this nation, and anytime we can forward their agenda and help them to 

be successful in life after the military, that is great. 

But can you elaborate a little bit on the Department of Labor’s 

overtime rule and how that has impacted your business and other 

businesses, please? 

Ms. SOLOVIC. Certainly. I get a lot of concern from small businesses, especially with the increase to the threshold of $50,000. It 

will cost jobs in many, many small businesses. And not just the 

level of increase which is huge, but the fact that the complexity of 

the guidelines is very, very difficult for small businesses to follow. 

To know who is exempt and who is nonexempt, and how it applies. 

When I mentioned my father’s ambulance service, how do you say 

today it was an ambulance, tomorrow it was a hearse, and who 

worked when? The complexity of it was overwhelming to him. 

My other concern is, and I hear this from many small businesses 

in smaller parts of the country, particularly the Midwest and the 

area of the country I grew up in, $50,000 in Manhattan is nothing; 

$50,000 in Fredericktown, Missouri, is a heck of a lot of money. 

I just sold my family’s home. My father is now in assisted living. 

It was a big house, 5,000 square feet, 4 bedrooms, 3 full baths, 2 

half-baths, a finished basement, and an extra lot for $116,000. It 

is a different world, we cannot make arbitrary decisions like that. 

We need to give small business owners the flexibility to manage 

their business in the way they deem appropriate. We are not slave 

drivers and greed mongers like we saw in the Industrial era. We 

want to care for our employees, we want to care for our families. 

SBREP-219A with DISTILLER

26 

We want to give back to our communities, and the statistics on how 

much more a small business gives back to their community as opposed to a large chain company is significant. So we are trying to 

be good. We are trying to do the right things. We just need government out of our business. 

Ms. RAMBERG. If I could add one thing to that. I cannot stress 

enough the problem with complexity. People are happy to follow 

the rules, but sometimes it is hard to know what the rules are. You 

spend money on lawyers, money on accountants, and time that you 

could be spending marketing or talking to your customers to just 

figure out if, in fact, you are following the rules correctly. 

Ms. EMERSON. And if you make a mistake, it is costly. 

Chairman CHABOT. Thank you. Thank you. The gentleman’s 

time is expired. 

Mr. KELLY. I yield back, Mr. Chairman. 

Chairman CHABOT. Thank you. 

The gentlelady from Michigan, Ms. Lawrence, is recognized for 5 

minutes. 

Ms. LAWRENCE. Thank you, Mr. Chair. 

I would like to ask this question of Ms. Emerson. Hearing the 

discussion on the challenges, there has been a shift in the development of small businesses to the use of incubators. What does it 

mean to startups to have that kind of business when you are saying you need support? What is the role, and how can we support 

the incubators if that is the way to provide you with the support 

that you need? 

Ms. EMERSON. Well, I am glad you asked me that question because I won a business plan competition that put me in a business 

incubator and I actually ended up staying in there for 5 years. So 

I can talk a lot about the value of incubators. 

I think the number one thing you fight when you start a business is loneliness and feeling like you are by yourself. So the fact 

that you can walk down the hall and commiserate with someone 

else that is trying to figure out how to get paid by a vendor, I think 

that is very important to have a sense of community. What I also 

found valuable in an incubator is that education can be done right 

in the same building. Networks can be set up. Potential funders 

that are interested in the businesses in the building can come in 

and see a cadre of businesses, not just one type. 

The Enterprise Center in Philadelphia is where I was located, 

and that turned out to be such an incredible proving ground for me 

in my business. It made all the difference in the world because 

when I started my business, back in 1999, being a homebased business was not cool. If you were working out of your basement, people did not take you seriously like you were in business. When I 

won my business plan competition, I was like, I am out of here. I 

am going to work every day. I got a parking space. It makes you 

feel—nowadays everybody is telecommuting and everybody is working from home, but it was not like that almost 20 years ago. So I 

think it is a great thing to do. 

Ms. LAWRENCE. I appreciate that. I think we, as the Small 

Business Committee, should really spend some time supporting 

that. 

SBREP-219A with DISTILLER

27 

I want to ask Ms. Ramberg, one of the greatest areas of success 

in my home state in Metro Detroit has been the rise of womenowned small businesses. According to the U.S. Census and the 

Small Business Administration, Michigan ranks among the top 10 

states in the number of new small businesses operated or open by 

men and women who are self-employed. How can we sustain the 

growth rates among women in small business? As a small business 

owner yourself, you already outlined some of those, but what would 

you advise us on this Committee on how we can do a better job 

with women? 

Ms. RAMBERG. Again, I think it is truly about mentorship. We 

do have issues. There are still many women out there who say that 

they go to find funding and they are discriminated against. I am 

quite sure that is true, but I think that if you are a woman who 

is going for venture funding and you talk to another woman who 

has been to that same person and asked for money, you will know 

what to look for. Again, I believe the answer is quite simple, which 

is just get people together, the experienced with the inexperienced. 

Get networks of women. 

There is an organization called the WE Festival in New York 

City. It just happened, and it was for women entrepreneurs, and 

the excitement around it and the sharing of knowledge was huge; 

10,000 women from Goldman Sachs, again, another organization. If 

you just get people together. 

I went to a dinner. It was 20 women brought together from different industries by somebody, and by the end of the dinner, we 

went around and every single person had to ask something they 

needed help with. Three women at that table said I need help raising money for my company. And guess what? The next day they 

were contacted by people. Now, I do not know if they will get the 

money or not. It will depend if the businesses are good, but I am 

fortunate that I have this network in New York City. If we can create those same networks for people so that you feel comfortable 

saying I need this, and someone out there says, okay, let me help 

you. 

Ms. LAWRENCE. Mr. Ray, and this is the last question, what 

are some of the challenges that you face in the competition with 

the corporates? I hear that often. I am a small business and I keep 

jumping up raising my hand. Look at me. Look at me. I can do it. 

What are some of the challenges there? 

Mr. RAY. It is very competitive. For example, I produce events 

and I have a magazine. There are a lot of bigger companies than 

mine. Sometimes it is the wherewithal to keep pushing through. I 

think that is one. 

I think, two, it is the business owner not having the education 

to talk the language of the large business person. That is what I 

have learned, what has helped me. I am talking to a big company, 

I will not mention them here, but a big courier or a big financial 

services company, a big bank. There are ways I have to talk. There 

are documents I have to have. They are risk averse. They do not 

know who I am from Adam, or Eve, for that matter. 

Those are two things that I have found that will be helpful. The 

small business owner must learn to talk the language of big busiSBREP-219A with DISTILLER

28 

ness and not think small, as you have alluded to. That is the way 

to succeed. Thank you. 

Ms. LAWRENCE. I hear clearly the need for information and 

training, and I love the analysis of not being alone and having access to those. So thank you, I yield back. 

Chairman CHABOT. Thank you very much. The gentlelady’s 

time is expired. 

The gentleman from Nevada, Mr. Hardy, who is the Subcommittee chairman of Investigations, Oversight, and Regulations, 

is recognized for 5 minutes. 

Mr. HARDY. Thank you, Mr. Chairman. 

Thank you for being here. I must say that I believe, Mr. Ray, 

your father and mine must have hung out together because my dad 

used to tell me, son, you can do it and like it or you can do it and 

hate it, but either way you are going to do it. Your attitude determines your altitude. 

Mr. RAY. I think they did hang out together, I think so. 

Mr. HARDY. All of you seem to have a great attitude. I think 

that is part of the success. 

Myself, being a small business person in the past, I had some 

successes, had some challenges. One of the challenges that you 

brought up, Mr. Ray, and also Ms. Ramberg, the federal government and duplicative regulations coming from not just from the 

federal government, from the state governments, the county governments, the city governments. Can you elaborate on that a little 

bit, Mr. Ray, what is your conversation there? 

Mr. RAY. Absolutely. Sure. What I think, as you said, is that 

there is a labyrinth of different things. If I do it right this way, it 

is wrong this way. Right this way, wrong this way. The best example I can give, again, with New York City in my backyard, I know 

the New York City Department of Small Business Services, I think 

it is called Fast Track. I do not recall the exact name. They have 

a system where they set up where you go to one place and the organizations, the entities are all in kind of one place. That is an example of something that can help. You go there, fill out a form. 

Other people and the civil servants are trained to help you navigate through that. Because if you are not trained or educated—and 

all of us are just experts in what we are doing—it is tough. It was 

tough to get in this building, much less being a small business 

owner. 

Ms. RAMBERG. I think it is clarity and knowing where the information lies. In San Francisco, for instance, right now you need 

to put a new employee poster up right now. My company works 

with a PEO who tells us, hey, here is the poster, go put it up. If 

we did not work with them, we would not know it existed. That is 

a tiny example of things that happen all the time. 

The amount of time and energy trying to understand what the 

regulations are, trying to work with the government to get around 

them, if there is a way to do it if it does not work with your company, and then comply with them. Again, the exempt rules, they 

are very complicated. It seems like they are easy, but it is not. 

There are people who do not exactly fit into one side or the other, 

and there is no place to go ask. If you go ask someone they say, 

oh, you have got to go figure it out yourselves. Having that answer 

SBREP-219A with DISTILLER

29 

as a small business owner, when this is not your core business, is 

incredibly frustrating and time-consuming. 

Mr. HARDY. Thank you. 

Ms. Solovic, you mentioned in your testimony about the overtime 

rule being a backbreaker. Mr. Knight and myself brought over 100 

congressional members together to sign this letter to try to rethink 

how we are doing this. Can you elaborate a little bit on some of 

the challenges, this being backbreaking also and one size fits all 

does not necessarily fit? 

Ms. SOLOVIC. Right. I think that is pretty simple right now just the way you said it. It is not the $50,000 necessarily. It is the nonexempt versus the exempt, the paperwork, the tracking. I said, in 

parts of the country, $50,000 is a lot of money to make. You are 

not victimizing a low-wage earner. Take the time to look at regulations such as that and look at the true impact on a small business 

and the community. If a small business has to cut jobs and they 

are on Main Street, it hurts that community. Where else do people 

go to get jobs? You do not have big industry or big companies coming in there, so it costs the entire community once those few jobs 

are gone. 

Mr. HARDY. I would like to touch on a little different subject 

somebody brought up, and I think this might have been you, Ms. 

Solovic, but it had to do with the length of pay, especially on federal government jobs. The challenge is, I have seen myself, it jeopardizes small businesses. I was usually the larger business. I would 

have to wait for 90 to 120 days for the federal government to get 

paid, which meant in turn it makes it tougher for me to get the 

finance to be able to pay my vendors and that trickle down. Any 

suggestions on how we fix that here federally? 

Ms. EMERSON. Well, I think you just have to make it a law. 

Folks have to get paid net 30. I mean, honestly, it is such a challenge because cash flow is king in a small business. If you have 

employees, you have to make payroll, regardless of when you get 

paid. Because it is so difficult for small business owners to get lines 

of credit, I mean, even if you qualify for a line of credit, the most 

you are going to get is 10 percent of your gross revenue. So for a 

business doing half a million dollars, that a $50,000 line. Well, if 

the government owes you $180,000, do you know what I mean? It 

strangles small businesses if they cannot get paid on time. 

Mr. HARDY. Then that 10 percent retention on top of that ends 

up strangling somebody when you do not even have that kind 

of—— 

Ms. EMERSON. Then by the time you get the money, it is not 

even the same value if you had to go out and factor the invoice or 

had to go to one of these payday lenders for small business, which 

is what I call these cash flow lenders. It is strangling people’s margins, and people are not able to make money because they cannot 

get paid on time. It is a huge issue, but it is not just a huge issue 

in the federal government. I think that there should be some 

MOUs that go out with corporations because I have found that the 

larger the corporation is, the harder it is to get paid, too. So it is 

not just a federal government problem; it is a problem all over the 

place. Everyone thinks they can pay a small business last or late. 

Mr. RAY. May I underline something? 

SBREP-219A with DISTILLER

30 

Chairman CHABOT. Yes, go ahead. 

Mr. RAY. I wanted to underline that. Thank you for asking the 

question. It is a double problem because, again, your money comes 

in late and you have big checks, $20,000, $30,000, or Melinda has 

$100,000 checks, and you have to pay out. I just got an email last 

night from one of my vendors who I work with. Ramon, I sent you 

an invoice for $1,000. I need that money. Can you get it to me? I 

am going to forward that money to him tonight. But the money 

that is coming in for me is going to take 45, 30, 90 days. I just 

wanted to underline it, is jamming me up. 

Ms. SOLOVIC. I would say when it comes to the corporations, 

even in the agreements that I sign with them now, they will just 

put 90 days. You have to float that money, and it is tough on us. 

Chairman CHABOT. The gentleman’s time is expired. 

The gentlelady from American Samoa, Amata Radewagen, is recognized for 5 minutes, and she is the Subcommittee chairman on 

Health and Technology. 

Mrs. RADEWAGEN. Thank you, Mr. Chairman. 

This has been really fascinating. I have learned so much today. 

I have a question for all of you, is the same question. Maybe we 

can start with Ms. Ramberg. What are some of the things that can 

be done to inspire the next generation of entrepreneurs? 

Ms. RAMBERG. I think we are inspiring them. I think if you 

talk to millennials, if you have been into a WeWork office recently, 

it is filled with people who are inspired to start businesses. What 

we need to do is we need to keep them inspired and we need to 

keep them realistic. We need to talk about the challenges around 

small business, and we need to give education. It is the same as 

we have been talking about here. When I started my show 10 years 

ago, there were organizations focused on small business and entrepreneurship that were shutting down. Now there is a cult of entrepreneurship, and I think people are very excited to start their own 

small businesses, we just need to provide them the resources to do 

it. I think they want to. 

Mr. RAY. Thank you for the question, my answer to that would 

be, just keep doing more of what we are doing here and keep providing platforms. I mean, the four of us, we have reached a level 

of success, but I think there is that cult of entrepreneurship. What 

can we do to go to the inner cities, those who are not yet inspired 

who think they cannot do it? I would just add that. How can we 

go maybe to small islands, et cetera, and help inspire them more 

and more and more. Thank you for the question. 

Ms. SOLOVIC. I agree. I also believe, I have always told people 

children emulate their parents, so they behave and do things, what 

they see growing up. I think the same is true for young people 

today. You know, let’s lead by example. Let’s give them opportunities, even in grade school, to understand what entrepreneurship is 

and how fun it is to run your own business and be your own boss 

and make money. There are options other than traditional work 

paths for them to be successful in this country. 

Ms. EMERSON. I would like to echo the same. I think it is about 

highlighting success stories, big and small. Highlighting youth entrepreneurs, women entrepreneurs, veteran-owned entrepreneurs, 

and making sure that National Small Business Week is not just 

SBREP-219A with DISTILLER

31 

PR. It is really about highlighting the successes and honoring people who are doing this work so that people can say, you know, I 

want to get that award one day. 

I think also looking at MED Week and putting some real teeth 

and resources around MED Week and highlighting minority women 

entrepreneurs during those times is really important because people look at that and see that as something of value. Everyone likes 

to hear their name called and get a little plaque with their name 

on it. So I think that more of that really will go a long way of making people feel appreciated and acknowledged and other people inspiring to feel the same way. 

Mr. RAY. May I add one more? May I answer one more? 

Mrs. RADEWAGEN. Yes. 

Mr. RAY. I wanted to add, ma’am, and say that, not to be the 

contrarian, but small business ownership, entrepreneurship ownership is difficult. I think it could be interesting to highlight it so 

people can see, you know what? This is not for me. Let me go, I 

do not know, go work in Congress or something like that. 

Mrs. RADEWAGEN. Thank you, Mr. Chairman. 

Mr. RAY. I am just teasing. 

Mrs. RADEWAGEN. Thank you, Mr. Chairman. I yield back. 

Chairman CHABOT. We hope you are. 

The gentlelady yields back. 

I think all the questions have been asked and answered. As chair 

of the Committee, I want to thank you all for your testimony here 

today. It has been very inspiring. I know that we have all learned 

a lot. In fact, we have decided to have you all come back every 

week from now on. We really do appreciate it. 

I think Chris Gibson, the gentleman from New York who has left 

at this point, he mentioned he was going to have his daughter, who 

is an aspiring entrepreneur, watch this maybe down the road. I 

would recommend that our staff tries to get this out because I 

think a lot of small businesses all over America, whether they are 

thinking about starting a small business or whether they already 

have one and they are looking for ways to improve it, I think there 

are just pearls of wisdom here that we do not want to just go off 

into the ether. You have all really done a great job, and thank you 

so much. I think you have done your country a great service, you 

really have, so thank you very much for this morning. 

I would ask unanimous consent that members have 5 legislative 

days to submit statements and supporting materials for the record. 

Without objection, so ordered. 

If there is no further business to come before the hearing, we are 

adjourned. Thank you very much. 

[Whereupon, at 12:33 p.m., the Committee was adjourned.] 

SBREP-219A with DISTILLER

32 

A P P E N D I X 

JJ Ramberg Testimony 

U.S. House of Representatives Small Business Committee 

May 11, 2016 

Good morning. Thank you Chairman Chabot, Ranking Member 

Velazquez and the Committee for the invitation to provide testimony today. 

My name is JJ Ramberg and I am the founder of Goodshop.com 

and the host of the program Your Business on MSNBC which is the 

longest running television show aimed at inspiring and helping 

small business owners. 

For the past ten years I have both grown my own company and 

interviewed thousands of small business owners, investors and experts to learn best practices for small business growth and survival. 

I am a third generation entrepreneur. My paternal grandfather 

moved to Los Angeles from Mexico with his young family and his 

first job in this country was a peddler selling pots, pans, and blankets door to door. He eventually opened up a furniture store in 

Downtown Los Angles catering to the Hispanic community which 

turned into a small chain of stores. My father took over that business and then subsequently branched out to establish one of the 

first document storage companies in the country which was ultimately acquired by Bekins and then Iron Mountain. He then went 

on to create a real estate development firm. 

My maternal grandfather opened a series of small businesses 

from a frozen pizza manufacturer to a tire distribution business 

and tropical fish store. In 1988 my mother, who was in her late40’s and had been a stay at home mom for the majority of her children’s school years, partnered with my brother Ken, a recent Stanford graduate, to start a company called JOBTRAK. JOBTRAK was 

a pioneer in the online career space, partnering with college and 

university career centers across the US and Canada and, after 12 

years, was acquired by Monster.com. 

I began my company with my brother Ken in 2005. Goodshop 

was conceived upon a foundation of social responsibility. Goodshop 

provides the best coupons and deals for more than 30,000 retailers 

and service providers and, if you select your favorite cause, a percentage of what you spend at thousands of those stores is donated 

to that organization. Today, we have saved shoppers more than 

$100 million and donated more than $12 million to organizations 

ranging from the American Cancer Society and the Humane Society of the United States to local schools, homeless shelters and 

parks. 

SBREP-219A with DISTILLER

33 

The proudest moment of my entire career was the November 

after our launch when we sent our first checks out to the causes. 

We were still very much in start-up ode and my brother and I recruited some friends, his in-laws, his kids and our siblings to create 

an assembly line in his living room where we printed the donation 

checks, put them into envelopes, added stamps and sent them out. 

That day proved that the idea Ken and I came up with was actually viable. 

Goodshop began, as many small businesses, with me working 

from my small apartment in New York City and Ken working from 

his home in Los Angeles. We contracted with a designer and developer whom we knew from Ken’s previous business. Our first true 

employee, Kari McMinn, worked with me at my home, much to her 

mother’s chagrin who hoped she would take the job she was offered 

from a more seemingly stable consulting firm. 

Today, Goodshop is based in San Francisco, has 56 employees 

and is rapidly expanding into new verticals. We also have a number of open jobs which we are trying to fill. 

I have been in a unique position during the expansion of my company. As the host of MSNBC’s Your Business, I have also had the 

honor of interviewing so many small business owners around the 

country in whose companies have been in differing stages of 

growth. 

Each week on the program, through profiles of small businesses, 

we tackle common business issues. For example, we explored how 

to handle pricing through the story of a hot air balloon company 

in Napa Valley; we covered expansion by telling the story of a children’s playspace company which started with one location and now 

has stores around the world; we explored creating a good company 

culture by spending time with a plumbing business in New Jersey; 

and we discussed open book management by profiling a design/ 

build firm in Maryland. Our stories have addressed issues ranging 

from how to find funding to how to recruit the best employees and 

how to market your product or service. In addition, since our show 

was on the air during the recession, there was a time when we did 

many stories on how to survive when the economy is heading 

south. 

The program also incorporates segments around the best technology to use in your companies, elevator pitches—where someone 

pitches their company to a panel of experts in our studio—and 

‘‘how to’’ segments such as how to look for new office space and 

how to determine whether to use a Professional Employer Organization or not. As you can see, we get quite granular in our segments. 

Over the last ten years, since starting my company and launching our program, I have seen a great change in attitude towards 

small business. There is a much more public focus on entrepreneurship and a celebration and appreciation for small business in general. When we launched Your Business, publications which focused 

on this population were shutting down. Today, there are many resources available for small business owners. 

SBREP-219A with DISTILLER

34 

And, when it comes specifically to women owned small businesses, while there were pioneering organizations like the National 

Association of Women Business Owners supporting them, there 

was not nearly the support there is today. While we are not where 

we want to be on that front, we have made progress. 

I thank you for holding this hearing focused on inspiring entrepreneurs and learning from the experts because I believe the best 

education you can get when it comes to starting your own company 

is from people who have been in the trenches themselves. I was extremely fortunate to have had a front row seat in watching both 

my father and my mother—in partnership with my brother—start 

their companies. Because of those experiences, by the time I 

launched my own business, I had a real sense of both the excitement and the challenges I would face. Of course nothing really prepares you for doing it yourself, but I was able to go in with my eyes 

open. 

When I’m asked about the most important things to consider 

when founding a company, I provide people with this initial checklist: 

1. Gather a good group of advisors. By this, I do not mean a list 

of big names or famous people. Rather I mean make sure you have 

people around you who can advise you on the issues with which 

you are not familiar. These can be paid advisors or those who are 

doing it for free. It can be structured or more casual. You are providing yourself with a critical shortcut if you have people to turn 

to for advice. I personally belong to an organization called the 

Young Presidents Organization which meets once a month to discuss issues we are dealing with in our companies. I find the advice 

I receive from these CEO’s invaluable as inevitably some subset of 

us has gone through the problem one of the other members is facing. 

2. Before you launch your business, ensure that there is actually 

a market for it. Entrepreneurs too often fall in love with their ideas 

and do not get a true sense of whether or not customers will be 

willing to pay for their product or service before spending a lot of 

time and money on developing their company. While I believe surveys and focus groups are helpful, in my own experience, I have 

found that they can be misleading and so the more experiential you 

can make your test, the better. Whether you are starting a technology company or not, I believe it’s important to familiarize yourself with the idea of a Minimum Viable Product, a concept made 

popular by Eric Reis’s book The Lean Start Up. 

3. Access to and preservation of capital is one of the biggest 

issues that small business owners face today. There are a number 

of ways to fund your business beyond traditional bank loans and 

equity investors such as online lending, grants, crowdfunding, and 

factoring to name a few. But, I also encourage people to read the 

stories of companies who did a lot with very little. We recently 

profiled a company called Project Repat which turns your old tshirts into blankets. After being turned down by multiple lenders 

and investors, they were forced to bootstrap their business. Today, 

they are grateful for what seemed a hardship at the time. Because 

SBREP-219A with DISTILLER

35 

they had limited funds, they had to become incredibly creative with 

their marketing and it worked. Now, not only is the company successful, but they own most of it themselves and do not have any 

debt. If and when they do go out to raise money, they will be able 

to do it at a much higher valuation. 

We are at an exciting time for small businesses. Yet it is still a 

struggle for many. Over the past few years, we have done a series 

on Your Business on Main Streets across the country where we 

have profiled cities including Natchez, Mississippi; Brundidge, Alabama; Golden, Colorado; Daytona Florida; Galena, IL; Woodstock, 

NY and many others. Through these stories, I have found a few 

consistent themes: 

1. Many of the Main Streets which were thriving were doing so 

because one individual or one organization led the revitalization. 

This included discovering and applying for grants to pay for improvements (like street lights and repaving sidewalks,) organizing 

local businesses to work together to plan events, and working with 

the local government to help boost excitement amongst consumers. 

To have more success on Main Street, it’s important to identify and 

support these champions. 

2. In spite of the work of this committee and the Small Business 

Administration, many business owners on Main Street do not feel 

like anyone in government is watching out for them. While they 

hear elected officials and members of the government in Washington speak of supporting small business, many business owners 

do not feel like they are seeing much action around that support. 

There is an issue around communication of improvements. More 

business owners need to know of the work you are doing here and 

learn how to take advantage of the resources provided by the federal government to help them grow their companies. 

3. While a lot of attention is paid to federal regulations, there is 

less focus on local and state regulations. Many small business owners—both on and off Main Street—cite these as challenging because it is difficult to keep track of everything. 

In addition, both on and off Main Street, we have heard a common refrain: difficulty finding affordable funding to expand, a challenge around recruiting top notch employees and a sense of loneliness and lack of community to help with business issues. 

That said, I believe we are in the beginning of a sweeping change 

when it comes to small business. Companies in the fintech and 

edtech space are working to address the issues of financing business and educating our workforce. With millennials now making up 

the largest share of the American workforce and primed to take 

over an increasing share of small business ownership, much will 

continue to change when it comes to entrepreneurship. 

Thank you again for taking the time today to celebrate small 

business owners and all they do. The more attention we can collectively bring to both the challenges of small business owners and 

their contributions, the more we can support this incredibly important segment of our economy. 

SBREP-219A with DISTILLER

36 

Ramon Ray, Editor, Smart Hustle Magazine 

Statement to U.S. House of Representatives Small Business Committee - 11 May 2016 

Chairman Chabot, Representative Velazquez thank you for inviting me to represent America’s small business owners and entrepreneurs at this Committee hearing. 

I would also like to extend a special greeting to the Representatives from New Jersey, where I live and New York, where I grew 

up. 

Starting and growing a business is fraught with challenges. I’ve 

started four business and sold one of them. I’m an entrepreneur 

who is currently growing two companies—one of those companies 

is Smart Hustle Magazine. 

The day to day challenges of business ownership include hiring 

the right staff, obtaining financing, trying to get new customers 

and keep the ones you have, navigating various government regulations and more. 

Business ownership is not just about challenges, but it also 

comes with the sweet taste of independence, the freedom to chart 

our own course, the privilege of helping others with our income, 

and earning the profitable rewards from our risks and hard work. 

The greatest reward is the awesome responsibility of providing 

for our families and supporting our communities. 

Chairman Chabot, fellow Committee members, more important 

than any of use in the room here are the thousands and thousands 

of business owners I speak to, in person, across the country every 

year and the millions of small business owners and entrepreneurs 

I reach through my writing, speaking and media appearances. 

Based on input from the small business community I represent, 

there are three things our government, this Committee, can do for 

small business owners. 

First, continued reduction of burdensome and unnecessary regulation—at the Federal, State and Local Level. We 

NEED regulation for our safety, but we do not need burdensome 

or unnecessary regulation. The horrendous treatment of Uber (now 

a large company) is the most public example of regulation gone 

wrong—stifling innovation and limiting growth. 

Second, reduction and simplification of taxes—I count it a 

privilege that I can pay taxes, from my hard earned income, to 

fund our government operations. However, is there not a LIMIT to 

what tax rates and tax laws are fair versus which ones are excessive and burdensome? Every year I pay thousands of dollars in 

taxes, I would rather reduce the taxes I pay and instead use those 

funds to grow my business, invest in my community and thus invest in the growth of America. 

Third, foster small business eduction—‘‘smart hustle’’—I 

applaud the great work of the Small Business Administration, 

SCORE, SBDC’s and other government supported organizations 

who support and educate small business owners. The more we inSBREP-219A with DISTILLER

37 

vest in the education of small business owners the more we ensure 

businesses succeed and not failure. 

In particular, I applaud the work of the New York City Department of Small Business Services. 

Private and for profit education efforts such ass the Goldman 

Sachs 10,000, Goggle’s Get Your Business Online, Microsoft Small 

Business Academy, Kaufman Foundation and so many other initiatives are an important part of the small business education ecosystem as well. 

I was recently speaking with Robert Herjavec of Shark Tank and 

we discussed that all small businesses hustle—they work hard. 

However, it’s ’those who are educated, who have SMART HUSTLE, 

who succeed. Educating business owners is essential. 

As I conclude my statement I think of a company like 

infusionsoft started by 3 friends in a strip mall in Arizona. Or a 

company like SumoMe started by a fired Facebook employee in 

Austin. These companies, my company and the millions of other 

small and medium sized businesses need to be encouraged to start, 

grow and thrive. 

Let’s think about the husband and wife who start a business together, or a high school graduate working on an invention, or that 

laid off 50 year-old forced to begin their own business. 

The best thing our government can do for small business owners, 

is to have limited regulation, lower and simplify taxes and continue 

to invest in the education of small business owners at the local, 

state and Federal level. 

Thank you for the opportunity to share about the hustle, the 

smart hustle of small businesses in America. 

SBREP-219A with DISTILLER

38 

Testimony of 

Susan Solovic 

THE Small Business Expert 

On 

‘‘Inspiring Entrepreneurs and Learning from the 

Experts’’ 

Before the 

Small Business Committee 

United States House of Representatives 

May 11, 2016 

The Honorable Steve Chabot, Chairman 

The Honorable Nydia Vela ́ zquez, Ranking Member 

SBREP-219A with DISTILLER

39 

Good morning Chairman Chabot, Ranking member Vela ́zquez 

and members of the committee. Thank you for the invitation and 

opportunity to provide testimony and to share my experiences 

working with small business owners and entrepreneurs. It is an 

honor to be with you today. 

Let me share with you a little bit about my entrepreneurial background. My mother was a pioneering entrepreneur. She opened her 

first business after her husband died in World War II and it was 

one of several she launched throughout the years. By the way, she 

also got her pilot’s license in 1944. I still have her log book, which 

shows when she took her first solo flight. 

After she married my father, they opened a funeral home in a 

small, rural Missouri town and I grew up working in the familyowned business. Personally, I started my first business when I was 

15 years old. I taught 75 little girls how to twirl a baton for $1.00 

each on Saturday mornings in the high-school gym. Soon, I expanded to teaching dance classes in my basement. When I left for 

college, one of my star students took over and paid me 10 percent 

of the revenue for the first year. I guess you could say entrepreneurship is in my genes. 

I’ve also worked successfully in the corporate world becoming the 

first female executive in the financial services division of a Fortune 

50 company. Additionally, I’m a licensed attorney, but my heart 

has always been in entrepreneurship and at this point in my life, 

I guess you could say I’m totally unemployable. I like calling the 

shots, making deals happen, running my own show, and bringing 

in money. I’m fortunate because my business is prospering, but the 

picture is not the same for millions of other small business owners 

in this country. 

Small businesses are struggling in the U.S.—as I’m sure you’re 

aware. The number of small business closures is out-pacing 

startups for the first time in 30 years. According to the Capital One 

Spark Business Barometer, small business confidence has dropped 

nearly 10 points since the same time last year. 

However, there are bright spots for small businesses. Thanks to 

technology, the barrier to entry is greatly reduced compared to 

when I started my first business decades ago. Resources rest at 

your fingertips to help you do everything from establishing your 

legal entity to learning how to manage and grow your business. Additionally, cloud-based solutions give small firms the ability to access sophisticated software solutions affordably, allowing them to 

compete more effectively with bigger companies. And, technology 

allows small businesses to do business around the globe from their 

garage or spare bedroom. 

Yet even with these developments, startup founders who begin 

with passion and a sparkle in their eye now tell me their business 

dream has turned into a nightmare. However, we know many great 

companies have launched in the midst of difficult economic eras 

and have risen to the top echelons of business, so I encourage small 

businesses to focus on what they can control, rather than external 

pressures they can’t control. In other words, don’t point fingers and 

SBREP-219A with DISTILLER

40 

place blame. Focus on building a great company that brings true 

value to the market. 

As such, I’ve created a methodology called The One Percent 

Edge: The Critical Difference That Will Make or Break Your Business. The business world is changing rapidly today. What’s new 

and cool today is obsolete tomorrow. Therefore, businesses that survive and thrive are the ones that have innovation in their DNA. 

They are constantly looking for enhancements and opportunities to 

bring something unique to the marketplace. 

In my own experience, I launched one of the first video-based 

Internet companies that provided news and information to the 

small business market. While there were other companies that provided similar content in a text format, we delivered the information 

via streaming video. We recognized small business owners are time 

and resource constrained. Statistics show that while it takes several minutes to read a 2,000-word document, it can be delivered in 

a much shorter amount of time via video and/or audio. Plus, while 

watching content on our site, owners could multi-task. And, unlike 

our larger competitors that had made huge capital investments in 

print publications, equipment and personnel, we were completely 

digital with a small staff. So when the recession hit, we were able 

to remain profitable while many of our competitors closed their 

doors. 

A number of years ago I taught an MBA class on growth strategies for entrepreneurs. Because of my travel schedule the university provided me with a co-teacher who was finishing his PhD in 

entrepreneurship. During our class time, my co-professor would 

discuss case studies and write formulas on the board. Once he finished, I’d stand up and tell the class how things work in the real 

world. The bottom line is that if you’re following case studies or 

textbook formulas you are already behind in the game. There is no 

blueprint for success in today’s dynamic business world. My motto 

is if you’re jumping on the bandwagon now, you’re too late. The 

window of opportunity has passed. 

Small business owners, not only need to make product and service enhancements, but they also need to embrace technology for 

greater productivity and profitability. Companies with the 1 percent edge, constantly re-evaluate their operations, plan accordingly 

and adjust in a timely fashion. They are proactive, not reactive. 

Small businesses have a tremendous advantage when it comes to 

this process because they are agile. Large businesses often fail in 

adjusting to market needs because they are too large to make timely adjustments to their business models. That’s why only 71 of the 

original Fortune 500 companies remain today. The others have 

gone to the grave, often simply because they failed to recognize 

market trends. 

One positive note, I’ve seen is an increased use of social media 

by small businesses. More and more small companies are using social media to broadcast their brands, engage with customers and 

increase their sales. Many years ago, I owned a boutique PR and 

advertising agency. Our clients complained about not having 

enough money to market their businesses. Today, the major comSBREP-219A with DISTILLER

41 

plaint I hear from small business owners is that they don’t have 

the time to market. The myriad social platforms often confuse them 

and they don’t understand how to take advantage of this gamechanging technology. 

Similarly, when I had my agency, we worked hard to get our clients booked on traditional radio and TV shows or mentioned in a 

newspaper or magazine. The value of the new coverage was a huge 

boost for small companies. Today, small businesses can become 

their own media company by creating video content, podcasts, 

hosting a radio program and blog posts. One financial services advisor I know has become a well-loved and respected resources in 

this community because of a weekly radio show and a self-produced 

cable television show. The bottom line: Small business owners can 

create a celebrity brand position with the simple tools available 

today giving them a significant advantage. 

I was an early adopter of social media. After I sold my Internet 

business, I began working independently building my own brand. 

My husband would question why I was wasting time on social 

media instead of getting on the phone making sales calls. Today, 

he has to eat those words as I am consistently ranked in the top 

five of small business experts to follow on Twitter. I do zero outbound marketing as business opportunities come to me. It’s an excellent position to be in and one I primarily attribute to my social 

media presence. 

Small business owners still need assistance and mentoring. I get 

hundreds of emails every week from business owners seeking advice on every aspect of their business development. This tells me 

that even with all the great resources on the Internet, business 

owners still like the one-to-one, personal touch. 

I’d be remiss if I didn’t mention small business capital needs. 

Traditional lending is down, and most startups use personal assets, 

credit cards and loans from family or friends. Crowdfunding is 

helping some small companies get off the ground and I am optimistic that the equity crowdfunding, including the new Title III 

regulations to the JOBS Act that will go into effect of May 16, will 

open up a new source of funds for small firms. Will it be enough? 

The jury is still out. 

Growth organizations need access to venture capital, and that is 

an area of concern for me in terms of being a woman in business. 

I wrote a book called ‘‘The Girls’ Guide to Power and Success’’ in 

2001. Sadly, in the 15 years since its publication the statistics have 

barely changed—particularly when it comes to VC funding of 

women-owned businesses. That is partly the reason fewer than 2 

percent of women-owned firms ever gross over $1 million in revenue. 

Having gone through the VC process myself, I can verify that the 

bias against women-owned businesses is real. There are myriad research studies that will also confirm it, but I experienced it firsthand. Being the only women-owned CEO selected to present at a 

venture forum, one of the organizers said he was glad I was attractive. I ask you, do you think he said that to any of the men? 

SBREP-219A with DISTILLER

42 

Training programs that focus on helping women understand how 

to pitch to the VC community and the addition of more female VCs 

is beginning to make small improvements in this area. But it’s only 

the tip of the iceberg; we have a long way to go to level the playing 

field. 

While there are many positive developments for small business, 

there are a significant number of obstacles resulting in a stifling 

affect. I’d be remiss if I didn’t touch on some of those. Politicians 

praise the importance of small business in producing jobs and innovation on one hand, yet continue to impose regulations and laws 

that create an environment that makes it nearly impossible for 

them to thrive. 

The regulatory burden in this country is in the trillions of dollars 

and small businesses pay 36 percent more than larger enterprises. 

Could small businesses in the U.S. eventually become extinct? In 

my opinion, if we continue down this path of hyper-regulation, they 

will certainly become an endangered species. How can we protect 

this important market sector? As one long-time entrepreneur said 

to me when I asked what needs to be done: Get out of our business. 

I truly believe that most governmental policies are passed with 

the best intentions in mind, and of course some regulations are 

necessary to protect our citizenry. Unfortunately. the consequences 

are not always understood and the results wreak havoc on small 

business owners. As former Senator George McGovern said after 

his business venture in Stratford, Connecticut failed, ‘‘I ... wish 

that during the years I was in public office I had had this firsthand 

experience about the difficulties business people face very day. 

That knowledge would have made me a better U.S. senator and a 

more understanding presidential contender.’’ 

In my role as a small business expert, I speak to thousands of 

small business owners from around the country. They are discouraged and disheartened. So I’m asking you to walk a mile in our 

shoes today so you can better understand what is happening to 

small businesses and why they are slowly dying off. 

The average sole-proprietor in the U.S. grosses annual revenues 

of $44,000 and works 52 hours a week. She is he most likely has 

put their personal finances at risk to start and run his business. 

He or she sacrifice family time, holidays, weekends and vacations. 

There is no family medical leave for the entrepreneur. If they don’t 

work, they don’t get paid. There is no overtime, and if their businesses don’t make it, no one is there to help bail them out or offer 

him an unemployment check. 

Small business owners are not the captains of industry from the 

industrial age. They aren’t slave drivers requiring their employees 

to work long hours with little pay in poor working conditions. They 

are individuals who are trying to provide a living for their families, 

to give back to the community, and to treat their employees with 

respect—often going without a salary themselves in order to pay 

their employees during tight times. We aren’t money-hungry greed 

mongers, and those who make a profit put a larger share of that 

back into the business. But I ask: When did it become a crime to 

SBREP-219A with DISTILLER

43 

want to better yourself and build wealth in this country? After sacrificing so much to build our businesses without governmental assistance, should we be penalized for this effort? Should the government tell us how to run our companies? 

Allow me to share a personal story. My parents grew up in the 

depression. My father served in the Navy in World War II. Neither 

one had any education to speak of, but they knew how to work 

hard. In 1963, they launched a funeral home in the small town in 

southern Missouri where I grew up. At that time, our business, like 

most funeral homes offered ambulance service to aid the community. In the ’70s, the DOL audited my parents for wage and hour 

violations. The auditor spent two days examining their books and 

talking with employees. His conclusion: When our vehicles were 

used as hearses overtime did not apply, but if the vehicle was used 

as an ambulance, then overtime did apply. The auditor extrapolated over a two-year period how much back pay my parents owed. 

When my parents refused to pay it because they thought the decision was unfair and arbitrary, the auditor met with our three or 

four employees and explained to them they had a right to sue and 

how to do it. Thankfully none of them did. But my parents quit the 

ambulance business, which was never a profit center, because trying to comply with the regulations was too costly and complex. As 

a result, our small community was left with no ambulance service 

until much later when the hospital began to provide it. 

Unfair and misguided regulations such as these, not only affect 

the operations of a small business, but also hurt communities and 

jobs. 

Speaking of overtime regulations, the increase in the overtime 

threshold to nearly $50,000 is one such back-breaking regulation. 

First, it is extremely complicated for small business owners to determine precisely which employees are exempt and which are not. 

Culling through the guidelines, which are almost as thick as the 

tax code, is just an added headache for an owner who is already 

stressed by simply trying to keep up with daily business operations. Therefore, the risk of misclassifying an employee is significant. Small business owners don’t have the funds to hire labor lawyers to help them navigate the complexity of the system. This puts 

them at risk for audits and even worse, lawsuits, which could be 

more costly than the overtime itself. 

Additionally, an arbitrary amount doesn’t take in account the differences in geographic economies. For example, $50,000 in the little 

town I grew up in is a big amount of money. I recently sold my 

family home, which was over 5,000 square feet, 4 bedrooms, 3 fullbaths and two half-baths, finished basement and an extra-large lot 

for $116,000. On the other hand, $50,000 in Manhattan wouldn’t 

allow me to come close to affording my apartment there. 

Increasing the overtime regulations means small business owners will have to reduce the number of employees, convert full-time 

to part-time positions, or increase the price of their products. Most 

small businesses find themselves competing on price with larger 

providers or big-box stores, therefore, price increases are not truly 

an option. Because profits margins have already been whittled 

SBREP-219A with DISTILLER

44 

away during the last recession, cutting operational costs—employees—is the logical answer. 

The same result occurs with the increase in the minimum wage. 

Small businesses simply can’t absorb the increase so they will cut 

the number of employees. One businessman from Ohio told me how 

he has been squeezed so much that more costs are something he 

can’t absorb. He plans to raise his prices, which he says the consumer doesn’t want to hear but the money has to come from somewhere. It doesn’t grow on trees. Another restaurant owner from the 

East Coast said he simply plans to close some of this locations because it is impossible to operate them profitability. 

The Affordable Care Act has also had a dampening effect on job 

creation. Many small business owners have held their employee 

count down to avoid the employer mandate. 

Mandatory family leave sounds good in theory, but let’s apply it 

to a typical small business. What do you do when a team member 

takes leave for 12 weeks? You still have to pay at least part of his 

or her salary so you can’t afford to bring on someone else. Even if 

you could afford it, how do you train replacements quickly, invest 

money in them, and then let them go when your original employee 

comes back? The only other option is to ask your remaining staff 

to pick up the slack. Employee morale and productivity is sure to 

wane impacting your bottom line. You may lose existing customers 

and business opportunities. Most small businesses have familyfriendly work environments to accommodate personal needs. Isn’t 

it better to allow the business owner to manage in way that is appropriate for his business? 

What about the business owner himself who has a medical issue? 

For example, my mother had Alzheimer’s. My father became her 

primary caregiver, which left no one to manage our family business 

other than me—an only child. I had to juggle commuting back and 

forth to my hometown to keep the business running while still trying to manage the demands of my own company until I was able 

to sell our family business. 

The same is true for equal pay. I have been the victim of pay disparity when I was an executive with a Fortune 50 company. When 

I was elevated to the executive level, I was paid about $20,000 less 

than my male predecessor. I understand how unfair it is and it is 

an issue that should be addressed, but not legislated. I understand 

how unfair it is and it is an issue that should be addressed, but 

not legislated. Business owners need the flexibility to establish 

wages based on experience and skills, not mandated by law. A man 

and woman who come to a job with the very same credentials 

should be paid equally, but if one has less experience and fewer 

skills then a business owner should have the flexibility to establish 

wages accordingly. 

The tax code is also problematic for small businesses. While I 

think it is important to lower corporate tax rates to stay competitive internationally, most of us are pass-through entities, therefore, 

we are just as interested in a less complicated and lower personal 

tax rate. Because of the complexity of the tax code, many small 

businesses don’t take advantage of available tax credits and deducSBREP-219A with DISTILLER

45 

tions. The cost of complying with the tax code is 206 percent higher 

than a larger company. 

While we’re on the subject of taxes, let’s discuss the death tax. 

For many small business owners, their business is their greatest 

asset and they want to pass it on to their heirs. Yet having paid 

taxes on it for years, when the owner passes away it becomes part 

of an estate that may be taxed at a rate as high as 55 percent by 

the government. Unfortunately, most small business owners don’t 

have the money in their estates to pay the taxes so the business 

must be sold or liquidated to pay the tax. There goes the business 

and there goes the jobs. 

There are still many bright spots for small business owners. 

America remains a great country with opportunity, which is why 

so many want to leave their homelands to come here. Our country 

was built on the spirit of entrepreneurship. Let’s not extinguish 

this important characteristic of our culture. Let’s create a pro-business environment that gives entrepreneurs the ability to start, 

grow, and build great companies that provide jobs and continue to 

drive our economy. 

Thank you again for the opportunity to testify. I am grateful the 

great bipartisan work of this committee, which has led to important legislative victories and progress for America’s small business 

owners and entrepreneurs. I look forward to our discussion today. 

SBREP-219A with DISTILLER

46 

Testimony of 

Melinda Emerson 

‘‘SmallBizLady’’ 

America’s #1 Small Business Expert 

‘‘Inspiring Entrepreneurs and Learning From Experts’’ 

The Small Business Committee 

United States House of Representatives 

May 11, 2016 

The Honorable Steve Chabot, Chairman 

The Honorable Nydia Vela ́ zquez, Ranking Member 

SBREP-219A with DISTILLER

47 

Good morning, thank you Committee Chairman Chabot and 

Ranking committee member Vela ́zquez and the rest of the Small 

Business Committee for the opportunity to testify on the status of 

small businesses in the U.S. 

My name is Melinda Emerson, but I’m known worldwide as 

SmallBizLady, America’s #1 Small Business Expert. My 

SmallBizLady brand reaches 3 million readers each week online. 

I’ve been an entrepreneur for 17 years as President and CEO of the 

Quintessence Group, a marketing and management consulting firm 

based in Philadelphia, Pennsylvania. We specialize in working with 

Fortune 500 companies who target small business customers. 

For the last 8 years, I have also run SmallBizLady Enterprises, 

which is our training and development company for small business 

owners, Our mission at SmallBizLady Enterprises is to End Small 

Business Failure. We work directly with women and minority entrepreneurs who want to start and grow successful small businesses. We publish a resource blog at succeedasyourownboss.com, 

which is syndicated through The Huffington Post. We reach millions of entrepreneurs a week and 22% of my audience is international. I get letters and emails each week from around the world 

asking for tools, advice, and funding. 

I am also the bestselling author of the book, Become Your Own 

Boss in 12 Months, which is in its second edition and the ebook. 

How to Become a Social Media Ninja. In addition to these for profit 

pursuits, I also run the Melinda F. Emerson Foundation for small 

business success, which hosts a flagship conference every fall called 

Reinvention Weekend. I am also a former columnist for the New 

York Times, Inc. and Entrepreneur.com. 

Technology really makes a difference for small business to get information to help them grow their businesses. For the last 7 years, 

I have also hosted a live tweetchat weekly on Twitter called 

#Smallbizchat to answer small business questions. Our audience 

ranges from start-ups to more established businesses depending on 

the topic of each show. We are the largest live small business audience on Twitter. 

One of the things I am known for is the Emerson Planning System, which I highlight in my book Become Your Own Boss in 12 

months. It’s my six-step system to transition from employee to entrepreneur: 

Step 1: Develop a Life Plan Before You Ever Write a Business 

Plan 

Step 2: Develop a Financial Plan, as the money to start your 

business will most like come from you right or left pocket and 

banks do not loan money to start-up, you must be in business at 

least two years with position cash flow. 

Step 3: Validate Your Business Idea, based on what skills you 

have and need to run that business 

Step 4: Know Your Paying Customer, don’t fall in love with your 

Idea, make sure there’s a demand for It and a customer willing to 

pay. 

SBREP-219A with DISTILLER

48 

Step 5: Write a Business Plan, you must plan for success it will 

not just happen to you 

Step 6: Launch While Working, It takes 12-18 Months for a 

Small business to break even let alone replace your corporate salary. 

As I thought about my opportunity to shed light on the state of 

small business in the U.S., I first looked back over my nearly two 

decades in business for ideas. And Chairman Chabot, I heard you 

were looking for some bold ideas to shape the future, so here goes 

a few. 

There are three critical things that really propelled my business 

success. The first was the initial business loan I secured. It was a 

$25,000 loan from Ben Franklin Technology Partners in 2000. It 

was a SBA backed loan fund, called the Competitive Edge Loan 

Program. What was unique about this program was that in addition to the funds, I also received 25% of the loan’s value in technical assistance for my business. My first accountant and marketing consultant were hired with these funds, and I must say they 

saved me. I was a former television producer, and I knew how to 

tell great stores on video, which is what my firm do, but I didn’t 

know a lot about running a business. I have a journalism degree 

from Virginia Tech, in fact the reason I started my business was 

because Oprah Winfrey inspired me, she was the first journalist I 

ever saw start a business. This made me think I could do it too. 

But there was a lot to learn, I second thing that made the biggest difference for me was that I recognized early on that I had to 

grow myself to grow my business. Every year I’ve been in business 

I’ve invested in some course, coaching or leadership development 

program. 

I have participated in executive training program at Dartmouth 

College, and the University of Virginia, I did the E200 training program sponsored by the SBA, the 8a Academy, Fast Track, I also 

went through Leadership Inc. Philadelphia, and the Urban League 

Leadership institute, but the first class I ever took was the SEA 

Program, which was a FREE state run program for people who 

were unemployed called the Self-Employment Assistance Program, 

which was run by the Women’s Opportunity Resource Center in 

Philadelphia. It provided 8-week business plan course, allowing me 

to collect unemployment while I built my business. I think a National program like this could help a lot of unemployed people reinvent themselves as small business owners. 

The third thing that was a pivotal moment in my business was 

when I won the minority business plan competition which was 

sponsored by The Enterprise Center and the City of Philadelphia. 

In 2001, I won $20,000 and free office space in a business incubator 

for one year. This enabled me to hire my first employee, and that’s 

when my business took off. We need more public/private partnerships America that seed and launch small businesses with grant 

dollars and incubation spaces, but we need some that intentionally 

support minority and women owned business that are main street 

businesses. 

SBREP-219A with DISTILLER

49 

In Hungzhou, China’s Silicon Valley, start-ups are given three years of space in business incubators and they have a $300-million 

dollar fund to seed new businesses. In Singapore, there is a mall 

in the heart of the financial district dedicated to youth entrepreneurs. Young entrepreneurs, as young as 10 years old, once accepted into the government training program can get discounted 

space, training and mentorship to sell their products, and when 

their business get big enough they can get retail space. They define 

youth entrepreneurs up to age 35. 

In Chile, Start-up Chile, provides $40,000 and place to live for 

one year if entrepreneurs are willing to come and start their business in that country. In this country, Start-up America, is largely 

public relations initiative with very few resources to provide anyone other than networking events. 

Because we have some of the greatest businesses in the world in 

America, we think that we have cornered the market on innovation. But I have traveled internationally as the SmallBizLady, 

through the World Entrepreneurship Forum, and we are losing our 

edge. We need to start teaching entrepreneurship education starting in kindergarten. We need to support and fund Junior Achievement and NFTE’s, especially in urban communities with decaying 

school districts to make sure that the next generation are ready 

with skills to launch and lead businesses. 

My biggest concern about what efforts the government, SBA, and 

MBDA are doing is only focusing all the efforts is on finding the 

next Facebook or tech start-up and that is a dangerous precedent. 

95% of all small business in the world will never gross of one million in revenue. We need programs that bolster main street businesses. 

There are four things businesses need: Access to Capital, 

Mentorship, Training, and Networking. This is especially true for 

women and minorities. We need access to networks, industry decision makers and market leaders. Especially those in non-tech industries, that are not expected to leaders outside of their typically 

networks and this limits their ability to scale. We just don’t have 

the mentorship or sponsorship relationships rather to build traction in our businesses and meet equity investors. They need that 

patient money that an equity investor could provide. 

Since the great recession of 2008, small businesses owners that 

were able to hang in there are hurting. They can’t get credit or capital. Although, if they are ecommerce business and have cash flow 

of at least $10,000 a month or more they can get high interest 

loans from cash flow lenders like Kabbage, Merchant Cash, On 

Deck or one of 50+ others. This industry needs some regulations 

and close scrutiny. Many of these lenders will fund a business with 

a 620 credit score at a 24-26% interest rate with immediate payment terms. This industry is preying on desperate small business 

owners, who can’t qualify for lending from traditional banks. 

And when business owners do apply for an SBA loan the delays 

and paperwork burden, make that a loan of last resort. Because 

when business owners need money, they need it in a hurry. One 

of the other main drawbacks from using SBA guarantees for loans, 

SBREP-219A with DISTILLER

50 

is that the government demands a UCCI lean on all current and 

future assets. That means for a $25,000 loan, a start-up business 

would never be able to use business assets as collateral for a future 

loan, once the business starts to scale. 

Now there is a lot of talk these days about crowdfunding, which 

has created some opportunities for product based business with 

sharp marketing, but the average crowdfunding campaign generates $10,000, and it a lot of work for so little money. Now I am 

slightly optimistic with the pending approval of Title III from the 

JOBS Act, but I am concerned that too many small businesses who 

are not properly networked or prepared will pursue this option 

with poor results. 

Technology is tough for some business owners. While cloud based 

computing has made enterprise level software available and affordable, there are too many options with no time to learn new software. This keeps many businesses paralyzed doing things the same 

old way. Too many business owners still do not have websites, 

which is their #1 sales tool. They are also overwhelmed with social 

media marketing. Everyone is out here trying to use them all 

Facebook, Twitter, Instagram, Goggle+, Snapchat, Pinterest, etc., 

but they must be strategic online. I advise small business owners 

to focus on one or two social media platforms, and they should be 

the ones where their best target customer is hanging out online. 

There are other regulatory challenges that small businesses face 

that should be reviewed.....the expanded categorization of who can 

and cannot be considered a 1099 independent contractor is a challenge for small businesses that cost of full-time employees is prohibitive to cash-strapped start-ups. The tax code needs to be simplified to help more small business owners, it costs a lot to be in 

business in the U.S. And 12 weeks of mandatory family leave for 

a team of four in typical small business in a real hardship for a 

struggling business with ongoing cash flow issues. 

When I think about things your committee could do to help on 

the enforcement of set aside goals and plans. This is critical for minority and women owned business success. The old ‘‘good faith effort’’ excuse should come with some financial penalty for agencies 

and prime contractors who do not meet goals. Create incentives for 

larger government contractors to identify and team with certified 

minority and woman owned firms. Also disadvantaged firms who 

are able to scale through 8(a), women-owned and veteran owned 

firms program should be encourage or maybe even required to help 

smaller firms grow once they are over $30 million in gross revenue. 

Despite all of the challenges, being a small business owner is still 

the greatest reward in business. We live how most people won’t so 

that we can live how most people can’t. Now is still an amazing 

time to launch a business, and no matter who you are, the world 

is still waiting on a better mousetrap. My favorite advice to give 

small businesses is, ‘‘You never lose in business either you win or 

you learn.’’ 

Thank you very much for inviting me to testify. I feel honored 

to be here. Æ 

SBREP-219A with DISTILLER