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FULL COMMITTEE HEARING ON 

HEROES OF SMALL BUSINESS 

HEARING 

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

HEARING HELD 

MAY 26, 2010 

Small Business Committee Document Number 111-070 

Available via the GPO Website: http://www.access.gpo.gov/congress/house 


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MARK CRITZ, Pennsylvania 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEES 

Subcommittee on Contracting and Technology 

GLENN NYE, Virginia, Chairman 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

KURT SCHRADER, Oregon 

DEBORAH HALVORSON, Illinois 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

MARK CRITZ, Pennsylvania 

AARON SCHOCK, Illinois, Ranking 

ROSCOE BARTLETT, Maryland 

W. TODD AKIN, Missouri 

MARY FALLIN, Oklahoma 

GLENN THOMPSON, Pennsylvania 

Subcommittee on Finance and Tax 

KURT SCHRADER, Oregon, Chairman 

DENNIS MOORE, Kansas 

ANN KIRKPATRICK, Arizona 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

DEBORAH HALVORSON, Illinois 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

VERN BUCHANAN, Florida, Ranking 

STEVE KING, Iowa 

W. TODD AKIN, Missouri 

BLAINE LUETKEMEYER, Missouri 

MIKE COFFMAN, Colorado 

Subcommittee on Investigations and Oversight 

JASON ALTMIRE, Pennsylvania, Chairman 

HEATH SHULER, North Carolina 

BRAD ELLSWORTH, Indiana 

MARY FALLIN, Oklahoma, Ranking 

LOUIE GOHMERT, Texas 

(III) 

Subcommittee on Regulations and Healthcare 

KATHY DAHLKEMPER, Pennsylvania, Chairwoman 

DAN LIPINSKI, Illinois 

MELISSA BEAN, Illinois 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

MARK CRITZ, Pennsylvania 

LYNN WESTMORELAND, Georgia, Ranking 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, North Carolina, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(IV) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Vela ́zquez, Hon. Nydia M. ....................................................................................... 1 

Luetkemeyer, Hon. Blaine ...................................................................................... 2 

WITNESSES 

Dippold, Mr. John, Co-Owner, Innovative Sintered Metals, Inc., St. Mary’s, 

PA .......................................................................................................................... 4 

Nelson, Ms. Michelle, President/CEO, Blue Strategy and Creative Intl, LLC, 

Sarasota, FL ......................................................................................................... 5 

Gay, Mr. Will, Diamond Brand, Fletcher, NC ....................................................... 7 

Norman, Mr. Time, President, STL Technology Partners. Bloomington, IL ...... 10 

Eiffert, Mr. Brad, Owner and Manager, Boone County Lumber Company, 

Columbia, MO ...................................................................................................... 13 

Kuknyo, Mr. Chris, Owner, Patriot disposal, Prescott Valley, AZ ...................... 29 

Hach, Mr. Robert II, President, Anemometry Specialists, Inc., Alta, IA ............ 32 

Martin, Ms. Wendy, Corporate Officer, Martin Publishing Company, Havana, 

IL ........................................................................................................................... 34 

Martinez, Ms. Maria E., Naturally Green Products LLC, Orlando, FL .............. 36 

Biddulph-Krentar, Mr. Brian, President, HIT Consulting Solutions, Inc. & 

HIT Application Solutions LLC, Exton PA ........................................................ 39 

Wallace, Mr. Daniel, Wallace and Pancher, Inc., Hermitage, PA ....................... 48 

Greenley, Mr. Brian, President, Greenley Enterprises Corporation DBA 

Maaco Collision Repair and Auto Painting, Littleton, CO ............................... 50 

Kottke, Ms. Cindy, President, C You at the Movies, INC. McHenry, IL ............ 52 

Flynn, Mr. Dan, CEO, Accipter Systems, Wexford PA ......................................... 54 

Bailes, Mr. Lea, Chief Executive Officer, Guier Fence Company and Guier 

Franchising Concepts, LLC, Blue Springs, MO ................................................. 56 

(V) 

APPENDIX 

Prepared Statements: 

Dippold, Mr. John, Co-Owner, Innovative Sintered Metals, Inc., St. Mary’s, 

PA .......................................................................................................................... 67

Nelson, Ms. Michelle, President/CEO, Blue Strategy and Creative Intl, LLC, 

Sarasota, FL ......................................................................................................... 72 

Gay, Mr. Will, Diamond Brand, Fletcher, NC ....................................................... 75 

Norman, Mr. Time, President, STL Technology Partners. Bloomington, IL ...... 81 

Eiffert, Mr. Brad, Owner and Manager, Boone County Lumber Company, 

Columbia, MO ...................................................................................................... 83 

Kuknyo, Mr. Chris, Owner, Patriot disposal, Prescott Valley, AZ ...................... 85 

Hach, Mr. Robert II, President, Anemometry Specialists, Inc., Alta, IA ............ 83 

Martin, Ms. Wendy, Corporate Officer, Martin Publishing Company, Havana, 

IL ........................................................................................................................... 91 

Martinez, Ms. Maria E., Naturally Green Products LLC, Orlando, FL .............. 92 

Biddulph-Krentar, Mr. Brian, President, HIT Consulting Solutions, Inc. & 

HIT Application Solutions LLC, Exton PA ........................................................ 96 

Wallace, Mr. Daniel, Wallace and Pancher, Inc., Hermitage, PA ....................... 98 

Greenley, Mr. Brian, President, Greenley Enterprises Corporation DBA 

Maaco Collision Repair and Auto Painting, Littleton, CO ............................... 103 

Kottke, Ms. Cindy, President, C You at the Movies, INC. McHenry, IL ............ 107 

Flynn, Mr. Dan, CEO, Accipter Systems, Wexford PA ......................................... 110 

Bailes, Mr. Lea, Chief Executive Officer, Guier Fence Company and Guier 

Franchising Concepts, LLC, Blue Springs, MO ................................................. 111 

Luetkemeyer, Hon. Blaine ...................................................................................... 115 

Heckman, Mr. Kurt, President, Sycamore.US, Inc., Frederick, MD ................... 117 

Tamny, Mr. David, Owner, Professional Property Inspection Consultants, Columbus, OH ........................................................................................................... 119 

(VI) 

(1) 

FULL COMMITTEE HEARING ON 

HEROES OF SMALL BUSINESS 

Wednesday, May 26, 2010 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 10:00 a.m., in Room 

2360 Rayburn House Office Building, Hon. Nydia Velμzquez [chairwoman of the Committee] presiding. 

Present: Representatives Velμzquez, Shuler, Dahlkemper, Kirkpatrick, Critz, Bean, Altmire, Sestak, Halvorson, King, Buchanan, 

Luetkemeyer, Schock, Thompson and Coffman. 

Chairwoman VELA ́ ZQUEZ. The Committee will come to order. 

Today we observe National Small Business Week, a salute to the 

hardworking entrepreneurs that make our nation great. 

In large cities, small towns, and everywhere in between, small 

business owners serve as the backbone of our economy. Most Americans get their first job at a small business, and studies consistently show that these firms create the most new jobs. Equally important, they generate jobs here in the United States that will not 

be exported later. 

Today our economy is showing encouraging signs of recovery. 

Last month we saw 290,000 new jobs, the largest increase in four 

years. To sustain that momentum, we are going to need further 

growth in the small business sector. Running a small business is 

never easy. It means working long hours and sacrificing time away 

from friends and family. Often entrepreneurs have to risk personal 

income to get their enterprise off the ground. 

Entrepreneurship means going against the grain, taking a 

chance, and building something new. When entrepreneurs do well, 

our country, as a whole, prospers. During the downturn of the mid1990s, small businesses created 3.8 million new jobs. As we work 

our way out of this recession, we are going to need that job-creating 

power. In addition to generating jobs, small businesses are our best 

innovators, developing new products and pioneering high-tech 

fields like green energy and biomedicine. 

But beyond simply providing the fuel that makes the economy go, 

main street businesses are the anchors of our local communities. 

Whether it is contributing to the local church, sponsoring a Little 

League team, or raising money for charitable causes, small businesses may our neighborhood stronger and better. 

We have before us today companies engaged in everything from 

publishing to lumber to developing next-generation data systems 

2 

for the Defense Department. You have all come from every corner 

of the nation to be with us today, and thank you for being here. 

You may be in different industries and represent diverse parts 

of the country, but there is no denying that your ingenuity and 

hard work are common bonds that unite all entrepreneurs. These 

characteristics are part of our national fabric. Indeed, they are part 

of the American story. 

Today we are looking forward to hearing your personal stories, 

as well as your perspective on what it means to be an entrepreneur. As Americans look beyond the current recession and toward a stronger, brighter future, they are increasingly looking to 

small firms for answers, men and women like all of you. 

So, again, thank you for being here to offer us your insight. 

With that, I yield to Ranking Member, Mr. Luetkemeyer, for an 

opening statement. 

Mr. LUETKEMEYER. Thank you, Madam Chairwoman, and thank 

you for calling this hearing to honor entrepreneurs during Small 

Business Week. 

A special thanks to our witnesses who have traveled from all 

over the country and taken time from their businesses to be with 

us today. 

It is no secret that small businesses are our nation’s economic 

powerhouse. Small businesses excel at innovation, creativity, and 

filling a needed niche in the marketplace. As our economy fights 

to stabilize and recover, we are counting on small companies to put 

our country back on the path to prosperity. 

However, the economic climate remains uncertain. Many small 

businesses are struggling. Last week the Labor Department announced that new claims for unemployment benefits rose despite 

previous predictions to the contrary. The weak economy is putting 

pressure on prices, and sales are lackluster. 

According to the National Federation of Independent Business, 

more small businesses plan to eliminate jobs than create them over 

the next three months. At the same time, a flood of mandates, regulations, and additional taxes threaten small businesses’ ability to 

grow or even survive. 

The new health care law, proposed climate change legislation, 

stricter environmental regulations, and a ballooning deficit are all 

economic roadblocks. These obstacles make it increasingly difficult 

for small businesses to help turn our economy around. 

We need to get government out of the way and allow small businesses to flourish. Congress should end job-killing taxes, reduce 

regulatory barriers, and pass the three pending free trade agreements to help increase small business exports. Each of these steps 

would help create jobs and reinvigorate the economy. 

Madam Chairwoman, thank you for calling this hearing. I look 

forward to hearing from this impressive group of witnesses about 

how they have overcome the difficult economy and become models 

for success. 

Thank you. I yield back. 

Mr. LUETKEMEYER. Now the chair recognizes Mr. Thompson for 

the purpose of introducing our first witness. 

Mr. THOMPSON. Thank you, Madam Chair, Ranking Member. It 

is my distinct honor to present to the Committee Mr. John Dippold, 

3 

President and Co-Owner of Innovative Sintered Metals, Incorporated, located in Pennsylvania’s 5th congressional district, in St. 

Mary’s, Elk County, Pennsylvania. 

The powdered metals industry, for those unfamiliar, involves the 

production of a hard solid metal starting from powder. A much 

wider range of production can be attained from powder processes 

and direct alloying of fused materials. Powdered metal products are 

utilized by a variety—a wide array of industries, from automotive 

and aerospace applications to power tools and household appliances. 

Innovative Sintered Metals is a diversified organization serving 

the commercial construction, pump, automotive, appliance, and 

lock industries. Mr. Dippold began with Innovative Sintered Metals 

in 2003 as the Vice President of Marketing and Sales, where he 

was able to assist with the company’s growth from $1.1 million in 

sales to over $4 million in sales in 2009. 

Mr. Dippold holds a bachelor’s degree in business administration 

from the University of Pennsylvania-Indiana, is a member of several professional business and volunteer organizations, including, 

but not limited to, the Metal Powder Industry Federation, the 

American Powdered Metal International, and the Boy Scouts of 

America. 

As a member of Congress, I am honored to have the privilege to 

represent the hardworking and innovative people of northwestern 

and central Pennsylvania. Mr. Dippold is a true testament to the 

resourcefulness that is so prevalent in the 5th congressional district, and I want to welcome Mr. Dippold to the Small Business 

Committee and look forward to his testimony today. 

Chairwoman VELA ́ ZQUEZ. And the chair now recognizes Mr. Buchanan. 

Mr. BUCHANAN. Thank you, Madam Chair. I would like to welcome Michelle Nelson, a small business owner from Sarasota, Florida, with 15 years of experience. I was talking to her a little earlier, and her and her husband, like many, have come from, as I did, 

Michigan, settle in our district. They are from Chicago. 

Michelle Nelson is the CEO of Blue Strategy + Creative International and many other companies. Her companies are 

headquartered in my home district of Sarasota, Florida. Michelle 

has served on the Board of Directors and been Chairman of the 

Small Business Council for the Greater Sarasota Chamber. She is 

the recipient of countless local small business awards, including 

the 2004 Excellence in Industry Award. 

We were talking a few minutes earlier, and she was telling—we 

were talking about this tough economy all over the country, but in 

our area we have had a great run for a lot of years, but it has been 

tough the last couple of years. It has been just their hard work and 

vision that kept them going and continue to build their business 

every day. 

Michelle is a passionate business owner with a tremendous vision. I am proud to have her as a witness with us today. 

Chairwoman VELA ́ ZQUEZ. Mr. Dippold and Ms. Nelson, you both 

will have five minutes to make your remarks. Go ahead. 

4 

STATEMENT OF JOHN DIPPOLD 

Mr. DIPPOLD. Madam Chair and Ranking Member Luetkemeyer, 

thank you, and members of the Committee. My name is John 

Dippold, and I am the President and Co-Owner of Innovative Sintered Metals. 

Powder metallurgy is a very interesting industry. It begins with 

metal powders, which are produced from recycled metal scrap, 

pressed at high pressures into a variety of shapes. These parts are 

then sintered in continuous furnaces just below their melting point. 

Our technology facilitates the manufacture of high strength, complex shapes, which are impractical or impossible with other metalworking processes. 

Our company sales this year will be $4-1/2 million, an increase 

almost 100 percent over last year. Our workforce has doubled since 

2004 when we took over the business. 

I certainly appreciate the opportunity to testify about the state 

of small business in America, particularly as it relates to manufacturing, which has been, and continues to be, a huge part of the 

economy throughout Pennsylvania’s 5th district. 

I am certainly not a hero in any sense of the word. I am reacting 

to very real and powerful forces throughout our economy. Twenty 

years ago, at the local level, my industry was dominated by several 

large family-owned operations. Many have since been acquired by 

multi-national corporations seeking efficiency and economies of 

scale. 

To be frank, this has been a very painful process for many in the 

region. But in crises there are always opportunities. I am just one 

of many entrepreneurs in the industry that saw a niche for nimbler 

firms that could react quickly in the global marketplace. Today 

that niche is growing. Once dominated by a few firms employing 

500, 800, or 1,000 workers, we are now seeing companies that employ 10, 20, and 50. 

Again, this has not been an easy transition, but I see real optimism for American manufacturing. People often ask, ‘‘How long is 

American manufacturing going to be a superpower?’’ My answer is, 

‘‘It depends on tax structures, wage disparities, health care reform, 

and regulatory hurdles.’’ 

Don’t believe everything you read, though. When my partner and 

I purchased the business in 2004, the company did very little work 

for the auto industry. We had 10 employees, and the company was 

in the red financially. Since we had a lot of experience in this field, 

automotive became a big part of our business, growing to 40 percent. 

So why didn’t we collapse when the auto industry tanked? The 

answer has a lot to do with our size, the way we approached the 

marketplace, and our steady growth. Rather than scale, our competitive advantage is service. My partner, an engineer by trade, 

works with clients on a personal basis. There is no administrative 

people between he and our customers. Customers are working right 

with the key people and decision-makers in our business. 

We have a small operation with tight margins. Every account is 

vitally important. I can tell you from experience, 20 years ago 

major automotive suppliers would have serious reservations workVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
5 

ing with a company our size. But today people are operating leaner 

and looking for the best service and the best value. 

We change with the demands in the marketplace. Powerful component design software and our focus on niche marketing has given 

us a real advantage. In some lucrative market segments, such as 

stainless steel, very few players have installed stainless technology, 

and it allows us to actually charge a premium for those services. 

With that, American manufacturing is changing, and small businesses have a increasing important role in its future. I thank the 

Committee for all it does to make it possible for companies like Innovative Sintered Metals not only to survive in hard times but to 

thrive in hard times. 

With that, I would be happy to answer any questions that you 

may have. 

[The prepared statement of Mr. Dippold is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you. Very impressive. 

Ms. Nelson. 

STATEMENT OF MICHELLE NELSON 

Ms. NELSON. Madam Chairwoman, Ranking Member, Congressman Buchanan, thank you for inviting me here today. My name is 

Michelle Nelson. I am the CEO of Blue Strategy + Creative International, located in Sarasota, Florida. I am also the owner of 

Anexio, a technology and managed service provider also located in 

Sarasota, Florida. 

I own and run these companies with my husband, Jeffrey Nelson. 

Our companies are B2B, serving the Gulf Coast as well as globally. 

I would like to thank the Greater Sarasota Chamber of Commerce for getting me here. They play a powerful role in supporting 

small business in Sarasota County. 

Your request was to testify with regards to how we have been 

successful despite the tough economic times. Our nation’s economic 

crisis brought significant obstacles for small businesses, for our 

small businesses—decreased consumer confidence, long-term clients closing their doors, increased costs of goods, staffing concerns, 

and, of course, our number one obstacle was credit. 

As savvy business owners, we built strong credit, maintaining 

the strength and financial agility for our company. In good economic times, we planned for cyclical down times of the economy. 

We had seen it before, and in a booming economy we knew that 

it would shift. What we did not anticipate was that the banks 

would take back our credit lines and double our interest rates. 

As we watched our nation bail out our financial institutions, 

these same institutions turned their backs on us. What did we do? 

We rolled up our sleeves and we worked harder. Fueled by the insanity of the credit crisis and committed to survival, we pioneered 

new ways to do business. 

It was obvious that, if we were to make it through, we had to 

take complete responsibility for the survival of our companies and 

take immediate action. We pleaded with our banks and vendors to 

keep our credit lines open and negotiated interest rates. We never 

received any financial assistance or tolerance from our bank, despite our strong financial history. 

6 

Instead, our vendors and other private banks—or other private 

industries were the most generous, maintaining and in some cases 

extending our credit lines. We extended credit to our clients, so 

their businesses could continue to thrive. We shouldered the burden of our clients’ financial limitations by allowing them to make 

payments over long periods. We, in essence, became a bank funding 

the commerce that we desperately needed. 

We did not look for government assistance or SBA loans. Our experience with these programs showed that they can be costly. The 

time and investment needed make it through—make it through the 

bureaucracy can be sometimes devastating for a small company. So 

we developed new programs and services to keep our global business communities moving. 

One of those programs, our technology support company created 

our own T.A.R.P. program, Technology Assistance Relief Program, 

for small business. We understood that leveraging proper technology was critical to our clients’ survival. So we provided technology support through managed services at fees that our clients 

could afford. 

Our marketing agency created small business marketing assistance. History tells us that marketing in a down economy brings 

great financial gains to the economy—or brings great financial 

gains when the economy returns. We knew that businesses needed 

to be clearer and more direct with delivering their message to their 

consumer. So we provided marketing products and services with 

extended payment plans and empowered our clients with marketready products. 

We created these programs by retooling our product lines. We 

met with each of our clients to understand what they could pay, 

and we created services to fit those budgets. We had less revenue, 

we had less profit, and we had a huge risk. We also had new businesses joining us and new revenue streams. 

We were sustaining, growing our client base, while watching our 

clients succeed as well. Over 75 percent of the businesses in our 

community that joined our programs are still in business today, 

and are still using our programs. 

In closing, we are surviving in this economy because we are pioneers, and, quite honestly, because the calculated risks we took are 

paying off. I can tell you that my businesses are the fortunate ones. 

A number of our brethren in the small business community, our 

relatives and professional cohorts, are not so lucky, most of them 

devastated by the condition of our nation, largely due to the credit 

crisis and the billions of dollars that never reached the small business community. 

We need Congress to identify and implement small business relief programs that are direct to the pioneers of our great economic 

stimulus engine—small business. No trickle-down, start with the 

small businesses, those opportunities already exist. 

I implore Congress to bring the fortitude of the pioneer back to 

our country. You can do that by directly financing, financially assisting the pioneers and the innovators of small business—those 

who are willing to do whatever it takes to keep their vision alive, 

those who are willing to risk everything to create enterprise. 

7 

It is the embodiment of our forefathers for this nation. I learned 

these ideals from my parents, my father a craftsman and stair 

builder in New England. Further generations have the opportunity 

to learn these ideals as well, to experience what it truly takes to 

succeed—hard work and the determination to create something 

with permanence. 

Thank you for the opportunity to testify. I will be happy to take 

any questions. 

[The prepared statement of Ms. Nelson is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Nelson. 

Before the chair recognizes Mr. Shuler, I would like to introduce 

and present to the members of the Committee our newest member, 

Mr. Mark Critz. Welcome. 

And he has been appointed to the Small Business Committee 

this week. Congressman Critz represents the 12th district of Pennsylvania in Congress. He comes to the Committee having worked 

a number of years for small businesses. Congressman Critz also 

brings his expertise on economic development issues, so he will be 

a great addition to this Committee. 

He spent the past 12 years focusing on those matters for the 

Pennsylvanians he now represents. Congressman Critz has received the Patrick Henry Award from the National Guard, which 

is the highest honor given to a civilian by the National Guard. 

Welcome to the Committee. 

Mr. CRITZ. Thank you very much. 

Chairwoman VELA ́ ZQUEZ. And now the chair recognizes Mr. 

Shuler. 

Mr. SHULER. Madam Chair, thank you so much for holding this 

very important hearing today and listening to our small business 

owners throughout most of our districts. 

Today it is an honor for me to introduce one of our great employers of the 11th district, who is not only able to participate in developing great technologies for the sporting industry such as, sports 

gear, and outdoor gear, but also be able to manufacture tents, for 

our military and for our Boy Scouts. It is impressive to go through 

their facility to see their technology and the way they are able to 

gain market share. 

Will Gay and his entire staff has done an incredible job of maintaining market share, but also being innovative through their technology and the ways they have conducted their business. In tough 

times, they have been able to cut back in areas, look at their overall business portfolio, and understand how they can be a true competitor in this industry. 

And so, Madam Chair, without further ado, I would like to welcome Mr. Will Gay to the Committee. 

STATEMENT OF WILL GAY 

Mr. GAY. Thank you. Madam Chairwoman, Ranking Member 

Luetkemeyer, and members of the Committee, Congressman 

Shuler, thank you for the opportunity to testify before you today. 

It is truly a great honor to me and my company. 

My name is Will Gay. I live in Asheville, North Carolina. I am 

the Chief Executive Officer of Diamond Brand Canvas Products 

8 

and Diamond Brand Outdoors. Diamond Brand was originally established in Philadelphia in 1881. We have been involved in the 

sewn products industry since 1920 when we first began to manufacture tarpaulins and other heavy canvas items. We are the oldest, continuously operating sewn product manufacturer in the 

country. 

In 1931, Diamond Brand manufactured the very first backpack 

for the Boy Scouts. Throughout the years, we have manufactured 

outdoor equipment for other well-known organizations and companies, including the Girl Scouts, L.L. Bean, and Eddie Bauer. 

A little over 45 years ago, our foray into the outdoor retail market began in a small garage connected to our manufacturing facility, and it has now grown to three stores with more than 40,000 

square feet of retail floor space. We are currently exploring expansion opportunities, both within and outside the current local markets that we serve. 

Diamond Brand has received many local and national awards, including Best Outdoor Outfitter in western North Carolina for the 

past six years in a row; the DLA Top Supplier Award, presented 

by the United States Department of Defense; and the Export 

Achievement Award, presented by the United States Commerce Department. 

Asheville is nestled in the beautiful Blue Ridge Mountains of 

western North Carolina, an area with countless resources for being 

outdoors. We conduct regular in-store educational programs that 

are free to our community, to help them begin their own outdoor 

pursuits. Our employees contribute hundreds of volunteer hours 

annually to trail maintenance and river cleanup initiatives. We are 

also active members on many of the local environmental organizations. 

Diamond Brand prides itself on its mission of being an outwardly community-focused organization. We give back more than $100,000 

per year to organizations that share our values and beliefs. We 

have partnered with the YMCA of western North Carolina at the 

highest level of financial support in its Strong Kids Campaign, an 

initiative focused on activity and exercise for kids. 

We also provide in-kind gifts and services and further support at 

summer camp initiatives for underprivileged children in our area. 

During World War II, Diamond Brand manufactured products for 

over 144 different government contracts to support the United 

States war effort. During the past 25 years, we have refocused our 

efforts to manufacture many products for the Department of Defense and have made government contracting a significant part of 

our area of expertise. 

Diamond Brand currently holds two multi-year contracts to 

produce the soldier crew tent for the United States Army and the 

two-man combat tent currently being fielded by the United States 

Marine Corps, Army, and Air Force. This tent has also gained favor 

and recognition with several allied foreign militaries and is being 

evaluated for a number of large contract tenders overseas. 

Diamond Brand is currently involved in several technology development initiatives for new tents and shelters for the United States 

Special Forces, the Marine Corps, and the Army. Diamond Brand 

is also manufacturing a platform of proprietary anti-corrosion operVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00014 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
9 

ational weapons and shipping covers for most of the Department of 

Defense’s rotary winged aircraft platforms, as well as the MRAP, 

Mine-Resistant Vehicles, and the Patriot Missile Systems that are 

deployed worldwide. 

Over the last decade, our regional economy in western North 

Carolina has suffered greatly from the loss of manufacturing jobs. 

Diamond Brand currently employs more than 140 people in our 

manufacturing and retail business platforms. We are fortunate that 

through our planning efforts and growth initiatives Diamond 

Brand has continued to aggressively hire and provide jobs and benefits for our employees. 

Our employees come from many diverse backgrounds and nationalities and cultures, with each one making a unique contribution 

on our business. As a small business, we know our employees, and 

we know that without their talent and dedication we would not be 

standing here before you to talk about the success we have enjoyed. 

I would like to tell you about a few of these special people whose 

contributions have made Diamond Brand what it is today. Wanda 

Hensley is 61 years old and has worked at Diamond Brand in our 

Boy Scout of America and military tent line for 14 years. Both her 

husband and son are currently laid off from other manufacturers 

in our area, so this job is crucial to the well being of her family. 

She takes advantage of our benefits package and 401(k), because 

her husband, who worked for his former employer for 24 years, lost 

all of his benefits that the company had committed to provide before they closed their doors. 

Marcus Wick is 29 years old and recently married with a young 

child. He graduated from Cal State with a degree in geography but 

has not been able to find a job in his field of interest. His last employer laid him off during the economic downturn. And although he 

had no experience in industrial sewing, Diamond Brand was the 

only company hiring, so he accepted our job offer. And today he is 

one of our top-producing employees. 

In conclusion, I would like to thank you for the opportunity to 

testify before this Committee today. I continue to ask each of you 

to be mindful that our ability to operate as a successful small business, remaining financially viable and nimble to respond to the 

needs of the marketplace, relies directly on our ability to run our 

business profitably. 

In doing so, we need to have the opportunity to reinvest our resources and capital into new technology that makes us more efficient in what we do, as well as invest in the ongoing training, hiring, and retention of our employees who make what we do possible. 

I want my company to continue to be a place where people want 

to work, knowing that they will be provided for and thus be able 

to provide for their families. I want to continue to dream big for 

the future of my family, company, and my community, in an area 

and an industry that has been hard hit during the past year. 

And I want to be reassured that the laws and policies that are 

currently being crafted and implemented today will offer us the 

ability to be the leaders of the entrepreneurial spirit and the engine of growth that this country has depended on for so many 

years. 

Thank you again for this opportunity. 

10 

[The prepared statement of Mr. Gay is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Gay. 

The chair recognizes Ms. Halvorson. 

Ms. HALVORSON. Thank you, Madam Chair. I am pleased to be 

able to be joined today by Mr. Tim Norman of Bloomington, Illinois, which I have the honor to represent here in Congress. Tim 

is President of STL, a technology services company based in Bloomington. Tim started the company with his wife Katie, who also is 

with us today, and currently serves as CEO of STL. 

This week we are celebrating National Small Business Week, 

and the title of our hearing today is Heroes of Small Business. And 

Tim and Katie certainly merit that recognition as heroes of small 

business. 

Tim and Katie both had good jobs at large companies when they 

decided to take a risk and start their own small business. Today, 

after nearly two decades of hard work and perseverance, Tim and 

Katie have grown STL into a thriving business that is a major employer in Bloomington-Normal metro area, and as well as throughout Illinois. 

They have navigated their business through tough economic 

times and are taking the lead in putting people back to work. Tim 

and Katie are also both active members in their community. Tim 

and Katie are members of the McLean County Chamber of Commerce and active supporters of Easter Seals and the American Red 

Cross, for which Tim served on the local Board of Directors. 

As a member of this Committee, I am so proud of the work that 

we have done to empower small businesses like Tim and Katie 

Norman, and we need to continue to ensure that our nation’s small 

businesses have access to capital that they need to grow and put 

people back to work, such as all of those on our panel today. And 

I am eager to work with my colleagues to do so. 

Once again, on behalf of this Committee, I welcome Tim to 

Washington, D.C., and look forward to his testimony. 

Thank you, Madam Chair, and I look forward to their testimony. 

STATEMENT OF TIM NORMAN 

Mr. NORMAN. Thank you, Madam Chairwoman, Small Business 

Committee, and Congresswoman Halvorson. As Congresswoman 

Halvorson said, Katie and I started the business about 18 years 

ago, and really what that means is we spend about 24 hours a day 

together. 

Some of those hours are pleasurable, some of those hours can be 

difficult at times, because the businesses are basically operated 

along with the children that we have. We have three children—our 

daughter Nicki who is 17, our daughter Cassie who is 15, and our 

son TJ who is seven. And they pretty much run the house. And 

when we are not chasing them around to softball games and everything else, we run our business. 

We have been very fortunate in the last 18 years. I say that because we are still standing. We are still moving forward. And one 

of the things, as the economy has had its ups and downs, the one 

thing that I can honestly tell you is that the passion still survives. 

And we are very proud to be a small business owner and slugging 

11 

it out, being in the one-armed knife fight in a phone booth, and trying to figure this thing out. 

One thing I will say is that some of the stimulus plans that you 

have enacted have made a difference. We are living proof. What I 

mean by that is we just recently built a hardened data center, Tier 

3, to the Tier 3 specifications, which means everything—it is designed not to break. And it is below grade. It is a true bunker. 

And I don’t know if anyone has tried to get money during a time 

when there is a recession and the banks are collapsing, but it can 

be difficult. But the SBA, using the 504 loan program, with the refinance option, allowed us to recapitalize our business, get our data 

center built, and I think the main thing to focus in on there is to 

get it built, because our bank was failing. 

And so midstream the SBA was able to make the bank whole, 

actually move us to a bank that was able to get this thing stood 

up and get this thing moving, because to build a special use building at a time of a recession, at the point in time that it was happening, you know, I think that we were scratching our heads thinking this is the worst time to ever be thinking about doing this. But 

I can honestly tell you getting a 4.83 percent interest rate for 20 

years turned into one of the best times to build. 

With that, we have been able to really drive our business. In 

driving our business, you know, there is really four different ones 

there. We are about a $14 million services business, so we are people and we are managed services. What I mean by that is we focus 

on leverage managed services, we focus on dollars that are recurring in nature. 

We do work with the Federal Government through the Department of Defense. We have some people onsite as contractors, but 

we have a Professional Services Division that focuses around IT. 

We have a Commercial Staffing Division that focuses around more 

of the manufacturing trades. Then, we have our Data Center that 

is, again, special use. And I am forgetting one. And then, we have 

BTS, which is more an IT managed services business, that focus on 

the small business. 

As we have grown and evolved our businesses, the diversity 

across the board helped immensely, because when one was up the 

other one was down. At this point in time, again, getting back to 

that SBA 504 loan program, it has allowed us to recapitalize our 

business, or allowed us to recapitalize our business, because our 

payroll has gone up $80,000 a week over the last three months. 

And if that money was to be invested into our data center, cash 

would be tight right now, but the money is becoming more available within the markets, and it is working. We have put to work 

over 150 people over the last two and a half months, and that is 

throughout the Midwest. We have got offices in Green Bay, Wisconsin; Appleton, Wisconsin; Bloomington, Illinois; East Peoria; 

Springfield, Illinois; and O’Fallon, Illinois. 

So we are trying to make it—use it as an advantage to get moving and to get growing, because now is the time to grow. 

One of my good friends who went to the military, upon his leaving he said—I said to him I said, ‘‘You know, I feel like we need 

to do something. I respect you for what you are doing and the services that you are offering our nation.’’ And he looked at me and he 

12 

said, ‘‘Tim, I want to tell you something. We will defend this country; you create jobs.’’ And that is what we are doing. 

And one of the things that can help, as we are growing and we 

are putting people to work, there has been a recurring theme that 

a lot of people find it more—find it better to stay on unemployment 

than to allow us to put them back to work. And if we were to 

shrink some of those benefits, it will force some people to get back 

into the labor force, to start paying some taxes versus putting it 

back upon some of the employers. 

With that, thank you very much for allowing us to be here and 

speak on our behalf. Our people appreciate what you have done, 

and for the work that you do as well. 

Thank you. 

[The prepared statement of Mr. Norman is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you. And the chair recognizes 

Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Madam Chairwoman. It is a 

pleasure this morning to welcome Brad Eiffert to the Committee. 

Brad is from Columbia, Missouri. He is Vice President and General 

Manager of Boone County Lumber Company there in Columbia. 

In 1965, Brad’s father, Howard Eiffert, established Boone County 

Lumber in Columbia, which is the county seat and which was 

named after Nathan and Morgan Boone, two sons of the famed pioneer Daniel Boone. Fittingly, two sons now co-manage the business 

that their father began 45 years ago and at which both brothers 

worked during high school. 

Brad obtained a bachelor’s degree in economics and a master’s 

degree in business administration from Mizzou’s home campus 

there in Columbia. He also served as a U.S. Air Force pilot for 

eight years and is a veteran of Operation Desert Shield. Brad 

worked for a lumber company in Chicago and later for International Paper there in Columbia, before joining his brother in 

1993. 

Over the years, Boone County Lumber has grown to three locations, 34 employees, and four part-time employees, supplying building materials to contractors and customers across much of central 

Missouri. Boone County Lumber is the 2006 winner of Pro Sales 

Magazine Marketing and Customer Service Award, and the 2004 

Columbia Chamber of Commerce’s Outstanding Small Business of 

the Year. 

Brad is also active in his community and serves as a member of 

the Columbia Salvation Army Advisory Board and the Calloway 

Bank Board of Directors. He has served on the National Federation 

of Independent Business Board of Directors since 2003, serving as 

National Chairman of the NFIB from 2006 to 2008. 

Brad, thank you for being here with us today, and I also might 

mention that Ryan, your son, is with us today, perhaps the third 

generation in the family business. And I look forward to your testimony. 

Welcome. 

13 

STATEMENT OF BRAD EIFFERT 

Mr. EIFFERT. Madam Chairwoman, Ranking Member 

Luetkemeyer, and distinguished members of this Committee, thank 

you for inviting me to testify today. 

My name is Brad Eiffert, and I co-own and operate Boone County 

Lumber Company in Columbia, Missouri. And I am accompanied 

by my 15-year-old son, Ryan, a ninth grader at West Junior High. 

Boone County Lumber is a family-owned company celebrating its 

45th anniversary this year. In 1965, four men provided startup 

capital of $2,500 each, and this, combined with the $100 my father, 

Howard, had to invest, began the company that now operates in 

three locations and employs 34 full-time and four part-time employees. 

Today, my brother Greg manages our Boone County Millwork location, while I manage the lumberyard. Together, we serve the professional home builder, remodeler, and commercial contractor by 

providing a variety of forest products, doors, windows, and moldings. 

Thank you for inviting me to share some of the challenges and 

successes of the last four years and our situation today. 

This July 2010 will mark the end of four full years since the 

housing market slump started a deep recession from which it has 

yet to recover. New single-family home permits in our community 

went from rates as high as just over 1,000 in 2005 to as low as 230 

in 2008. While the demand for our products plummeted, the market values of many forest products dropped accordingly. This combination of factors has crushed our revenue for the duration of the 

slowdown. 

One of the biggest challenges early on was answering the constantly begging question of when things might turn around. We 

have since moved on from that question to asking how we can most 

effectively adapt to what we call ‘‘the new reality.’’ 

There have been two sets of heroes in our story. One is the professional builder and remodeler we serve on a daily basis, who did 

not participate in the excesses of the housing boom. We have been 

fortunate to serve some customers for two generations and are 

proud to stand beside this group of resilient survivors. 

This leads me to the second group of heroes of the last four 

years—our people. The personal sacrifice made by everyone in our 

company is the only reason I am before you today. We not only cut 

hours and overtime, but every salaried person took a pay cut as 

well. 

While doing this, we asked our employees to perform services we 

used to be able to afford from outside companies. We became our 

own custodians, Ryan is now our lawn service, and we decided to 

live without water coolers, newspaper subscriptions, coffee and 

vending machine services, weekly entry rug cleaning, and learning 

to live with changes like high deductible HSA health plans and reduced employer contributions to 401(k) accounts. 

We have not purchased a new truck in four years, and oftentimes 

will park a vehicle rather than fix it, based on seasonal needs. 

Ironically, the office building we constructed with our own employees during the housing slump in 1981-’82, in order to keep 

them busy and productive, is the same building we have completely 

14 

remodeled on the exterior in order to provide productive activity for 

our staff during the last three years. We completely remodeled the 

exterior of our building using our truck drivers, lumber yard, and 

office staff. 

While facing the severe slowdown, we never stopped asking what 

we can do during this time to take advantage of untapped opportunities. Two years ago, despite the recession, we opened a new 

showroom in the central Missouri area of Lake of the Ozarks to 

display windows, doors, and moldings. Our geographical service 

area is expanded and, so far this year, almost 10 percent of our 

total sales have come from this new market area. 

In March of this year, another opportunity presented itself, and 

we took aggressive action. Our primary local competitor in the commercial door and hardware market went bankrupt. We assumed 

the completion of several ongoing projects, purchased much of their 

equipment and inventory, and offered four employees employment 

with us in our commercial door division. 

This effectively doubled the size of our commercial door operations in the last 60 days and increased our commercial sales exposure to new vendors and to new customers. While it is early in the 

process, we are excited to continue to diversify ourselves beyond 

the residential housing market. 

Our latest challenge today remains moving beyond break even. 

We need to continue to find efficiencies and sales opportunities and 

become more profitable. We need to be able to make money and retain it in our business in order to fully restore the incomes of our 

committed employees and reinvest in our business. 

While we remain cautious regarding the current situation, we 

are optimistic that the worst of the crisis is behind us, and we are 

well positioned to move into the new reality of today’s housing and 

commercial construction market for another 45 years. 

Thank you for the opportunity to testify before you here today, 

and I will be glad to answer any questions. 

[The prepared statement of Mr. Eiffert is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Eiffert. 

And now the chair recognizes Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Madam Chairwoman. 

Congratulations to each of you. As I listened to the testimony 

this morning, you have managed to take lemons and make lemonade out of it. You have each looked at opportunities in a difficult 

time, in a difficult period here, and look at from the standpoint of 

how can we, you know, pull up our bootstraps and make something 

work here. So congratulations, and I continue to applaud you. 

And I can tell you we are adamant about trying to continue to 

keep you in business and make sure that you continue to be able 

to take advantage of those opportunities. 

Along that line, I would just like to start out, Mr. Eiffert, with 

you. I know that there is a couple of things I would like to talk 

to you about this morning with regards—one of them is the new 

home buyer’s tax credit being in the construction business, which 

has been hammered over the last several years here. 

Can you tell me the impact that it has had? Has it been positive, 

negative? Would you like to see it extended? Have you had enough 

15 

of it? Can you just give me an overview of what you feel in your 

area, what it would be? Is it something that would be beneficial, 

or time to move on? 

Mr. EIFFERT. Overall, I have heard some of the criticisms that 

it perhaps moved demand and concentrated the demand into a narrower timeframe. But at the same time, a lot of my new home 

builder-oriented customers, the ones that predominantly build new 

spec homes, have seen their inventories turn. 

And I think that an aspect of the most recent credit that was 

very effective was that there was also an incentive for the not first 

time home buyer, the $6,500 for those that had already purchased 

a home in the past. But what we saw with the tax credit overall 

was I think it increased the liquidity in the housing market. 

We had heard a number of people that said, ‘‘I could sell my 

home if my prospective buyer could sell their home.’’ And so what 

we saw was that the tax credit put some liquidity in the housing 

market, and we saw more transactions taking place across not only 

the new home but the existing home spectrum. And so in our community I think it did make an impact, and I think it was directly 

related to overall liquidity and transaction volume in the market 

at large. 

So I would say it has been quite effective, and it has been something that certainly I have seen an on-the-streets impact from it. 

Mr. LUETKEMEYER. I notice that, Mr. Norman and Ms. Nelson, 

you guys talked about access to credit this morning and your experiences with it. And, Mr. Norman, you have a bank failure in the 

middle of a loan process. That is a rather stressful situation. Can 

you elaborate on that just a little bit? 

Mr. NORMAN. Yes. When it is good, it is great. When it is bad, 

it is pretty darn bad. 

[Laughter.] 

We were pretty fortunate in the fact that we have got a pretty 

good banking relationship with the banks that were failing and the 

banks that weren’t failing. And our loan officer was acting a little 

squirrelly at one point, and I said, ‘‘Sir, if at any point in time you 

don’t have faith in the bank to be able to deliver the services that 

we need, and the capital that we need, I want to know.’’ 

And he made a call one day and he said, ‘‘I will do everything 

I possibly can to get you landed in a bank,’’ and he said, ‘‘This is 

no reflection upon your business. This is a reflection upon ours. 

And I can’t service you.’’ And so he literally had me in another 

bank in about an hour, but it felt like about three months. 

Mr. LUETKEMEYER. Ms. Nelson? 

Ms. NELSON. My experience with the SBA loans, both through 

my chair position with the Greater Sarasota Chamber, as well as 

my own due diligence, was that it was a very cumbersome process. 

I think a lot can be done to not only assist the small business 

owner in making their way through all that paperwork, but 

streamlining the process so that it is easy. 

There is not a lot of time. We already wear a lot of hats. So to 

take time away from the business, the limited time that we already 

have, it is really hard to take on a process like that, make your 

way through it. And typically the process, from the initial paperwork to funding, is long, and typically that doesn’t work. 

16 

Mr. LUETKEMEYER. I know that a couple of things that were in 

the health care bill, one of them was with regards to if you have 

$600 worth of economic or, you know, some transactions with individuals, that you have got to send them a 1099. Does that affect 

any of your businesses? Mr. Dippold, yours? 

Mr. DIPPOLD. Yes. We have several contractors that we utilize 

that, yes, that does affect our business. 

Chairwoman VELA ́ ZQUEZ. Is your mic on? 

Mr. DIPPOLD. I will bring it closer. How is that? 

Mr. LUETKEMEYER. There you go. 

Mr. DIPPOLD. Yes, that does affect our business somewhat, that 

$600. Certainly, the 1099, we must pass those on, and we, you 

know, follow those areas. So, yes, it certainly does make a difference for our business. 

Mr. LUETKEMEYER. Mr. Eiffert? 

Mr. EIFFERT. Absolutely. I mean, I look at something like that 

and I say, ‘‘Okay. What is the personal impact of this?’’ Well, the 

personal impact in my business is it will land on a lady’s desk 

named Vicki Mansfield, who has been with me just over 30 years. 

And she will have to go through the process of now trying to find 

taxpayer ID information on all the vendors that we have done business with. 

And I can’t even imagine the number of hours that this is going 

to take, to try to get the information that is going to be required 

to fill those out. But I would think that we would probably have 

to do 100 to 200 1099s. 

Mr. LUETKEMEYER. Okay. Just very quickly, have each of you 

looked at the health care bill? And is it going to be a good deal for 

you? Is it going to cost you money? Are the provisions in there 

about mandatory insurance, is that a problem for any of you? 

Mr. NORMAN. With our business, on our core employees, we already have carry a health plan for them. On the staffing side of 

our business, to where, you know, it can grow by the hundreds in 

a couple weeks, I have no clue how it is going to affect us. And I 

don’t know how to really dissect it. So yes and no. 

Mr. LUETKEMEYER. Ms. Nelson, I see you— 

Ms. NELSON. Yes. I haven’t had a chance to dissect it either. I 

am not familiar enough with it to know. We do offer health insurance currently, and it is working. So I am half-tempted, with all 

the other hats we have, to, you know, continue to hold on to that 

while we focus on other fires. But rumor has it from my business 

partner and husband that there is some grumbling that there will 

be some difficulties. I just don’t know what those are at this point. 

Mr. LUETKEMEYER. Okay. I see my time expired. Thank you, 

Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Ms. Halvorson. 

Ms. HALVORSON. Thank you, Madam Chair. I know that Mr. Norman has had some good experiences with the 504 loan programs, 

and, Ms. Nelson, you say it is cumbersome. Tim, did you find that 

it was cumbersome when you were put into an other loan in an 

hour? 

Mr. NORMAN. Well, I think there is two different pieces and parts 

to it. We actually used—I would have to defer to Katie on the actual name. 

17 

Ms. HALVORSON. But I guess my point is—you are right. And 

Katie probably worked on that, too. But we are trying to make this 

process not cumbersome, you know, the application is smaller, the 

process has gotten less, the fees have been taken off. I mean, we 

are doing everything in our power to make it not cumbersome. 

And, you know, some of the problems lie with the perception of 

being cumbersome. So we would like your input in writing to our 

offices or to the chairwoman, but everything we have done since we 

have reauthorized the SBA process has been to eliminate that cumbersome process. 

You know, we have increased the government—the part that the 

government backs, so everything we have done is to try to make 

that process not cumbersome. So, you know, and I would like the 

other people to give their inputs, because if it has still got the perception that it is cumbersome, we still have our work cut out for 

us, because we are doing everything to make sure it is not. 

So I would like to make sure that we are doing whatever it takes 

to make sure it is not. Mr. Norman? 

Mr. NORMAN. We used a third party, and they actually did— 

Ms. HALVORSON. Oh, that is right. 

Mr. NORMAN. —the whole process. I think it was called the— 

Ms. HALVORSON. Yes. 

Mr. NORMAN. —Small Business Growth. 

Ms. HALVORSON. Right. We talked about that yesterday. You are 

right. 

Mr. NORMAN. So they did all of the paperwork, and they actually 

knew the new regs coming out before the SBA did. 

Ms. HALVORSON. Right, right. And there are other things. But 

does anyone else want to share some of the processes, if they have 

used the 504 loan program or some of the other programs that the 

SBA offers? 

Mr. DIPPOLD. We have used the programs considerably over the 

last two years. We moved into a new facility. We are now in the 

process of putting on—a new addition onto our manufacturing. In 

our region—I can only speak at that, and it is North Central Economic Development—whether or not—I can’t comment on how complex and cumbersome it is, because they take care of everything. 

They do a wonderful job. They make it easy for me. 

Ms. HALVORSON. Correct. 

Mr. DIPPOLD. And have made it very easy for me. And they are 

very quick to react, they are very quick to get the loans through 

to committee, get approval, and I see very little. I am called to 

come down and sign documents. 

Ms. HALVORSON. Right. 

Mr. DIPPOLD. —to make signatures. So I am not sure how complicated— 

Ms. HALVORSON. Okay. 

Mr. DIPPOLD. —the system is, but they certainly handle—do a 

great job of handling that very quickly. 

Ms. HALVORSON. So then maybe it is the region or we need—so 

does anybody have any other comments about—because the only 

other thing I would like to hear from any of you is maybe your 

input on some of the thoughts of the $30 billion lending that is 

being proposed by the administration that is currently working its 

18 

way through Congress about believing that this infusion of capital 

into community banks will help the lending to all of you, because 

the number one thing I hear from every small business that I talk 

to is the lack of capital that you are able to get. 

And everybody is trying to point fingers somewhere. And do you 

think that this infusion into the community banks somehow, or the 

banks, are going to help you get your loans any easier? I don’t 

know, Mr. Eiffert, if you have heard of this going to Congress, or 

if you think that that is going to help at all. 

Mr. EIFFERT. You know, kind of with my bank board hat on now, 

we just haven’t seen a lot of loan demand out there. And some of 

the loan demand that is out there is because it is coming from 

some place where they don’t want it any more, just because of the 

lack of liquidity or it is just not that good of credit. 

So, overall, I think most of the lenders that I speak with just 

haven’t seen a robust demand for loans. 

Ms. HALVORSON. Okay. 

Mr. EIFFERT. That is what I hear oftentimes. 

Ms. HALVORSON. Mr. Gay? 

Mr. GAY. I would echo—our banking relationships have traditionally been with some of the larger banks, those that received help 

from the government. And after 10 years that my wife and I have 

owned the business, and run it profitably and successfully, we were 

told that we would have about a 50/50 chance of seeing our line of 

credit renewal. We have paid back all of the term debt. All we had 

was basically a line for working capital left. And they came back 

and told us 50/50. 

Ms. HALVORSON. Okay. 

Mr. GAY. So we have started looking at the community banks, 

because what we are looking for is a relationship. And I do believe 

that that can help. 

Ms. HALVORSON. Okay. And I—my time is up. I yield back to the 

chairman. 

Chairwoman VELA ́ ZQUEZ. Mr. Thompson. 

Mr. THOMPSON. Thank you, Madam Chairwoman, and thanks to 

the panel for what you do in your communities, for jobs, and how 

you are involved in the communities, too, beyond your businesses, 

just as being active members of the community. 

Mr. Dippold, I wanted to come back to the—I mean, the powdered—as I follow the powdered metals industry, 2008 and 2009 

tied a lot to the meltdown of the auto industry, there were just a 

lot of powdered metal industries that—or businesses that were just 

suffering tremendously with business loss. 

That was not your story, though. I mean, your record is one of 

really just a remarkable record during a very, very difficult time. 

And so I wanted to come back and ask you, what were the differences? What did you do during very difficult economic times to 

make sure that your business was successful, that your employees 

had that security that came working for a successful small business? 

Mr. DIPPOLD. Yes, thank you. Really it was. Our area—we are 

in Elk County in Pennsylvania, and it is very industrialized, very 

automotive-based. And we have always had the pleasure of having 

one of the lowest unemployment rates in the State of Pennsylvania. 

19 

And, unfortunately, over the last couple of years we have had the 

distinct honor or dishonor of having the highest unemployment. So 

we live and die with the automotive industry, like it or not like it. 

In our situation, we are a rather small company. We have been 

able to really get into some niche markets and niche technologies 

that allowed us steady growth. And we were successful in years 

prior to the recession of having opportunities lined up that our 

sales continued to grow. 

We did see a 10 percent reduction in sales in 2009. We actually 

grew from ’07 to ’08 and saw a reduction of 10 percent in ’09. At 

one point, the early part of ’09, we were down about 30 percent, 

but some of our new programs started hitting and really made a 

huge difference for us personally. 

Our area, I can say that people are busy again. Things are starting to look good. I certainly think our economy is still fragile. I 

think any large disruption could certainly knock us off the rail. But 

I see opportunity, and I see opportunity for small business. 

And we continue to work with our employees. We did rotating 

layoffs. We did schedule changes. We accommodated, we worked 

with our employees, and our big thing is to keep our employees 

with us. We implemented gain-sharing opportunities with them, 

and we work for ways to keep not just their base compensation but 

be part of the business and be part of the business success. 

Mr. THOMPSON. Great. Thank you. A question to throw out to the 

panel. If you had the opportunity to have—what one program, what 

one program could—or policy change that Congress could make 

that would help your business grow? What would that one policy 

change be? 

Mr. NORMAN. Less tax. 

Mr. THOMPSON. Okay. 

Ms. NELSON. No surprise there. 

Mr. GAY. I will echo that, but I would also say further support 

to help get people off the unemployment rolls. Where we currently 

stand in double digit unemployment in our area, we are still having a terrible time getting people to come back to work. And while 

we want to be sympathetic and understand that there is a lot of 

difficulty with people losing their jobs, they also have to have some 

incentive to go back to work. 

Mr. THOMPSON. Very good. 

Mr. EIFFERT. I am also concerned about the tax environment, because I see as the economy recovers, and we have tax cuts expire, 

I think they are going to be expiring at a critical time when capital 

is needed in our companies. 

As I said, it has been a long time since we purchased new delivery equipment, and I think that as we recover, keeping funds in 

the hands of entrepreneurs so that they can reinvest in their companies, in equipment, that will help the economic activity of, you 

know, truck dealers, car dealers, equipment manufacturers, and 

just keep more money out there in the private economy. But I 

think otherwise we will be providing a little bit of a headwind to 

the recovery, if you will. 

Mr. DIPPOLD. In our industry, there is a bit of a disparity. Certainly, I am a bit biased, but I certainly feel small business is 

where it is at. And we have made significant strides in service and 

20 

bringing opportunities and great quality, great delivery, to our customers. Where I see a problem in our business is if there was some 

way that we could get some sort of funding, industry funding for 

an R&D development that would allow smaller businesses to create 

jobs and advance the technology. 

Multi-national companies have the financial wherewithal to 

spend a lot of money on R&D and development and creating new 

products, materials, and processes, where as a small business 

owner financially we are a bit bootstrapped in order to do that. 

Chairwoman VELA ́ ZQUEZ. Will you yield, Mr. Thompson? 

Mr. THOMPSON. Please. 

Chairwoman VELA ́ ZQUEZ. Mr. Dippold, are you referring to debt 

financing or equity investment? 

Mr. DIPPOLD. Creating, yes. 

Chairwoman VELA ́ ZQUEZ. Okay. Thank you. Thank you for yielding. 

Mr. THOMPSON. Okay. I think I have expired my time. Thank 

you, Madam Chairwoman. 

Chairwoman VELA ́ ZQUEZ. Mr. Critz. 

Mr. CRITZ. Thank you. You know, I actually come from the small 

business economic development era. I did that for Congressman 

Murtha for many years. And one of the things that I have always 

seen is small businesses and trying to get access to capital, and I 

am curious, because in traveling throughout our district, small 

businesses many times when they are going to bigger banks don’t 

have as much success as they do with going to local community 

banks. 

And I am curious for the panel, where you have received your financing, if it has been better going to the local community bank, 

and what role the SBA played, if it was helpful or if the SBA led 

you to a certain bank, or what you see as a winning strategy. 

Mr. NORMAN. What I have found is that your bigger banks have 

people that focus on SBA loans. Your community banks don’t have 

the resources necessarily to have a person who is an SBA expert. 

And so if you were to inject some cash into a community bank to 

get them an SBA education, I think that you would see some SBA 

loans probably get freed up. 

But it is such a complex process at times, you know, and when 

you are in the foxhole, and you are not really working from a strategic position, you need help. 

Mr. EIFFERT. I have not used the SBA loan process, but we do 

maintain a line of credit, and it is with a local bank. But overall 

I have found the value of having a relationship—I mean, I have got 

a relationship with people on the Board of Directors of my local 

bank. I know the leadership of the local bank. 

I have got a long-term personal relationship with the commercial 

banker that I bank with. And I think the communications and the 

consistency of our relationship and the trust and the—we know one 

another’s character. To me, just the value of that local relationship 

and local ties has been critical to maintaining a confidence in each 

other, actually, you know, the reassurance that they will be there 

for me, and my communication with them of what I am doing and 

proactive steps that I am taking to be a good customer. 

21 

But I have a hard time understanding how anybody really operates without just that personal kind of contact and relationship 

with someone that knows your business and that you know them. 

Mr. DIPPOLD. From our standpoint, when we purchased the business in 2004, it was also necessary for us to move out of our current location and into a new facility. The larger banks really didn’t 

want anything to do with any piece of that. We ended up with two 

smaller banks who took the risk on us, but they knew us personally. They knew our backgrounds, and they did take the risk and 

they worked with us, and everything turned out very well. 

So certainly my standpoint is the smaller banks were there for 

me when I needed them, and I will continue to utilize them moving 

forward. 

Mr. CRITZ. Well, thank you. Thank you. I appreciate that. One 

thing, actually, for Mr. Dippold. I was wondering if—you had mentioned that your business is starting—and you are the only Pennsylvania company that—so I know sort of the Pennsylvania geography. 

I am curious. You said your business is picking up, and you have 

weathered the storm quite well. I am wondering, does that mean 

that the auto industry is buying more from you now? Have you 

seen an increase in orders from out of the—like the GMs and the 

Chryslers and the Fords? 

Mr. DIPPOLD. Yes. And, you know, the old adage of sometimes it 

is better to be lucky than good, a lot of our new programs that we 

launched over the past six months, and for the next 18 months, are 

Ford-related products that are on their new diesel engine. They are 

on their new F-150s, engines that are coming out, and the new designed F-150. 

So we have aligned ourselves as a Tier 3 supplier through Ford. 

That has been very successful for us. So, yes, we are seeing those 

definite business increase, but a lot of our products are new applications for the industry, for that automotive supplier. 

Chairwoman VELA ́ ZQUEZ. Mr. Buchanan. 

Mr. BUCHANAN. Thank you, Madam Chair. And I want to thank 

you for doing this, recognizing the heroes, because as someone that 

has been an entrepreneur for 30 years and not a career politician, 

I understand what you go through, and appreciate Ms. Nelson 

being here today, because she has been very active in our chamber 

and all that you have done. 

Let me just say, and as you know this, that 99 percent of all the 

businesses in Florida, in Tallahassee, our capital, are small- and 

medium-sized businesses. They create 70 percent of the jobs. 

I don’t think we celebrate small business enough in this country. 

I think it is what makes this country great, fundamentally. So I 

just want to—I can’t say enough to applaud you, and that I—I have 

been through two tough cycles, in the ’80s where we had 20 percent 

interest rates, in the ’90s where we had the S&L banking crisis. 

But this is the worst I have ever seen—in the last 30 years that 

I have seen in business, or the last 35 years. You would have to 

probably go back to the ’30s. 

But, again, I applaud your success. I will give you one other statistic, just to tell you how great you are. They have said—the U.S. 

Chamber said that eight percent out of businesses that start up, 

22 

out of 100 succeed, in five years are still standing, let alone in this 

environment. So, again, I applaud your efforts. 

Ms. Nelson, again, I am glad to have you here today representing 

my district. What are the keys, a couple of keys that you think are 

the keys for you to survive through this struggling time? Because 

I have got to tell you, most of the businesses in our area, there are 

some niches, are down probably 30 percent. And many of them, unfortunately, are in the bubble or been out of business. What has 

been the key to your success, you and your husband? 

Ms. NELSON. Well, I think—as we talked about before, I think 

the most important piece of being a business owner—and I think 

we have all talked about it—is pioneering new ways to do business. 

I mean, in tough times like this, you just learn to roll up your 

sleeves and get the work done, to innovate, to be a pioneer, and we 

have all done that. 

And you have to do things that are uncomfortable. You have to 

change your staffing, you change your health care benefits. There 

is a ton of things that you have to do in order to survive. It is not 

comfortable, it is not what you like, and, quite frankly, I think we 

get a little comfortable when things are good. And we are used to, 

you know, enjoying those times. And then, when times get tough, 

we complain about it a little bit, but ultimately we turn around 

and we make it happen, because that is what small business owners do. 

So that has been our success. You know, as a husband and wife 

team, it is a little tough. We spend a lot of time together, and we 

balance work and life. But we all do that. Everybody on this panel 

and everybody watching would tell you the same thing, but that is 

what we sign on for when we come on. So I think success is just 

that fortitude and that hard work that gets it done, be willing to 

do what you have to. 

Mr. BUCHANAN. Well, you definitely have that attitude, and that 

is the reason you are successful. 

Mr. Eiffert, I wanted to ask you, because you brought up taxes, 

you know, the mentality up in Washington is tax the rich. The rich 

I know, most of them are small business people, medium-sized companies, with pass-through income. Either they have got an LLC or 

a Subchapter S or a partnership or a sole proprietorship. 

What is your thoughts on that? You touched on that, because 

what happens—if you make $750, you know you don’t take home 

$750. And if you have got to pay another 10 percent in taxes, it 

is a couple more jobs that you are not going to be able to hire somebody. But I would like to just have you add on, if you think I am 

right on that. 

Mr. EIFFERT. Well, I think you are very right on that. And, you 

know, one of the things—small companies, sometimes the quickest 

cash that we have available in a small company is what we don’t 

take home as owners. You know, we have had periods of time 

where you just didn’t take any income home, because you wanted 

to leave the money in the business. 

So certainly, you know, to the extent that that—you know, that 

taxes would affect the livelihood of any entrepreneur, and what 

they take out of the business, versus being able to leave the funds 

in the company, it certainly makes a difference, because I know reVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
23 

cently we have only been taking out of it what we need to live on. 

And, you know, having the tax rates minimal gives us more liquidity that we need to support our families. 

So to that— 

Mr. BUCHANAN. Thank you for that, because I have limited time. 

I wanted to get one more question to the panel, because this is 

something I wasn’t planning on talking about, but it has been 

brought up twice here today, and I heard it in a town hall meeting 

a week ago Saturday. 

And I am as passionate as anybody. All of us—working families 

in the country are clearly hurting. But a gentleman stood up at the 

town hall and he says, ‘‘I have run ads in our community for some 

time. I can’t get anybody to come in and look for a job.’’ You know, 

you guys have got to be very careful about the unemployment benefits, what we are doing here, the extension. Some people need 

them. Some people are taking advantage of the system. 

So I talked to him after that was his comment, and I said, ‘‘Well, 

tell me, you know, how are they surviving? They can’t survive.’’ He 

said, ‘‘Well, they are taking the check, and they are working underthe-table side jobs.’’ And he can’t get anybody to take a job there 

locally in his community. That is what he claims. 

Does anybody want to add on to that? Or is it just one incident? 

Because I just had this come up recently. Or do you think that is 

pretty widespread in your communities? 

Mr. NORMAN. Well, I think, coming from the staffing side, with 

my staffing hat, there is a consistent message each and every 

week, probably two out of 15 people that we interview or we offer 

jobs to, that—around our area Caterpillar is a main supplier or a 

manufacturer in Peoria, and so there is a lot of labor that was laid 

off there. A lot of it was union labor. 

But the unemployment benefits are about break-even to what 

they could be making otherwise, and a lot of them are just saying, 

‘‘I have got about six weeks left. I am just going to coast for the 

next six weeks, and give me a call back then.’’ 

Mr. BUCHANAN. Thank you, Mr. Norman. I yield back. 

Chairwoman VELA ́ ZQUEZ. Time has expired. Mr.—Ms. Kirkpatrick. Sorry. 

Ms. KIRKPATRICK. Thank you, Madam Speaker, and thank you, 

panel. I represent a very large rural district in Arizona, and most 

of the businesses are small business. And by ‘‘small business’’ I 

mean Mom and Pop to less than 50 employees. And one of the 

things that—we know the survival rate is low, as Mr. Buchanan 

said. One of the things that we experienced overnight, lines of credit just disappeared. 

And I want to hear from you if you had similar experiences. So 

it didn’t seem to matter whether it was a large bank or a community bank. The lines of credit just disappeared. So I would question 

the entire panel. If you would just give me an idea of your experience with that. Ms. Nelson. 

Ms. NELSON. Yes, thank you. We bank at a large bank and had 

a history with that bank. It was not a community bank, and they 

immediately came in and took away a good portion of that. We also 

had a credit line on our home that we used when we needed to, 

hadn’t tapped into it, actually was in the process of doing a few 

24 

things to our home when we realized—we got notice that they had 

taken out a number of the funds while we were under construction. 

Same thing—you know, as small business owners, there is times 

we tap into our corporate credit cards and personal credit cards. 

The interest rates on those changed. So it was a quick shock to realize there was actions we needed to take in order to secure keeping the availability of the funds that we need in order to deliver 

the supplies and the goods to our clients. 

So it was not a local bank, it was a large bank for the most part, 

that we had that struggle with. 

Ms. KIRKPATRICK. Has that been restored? Has your line of credit 

been restored? 

Ms. NELSON. We actually went—we called them and negotiated 

pretty heavily. It did not go away, but it was significantly reduced. 

And keep in mind, we rarely tapped into them. So they should 

have—you know, we anticipated that they would always be there. 

Probably the biggest place where we got the resources was from 

major suppliers, Dell being one of them for instance. When we 

went back to them and said, ‘‘Look, we have been a major provider 

of equipment for you in this area, and we need help,’’ they stepped 

up and actually significantly increased our credit line. It was 

things like that. It was those industries that really came to bat and 

said, ‘‘We are just going to have to band together and get this 

taken care of.’’ 

Ms. KIRKPATRICK. So it was business, not the banks, that came 

to your rescue. 

Ms. NELSON. Yes. For the most part, yes. 

Ms. KIRKPATRICK. Anyone else have experience with that? 

Mr. GAY. I think what Mr. Eiffert said earlier about relationships 

is the key to our future going forward, because we—as we went 

through our renewal process, a big part of our business is government contracting. We get paid every 28 days by the government, 

which is pretty good. 

And their comment back to us is, ‘‘Well, we don’t think we can 

perfect the receivable, the guarantee on the receivable,’’ which to 

me is absolutely ludicrous. The smaller banks, the community 

banks, the folks that take the time to get to know you, to really 

understand what your business looks like, what your cashflow 

needs are, and the like, I think are going to be the ones that are 

going to help us go forward. 

Ms. KIRKPATRICK. Now, there is—did you want to speak to it? Go 

ahead, please. 

Mr. DIPPOLD. Just quickly, on the small bank side, we utilize the 

small banks. And there were conversations about negotiations of 

tailoring back our lines of credit. We have some new opportunities 

coming through—convince them that we needed that line of credit, 

because we had new business we were launching. And as a result, 

we were successful in keeping that line of credit, and only had to 

negotiate a floor on the percentage rate. 

Ms. KIRKPATRICK. Now, in the SBA loan package, there is a provision for a small line of credit. We wanted it to be easily accessible 

to small businesses. Have any of you tapped into that? 

Ms. NELSON. No. 

Mr. DIPPOLD. No. 

25 

Ms. KIRKPATRICK. Okay. So you are sticking with your existing 

banking. Well, I applaud your survival, your efforts. You know, I 

agree—I am a former small business owner myself, and through 

the hard times is when you—you know, you really look at those efficiencies, and, if you can survive, you come out that much stronger. So, again, thank you very much for being here today. 

I yield back. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. King. 

Mr. KING. Thank you, Madam Chairman. Madam Chair, I appreciate you holding this hearing today, and this is fascinating, to 

hear the panel talk. I really am having a hard time deciding where 

to start. 

But one of the things that I think wasn’t developed to its fullest 

extent was the questions that were being asked by Mr. Buchanan 

with regard to how difficult it is to hire someone who is being paid 

not to work. And is there anybody on the panel that has actually 

hired somebody that was drawing unemployment and known that 

they have gone off of unemployment to go to work? Have you experienced that in the last year or two or three, anyone? 

Mr. GAY. Very rare. 

Mr. KING. But has it actually happened to any of you? 

Mr. DIPPOLD. It has not happened to me. 

Ms. NELSON. No, we have hired a number, and they all went off 

unemployment. They were very—I had one employee walk in with 

his first paycheck crying, saying, ‘‘You have no idea what this does 

for me.’’ So I have not had the experience of them, you know, trying 

to do otherwise at all. 

Mr. KING. So I hear you clearly that people that were drawing 

unemployment, it hadn’t expired yet but you hired them while— 

Ms. NELSON. Yes. 

Mr. KING. —and they took the job rather than the unemployment 

check. 

Ms. NELSON. Yes. 

Mr. KING. Thank you. 

Ms. NELSON. Absolutely. 

Mr. KING. Anyone else have that experience? 

Mr. EIFFERT. No, sir. 

Mr. KING. So I think Mr. Buchanan has illustrated that in a way 

that we need to think about, is he said some need it and some 

don’t. Some game the system, and some don’t. 

Ms. NELSON. Yes. 

Mr. KING. It is hard to have a universal approach to this I just 

think I have had people in the wintertime in my construction office 

open the door, stick their head in, and say, ‘‘You don’t need any 

help, do you?’’ and they close the door and walk away. And I realize 

that they are going to put me down as somebody they applied for 

a job with, and so now I say, ‘‘Yes, here is the application. Come 

on in, sit down.’’ And they don’t come back if they are not looking 

for work. But that is an interesting observation. 

And I noticed that Mr. Norman has an employee base that goes 

up to roughly 200 additional, that you are concerned about how 

that might be affected by the health care program. But I would ask 

you: is there anybody on the panel that uses eVerify to verify legal 

employees? 

26 

Mr. NORMAN. Yes. 

Mr. KING. Two of you do? Mr. Gay? 

Mr. GAY. Yes, sir. 

Mr. KING. And Mr. Norman? 

Mr. NORMAN. Yes. 

Mr. KING. Do you find it a system that works well for you, Mr. 

Gay? 

Mr. GAY. I think the system works well. The thing that is difficult with eVerify is you have to hire the employee first before you 

do eVerify. So if they kick out, now you have essentially hired that 

person, and they go back into the unemployment ranks. And I 

know there are some discrimination issues around that, but— 

Mr. KING. What do you—I mean, I am going to put it in a little 

bit of a way—I would characterize it this way, that you have to 

hire someone who is working illegally, you have to break the law 

in order to find out if they are breaking the law. And then, if you 

find out that they aren’t legal, then you have to let them go. 

Mr. GAY. Yes, I think that is a fair statement. And being a federal contractor, that is something that we have to take very seriously. 

Mr. KING. As a federal contractor, do you ever see a contract that 

requires you to certify a drug-free workplace? 

Mr. GAY. Yes. 

Mr. KING. How do you comply with that in your state? Can you 

do that within your state laws? 

Mr. GAY. Yes, we do. We do drug pre-screening before everybody 

is hired, and then random drug tests over the lifetime of their employment. 

Mr. KING. That is good business. Thank you. 

Mr. Norman? 

Mr. NORMAN. We do the same. Our people go through drug tests, 

drug screening. A lot of times, too, when you get into the volume 

staffing, it is part of the deal that you have to show proof of citizenship. You have to show proof of no drug use and everything else. 

So it is a—it is just part of the process. 

Mr. KING. And you would be happy if we amended eVerify so 

that it can be with a bona fide job offer as opposed to having to 

actually put them on the payroll and then find out? 

Mr. NORMAN. Right. You know, and there is always—what we do, 

too, is we put an employment—basically, an offer letter together 

that makes it contingent upon passing the drug screening and all 

of the citizenship stuff. 

Mr. KING. I hope that line is fine enough. 

Mr. Eiffert, you were the one that actually spoke to me in a way 

when you talked about how you had to pinch pennies and squeeze 

things down and get rid of the clean rug service and Ryan mows 

the lawn. If he was the son of one of your employees, could he do 

that for you? 

Mr. EIFFERT. No, sir. 

Mr. KING. And I bring that up because I think they would have 

to be 18 years old to ride the riding lawnmower around to cut the 

grass around your place, but they would have the keys to the car 

two years earlier. That seems like a child labor law that we ought 

to take a look at. 

27 

But you also have—you have 34 employees and four part-time, 

as I read in your testimony. And have you given thought to what 

you might do with an employee base if you are bumping up against 

the 50-person cap that would put mandated health insurance on 

you? Has that crossed your mind, that a 50-employee threshold 

might be something you would want to back away from, if you 

reach that point? 

Mr. EIFFERT. I expect that we would become multiple entities. 

Instead of just two locations, we will be two companies. 

Mr. KING. I expect that is the case with all of the witnesses. 

Thank you, Madam Chair. I would like to find the answer to that 

question. 

Chairwoman VELA ́ ZQUEZ. Mr. Altmire. 

Mr. ALTMIRE. Thank you, Madam Chair. I wanted to I think 

close out this first panel by just getting some clarification on the 

issue that has come up multiple times about unemployment, because you are here at a very important time. As you know, the 

Congress is debating that very issue, maybe as soon as today, on 

whether or not to extend unemployment benefits. And Mr. Gay and 

Ms. Nelson both addressed this. 

But I wanted to ask the question in a little bit different way and 

just start at Mr. Eiffert and go across. Two things. Do you—have 

you seen specific examples—I am not asking you to name names, 

but just, you know, have you seen a person who you believe could 

work, there is a job available for that person, but because they are 

on unemployment they choose not to, they choose to stay on unemployment rather than take a job? I know, rhetorically, we hear that 

is what happens, and there are people who do that. But have each 

of you seen a specific person who has done that? 

Mr. EIFFERT. No, sir. I am not available—I am not aware of anyone that has specifically done that. 

Mr. ALTMIRE. Well, thank you. The second question was—and 

then you can go down—is if we were taking up this vote about 

whether or not to extend unemployment, if you had that vote, what 

would you recommend that we do? Given where we are in the economy, given what you see in your regions, the impacts that the recession has had on your businesses and those around you, do you 

think it is an appropriate action to take? 

Mr. EIFFERT. Again, I am not aware of anyone specifically in that 

circumstance. And I think it is going to be a difficult vote, because 

I know it is a difficult economy. But, overall, I think that—you 

know, I was always kind of raised under the mantra that there are 

jobs out there for people that, you know, are productive. And I 

know that might be naive in some economies, but I would probably 

go with the unemployment system that we have now, thinking that 

it provides the cushion and the time that it should to be able to 

provide someone a chance to find employment. 

Mr. ALTMIRE. Thanks. 

Mr. NORMAN. I can give you a list. You know, it is—I think it 

is—if you are hiring, you will run into it. Or if you have got accelerated growth, you will run into it. If you are not hiring, I don’t 

think you will see it, but the fact is that I have seen the people, 

I have spoken to the people, and our people have spoken to the people, and it happens weekly. And I would vote to repeal it. 

28 

Mr. ALTMIRE. Okay. 

Ms. NELSON. Wow, it is tough. We have had a lot of growth, so 

we have not run into a lot of that, or we haven’t run into any of 

that for the most part. The people—when we have hired—we have 

made a good probably half a dozen hires this year, and have had 

no problem finding the people we need and have had no problem 

in them accepting the jobs. So that has not been an issue. 

What my vote would be, that is tough. It is hard to sit in this 

position and be employed and to make that decision, to make that 

call. I will tell you that, from a philosophical perspective, I think 

that we need to push people to start working, to move past their 

comfort zones, to take whatever they can. So I can understand both 

arguments. 

Mr. ALTMIRE. Okay. Mr. Gay? 

Mr. GAY. Yes, sir. I think we are now approaching I believe it 

is 99 weeks that unemployment has been extended, coming up on 

two years. That is a long time. And, clearly, we have been through 

some challenging times in the economy, and I think people need to 

know that there is a safety net. 

I think what we see is we had a Volvo manufacturer close in our 

area. These people were making, you know, $35, $40 an hour perhaps, and they don’t want to come take the $15 or $20 an hour job. 

But what they will do is come in, apply, and then go back to the 

Employment Security Commission and say, ‘‘We went and tried. 

We didn’t get the job.’’ And then, that just allows them to continue 

to stay on there. 

So somewhere at the Employment Security Commission level 

things I think also need to be broken, because it seems like they 

are enabling a lot of that to continue to go on. 

Mr. ALTMIRE. Okay. Thank you. 

Mr. DIPPOLD. Thank you. I have not personally had the experience. We hired only three people in the past six months, none of 

which were in that situation. So I can’t comment there. But I personally believe it is time to push those individuals out into the 

marketplace. What we are seeing when people are interviewing 

and are coming through the system, we are seeing much younger 

people. We are not seeing the 30-, 40-year-old people that are coming in for those interviews. So that tells me, at least in my situation, that there are people taking advantage of the system. 

Mr. ALTMIRE. Thank you, all. No further questions, Madam 

Chair. 

Chairwoman VELA ́ ZQUEZ. Thank you. We are finished here, 

right? Yes. Let me take this opportunity to thank all of you, and 

I hope that—well, it is important that in order to get this economy 

growing again we need to create jobs. We lost 11 million jobs. So 

it is hard to believe that people are—when you are hiring, that people do not want to get back to work. In fact, we have only been creating 250,000 in the last month, and previous to that 159,000. 

So, but the intent of this hearing is to listen to the stories, to see 

what is working in terms of small businesses, getting your businesses growing, and hiring again. Thank you for the contributions 

that you make to our economy, and for your ingenuity. You have 

been able to adapt and make the changes necessary to be able to 

29 

come here to us—to the Committee and talk to your successes and 

the positive stories that you all represent. 

So with that, I want to thank all of you on behalf of this Committee. And you are all excused. Thank you. 

I will ask the second panel to please come forward and take your 

seats. 

[Recess.] 

Chairwoman VELA ́ ZQUEZ. The Committee will come to order, and 

the chair recognizes Ms. Kirkpatrick for the purpose of introducing 

our first witness. 

Ms. KIRKPATRICK. Thank you, Madam Chairwoman, and thank 

you for adjusting the order of the witnesses. 

I am very pleased to introduce Chris Kuknyo of Patriot Disposal 

in Prescott Valley, Arizona. Chris helped found Patriot Disposal 10 

years ago, fighting the odds to build a business that now serves 

thousands of residential and commercial customers throughout 

Yavapai County. 

Patriot is a local company serving local communities, and the 

business gives back by contributing to local organizations and 

events, including the local food bank, Little League, the Prescott 

Valley Team Up to Clean Up, and the company was the first to 

bring recycling services to the area. 

Chris is equally involved serving as Vice Chair of the Prescott 

Valley Chamber of Commerce, as well as on the Board of Directors 

for the Prescott Valley Economic Development Foundation. 

Chris, welcome to our committee. 

STATEMENT OF CHRIS KUKNYO 

Mr. KUKNYO. Thank you very much. Thank you, Madam Chair, 

for allowing me to speak with you on behalf of the small business 

folks of Arizona’s 1st congressional district. And I also want to 

thank Representative Kirkpatrick for the invitation to do the same. 

My name is Chris Kuknyo, and I am one of the co-founders of 

Patriot Disposal. We are a small trash and recycling company that 

just celebrated our tenth anniversary. You see, 10 years ago, I and 

another gentleman took hold of the American dream. We knew that 

the dream wasn’t entitlement, but opportunity, that if we believed 

in ourselves and worked hard there was nothing we couldn’t accomplish. 

My partner knew the trash business and was a whiz at financing 

and administration. I knew how to fix trucks, and I had a knack 

for marketing. We developed a rock solid business plan and took 

it to the service corps of retired executives in the Small Business 

Administration. They said, ‘‘Don’t do it. You will never make it. 

Waste Management will crush you.’’ We took our plan to the banks 

where one loan officer laughed and said, ‘‘Come back when you 

don’t need the money.’’ 

So we did what so many small business people do, we went all 

in, we put everything we owned and worked for on the table. I took 

out a mortgage on my home, we purchased a garbage truck and 

300 garbage cans. Today the banks visit us on a regular basis 

wanting to help us manage the cashflow of our 16,000 residential 

and 800 commercial accounts. 

30 

The journey from zero employees to 29 employees has not been 

without its challenges, as represented by my graying hair. I looked 

at a photo the other day of these two young guys standing so 

proudly in front of their first garbage truck, and the guy on the 

right does not resemble what I see in the mirror in the morning. 

We had to swim with the sharks to get the capital to keep us up 

with the growth that we had. I am talking about non-traditional 

lenders that charge 14 to 21 percent. I have to compete with the 

largest disposal company in the world, who happens to own the 

only landfill in the county that accepts household trash. They 

charge over double the rate that is offered in Phoenix, because they 

are the only game in town. 

We have to contend with our own government that seems bent 

on our destruction. I remember the first quarter of 2006. We only 

had so much money, and it was two weeks until our billing was 

going to be coming in. We had a choice to make. We could miss 

payroll and lose our employees, not make a fuel payment and have 

our gas pumps turned off, not pay the landfill bill and have Waste 

Management put us out of business, or miss a tax bill and take a 

hit from the IRS. 

The tax we missed for the quarter was $44,000, but after penalties, fines, and interest, it is now $88,000. I know that figure is 

not much to you folks, but for a small business that could be just 

devastating. If I was to open a business that charged that much, 

and acted in that manner, I would be arrested and tossed in prison 

for loan sharking. 

The frustration is amplified when you open up the paper and you 

see the same government that is holding your feet to the fire for 

thousands is giving billions to help the foreign nation of Haiti, or 

giving out gigantic loans to huge corporations because they are too 

big to fail. 

We have been under attack from the big box stores and giant corporations, who can weather this economy and use it to further gain 

market share by eliminating the pesky small businessman. 

As small business people, we are so busy getting the kids to ball 

practice or helping at the school that we don’t have the time or energy at the end of the day to lobby Congress to let you folks know 

what needs to be done. That is why I am so honored, and I truly 

am thankful for this opportunity to share with you folks today. 

When I found out I was making this trip, I went to the Chamber 

members and small storefronts around my town and asked a simple question. Is there anything you would like me to convey on 

your behalf? They didn’t take long to answer. ‘‘Tell them the banks 

still aren’t lending. Stop trying to be my partner. No more spending. And they are taxing us to death.’’ 

I am sure you hear that last one a lot, but do you ever take into 

consideration the big picture? It is not just the Feds that want to 

profit from any success we may have, but the state, county, and 

city are also lined up. 

Let me give you a quick example of Patriot’s purchase of a used 

trash truck we bought in California. After paying California sales 

tax, we had to pay a temporary tax to drive it home to Arizona 

where we were informed that, because we did not pay city sales tax 

31 

in California, we owed sales tax to the town of Prescott Valley, Arizona. 

Filling the tank with diesel, we also paid more taxes to get the 

fuel to get it home, and then we were taxed to license the truck 

and transfer the title, and the county wants to tax you to inspect 

the truck. And if over a specific gross vehicle weight, the IRS wants 

a form filled out and more federal tax paid. Now the truck can go 

to work picking up trash for $16.75 a month. 

When you consider any future legislation, please consider that 

even the smallest impact has an effect on small business. In this 

town, it seems like a million dollars is hardly ever mentioned anymore unless it is $5-, $6-, or $700 million. For the most part, you 

seem to speak in billions and now even trillions. These are 

unfathomable amounts. To a small businessman in this economy, 

$1,000 is a lot of money. A thousand dollars is what it will take 

to cover rent on the store. A thousand dollars will allow me to keep 

my home and make the car payment this month. A thousand dollars separates me from bankruptcy. 

I have never seen so many dreams shattered as I have in the 

past year. Folks that had been doing their best to hang on until 

the economy improves have lost their businesses, their homes, their 

savings, their dignity. If you don’t believe in God, you have never 

been in business, because over this last year I guarantee we have 

all been hitting our knees and asking, ‘‘Lord, please keep the 

wolves at bay for just one more day.’’ 

And should you survive the attacks from the big box stores, and 

get out from under the mountain of taxation, if the clouds part and 

God looks down and smiles on your business, and what do you hear 

from your national leaders? You hear, ‘‘You are a fat cat, you are 

the rich, you need to spread the wealth around.’’ 

I tell you, that is not the way to start a bonding session. But my 

message is a message of hope. Small business really is the backbone of this country, and proof of that is that we have not failed 

completely. I know it is not a popular thing to say, but I really am 

proud of this country, and I still believe in her and the way we do 

business. 

Folks from around the world are knocking our door down to get 

in, because we are, and always have been, the land of opportunity. 

I think to summarize what the folks back home wanted me to express is that we really don’t need you to do anything for us, just 

don’t do anything to harm us, consider the impact of any legislation.’’ 

Thank you. 

[The prepared statement of Mr. Kuknyo is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you. And the chair recognizes 

now Mr. King. The chair recognizes Mr. King. 

Mr. KING. Sorry, Madam Chair. Thank you. I was focused on the 

witness’ testimony. It was so interesting, I was writing a quote 

down. I will be reviewing that. This is very fascinating to me, and 

that is so much packed into five minutes. Thank you. 

I have the privilege to introduce the next witness, who is Rob 

Hach. And he and his wife Tara are the owners of a company 

32 

called Anemometry Specialists, Incorporated, that is established in 

Alta, Iowa, a small community. 

They set the business up in 2002, and they have seen expansion 

since that period of time. What it is, anemometry is the study of 

wind. And they set up sensing devices to determine if a wind-generating field can be an effective producing field. They consult on 

that and establish and install and construct the small wind generators that we see around places here in this capital, as a matter of 

fact. And that kind of growth has set up a branch in Texas as well. 

I am quite impressed with what they have done as—and they are 

the Iowa Small Business Persons of the Year Award winners, but 

also it doesn’t take very long to find out that Rob is not alone in 

this partnership, that if you visit their business and make only eye 

contact with Rob, you will soon find that Tara, who is seated behind him, is as much a partner as Rob is. 

I am very pleased to introduce him today, and I am looking forward to Rob’s testimony. 

Thank you, Madam Chair. I yield back. 

STATEMENT OF ROBERT HACH, II 

Mr. HACH. Madam Chairman, Ranking Member Luet—Luet— 

thank you, and Congressman King, thank you. 

[Laughter.] 

Thank you for the invitation to address this Committee today. 

My name is Rob Hach. Behind me, the good-looking lady behind me 

is my wife and business partner, Tara. We own and operate 

Anemometry Specialists, Inc., in a rural northwest Iowa town. 

For eight years, our company has been powered by the winds 

that sweep across the plains of the Midwest and throughout the 

United States. This wind turns thousands of wind turbines across 

the landscape today. In recent years, we have been able to travel 

to other countries, to several South American countries, as well as 

South Africa, to capture the winds in the other countries. 

It is an honor to present the—that our company resides in the 

5th district of Iowa represented by Congressman King. Our district 

has a larger number of wind turbines than any district in the 

United States. This means our district is a leader in renewable energy and renewable fuels. 

Our clients in the wind industry understand our name, and it defines what we do. Anemometry means the study of wind. What we 

do for our clients is specialize in the study of wind. We study to 

determine the feasibility and the success of a wind farm. We install 

what is called a meteorological tower. It is a 200-foot tower with 

sensors up and down that measure the wind speeds and wind direction. 

The data is transmitted back to our office. A meteorologist analyzes and processes the data, and then provides a report to our developers and our clients. These reports are then used to finance a 

wind farm. 

Recently, our company, as Congressman King said, received an 

award from the United States Small Business Administration for 

the Business Persons of the Year for the State of Iowa. From 2004 

through 2008, we have doubled our revenues and our employees 

33 

each consecutive year. Even in the tough economy of 2009, we were 

able to show a profit and expand the company. 

We have been able to add an office in Texas, an office in New 

Mexico. We have been able to bring on four more employees during 

2009, and we continue to hire. It brings our total to 30. We were 

able to avoid layoffs, maintain benefits, and we have been able to 

take care of the families that made our company successful and 

grow. 

We continue our growth in 2010. We are looking to add two more 

regional offices and an additional 10 more employees. We have 

added a new division to our company which installs and services 

small wind turbines like the ones that you see on the—in the Botanical Center here in D.C. 

Today, I would like to highlight some of the programs that are 

in place that we have been able to take advantage of at 

Anemometry Specialists, despite today’s economy. 

The Business Association—the Small Business Association has 

been the best program that we have seen to be able to help our 

company. Tara and I started our company in our twenties, and, as 

you have heard numerous times today, getting credit has been difficult. We did not have the cash or the assets the banks needed in 

order to secure a loan. 

We were able to access an SBA 504 loan, and be able to get— receive a $150,000 line of credit from the SBA. We were able to 

work hard and build our company during our early years when we 

weren’t able to secure funds through conventional banking or fundraising. 

We paid our debt off early, and just recently secured another 

note with the SBA for the purchase of our building. Last year we 

were able to secure a $184,000 loan to purchase a 17,000 square 

foot building, backed by the SBA. The SBA is offering small businesses confidence in an uncertain economy. 

Through the SBA, we have been able to work with programs like 

SCORE, Counselors of American Small Business, and the Small 

Business Development Centers, where we are able to access experience through support services and business advice. 

Business guidance and mentoring is just as important as company finance. It is vital for a new business owner to know how to 

manage the company and its growth, especially with the changing 

regulations and global competition. 

A state loan—I am going to skip that one. 

The funds that allowed Tara and me to work continuously with 

a CEO coach over the last two years has been vitally important. 

We have been able to work with a CEO coach, and it has been able 

to take our management team even higher and grow our company 

even more, and, especially with our five years of growth, we have 

been needing that CEO coach. 

It is kindly that I ask the Committee to continue to support the 

Small Business Administration and its revitalization of the small 

business workforce. As business owners, we would like to see more 

offered in training funds, so that our workforce might be able to 

continue to change and adapt in an ever-changing world economy. 

Business incubators and low-income housing type of office and 

warehouse spaces will be also nice for consideration. 

34 

Thank you again for the opportunity to address the Committee 

and testify on the small business heroes. I would be pleased to accept any questions. 

[The prepared statement of Mr. Hach is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Hach. 

And the chair recognizes Mr. Schock. 

Mr. SCHOCK. Thank you, Chairwoman Vela ́zquez. Appreciate you 

having this Committee hearing and allowing us to bring members 

from our districts back home with relevant experience. 

Ranking Member Graves, fellow Committee members, I am honored to welcome today Ms. Wendy Martin, who is the Corporate Officer for Martin Publishing in Havana, Illinois. Wendy, along with 

her husband Bob, who joins her here today, own two local newspapers, a printing company, and a basement dewatering business. 

The Mason County Democrat is Mason County’s oldest established business, having observed its 160th year in 2009. Their 

other newspaper, The Fulton Democrat, recently celebrated its 

155th anniversary, and is the oldest established business in Fulton 

County. 

Wendy’s family newspaper history can be traced to her grandfather, Dr. Morris Fishbean, who was editor of The Journal of 

American Medical Association for 25 years, and was the author of 

the first syndicated column that we have all come to know, ‘‘Ask 

the Doctor.’’ 

Wendy has seen a lot of changes to the newspaper industry is 

her 25-plus years with the company. And as the former President 

of the Havana Chamber of Commerce, Wendy has helped to revitalize a depressed community in her county. 

I am pleased to introduce Ms. Wendy Martin of Morton Publishing—of Martin Publishing from Havana, Illinois. Welcome, 

Wendy. 

STATEMENT OF WENDY MARTIN 

Ms. MARTIN. Thank you. Madam Chairwoman, Ranking Member 

Graves, and Congressman Schock, thank you so much for the opportunity to talk to you here today. 

Our company, Martin Publishing of Havana, has two newspapers 

and a printing company, as he said. And I guess I am repeating 

myself, but we are—both of them are over 150 years old, and we 

are very excited. The paper that is 155 years old has always been 

in my husband’s family. 

My husband Bob here, he and I have been working together for 

36 years, although he has got a few more years’ seniority on me. 

He started at the newspaper when he was seven sweeping floors. 

He says that is indentured servitude. When I started, we had a linotype operator, and we cast the headlines in hot lead. 

In 1974, who could have imagined personal home computers, 

Google, Yahoo, and news aggregators? For those reasons, and a variety of others, the newspaper industry has changed dramatically. 

For once, it is to our advantage to be the small hometown newspaper. Our news is all local, and our readers depend on us to cover 

the schools, the city councils, 4H clubs, and the things that matter 

to them. 

35 

Industry-wide, circulation has taken a nosedive, but we are kind 

of holding our own. Bob says we are kind of like you. You get elected every two years, and our readers vote on us every year when 

we send out the subscription renewal forms. 

To stay competitive, it is always critical to keep your equipment 

and processes up to date. In the next few weeks, we will complete 

the launch of new Internet editions of our newspapers. Our mission 

is to provide the best local news coverage that we can, but the success of our business really depends on other small businesses. The 

majority of our customers are just like us—small, local entrepreneurs catering to the local communities that we serve. 

Thanks to a federal USDA RCDI grant, we were able to be part 

of a program called Shop Havana that supports our community of 

3,800. The goal was to raise community awareness regarding the 

difference people could make by doing just a little more shopping 

at home. 

We calculated that if each resident spent just $12 a week more 

in town that they could make a million dollar difference in Havana 

at the end of a year. This wasn’t spend $12 more, just spend $12 

that they might have spent out of town at home. 

In addition to promoting it in the newspaper, our printing company helped by designing decals for the doors of every business in 

town, and table tents that were placed by the cash registers, and 

they were there to remind shoppers that the best reasons to shop 

Havana were that local businesses were there to serve them with 

personal service, high-quality goods. They created local jobs, and it 

kept tax dollars at home. 

While we are only six months into the program, we know already 

that the benefits have been incalculable. Members of our community have become keenly aware of the difference that they can 

make and of the importance of shopping locally. I think that is why 

my successor at the Chamber of Commerce opened up a new business in town this year, and why the owner of a restaurant that 

burned to the ground last year reinvested all of his money back in 

the community and has reopened. He named the bar The Phoenix. 

We have another business downtown that has expanded, and we 

even attracted a new restaurant. 

I have talked mostly about the newspaper side of our business 

and what we have done to try to ensure that the tradition of local 

news continues. Our printing company weathered the storm of 

desktop publishing, but the overall crash of the newspaper industry 

has taken its toll. 

At one time, we had 50 employees, and we printed more than 

two dozen different newspapers. Today, we do about half that. In 

the past year, we have taken a sideway step, and we diversified by 

opening a new business, Basement Rescue, which provides solutions to wet basements. We have five employees, and we were able 

to launch this company with the help of a low-interest USDA loan. 

It has been especially rainy in our neck of the woods, so the timing was really good for this. And we are hoping that maybe by the 

time things start to dry out that the economy will have gained back 

its strength. 

In my roles as one-time chairman of a group we call Hav-A-Vision, which is an ac hoc economic and community development orVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
36 

ganization, my work with the Chamber, and as a local newspaper 

reporter, I am probably more aware than most people about the 

many different programs that are available, the federally-funded 

programs that can benefit or have benefitted the businesses in our 

area. 

The Small Business Administration has a fellow who helps folks 

write business plans. He helped us with ours. In addition to Shop 

Havana, we have a brand-spanking new national scenic byway, and 

it is expected to open new vistas as—for businesses as well as tourists. Congress’ continued support for these programs and others 

like them is essential. 

We are very excited about our proposal, the proposal by Congressman Schock, and Representative Walt Minnick, to provide 

payroll tax relief. Talk about stimulus. Employees will have more 

money in their pocket, and employers will have a much-needed revenue source to invest in their businesses. We love it. 

Thank you for your attention today. I am humbled and honored 

to have had this opportunity to address you, and we are grateful 

that we live in a country where freedom of the press is cherished, 

and where small businesses are valued. 

Thank you very much. 

[The prepared statement of Ms. Martin is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Martin. 

Our next witness is Maria Martinez. She is the President and 

CEO of Naturally Green Products, headquartered in Orlando, Florida. Naturally Green Products manufactures and distributes cleaning and maintenance products. Ms. Martinez previously owned a 

janitorial company for 20 years before she started Naturally Green 

Products. 

Welcome. 

STATEMENT OF MARIA E. MARTINEZ 

Ms. MARTINEZ. Thank you. Chairwoman Vela ́zquez, Ranking 

Member Graves, and members of the Committee, I am here today 

as a member of the U.S. Women’s Chamber of Commerce, representing our 500,000 members, three-quarters of whom are American small business leaders and heroes. 

I am Maria Martinez, founder of Naturally Green Products. I 

have three decades of entrepreneurial experience. Naturally Green 

Products manufactures and distributes the most comprehensive 

line of DfE, designed for the environment, green formulated cleaning products, and EPA-registered disinfectants for all cleaning requirements, facilities, and industries in the commercial marketplace. 

In 1993, with an SBA-backed loan, I purchased a commercial 

janitorial company. I certified my business as a woman minority 

business enterprise, with the National Minority Supplier Development Council, which made it possible to network with prime contractors to the government, and large corporations with minority 

initiatives. 

My company possessed a Secret clearance, which allowed me to 

bid on projects of the caliber I desired. Within a few years, my company had grown to employ 400-plus individuals and a varied cusVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00042 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
37 

tomer base. During the growth years, I purchased a small office 

building with a 7(a)—SBA 7(a) program loan. 

In 2003, I was 8(a) and SDB certified through the SBA. I also 

became HUB zone certified, which, when added to the already existing certifications, I became an asset of great value to my customers. What distressed me in business was that a woman business owner received no consideration unless they were a minority. 

The SBA didn’t have any programs for women, unless you were 

within the acceptable minority categories. Needless to say, I am 

grateful that I am a minority woman. 

After the disaster of September 11, 2001, my business took a 

downturn. I applied and was granted an SBA disaster relief loan, 

which helped stabilize my company. From 1999 to 2006, my company serviced the janitorial, relocation, and CAD design needs of 

Northrup Grumman in Florida. 

During the hurricane disasters of 2003 and 2004, their facility 

was devastated. My company relocated all furniture, equipment, 

and files to a dry facility, and dried out their building. Our rapid 

response saved important files, and the staff was able to return to 

their offices within two weeks. 

In 2004, I was honored with two prestigious awards from 

Northrup Grumman, which opened doors for my company. In 2005, 

I was invited to bid on a janitorial contract worth $17 million per 

year. I partnered with a larger firm. Out of 11 bidders, we were 

chosen for the final three. Although the incumbent won that award, 

it was a milestone for my company. 

Talk had begun on cleaning for a healthier environment. I 

searched for cleaning products and equipment that would help in 

this effort, but to no avail. In late 2007, I experienced a Leadership 

in Energy and Environmental Design green building, which had indoor air quality sensors and alarms. These sensors picked up volatile organic compounds in the air and set off an alarm. 

Again, I searched for products that would meet such cleaning 

and indoor air quality requirements. I used various products that 

laid claim to being green, as well as those that were certified with 

a popular third party certifier, but all of them set off the alarms. 

Out of sheer frustration, I found a chemical engineer that could 

help me create a line of cleaning products that could be used in 

these buildings, products that were truly green. The process of creating, formulating, testing, and certifying these products took two 

years. We chose the EPA’s program for green chemistry, the DfE, 

because we found that they have the strictest requirements with 

regard to solvents. 

I formed a new company with new challenges to face and overcome, such as the EPA’s DfE program for green chemistry is not 

recognized within the U.S. as a viable certifying entity among large 

institutions, including government agencies. 

The nonprofit organization, Green Seal, has a significant market 

share among large institutional purchasers and government agencies. Green Seal has a strong marketing arm that is actively promoting their certifications. Green Seal is not small business friendly. Their fees are $3,500 per product for the entry-level pricing. 

38 

The economic crisis has made it impossible to obtain banking 

support, even with an SBA backing. Companies claiming to be 

green, but aren’t—we call that green-washing. 

This adventure of Naturally Green Products is a blessing in my 

life, and I am grateful to have these challenges to address. 

Thank you, ladies and gentlemen, for allowing me to speak. 

[The prepared statement of Ms. Martinez is included in the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Ms. Martinez. 

The chair recognizes Mr. Sestak. 

Mr. SESTAK. Good morning, Madam Chairwoman, and the rest of 

my colleagues on the Committee. It is an honor to introduce my 

constituent today, Mr. Brian Biddulph-Krentar, President of HIT 

Consulting Services & Application Solutions of West Chester, Pennsylvania. 

HIT is a small business, Madam Chair, dedicated to helping the 

health care community reduce cost and medical errors, improving 

patient outcomes through technology. In 2008, HIT was ranked 

21st on the Philadelphia 100, the list of the 100 fastest-growing, 

privately-held companies in the greater Philadelphia region. 

When Mr. Biddulph-Krentar contacted my office in March of 

2009, HIT had 25 employees and was looking for additional capital 

to help launch two new health care information technology software programs. With the tightening of the credit market, especially 

to small businesses, he was faced with the difficult choice of either 

laying off eight to 10 employees or dipping into his personal savings to avoid any job cuts. 

My office connected Mr. Biddulph-Krentar with the Small Business Administration’s Philadelphia Regional Office, which provided 

him with the information about the SBA loan programs available 

for small businesses. On the one-year anniversary of the passage 

of the American Recovery and Reinvestment Act, he contacted my 

office to announce that HIT had closed on a 7(a) loan backed by 

the SBA, with a community bank that participated in its lending 

programs. 

Knowing the success of HIT and the jobs of employees were at 

stake, Mr. Biddulph-Krentar worked hard to find a bank that 

partnered with him and the SBA to meet the company’s needs. As 

a result of his perseverance, and the continued efforts of Congress 

and this administration, to support America’s small businesses, he 

now reports that HIT will hire additional supporters. 

Their SBA guaranteed 7(a) loan has given them the confidence 

of knowing that they can continue to grow. And at the same time, 

the SBA’s lending volume has dropped to less than half of what it 

was prior to the recession setting in. At the end of 2007 this occurred. 

Moreover, small businesses are finding affordable credit difficult 

to come by. More than 40 percent of small businesses have credit 

limits put on their company credit cards, and 60 percent have experienced an interest rate increase on their card. 

I believe we have to do more to remove the barriers to success 

our nation’s small businesses face. We should either ensure—we 

should ensure continued access to capital for these vitally important entrepreneurs by increasing SBA lending limits and improving 

39 

terms for community banks to encourage investment in small businesses. 

And, in closing, I think it is important to note, Madam Chair, 

that over the past decade small businesses create as much as 80 

percent of new American jobs. 

And I wish you, sir, continued success, and thank you for being 

part of the great entrepreneurial engine that powers this wonderful 

nation. 

Thank you. 

STATEMENT OF BRIAN BIDDULPH-KRENTAR 

Mr. BIDDULPH-KRENTAR. Thank you. Thank you to the Committee as well for this opportunity, and to the other panelists for 

sharing their stories. They are familiar and comforting as well. 

I started HIT about six years ago. I was the only employee. I did 

all the work, managed, went to the hospitals. What we do at HIT 

in both companies is we go in the hospitals, and we help them implement software, improve patient workflow, and redesign their departments. 

I wanted to start a company that was dedicated to improving 

health care through the use of information technology, started out 

doing only services, so that did not require a lot of initial startup 

capital. So we were lucky in that aspect. 

I was able to fund the company with a little bit of my savings 

and just continue to grow as we received more business. It did require an enormous risk, because I left a stable job and a well-paying job, and the patience of my wife, while, like a lot of other people have said, I was working 20-hour days, so she was taking care 

of the kids and the house and all the errands and all that stuff. 

We had to work very hard to attract our clients, build a solid reputation, and we had to find the right employees. We had to find 

employees who wanted to share in our vision, and also who could 

accept the risk of working for a small startup company. So we got 

lucky and found a good group of employees, and we have continued 

to be able to do that. 

Not long after we started the services industry, services company, we actually became a leading partner of Siemens, which is 

the number—which is one of the top three largest global health 

care companies in the world. And three years after inception, like 

Congressman Sestak said, we became the 21st fastest-growing company in the Philadelphia region as ranked by Philly 100, which is 

part of the Wharton School. And then, in 2009, we were the 42nd 

company. 

Through our work in hospitals, in the United States and Canada, 

we saw a need for better communication of critical test results, so 

that kind of led us to a new path. We started to develop our own 

software. That requires a very different type of funding. You need 

a lot of upfront capital with the hope that you have some revenue 

coming in down the road. 

So I liquidated a lot of my retirement savings, which I am sure 

is not uncommon, and we have partnered with a small community 

bank, after some failures with large banks. That got us to a certain 

point, and then, as Congressman Sestak said, we tapped into the 

SBA program. That was a pretty long process for us until we found 

40 

the right bank, and I think it was a long process, because the 

banks that we looked at initially weren’t well educated on the SBA 

program. 

Once we found the right bank, Conestoga Bank, who had an SBA 

team, including Morgan Johns, the program worked really well for 

us. We had to provide a lot of initial paperwork, but they, the 

bank, and Morgan and his team, took care of most of the process, 

and that got us to where we are today, which is on the precipice 

of a lot of work coming in, and also with that the need for more 

capital. 

So we find it important to balance equity and debt, so we will 

probably look to get a little bit more investment. We also have received some investment from friends and family, about $1.5 million 

to this point. So we are at the point where we need to grow, we 

can grow, we have the work, we need employees. We just need to 

find the capital and the funding to support our growth. 

Thank you. 

[The prepared statement of Mr. Biddulph-Krentar is included in 

the appendix.] 

Chairwoman VELA ́ ZQUEZ. Thank you. And I know that most of 

you were sitting here when the previous witnesses were testifying, 

and the members posed basically one of—the question about access 

to capital. And I know that you either faced that obstacle or you 

have heard from other small businesses that they are facing difficult times in terms of accessing capital. Can you talk about your 

own experience regarding that? 

I hear what you are saying, that some of the SBA programs have 

been instrumental, have been good to you. So do you see a role for 

the Federal Government in providing access to capital facilitating? 

Because the loans that you get you get it through the local banks, 

they are guaranteed by the Federal Government. In fact, we increased the loan guarantee from 75 to 90 percent. And through the 

economic stimulus package, we lowered the fees that you pay to the 

Federal Government. 

So we incentivize borrowers by reducing the fee, and we incentive the banks to lend by reducing the fees that they pay. So do 

you feel that in the very difficult economic times that we are in 

that there is a role for the Federal Government to help small businesses access capital? Yes, Ms. Martin, you can start. 

Ms. MARTIN. Well, I know that my point of view is going to be 

a little different than everyone else’s, but I think it is spot-on for 

this particular Committee. The loan that we got, one of the things 

that is important is, besides that it gave us capital to get ours 

going, when it gets paid back, it will go back into our community, 

and they will be able to loan it again to other businesses. And we 

think there is a lot of value in that. You know, we know it was 

good for us, but we are glad that it is going to be good for our 

whole community. 

Mr. HACH. As far as stimulus funds that are available out there, 

I would say that the SBA funding would be the best way to get 

people back to work. So I am in favor of continuing to support the 

SBA with the President’s support of the $30 billion that he is earmarking for the SBA. And maybe ‘‘earmark’’ is not the right word, 

but that he is proposing for the SBA. 

41 

I see that as a tremendous amount of stimulus for the economy, 

helping the small businesses continue to hire more employees. 

Mr. KUKNYO. We have been kind of insulated from it, because 

the nature of our business of trash isn’t stopping, and it is something people still want to pay for. We have actually caught up on 

a lot of bills, because we haven’t had to pay for this massive growth 

that we have had for the last eight years. But at the same time, 

the recurring monthly revenue keeps coming in, so we have actually caught up. But I am ready for it to start again, though. 

Chairwoman VELA ́ ZQUEZ. Very good. Ms. Martinez. 

Ms. MARTINEZ. I had a little different experience in the last business, the janitorial company. As you heard in my statement, I was 

able to acquire four separate SBA loans, and they were rather easy 

to get. I was using a small community bank, which they had a 

wonderful person there who was very knowledgeable about the 

SBA, and she was able to move things quickly. 

But in this new company that I have, and with the times being 

as difficult as they are, I have been to three separate banks with 

an SBA backing to get loans, and haven’t been able to acquire one. 

So I see it so differently now than it was for me back 10 years ago. 

Mr. BIDDULPH-KRENTAR. And I think we shared a similar story 

earlier where the reason you didn’t get past the banks, you didn’t 

get to the SBA, so I think I had the same issue. It took me a year 

to get an SBA loan, because I was going to the wrong banks that 

weren’t well educated about the SBA program. So I think the Small 

Business Administration playing a role in educating banks and 

helping them to facilitate the program would help people like us. 

Chairwoman VELA ́ ZQUEZ. Mr. Kuknyo, I know that you compete 

against one of the largest, if not the largest, waste— 

Mr. KUKNYO. Biggest in the world. 

Chairwoman VELA ́ ZQUEZ. Right. So what are some of the challenges that you face in competing against such a large firm? And 

what benefits are you able to offer your customers that large firms 

cannot? 

Mr. KUKNYO. We put into the community like no other garbage 

company I have seen. You know, we sponsor the Boy Scouts, the 

food bank, not only with our money but with our time. And, you 

know, we get totally involved in the community, the community I 

have lived in since 1978, so it is something that we are all about. 

This biggest garbage company in the world just—they are trying 

to use these economically troubling times, in my personal opinion, 

to crush the small buys, because they are offering my residential 

customers three free months of garbage disposal if they make a 

switch from my service to theirs. A small businessman, I cannot 

work for free for three months. They can do that. 

Oddly enough, they didn’t offer that to their customers; they offered that to my customers. So that is—I hope that answers your 

question. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Luetkemeyer. 

Mr. LUETKEMEYER. Thank you, Madam Chair. I know two of you 

mentioned SCORE, that you had worked with SCORE. We have a 

very active SCORE chapter in my district, and I was just curious 

about your experiences, and if you could elaborate on it just a little 

42 

bit, make sure everybody understands what SCORE is and how 

they were able to impact your businesses. 

Mr. HACH. Score, for our company, was beneficial. The mentoring 

and the training was helpful, and we did get a point that we 

were—exceeded the level of experience of our SCORE members. 

And we have been in a conference for the last three days with the 

SBA and learning about the opportunities that the SBA offers. And 

so there is a SCORE online, and you can go online and be able to 

access more SCORE counselors. 

And we have a new SCORE chapter president, and he has been 

able to talk us into becoming SCORE members. So we are going 

to be able to go out and counsel other small businesses, my wife 

and I. 

Mr. LUETKEMEYER. Very good. 

Mr. KUKNYO. They were a nice asset to have to ask questions 

about. But like I said, they told us not to go into business. And, 

by the way, they were right. There is a couple of times where, you 

know, we were not in the good shape like we should have been. But 

they are a good resource that way, but we didn’t have much luck, 

they told us not to do that. 

Mr. LUETKEMEYER. Have you checked back with them since 

then? Are you using— 

Mr. KUKNYO. No, sir. You know what we have done? We have 

kind of developed our own SCORE. We found other guys that have 

retired from the business, and we asked them questions, and we 

take from—we have a huge retired population in my city, and there 

is so much knowledge, so much experience that you can get from 

these people. And they would love to share it with you, too. 

Mr. LUETKEMEYER. Fantastic. Ms. Martin, I asked this question 

of one of the other panelists a while ago with regards to the new 

1099 requirement on vendors that you have $600 worth or more of 

expenses with. Is that going to be a problem for you? Because I 

know in your business you have lots and lots of people you deal 

with. 

Ms. MARTIN. No. 

Mr. LUETKEMEYER. No? 

Ms. MARTIN. No. 

Mr. LUETKEMEYER. Your bookkeeper said it is not a problem, the 

1099s? 

Ms. MARTIN. No. 

Mr. LUETKEMEYER. I know it is one of the concerns I get. I get 

tons of mail on this from my constituents, my small business folks. 

They just really—it is just another layer of regulation, another 

layer of cost that is being put on these folks. 

Ms. Martinez, I see you shaking your head. You are familiar with 

the situation. Is it a problem? 

Ms. MARTINEZ. Well, in the janitorial company that I had, I had 

a lot of small contractors that would come in to do a small job, you 

know, that maybe it would be $5-, $6-, $7-, $800, less than $1,000 

let us say. So, in my case, it probably would have—with such a 

turnover of employees when you are just hiring them for one job 

here or one job there, it would be pretty burdensome. 

Mr. LUETKEMEYER. Very good. I just want to thank all of you for 

being here this morning. I will wind up my questions here, and 

43 

allow somebody else some extra time. But thank you for all that 

you do. You are anchors in your communities. You are anchors not 

just from the standpoint of employment, an economic generation of 

activity that you produce there, but also for the support you give 

to the local folks. Thank you for all that you do. 

Ms. MARTINEZ. Thank you. 

Ms. MARTIN. Thank you. 

Mr. LUETKEMEYER. Madam Chair, I yield back. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. King. 

Mr. KING. Thank you, Madam Chair. Yes, first, I want to go back 

to Mr. Kuknyo. Your testimony is fascinating to me, because you 

came up with a business plan, and people advised you that it 

wasn’t a very good business plan, come back when you don’t need 

the money, your banker said. 

I listened to Mr.—Congressman Hall from Texas say one day 

that he—he said his banker said to him, ‘‘I have listened to your 

idiotic idea with an open mind,’’ and you went ahead and defied 

that anyway, and you made this work in the face of the toughest 

competition that you could ask for. And now they are working to 

push a monopoly by providing a free service until they can squeeze 

you out, 14 to 21 percent interest. 

And then, getting down to the really interesting stuff where you 

said, ‘‘Stop trying to be my partner, government. We really don’t 

need you to do anything for us, just don’t do anything to harm us.’’ 

I will give you just an opportunity to embellish that a little bit. 

That is a pretty powerful statement, and it resonates with me. 

Mr. KUKNYO. Well, you know, I think when it comes—like the 

legislation we were just talking about, if we have to do more paperwork, we have to pay somebody to do that paperwork. We have to 

do that—the accounting. 

Take the taxation off. When I was testifying about the stuff that 

we go—the county wants to inspect my trucks to make sure that 

they are flight tight. None of them are. There isn’t a garbage truck 

in this country that is. But you have to say, yes, it is, and then 

they write their little slip, they get their check for $88, and they 

are happy. You know, take that stuff away. It is just taxation to 

generate revenue. Let us handle that money. We will bring this 

economy back. 

Mr. KING. What do you think would happen if you or any other 

business in America would put a notice up on their website that 

said, ‘‘We are here to announce that we are in compliance with all 

government regulations’’? 

Mr. KUKNYO. I don’t even understand that question. 

Mr. KING. Okay. Do you believe that there is a business in America that is complying—there is a—let us see, there is a website 

called Constitution Daily that posted a couple of years ago that 

there are 682 federal agencies. Now, I counted 43 that regulated 

my business, but 682. 

Do you believe that there is a business in America that is in compliance with all federal regulations that could open their doors and 

be inspected and pass the test? 

Mr. KUKNYO. No. 

44 

Mr. KING. Is there anybody on the panel that believes that there 

is a business in America that could be in compliance with all of the 

federal regulations? Mr. Hach? 

Mr. HACH. I am sorry. DOT was one that loves us, and we are 

on the road all the time. And we inspect all of the trucks before 

they leave our shop, and we can go 16 miles down the road to 

Early, Iowa, and the DOT weigh scale can find something that 

needed to be addressed. And we inspect all of our trucks, and we 

are a very safe and secure company. But they can find something. 

Mr. KING. And that is just one state regulatory agency that you 

couldn’t—well, I suppose it is possible that you could be in compliance with that. I want to make this statement and ask if the rest 

of you might agree with me. When I started a business in 1975, 

my biggest concern was that I didn’t know all these regulators 

were, I didn’t know how I could find out what the regulations were, 

and I feared that I could not be in compliance and I couldn’t meet 

all of the government regulations. 

I thought I can do the work, I can fix the trucks, I can sell the 

business, or sell the service of the business, but I didn’t believe 

that I could figure out how to comply with all of the regulations 

that are there. Did that fear exist in Mr. Hach and on down the 

line when you established your business? 

Mr. HACH. Absolutely. And we found with—again, back to the 

DOT, great friends with them, or at least our checkbook. We found 

out through—oops, we missed a scale coming in through Walcott, 

Iowa, and we didn’t know we had to pull in. And they flagged us 

down and said, ‘‘You need to go through a scale.’’ We did not know 

we needed to go through a scale. We had been—I had been doing 

this work for 12 years prior, previous, before getting pulled over. 

And so, yes, we were not in compliance and not notified that there 

were these new regulations that we needed to follow. 

Mr. KING. Mr. Kuknyo. 

Mr. KUKNYO. And I reflect that with his DOT statement as well, 

because they can find something wrong with a brand-new truck, 

you know? And it seems like when they want to generate revenue 

that stop checkpoints go up more and more. But, yes, anything you 

can do to back out would help. 

Mr. KING. Why don’t you open your own landfill? 

Mr. KUKNYO. Would you write the check to help me do that? I 

would love to do that. Like as you remember, the banks aren’t talking to me, and that is many millions of dollars. Matter of fact, 

Waste Management has the only landfill in my county. That is why 

we pay double what they do 100 miles away in Phoenix. 

Mr. KING. I thought you might tell me it would be the regulations that keep you from doing that. 

Madam Chair, I appreciate the attention. And if that is a yes, I 

would be happy to hear that. I saw a nod. And I yield back the balance of my time. 

Chairwoman VELA ́ ZQUEZ. Mr. Schock. 

Mr. SCHOCK. Thank you, Madam Chairwoman, and, again, I appreciate the testimony, and so many good questions have already 

been asked. So I won’t be repetitive. 

First, to my witness, Ms. Martin, you talked about some of the 

creativity you have had to enlist. Havana has had very high unemVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
45 

ployment. Your county especially, in my congressional district, has 

one of the highest unemployment rates, or actually has the highest 

unemployment rate of the 20 counties that I represent. 

Maybe you could talk a little bit about how the above average 

unemployment rate in that area has affected your company, and 

specifically the customers, obviously, who ultimately buy your publications. You mentioned you do sheet fed printing. Maybe you can 

talk a little bit about how that benefits your customers and how 

you have had to become stronger or more creative, given the tough 

economic times we are all facing, but especially in your part of the 

world. 

Ms. MARTIN. Thank you. Well, you have asked a couple of different questions. One of them was about, you know, our low unemployment and how that has affected us, and— 

Mr. SCHOCK. High unemployment. 

Ms. MARTIN. I am sorry, the high unemployment, yes. You know, 

I mentioned about newspaper circulation taking a nosedive. And, 

you know, we have tried to hold our own, but what happens is, as 

far as our circulation is concerned, is people find ways to cut costs 

and share newspapers. So that cuts into our circulation. But, you 

know, we understand that that is what people have to do until they 

can get back to work again. 

And, of course, Havana has worked on—the different organizations that I have been involved in, we have worked on lots of different programs trying to shore up businesses, so that there can be 

continued employment. You know, there was a federal grant that 

helped us go to Fairfield, Iowa, to see what they are doing with 

small business incubators, you know, because you have got to get— 

I mean, I believe the gentleman over here had said 80 percent of 

the—as many as 80 percent of the jobs are created by small businesses. 

So we have done a lot to try and work on that. With us personally, with our business, with our sheet fed—we have newspaper 

presses and we have what they call sheet fed presses. So what we 

were able to do is show some of our customers how they could do 

their products more economically by marrying both newspaper and 

sheet fed work together. 

So we will do a real nice, fancy cover for a magazine, for example, and we will have a little less expensive printing process for the 

inside paper. You can still have nice paper and still do it on a 

newspaper press. So that is one of the things we have done. 

Thank you. 

Mr. SCHOCK. I just give the opportunity to any of the panel members—you know, we obviously asked you all to come here to highlight your respective businesses and how successful you have been, 

in spite of the storm. But are there any specific things, other than 

not hurting you—I am reminded of the Hippocratic Oath in medicine, ‘‘Do no harm,’’ which seems pretty simple to ask of your representatives in Congress. 

But perhaps there are things that we could be doing proactively 

that you would like to see if you were sitting in Congress or if you 

were the Speaker of the House. What legislation or what initiatives 

would you like to see us advance here in the nation’s capital that 

46 

you think would be most beneficial to entrepreneurs and small 

business people in America? Any of you. 

Ms. MARTINEZ. Well, I would like to address the EPA, which is 

something that I have come across recently. You know, the EPA is 

government, and their design for the environment program is sponsored, you know, by the government. 

And it is amazing to me that government entities cite prime contracts to the government, etcetera, like the Northrup Grummans 

and the Lockheeds and the Boeings, etcetera, don’t recognize the 

EPA’s program. You would think that that would be the first program they would want to support, because they get their funding, 

they get contracts from the government, etcetera. 

But what I have found out lately is that the EPA has not been 

marketing themselves at all, and they have made a statement just 

recently about that. What would be wonderful to see, and I don’t 

know if this has to do with legislation, giving more money to the 

EPA for the Design for the Environment Program, whatever, but 

the green issue is supposed to be big. 

The Federal Government is pushing green. Everyone is trying 

their best to do the green thing. And I am a green company, completely, with my products. But not only does the EPA not get any 

support, and that is who I have got my product certified by, but 

there is also no help, no funding, nothing, even though I am spending all of this money and time in producing something that I know 

the Federal Government wants to see. 

So that might be an issue there that might have to be discussed 

in Congress. I don’t know. But these are two very important aspects that I deal with on a day-in and day-out basis right now. 

Mr. SCHOCK. Well, certainly the EPA is one of the favorite agencies that gets a lot of attention from business people in my district 

as being more of a hindrance than a help. 

But my time is expired. I thank the panel again, and Madam 

Chairwoman, for your indulgence. 

Chairwoman VELA ́ ZQUEZ. Sure. Mr. King. 

Mr. KING. Thank you, Madam Chair. I appreciate being recognized. I want to keep it really brief, but I saw something that was 

very, very ironic, that I wanted to make sure I could express to the 

Committee. And that is Mr. Kuknyo’s testimony that shows the tax 

billing he missed for that quarter was $44,000, but after the interest and the penalties and fines that is now $88,000. 

It happens to be an ironic coincidence that a baby born in Amer- ica today’s share of the national debt is $44,000. And by the time 

they start fifth grade it will be $88,000. I hope that makes you feel 

better. You are like a newborn, so start again. 

Thank you, Madam Chair, and I yield back. 

Chairwoman VELA ́ ZQUEZ. Thank you. Any other member that 

wishes to make—any other questions? If not—yes, Mr. Hach. 

Mr. HACH. Yes, I am sorry. The question was asked to the previous panel, and Mr. Schock had led to legislation that would have 

an impact on small business. And one of the ones that would significantly have an impact on our company, that could benefit our 

company, is a non-renewal of the blanket unemployment funding 

in six weeks or when it comes up again. In northwest Iowa, it is 

very difficult to find employees, and so we were actually, I would 

47 

have to admit, kind of excited about the recession. And that would 

mean that we would have more employees to draw from. 

We have gone to a number of different job fairs where the people 

will walk through, and we are interested, and they will not take 

an application, because their unemployment hasn’t run out. We 

had a tenant that I offered—actually helped him find a job and he 

said, ‘‘I have $16,000 worth of unemployment coming to me. I don’t 

need to go and apply for this job.’’ 

So the unemployment, I think you, by not renewing it with a 

blanket renewal, would be beneficial to small business owners. I 

think everyone who sat on the panel stated that, that unemployment is hurting the unemployment rate in America. And by—if we 

can hold off for a month before renewing it, some other plan besides just a blanket renewal is going to be hindering—is hindering 

companies, and we need employees. We need employees. 

Chairwoman VELA ́ ZQUEZ. Time has expired. 

Mr. HACH. Thank you. 

Chairwoman VELA ́ ZQUEZ. Mr. Coffman, the chair will recognize 

you at this point. 

Mr. COFFMAN. Thank you, Madam Chairman. I apologize for not 

being here earlier. I came from another committee that was talking 

about the oil spill in the Gulf of Mexico. 

I am just wondering if you could just maybe individually just tell 

me what you see going forward, just in a nutshell. Are you optimistic or pessimistic about the next six months? 

Mr. HACH. I am optimistic. I am absolutely optimistic. I was able 

to hear a comment last night from a recitation of Sam Walton’s 

comment that he refuses to participate in a recession. And we feel 

the same way; we are not going to participate in the recession. 

Mr. KUKNYO. One thing that has been good is it has forced us 

to get our processes down pat. It has forced us to run smooth and 

to run lean, and I think that is going to benefit us coming out of 

this thing, where when things were growing so fast we just got lazy 

on a lot of things, where we could have trimmed budgets or what 

not. And this has made us become sharp again. 

Ms. MARTIN. I am always optimistic, so, you know, everything 

that we do—we try to do is to help our community and help the 

businesses in it, because they are our customers. And so I am—if 

it is not working, then we look for something else to do. 

Ms. MARTINEZ. I am very optimistic, and in the State of Florida 

where I live the State is doing—they have a lot of programs to try 

to help small business either exporting or improve their importing 

or their services and all. And I am taking part in a few of those 

opportunities, so I am very optimistic. 

Mr. BIDDULPH-KRENTAR. I am optimistic as well. With a little 

more certainty around health care reform, it is evident that hospitals are starting to spend more money, which is a big help to our 

business. 

Mr. COFFMAN. Thank you, Madam Chairman. I yield back. 

Chairwoman VELA ́ ZQUEZ. Thank you. And let me thank all of the 

witnesses for your participation here today. We are really very, 

very grateful, and we wish you all the best. We need you more than 

ever. Thank you. 

[Recess.] 

48 

Ms. DAHLKEMPER. [presiding] The hearing now resumes. 

I am very pleased today to introduce Dan Wallace of Wallace and 

Pancher, Incorporated, from Hermitage, Pennsylvania. Mr. Wallace, a civil engineer, is here today with his business partner, biologist Brian Pancher, to share the story of their environmental, engineering, and construction firm. 

Dan and Brian’s story is an incredible small business success. 

They have built their company from the ground up, literally. Their 

business, which they started in October of 2001, expanded from the 

two partners working out of Mr. Wallace’s basement to 80 employees among three separate offices in 2010. 

They built their company from scratch, working year after year 

to develop a strong client base and refine their business to one that 

could weather the current recession and turn 2008 into a breakout 

year—or 2009 into a breakout year. Wallace and Pancher demonstrate the strong work ethic and can-do attitude that makes 

western Pennsylvania a great place to do business. 

I am very proud to have Dan and Brian here to represent our 

region’s small businesses before this Committee. And I appreciate, 

Mr. Wallace, your being here today. You now have five minutes for 

your testimony. 

STATEMENT OF DANIEL WALLACE 

Mr. WALLACE. Representative Dahlkemper, other members of 

Congress, thank you very much for giving us a chance to be here 

today and tell you the story of our company. It is at times like this 

that we get to reflect back—Brian and I get to reflect back and 

think about all of the things or the path that has taken—that we 

have had to take to get to where we are today. And it doesn’t happen too often, because we are too busy trying to manage the business and manage the growth, but it is, nevertheless, a fun story to 

tell. 

Well, Brian and I are a fairly unlikely pair to get together, let 

alone to start a new business. And Brian being a wildlife and fisheries biologist, and myself a civil engineer, often those two disciplines within the industry of consulting engineering butt heads, 

and they don’t really work together so well a lot of times. 

But Brian and I became good friends. We met at a big engineering firm where I was already working. Brian was coming into that 

company, coming in from working for environmental agencies 

around the country as a biologist, and he and I just became friends. 

And, you know, after a few years we decided that, you know, it was 

time, we want to do this for ourselves. 

So we decided to incorporate our business just two weeks before 

September 11, 2001. And as everybody knows, that was, you know, 

a day that has changed our country and changed the world. And, 

you know, a lot of people told us that we were crazy for starting 

our business. We had good jobs at this big engineering firm, and, 

you know, we really could have had our life pretty much set at that 

company doing projects all over the country for, you know, large 

and small projects. 

But we didn’t listen to them. We went ahead and we gave our 

notice at that company, and we left, we stepped out on our own. 

Well, we had nowhere to step to, so we went into my basement. 

49 

And we had one old computer and two desks, kind of makeshift 

desks, and we had a big idea. And from there it becomes a pretty 

interesting story. 

Through our network of contacts that we had at this big engineering firm, we thought that we were going to be able to, you 

know, contact them, get work, that type of thing. And so we started 

making those phone calls, and one by one they told us that they 

didn’t have any work for us. So our strategy had to change pretty 

quickly. 

And so we had to start putting ourselves out in front of anybody 

we could to get our name out, and what we could do for clients. 

Our company started off doing environmental consulting, stream 

and wetland issues, getting projects through that process to get the 

permits to fill in wetlands. We designed new stream corridors and 

wetland replacement or mitigation sites. 

And, you know, one by one we got the chance, the opportunity, 

to do work for different clients, and they loved that we were able 

to do that for them. And they started telling other people, and soon 

the word of mouth really started to spread, but we still kept doing 

presentations at conferences, any place we can go to get our name 

out. We have done free work. We have done all kinds of things. 

But, you know, so we kept—we got to the point at the end of 

2003—now, this is our second full year in business, and we realized 

that we couldn’t do any more work than humanly possible, and so 

we hired our first employee November 3, 2003. 

By the end of 2004, we had to hire one more person, and we 

knew that we were quickly running out of room in my basement, 

and we had to make some move to get out to a bigger space. So 

we purchased a small home, and we remodeled it into an office. 

We moved into that place in August of 2005, and at that point, 

again, we only had four people. So just about I guess it is four and 

a half years ago that we moved out of my basement, and now we 

have about 80 people. And as of this week, we may have more because we continue to keep hiring to meet the needs of our clients. 

During those years, we have added a construction division, and 

it really started off with myself renting a little mini-excavator, because I couldn’t get across to the contractors to build those natural 

environments the way we knew they needed to be built. So we now 

have full service construction crews, and we have been very blessed 

to experience the growth. 

Last year we hired about 31 people. This year already we have 

hired over 20 people. And we see a continuing demand for the services we provide to our clients, and we will continue to hire people 

to meet that demand and give those clients more than what they 

expect. And that is our belief. 

Thank you very much. 

[The prepared statement of Mr. Wallace is included in the appendix.] 

Ms. DAHLKEMPER. Thank you, Mr. Wallace. 

I would now like to yield to the gentleman from Colorado, Mr. 

Coffman, to introduce the next witness. 

Mr. COFFMAN. Thank you, Madam Chairman. It is a pleasure to 

welcome a fellow Coloradan and constituent, Brian Greenley, to the 

Committee. 

50 

Mr. Greenley is the President of Greenley Enterprises Corporation, DBA Maaco Collision Repair and Auto Painting, in Littleton, 

Colorado. He has established the most successfully—the most successful Maaco franchise in history, growing his business from a 

humble beginning of six employees in a 9,000 square foot location, 

with $400,000 in annual revenue, to his current business of over 

30 employees with 17,000 feet of work space, and $4 million in revenues. 

Mr. Greenley has received several industry awards, including the 

International Franchise Association’s Franchisee of the Year 

Award. He became the first inductee of the Maaco Hall of Fame 

Award, which was established in memory of Maaco’s founder, Anthony Martino. 

Outside of the workplace, Mr. Greenley enjoys traveling with his 

wife and daughter, along with various recreational activities, such 

as gardening and sports. 

Welcome to the Committee, Mr. Greenley. We look forward to 

hearing your testimony. 

STATEMENT OF BRIAN GREENLEY 

Mr. GREENLEY. Thank you, Mr. Coffman, and Ranking Member 

Luetkemeyer, for inviting me here today. My name is Brian 

Greenley, and I do own the Maaco Auto Painting and Collision Repair in Littleton Colorado. 

Maaco itself has 475 stores nationwide and is the largest chain 

of its kind. My franchise provides an economical choice to customers for auto painting and collision repair. When I purchased my 

franchise in 1991, I was the young age of 21. I am proud to say 

that my company has grown every year, except for one, over the 

past 20 years. 

I started my business with six employees, as Mr. Coffman told 

you about. Today I do employ 31 full-time employees. 

Nationwide there are 900,000 franchised small businesses employing nearly 21 million workers. It is not my position today to 

convince you of the importance of small business, but to explain 

what makes my small business successful. It did not take me long 

to understand that my service competes for discretionary income. 

My customers have a choice of how and where they spend their 

money. One key factor was to maintain a cost-effective service that 

delivers quality, convenience, and, most importantly, value. 

Positioning value over the years has been difficult, with rising 

labor costs, payroll taxes, costs of goods, utilities, property and personal income taxes. One way I have overcome these obstacles has 

been to increase productivity levels through streamline production 

methods and a strong emphasis on advertising and customer retention. I have always reinvested my profits into my business for additional advertising, expansion, and quality staffing. 

Early in my career, I purchased a plot of land and constructed 

a state-of-the-art facility. This was done with the assistance of a 

SBA 504 in 1997. With this assistance, I was able to achieve my 

goals to increase revenues, while expanding my staff and adding 

new products and services, at this time striving to control costs. 

I believe the SBA is a crucial source of funds necessary in maintaining, growing the small business community to continue to add 

51 

jobs, which is crucial to the economy, especially today. As I have 

expanded my business, I have learned the importance of positioning and leveraging my brand, personal relationships, and buying power, to maintain costs. 

One area of concern is the rising costs of labor, which has more 

than doubled over the past 20 years. Along with labor costs, higher 

payroll taxes and workers’ comp insurance, it has made it difficult 

to maintain healthy gross margins. 

As a retailer of a most competitively priced product and service, 

I have to lower my gross margins in order to increase revenue. One 

example is maintaining the lowest advertised price for an entrylevel paint service. In 1991, this advertised price was $199. Today, 

it is $249. That is only a 25 percent increase. 

Advertising and promoting my business is essential in the success I have achieved year after year. I have increased my advertising budget by more than 10 percent and managed to increase 

gross sales by five percent following a record year in 2009. It is 

only through my ability to aggressively increase customer count 

that I keep my business successful, but constantly rising costs 

make it more difficult to provide value for customers. 

I would, therefore, respectively ask legislators to understand the 

impact that any legislation has on the job-creating small business 

community, for example, higher taxes, national health care reform, 

and such legislation as the Employee Free Act—or Free Act 

Choice—Free Choice Act. 

Even with increased sales, profit margins remain a challenge to 

maintain. With small businesses tax incentives, we would able to 

invest in our own companies. I have made that choice, to keep my 

employees who have invested many years of their time. It is not 

my intention to reduce costs by cutting jobs. Even during the economic slowdown, I have not had to reduce my workforce by even 

one person. 

I strive to be—I strive to find competitive advantages and share 

ideas with employees, fellow franchise owners, and look forward to 

continued growth. I ask Congress to embrace those of us willing to 

invest everything that we have to make our companies successful 

and grow our businesses. 

I believe the administration has not placed enough focus on making life a little easier for small business owners, such as myself. A 

bailout or handout is not what we are looking for. But policies recently enacted, still being debated, from health care reform to climate change and financial reform, do not, from my perspective, 

help small business. 

Thank you, members of Congress, for allowing me to speak 

today. And if you have any questions, I would like to answer them, 

please. 

[The prepared statement of Mr. Greenley is included in the appendix.] 

Ms. DAHLKEMPER. Thank you, Mr. Greenley. 

I would now like to recognize Ms. Bean from Illinois to introduce 

the next witness. 

Ms. BEAN. Thank you, Madam Chairwoman, for convening this 

hearing to recognize National Small Business Week, and thank you 

to all of our panelists for taking the time away from your busiVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
52 

nesses. We know how demanding and costly it is for you to separate yourself from the day to day, and we really appreciate having 

you here today. 

For you, and for so many small business owners, every week is 

Small Business Week, and we understand that your success is the 

key to our economic growth as a nation and the jobs that you create as part of that growth. That is why we have been very supportive in the stimulus that we did to make sure that we addressed 

issues like access to capital, that we provided bonus depreciation, 

the NOL carryback, and a variety of other tax cuts as well. 

The 7(a) and 504 loan programs—I don’t know if all of you have 

participated, but we have someone who is going to talk about her 

own experience in a second, telling about how it has helped her. 

But $25 billion has gone into the hands of small businesses 

through the SBA lending program, after we increased the guarantees and reduced the feeds in the stimulus package. 

But we recognize that that alone isn’t enough, and many small 

businesses are still facing a credit crunch, and it will be a top priority for when we return from the Memorial Day weeks that we 

will be spending in our district. 

But it is my privilege today to welcome Cindy Kottke from 

McHenry, Illinois. She operates a successful chain of movie theaters, including four indoor theaters, two of which she owns, and 

one outdoor theater. C You at the Movies is an example of how a 

dedicated and resourceful individual can transform a dream into a 

profitable business. 

You have joined me in the past at a federal forum that I did for 

small businesses in the district, and you were very well received 

by the other business owners, who heard your story then, and I appreciate you being here in Washington to share it with my colleagues. 

STATEMENT OF CINDY KOTTKE 

Ms. KOTTKE. Representative Dahlkemper and Ms. Bean, and distinguished Committee members, thank you. I am honored and 

humbled to be here today. 

Ms. DAHLKEMPER. Can you turn on your mic, or get closer 

maybe? 

Ms. KOTTKE. Like many, I love the movies. At times my life 

seems like a movie. In fact, I feel a strong kinship with Forrest 

Gump, in that you never know what you are capable of until you 

try. 

At 14, I created a neighborhood carnival. It was a fun-filled day 

of wheelbarrow rides, downhill barrel rolls, bucket tosses, and 

more. My Dad watched as I worked as hard as I could, and at the 

end of the day, and after I invested all of my babysitting money, 

he asked how much money I had made. I was embarrassed to tell 

him nothing, but I enthusiastically told him how much fun it was, 

the kids loved the day, and that it really didn’t matter, everyone 

had fun. 

He paused and looked as he pulled a $20 bill out of his wall, and 

with his huge smile and a twinkle in his eye said, ‘‘Cindy, there 

are times in life when business isn’t only about profits or yourself.’’ 

53 

I saw that day the importance of fun and creating memories. I used 

that $20 to contribute to my next venture. 

I believe that is the first day I understood how business could 

build a community. Like many small communities, McHenry’s 

downtown had been impacted by the new big box stores. Storefronts were struggling and beginning to look rundown. Many had 

closed. I saw an opportunity. My mothers, sisters, and I became 

purveyors of resale home furnishing, opening our first retail venture. This allowed me to purchase and renovate the building, which 

sits proudly on the corner of Main Street and Route 31 in 

McHenry. 

Customers flocked. I received a facade grant towards the improvements, and the building was featured on the city sticker for 

the year. This is when I understood how a community could help 

build a business. My entrepreneurial spirit got the best of me once 

again when one day I saw a sign ‘‘For Sale or Lease’’ on the closed 

downtown movie theater. 

I drove the building owner crazy, but finally convinced him to let 

us host an Oscar party at the theater. More importantly, it would 

be an opportunity to possibly reopen the theater, which could act 

as a linchpin to help bring families into the downtown. Families 

downtown meant money spent in our downtown. McHenry was 

ready, and I was willing. 

Both the city and the community has supported me throughout 

this journey. With the help of the SBA, we were able to purchase 

the McHenry downtown theater, and then the Antioch downtown 

theater. Today, C You at the Movies operates four indoor locations 

and one of the 12 remaining drive-ins in Illinois. 

We may not have the newest equipment, or the latest innovation, 

and 3-D at this time is just a dream, but our customers are loyal. 

We have watched children grow. Families come back because we 

offer a fun, safe, family-friendly and affordable movie-going experience, affordable fun that builds memories. 

We offer the C Team, employees committed to exceptional customer service. Our company is a growing family of over 50 employees from within our communities. These are the hardest working, 

most loyal young men and women which I am proud to say are part 

of our team. They are learning skills—public speaking, cash handling, conflict resolution, and customer service—that will serve 

them throughout their lives. 

In recent years, I have faced a family health crisis, the economic 

turn, and the steep learning curve of the movie industry. Maneuvering through the challenges of operating a small business in today’s unique and different environment is difficult. Banks are reluctant to lend, cashflow is growing tighter. 

Last year I realized I needed some help. Never one to shy away 

from learning what I don’t know, I went to the McHenry County 

College’s Small Business Development Center. I met with the director, Mary Margaret Maule, who very politely but directly told me 

I needed to improve my skills and put processes in place in order 

to keep up with a growing company. 

We have learned to improve our cashflow by reducing the waste 

within our company and to make decisions using metrics that 

mattered. My work with the ISBDC has helped me to establish betVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
54 

ter business practices, processes to increase the efficiency, and communication tools to work with my employees, suppliers, and banks. 

We have and will continue to attend several classes, workshops, 

meet one on one with experts and mentors, and grow our business. 

Today we are looking towards the next great cinematic event for 

our company. We once again are entering a growth phase, and 

hope to acquire another small downtown theater, and are working 

with two communities on projects to expand our properties and 

part of a larger downtown revitalization. 

Being a small business owner can often be a lonely role, but I 

have found my success has been due to the help of many—my husband Danny, my family, my friend, general operations director, and 

partner, Scott Dean, the SBA, the economic development teams of 

the communities we operate in, and the resources of the SBDC. 

My company is built on the premise that if you make things fun, 

affordable, and from the heart, the customers will come. 

And back to one of my favorite movies—life is like a box of chocolate. But I say go for the popcorn, and I will see you at the movies. 

Thank you. 

[The prepared statement of Ms. Kottke is included in the appendix.] 

Ms. DAHLKEMPER. Thank you, Ms. Kottke. 

I would now like to yield to the gentleman from Pennsylvania, 

Mr. Altmire, to introduce the next witness. 

Mr. ALTMIRE. Thank you, Madam Chair. I am pleased to introduce Dan Flynn, my friend and constituent. Dan Flynn is President, CEO, and Co-Founder of Accipiter Systems in Wexford, Pennsylvania, and is truly a small business hero in my district. He has 

13 years of experience developing and supporting commercial and 

military data communications. He has successfully grown Accipiter 

Systems through contract engineering and a focus on product development. 

Among other accomplishments, Accipiter Systems has developed 

unique approaches to signaling and security and designed secure 

network and storage systems for the Joint Strike Fighter Flight 

Trainers Program. Dan is a member of my Small Business Advisory Board, and a valuable resource to me, and I look forward to 

hear more about ways that he would improve small business in 

western Pennsylvania. 

Thank you, Dan, for making the trip to testify, and welcome to 

the Committee. 

STATEMENT OF DAN FLYNN 

Mr. FLYNN. Thank you, Congressman Altmire, Congresswoman 

Dahlkemper, and the Committee. It is an honor to be here. 

My name is Dan Flynn. I am President and CEO of Accipiter 

Systems. Accipiter Systems is in its eighth year building computer 

networking products for the networks of the future. The products 

we build connect your computers to those of others with greater energy efficiency than is possible today. 

When I lost my job nearly eight years ago in 2002 during the 

downturn in the telecom industry, I was the Director of Engineering at Marconi Communications. I knew employment opportunities 

were sparse, but I needed to find employment to continue to proVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00060 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
55 

vide for my wife and three children. But the problem was bigger 

than just me becoming unemployed. As a director, nearly my entire 

staff of 75 people was permanently laid off. 

This was not one family that was affected; it was many families. 

I knew the people that worked for me were talented and hardworking. Although I was confident that each individually could find 

a job, even in a difficult market, the layoff probably meant many 

families would be uprooted. I thought there had to be a better way. 

Rather than solve the employment problem as individuals, why not 

form ourselves into a team, attract business, and create our own 

jobs? 

The days of Edison where lone innovators created ideas and associated wealth are in the past. Today, innovation and incomes are 

the product of teams. If we were willing to form ourselves into a 

team, this team with its talents could compete nationally and even 

internationally. We have that kind of talent in this country. The 

team is the catalyst. 

Rather than uproot the families, let us uproot the revenues and 

bring the revenues to this team and their families. This was the 

thinking. This team became Accipiter Systems. But we had to 

think even more creatively than this, as 2002 was not like the 

years past. 

Venture capital money was scarce. The founders were not 

wealthy. How could we start a business without funding? Rather 

than strike a product idea, attract venture capital, and explode 

onto the center stage, we instead chose to build the company one 

contract, one grant, at a time. We needed to first sell ourselves 

based on our engineering skills and grow through contract engineering services. 

We wrote proposals to win grants. When our early proposals 

were rejected, we regrouped and tried again until we were successful. We augmented existing companies with our unique expertise 

and helped them increase their revenues. Soon we were helping 

Lockheed Martin, Ericsson, Marconi Communications, and other 

large companies win $15 million and $22 million contracts. 

It was now their insight and their willingness to team with small 

business that allowed them to win. But we were not done growing 

by teaming yet. From the contract engineering services business, 

we were able to discover new product ideas. Rather than brainstorm product ideas in isolation at the often referred to ‘‘kitchen 

table,’’ we worked with real customers who had real problems that 

needed to be solved. Through this process, the product ideas 

emerged. This was a different way of thinking from the 1990s. We 

chose to go to the customer and listen to their needs. 

In 2006, with the Army, the Penn State Electro-Optics Center, 

the government, and others working together, and each performing 

their respective roles, we began the development of a new technology that connects computers with much greater efficiency than 

that which is possible today. This new technology has attracted 

contracts from the Army, DARPA, and NAVAIR. 

In a difficult economy, we have doubled the number of people we 

employ, and have a promising future as a team. Accipiter Systems’ 

employees have believed as a team, have worked as a team, and 

are succeeding as a team. I am confident that this team will grow, 

56 

continue to add jobs, and will meet tomorrow’s challenges in building computer networking products that will compete worldwide. 

To conclude, I would like to thank the Committee and Congressman Altmire for this opportunity to tell our story. 

Thank you. 

[The prepared statement of Mr. Flynn is included in the appendix.] 

Ms. DAHLKEMPER. Thank you, Flynn. 

I would now like to yield to Mr. Luetkemeyer to introduce our 

last witness. 

Mr. LUETKEMEYER. Thank you, Madam Chairwoman. It is my 

pleasure to introduce Lea Bailes, Chief Executive officer of Guier 

Fence in Blue Springs, Missouri. Lea began his career practicing 

law in the areas of business and estate planning. He joined Guier 

Fence in 2005. In 2009, he and his wife purchased the company. 

They now employ 60 people with three company-owned locations in 

the Kansas City area, and two franchise locations in Omaha, Nebraska. 

Lea is a graduate of Baylor University and the Baylor University 

School of Law. We welcome him to the Committee as one of our 

small business heroes of the week. 

Lea? 

STATEMENT OF LEA BAILES 

Mr. BAILES. Thank you very much, and thank you, Committee, 

for inviting me here to testify today. 

As you said, my company, Guier Fence, is a 31-year-old familyowned business. It specializes in fence installations in the Kansas 

City area, and now we are offering franchise opportunities based 

on what we think is a perfected business model and our years of 

experience. In our $10.1 billion fence industry, there is over 20,000 fence 

companies. Most of these companies are small with few employees, 

but with revenues in the neighborhood of $10 million, and with us 

having 60 employees, that puts us in the top one percent of fence 

companies in the United States. 

Despite the economic downturn, and especially the hard effect it 

has had on the construction industry, our company has remained 

financially solid and profitable. Our success comes directly through 

the individual effort, talent, and commitment of each of our employees, who contributes to our reputation for excellence not only 

in our market area but in our industry. 

Unfortunately, last year our employee count dropped from 74 to 

50. Many of these wonderful people, who no longer work for us, 

worked for Guier Fence for over 20 years. I knew each of them personally. I also knew that the decisions that we had to make were 

going to affect their families, and I knew their families as well. 

But as a company, we had to make these decisions to allow us 

to survive in turbulent times. Fortunately, this year we have been 

able to hire additional people due to an increase in welcomed demand. We received no government funding in order to do this, but 

it was through our own marketing efforts and financing alone. 

There are many other exciting events that are happening at 

Guier Fence. Our revenue is trending upward, and we just signed 

57 

our first franchisee in Omaha with several more on the way. Although our company is stable, our employee count is increasing, 

and we are growing again, our challenges remain. Banking regulations have disabled the banking system’s ability to loan money toward commercial and industrial projects. 

Without these projects, companies such as ours who have relied 

on these streams of income as a strong percentage of our revenue, 

and a large percentage of our revenue, are being hurt. Without big 

commercial and industrial projects that are privately funded and 

not government funded, we are unable to employ additional workers. 

In addition, the tightening of lending is making it more and more 

difficult for our potential franchisees to start businesses that would 

employ more people. In fact, Guier Fence started providing financing for our franchisees in order to assist them get started in their 

own business. The loosening of these regulations as they relate to 

small businesses is critical. 

Additionally, per employee costs are rising that reduce our margins. These costs include costs related to health insurance benefits, 

worker’s compensation, employment taxes, and other compliance 

costs. Federal regulations continue to increase the financial burden 

on small businesses, especially on small businesses like us with 

greater than 50 employees. 

The arbitrary number of 50 will do more harm than good when 

it comes to employing people. By placing such standards on businesses like ours, we will be forced to make decisions unfairly on 

our head count. You are punishing us. If at under 50 employees our 

costs for employees substantially lower, we will have to scale our 

business or change the way we do business in order to continue to 

operate. 

We cannot price our products higher and tell our customers that 

our prices are higher because we have over 50 employees when our 

competitor doesn’t. If legislation continues down this path, you will 

create a flux of 49-employee businesses. 

I am unclear on what effect certain new laws will have on my 

business. I do think our health care costs at this point are going 

to rise. I have no idea whether our taxes are going up and down. 

I do know that if you pass a value added tax it is going to hurt 

the construction industry and a lot of other industries. 

But the biggest concern I have is that all of this uncertainty affects us in our way we make decisions. It is hard to make a decision when you are very uncertain on what the impact of this legislation or potential legislation is going to have. We don’t know 

whether we should grow, we don’t know if we should grow, we 

don’t know if we should shrink, and we don’t know what decisions 

to make at this point. 

In order to assist small businesses, please do not increase the 

number of rules and regulations, just enforce the ones you already 

have. Work with us and inform us, educate us, help us to comply 

with a lot of regulations that are out there. Don’t raise our taxes, 

don’t impose a value added tax, and I would also ask that you repeal the health care bill. 

58 

I am not asking for a handout. I am asking that you stop creating additional obstacles for Guier Fence and other companies like 

ours to be and remain successful. 

Again, I thank you for this opportunity to testify today. 

[The prepared statement of Mr. Bailes is included in the appendix.] 

Ms. DAHLKEMPER. Thank you, Mr. Bailes. Thank you to all of the 

witnesses. I think the diversity of the businesses in front of us is 

one of the great things about today and recognizing small business 

heroes throughout the country. 

I will now recognize myself for five minutes. Mr. Wallace, thank 

you again. As a constituent—and all of you, really, thank you for 

taking the time out of your busy schedule. As a small business 

owner myself, my husband is now running it all by himself and he 

misses me, but—and I do miss the business often. There is many 

days when I miss being that small business owner and the challenges and the excitement that goes along with that. 

One of the things I wanted to ask you, Mr. Wallace, as you 

added—how many employees again last year? 

Mr. WALLACE. About 31. 

Ms. DAHLKEMPER. And this year over 20? 

Mr. WALLACE. Yes, over 20. 

Ms. DAHLKEMPER. What do you think has made that possible, 

considering the economic times we are in right now and the deep 

recession, has made it possible for your company to grow by such 

large numbers? Because prior to 2009 you had less than— 

Mr. WALLACE. About 30 employees total. 

Ms. DAHLKEMPER. Okay. That is pretty large increases. 

Mr. WALLACE. It was a big jump. Like I said, Brian and I, we 

continue to put ourselves in front of the people that may turn out 

to be new clients. And, you know, I guess our philosophy is simple: 

give them more than what they expect, meaning our clients. And 

we try to instill that within all of our employees, and we have a 

great group of employees that feel that passion also. 

And diversification is a big part of what Brian and I talk about 

all the time, because we know that as a small business that you 

are always one step away from some kind of a major setback in 

your company. And so we keep very focused, we keep very attentive 

to our clients’ needs, and they continue to come at us and give us 

more work and more work, and we just continue to hire the people 

to meet the needs. 

Ms. DAHLKEMPER. Thank you. Appreciate that. 

Mr. Flynn, you also added a number of employees during this recession. Is that correct? 

Mr. FLYNN. Yes. We have grown from eight employees to 15 employees. And I think what has contributed to that growth is having 

us think and work as a team. And it really goes down to the individual. So when I am asking the individuals to act as a team, what 

do I mean by that? 

I need them, when they come to work, to not just bring all of 

their skills and all of their tools and all of their wherewithal, but 

all of the skills of people that they know to bring to bear on what 

it is that we are doing. We need to get leverage. We are a small 

company. 

59 

And for us to compete with large companies it requires us to 

have a larger footprint, and we get that through leverage and we 

get that through each person thinking of themselves as a team and 

assembling the people that they know and asking those people 

questions and how we could do better. That is how we are adding 

those jobs. 

Ms. DAHLKEMPER. Thank you. Did either of the other three want 

to express anything about this particular time and whether adding 

employees or not and what has been your success at this particular 

point in the recession? 

Mr. BAILES. For us, we have had to change the mixture of our 

revenue more from commercial to residential, so we have been able 

to hire employees on one side but decrease on the other side. So 

we are kind of mixed on— 

Ms. DAHLKEMPER. And your numbers are down, though? 

Mr. BAILES. We are down overall, but we have been able to hire 

some this year and hope to hire more. 

Ms. DAHLKEMPER. Thank you. I guess I just wanted to ask each 

of you what you think has been the one thing—if you could pick 

one thing that has maybe been the best thing you have done in 

your business to help you be successful today. And I will start with 

Mr. Bailes. 

Mr. BAILES. Unfortunately, it has been reducing our head count, 

because we had some unprofitable divisions within our company 

that, because of the way some of the market shifted, we had to get 

rid of. But that—making those really tough decisions that I really 

didn’t want to make are what kept us strong and stable and profitable. And so, unfortunately, that is one of the better decisions, and 

then also starting the franchise program has been very beneficial 

for us. 

Ms. DAHLKEMPER. Thank you. Ms. Kottke. 

Ms. KOTTKE. Mine would have to be going to the Small Business 

Development Center, because I kind of outgrew my skills, and they 

have been extremely helpful in showing me different ways to improve myself. 

Ms. DAHLKEMPER. Did you go to them in the beginning or— 

Ms. KOTTKE. No. 

Ms. DAHLKEMPER. How far into your business model? 

Ms. KOTTKE. Oh, last year. 

Ms. DAHLKEMPER. And you have been in business— 

Ms. KOTTKE. Since 2003. 

Ms. DAHLKEMPER. Okay. Thank you. Do you wish you had gone 

to them earlier? 

Ms. KOTTKE. Yes, I do. 

[Laughter.] 

Ms. DAHLKEMPER. Mr. Wallace. 

Mr. WALLACE. Well, I am trying to think of the one thing, there 

are so many, but I would have to say, you know, moving out of my 

basement. 

[Laughter.] 

And that sounds funny, but when you—Brian and I had a hard 

time trying to figure out how to take that step, how to even hire 

our first employee, because, you know, starting with nothing, we 

literally had nothing, no money, nothing. And to learn how to 

60 

spend the money to help our company make money was a difficult 

hurdle for us to jump. 

And so we took that step and moved out of our—out of my basement into a house, a small house, and within eight months we 

were already planning our expansion of 4,800 square feet. And, you 

know, we moved in in ’08, and we are already out of space. So, 

again, which is a good thing, and, you know, we have two other locations now, and those are starting to fill up, and it has been really 

interesting. But, again, moving out of our basement was probably 

a key component. 

Ms. DAHLKEMPER. Thank you. Mr. Greenley. 

Mr. GREENLEY. Mine has just been the concentration on reinvesting in my business and my employees, growing the business 

constantly, never looking back, learning from my mistakes of what 

works good and compounding that. That is just my foundation. 

Ms. DAHLKEMPER. Thank you. Mr. Flynn. 

Mr. FLYNN. I would answer that with the word ‘‘relationships.’’ 

We highly value the relationships we have built in industry. That 

includes the Penn State Electro-Optics Center, the Innovation 

Works Technology Collaborative, with our customers, the Army, 

the large contractors like Lockheed. To us, a very important part 

of our success has been our relationships. 

Ms. DAHLKEMPER. Thank you. And now I yield to Mr. 

Luetkemeyer for five minutes. 

Mr. LUETKEMEYER. Thank you, Madam Chairman. 

Mr. Greenley, in your testimony you indicated that you had a 

504 SBA loan. Can you—I assume you have been satisfied with 

that? Can you see some places where we could streamline the program, improve the program? What has your experience been? 

Mr. GREENLEY. I originally took that loan out in 1997. I was 27 

years old, and it was difficult. I went to the bank and needed to 

borrow a million dollars. I had only operated my business at that 

time for seven years. It seemed very cumbersome then. I did go to 

several banks. 

One of the things I remember was the larger banks felt more secure underwriting one of those loans. The smaller banks were very 

fearful of those loans. Proudly, today I have paid that loan off, and 

I am not in the situation where it is as important to—or I would 

need the funding from SBA, but I have taken personal funds out 

to secure my business and grow it forward today. And it is just 

something I found you have to do. 

Mr. LUETKEMEYER. Very good. Mr. Bailes, you had a number of 

comments with regards to some concerns you had with the regulations, especially the health insurance one at 50, and the VAT tax. 

Would you like to elaborate on that just a little bit? 

Mr. BAILES. Sure. 

Mr. LUETKEMEYER. Because those are important things that are 

out there right now that are affecting a lot of small businesses we 

have heard about today as well. 

Mr. BAILES. Well, with the health care bill, one of my biggest 

concerns is the mandatory opt-in. Right now, we provide health insurance coverage for our employees and pay for most of it. With the 

mandatory opt-in, they automatically have to enroll, and then deVerDate Aug 31 2005 10:00 Jul 07, 2010 Jkt 000000 PO 00000 Frm 00066 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\56755.TXT DARIEN
61 

enroll, and then we pay a penalty. And there is nothing saying that 

once this is passed that you can amend that and raise that penalty. 

And so right now the way it looks is that it would actually be 

less expensive for us to just pay the penalties and not offer any 

health care coverage, which I don’t really want to do. I don’t think 

that is the right thing to do. But we have to do what makes economic sense. 

And so from my, honestly, limited understanding of the bill, I 

just don’t think—I am concerned with what could happen in the future with amendment to it or raising penalties or changes that— 

like I said, amendments within the bill in the future. It is easier 

to chance what is passed. 

Mr. LUETKEMEYER. How would the VAT tax affect your business? 

Or what do you see as the problems are—the pluses or minuses 

with it? 

Mr. BAILES. Well, if you take a commercial construction job, you 

have so many different layers of value added tax. You have a raw 

material supplier, you have somebody who converts it into another 

type of material, you have somebody who distributes it, you have 

somebody who retails it, and you have somebody who is, let us say, 

a general contractor. 

And if there is a tax on every level of value that is added in 

seven or eight steps, that is going to make the cost of a commercial 

project outrageous, and probably not even a feasible way of doing 

business. So if you are going to have commercial construction in 

the future, you are going to either have to completely change the 

way that you do business and vertically integrate a business, or 

you are going to have to figure out other ways to reduce costs, and 

take lower margins or whatever it happens to be. But I think that 

would be detrimental to large projects. 

Mr. LUETKEMEYER. Something that a lot of small business people, especially farmers as well as small business folks, have talked 

to me about concern with is extension of the estate tax. And we 

haven’t heard one question on that yet today. 

You know, this year the estate tax fell off, but next year it is supposed to go back, unless we extend it to a million and 55 percent 

of everything over that. Most of all of you are young enough that 

it may not be something that you are considering yet, but is that 

starting to enter into your plans as you start getting down the road 

here and your company starts building? 

I know most of you don’t look like you are as gray-headed as I 

am, so it is probably not a problem for you yet. But I know as we 

age a little bit, and we start looking a little bit down the road, 

what our families may have to do or what our business partners 

may have to do with this entity that we have created here, this 

wonderful business that we have, have you started looking at that? 

Is that a concern at all? 

Mr. BAILES. Coming from an estate planning background, I know 

it is a concern for a lot of people. I know it is a concern for me. 

And being young, it is a good time to start planning. Since I am 

out of practice, I can say that everybody should do an estate plan. 

But it is something that, if you are not concerned with, you should 

be concerned with, but, yes, that would—the levels do concern me, 

62 

because that affects how you have to plan. So, yes, that has crossed 

my mind. 

Mr. LUETKEMEYER. Anybody else? Have you guys thought about 

it at all, or you are still trying to figure out how to make a buck 

and grow the company? And, you know, Mr. Greenley, he says I am 

barely 40 years old here. He has still got a lot of years ahead of 

him. But anybody else have any concerns about it, or have you 

thought about it at all, or is it not something you are working on? 

Mr. WALLACE. Well, maybe I could just jump in real quickly. I 

just turned 46 last week, so I start to, as I get older and I get more 

gray hair, when I look in the mirror I start to think about those 

things. 

And, specifically, on what you are talking about, the estate planning part of it, I haven’t really, because I have been so focused on 

building our business and addressing the needs from day to day. 

But I haven’t really thought about it in any great detail, but I 

know that is something I will need to do shortly. 

Mr. LUETKEMEYER. Okay. 

Ms. KOTTKE. Actually, I probably am your age. I have grandchildren and children over 30. We are currently working on it with 

our legal counsel, so yes. 

Mr. LUETKEMEYER. Okay. Mr. Greenley. 

Mr. GREENLEY. I have. Currently, I have advisors, financial guys, 

that work with me on that planning, and we have addressed the 

issue of how that has changed over the past five years and how it 

is an ongoing basis and we have to account for that in the future. 

Mr. LUETKEMEYER. And you incur new attorney costs and new 

accounting costs every year just to try and comply with and try and 

make sure that you don’t wind up getting, you know, caught here 

with the law changing and— 

Mr. GREENLEY. We do, yes. 

Mr. LUETKEMEYER. —certainty of it. 

Mr. GREENLEY. I do. 

Mr. LUETKEMEYER. Mr. Flynn, any comment? 

Mr. FLYNN. We are concerned about these issues and other 

issues like it, insurance in the event of an untimely death. These 

are additional costs on the business where we have to ensure an 

orderly transfer if something like that were to happen. It is another impact of growing older is concerns along those lines, to 

make sure that insurance is in place to cover that should that happen. 

But, yes, we are also very much focused on our current situation, 

and we will look at that issue, along with other issues, as we are 

advised to do so. 

Mr. LUETKEMEYER. Okay. Thank you. Thank you, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. [presiding] Ms. Bean. 

Ms. BEAN. Thank you, Madam Chair. I had a question for Cindy. 

You had mentioned that you had an SBA loan to help you buy your 

first theater. Had you applied for other loans before the SBA loan? 

Or is that the first venue that you pursued? 

Ms. KOTTKE. When I applied at a couple of banks, they wouldn’t 

even talk to me unless it was an SBA guaranteed loan. But that 

was the only way I was able to acquire the first location, and a 

year later the second location. 

63 

Ms. BEAN. So it did make the difference on whether you— 

Ms. KOTTKE. Absolutely. 

Ms. BEAN. —could start your business. 

Ms. KOTTKE. Yes, it did. 

Ms. BEAN. And how many employees do you now have? 

Ms. KOTTKE. We have 57 today. We have—about 20 of them are 

seasonal, because of the drive-in. And the 30 throughout the year 

then. 

Ms. BEAN. And you also mentioned that you had a positive experience with the SBDC that provided other consulting services. Have 

any of the other businesses participated in any of the programs 

available through community colleges, SBDCs, or some of the workforce development training that we provide funding to at the community college level? Yes? 

Mr. FLYNN. We, in Pennsylvania, work with a number of economic development entities. Some of these have been the reason 

that we are—I am here today. So the technology collaborative is in 

an early stage. They are very deterministic. Their money is made 

available on a very deterministic schedule. If it is not deterministic, 

we have to treat that as a windfall. 

There are other entities like Innovation Works that steps in with 

larger dollar amounts that can help us grow our business, so these 

have been some of the key reasons why we are here. And as tax 

bases shrink, to see those organizations after they have had such 

a big impact, are making small business possible, that is disconcerting. So we value—and because we can’t afford to have CFOs 

and VPs of HR on our staff, these are the people that we are turning to. 

We still have the issues. So those are a very important part of 

our success. 

Ms. BEAN. Have you worked with SCORE at all? Some of the retired— 

Mr. FLYNN. We have been in touch with SCORE. Our business 

is a high-tech business, so we looked for groups, development centers, that are more attune to our— 

Ms. BEAN. The technology— 

Mr. FLYNN. —industry. 

Ms. BEAN. That makes sense. Anybody else who worked with any 

workforce development training in their communities? No. It is 

good to hear the feedback about some of the programs that we have 

initiated, of where it is working and how many folks are participating in it. 

Access to capital—how much of a challenge is that for all of you 

right now, particularly if you are working with community banks? 

Many of them are overly exposed to commercial real estate on their 

books, and that has constrained their balance sheet and limited 

their ability to lend. Is that an issue for any of you? No? All right. 

That is— 

Ms. KOTTKE. Can I answer that? 

Ms. BEAN. Sure. 

Ms. KOTTKE. I have been talking about expanding for the last 

couple of years, and about a year and a half ago the banks are telling me, ‘‘You know what? Lay low right—just wait.’’ And about 

three months ago, I was approached by one of my community 

64 

banks saying that there was this new program going to be available through the SBA. 

Ms. BEAN. Good. 

Ms. KOTTKE. And that they would definitely be interested in 

looking at the project then. 

Ms. BEAN. Wonderful. That is good to hear. 

Mr. BAILES. I would like to say one thing if I could. 

Ms. BEAN. Sure. 

Mr. BAILES. Since we have two sides of our business, the established Guier Fence side, we haven’t had any problem getting financing. But for our new franchisees, like I said in my testimony, 

they are. And they are SBA-backed loans, but they still—they can 

do an express loan program with our minimum entry-level fee, but 

they are still difficult to get. 

And I don’t know really why that is. You would think that those 

would be fairly straightforward, and these are even people with 

good credit scores, with plenty of assets, even cash to back a pretty 

simple $50,000 loan. I think the SBA is a little—or the community 

banks are a little timid on giving money to a new business. 

Ms. BEAN. Right. 

Mr. BAILES. Because a lot of the franchise is still—you are still 

investing in a little bit of blue sky there. You are not buying— 

Ms. BEAN. Yes. Even though the model works, they have never 

run it before. 

Mr. BAILES. That is correct. And so, you know, you are investing 

in intangible assets, and that is where we are seeing a little trouble. 

Ms. BEAN. Absolutely. And someone else had a comment. Yes. 

Mr. FLYNN. Just real quick. One of the observations about the 

loans is if they require a personal guarantee, and we are talking 

millions of dollars, what we are asking the small business owner 

to do is face down personal financial ruin in the event that the 

business—the gamble it took did not work out. 

So those personal guarantees, we go through all of this effort to 

incorporate these companies, so that they are an entity unto themselves, but then we are asking the small business owner to still 

back up the loan. 

Ms. BEAN. Okay. Thank you. I yield back. 

Chairwoman VELA ́ ZQUEZ. Ms. Kottke, I read in your testimony 

that you are in the process of acquiring another theater? 

Ms. KOTTKE. Yes, ma’am. 

Chairwoman VELA ́ ZQUEZ. And so I was wondering, every time 

families in America are facing budgetary constraints, they cut recreational money. So how is it that your business is doing so well, 

that in a business like that that could be impacted by the economic 

downturn you are succeeding to the point that you will acquire another theater? 

Ms. KOTTKE. Well, the movie industry is having record-breaking 

years, and that is mostly because of the 3-D technology, which we 

do not have. Our ticket prices are $4 and $6 at our indoors, and 

they are like $8 and—it is $8 at the drive-in because you get a double feature, and $4, again, for children. 

We just offer customer service, good, old-fashioned customer service. And that is what brings our customers. In order to obtain this 

65 

next one, we are negotiating a rent with option, and then we will 

see how well that takes off. The expansion of the two projects, one 

in Zion, one in McHenry, are in TIFF districts, and we are talking 

several million dollars. Of course, we have got to do it controlled, 

because we know what happens when I don’t do that. And in order 

to get—possibly even get the equipment, the 3-D equipment. 

Chairwoman VELA ́ ZQUEZ. Mr. Flynn, if you go to a traditional 

bank, financial institution, to apply for a loan, what requirements 

will they ask of you in order to get that loan? 

Mr. FLYNN. So we have a line of credit through a major bank. 

We also have credit cards for the employee, so they can make small 

purchases to facilitate their day. To get that line of credit, we had 

to show up with our personal tax statements for the bank to review 

my tax statement, personal tax statement, and my co-founder’s tax 

statement. 

Chairwoman VELA ́ ZQUEZ. But in a traditional loan that is not 

guaranteed by the Federal Government, will the bank require collateral? 

Mr. FLYNN. Yes, they—in our case, we may be purchasing tools 

for the business, and those tools would be the collateral. But, 

again, ultimately it could be your home that is the collateral for 

that loan. 

Chairwoman VELA ́ ZQUEZ. Yes. Well, the difference in terms of 

those loans that are backed by the Federal Government is that we 

incentivize financial institutions who are participating with the 

SBA to provide or make those loans by reducing the risk— 

Mr. FLYNN. Right. 

Chairwoman VELA ́ ZQUEZ. —for the financial institutions that are 

participating in those programs. The government will guarantee we 

increase it from 75 to 90 percent, and then to also get small businesses off the side lines and incentivize for them to go to the bank 

and apply. We reduce the fees that the borrowers have to pay. 

So I guess that some of those programs have worked for some of 

the small businesses that have been testifying here today, and 

what we want to make sure is what else we can do in order to facilitate access to capital for small businesses. 

Mr. FLYNN. One suggestion I would give there is education, and 

there are a number of entities that help educate us what the process is and what the tradeoffs are. 

Chairwoman VELA ́ ZQUEZ. Okay. Yes, Mr. Greenley. 

Mr. GREENLEY. One of the things that I am aware of is the 90 

percent backing is due to expire today. Am I right? And it is going 

to go back to the 70 percent backing. 

Chairwoman VELA ́ ZQUEZ. No. Well, we are going to extend it. 

Mr. GREENLEY. Okay. 

Chairwoman VELA ́ ZQUEZ. Yes. 

Mr. GREENLEY. I mean, that is one of the—you know, the factors. 

Chairwoman VELA ́ ZQUEZ. Sure. 

Mr. GREENLEY. If banks are going to loan money, it is how much 

their guaranteed portion is. 

Chairwoman VELA ́ ZQUEZ. No, it has been 90 percent, and it will 

continue to be 90 percent. 

Mr. GREENLEY. You know, you talk about incentives for the lending, I wish there was an incentive for us that are investing in our 

66 

own business. For those of us that, you know, decide not to lay 

somebody off and to keep them on the payroll, there is no incentive 

for that right now. There is a lot of incentive. I mean, the one incentive to us is to minimize our exposure, so that we stay in business, but over 20 years of experience, every time I cut back I find 

myself—it is not healthy for the business. 

Mr. WALLACE. Yes, I have a comment. 

Chairwoman VELA ́ ZQUEZ. Mr. Wallace. 

Mr. WALLACE. Access to capital has been challenging for Brian 

and I, and the need for personal collateral, that type of thing, backing of the loans. 

But one area that really bothers us every year is the fact that 

when we have a good year, at December 31 our accountant shows 

us that we made—we have so much of a profit, and we have to pay 

tax on that profit as it gets split down to—and comes to our personal income taxes. 

We don’t take that money in pay, but we still have to pay tax 

on that money. And by the time, you know, April 15 rolls around 

when we have to pay our tax bill, that money is long gone, been 

used into the business. And just last year on the amount of money 

that we had to pay tax on, that we never personally received in distributions or pay or whatever, we could have bought at least five 

vehicles and probably hired three additional employees. 

Chairwoman VELA ́ ZQUEZ. Well, that is why in the economic recovery package we, the Federal Government, reduced taxes for 

small businesses, especially in the manufacturing sector. 

Mr. WALLACE. Well, then, that will be great. 

Chairwoman VELA ́ ZQUEZ. Any other questions? If not, I ask 

unanimous—thank you. Thank you for all the witnesses who have 

been able to be with us today. This has been an incredible experience, and it is great to know the incredible contributions that you 

are making to help get this economy back on track. 

I ask unanimous consent that members will have five days to 

submit statements and supporting materials for the record. Without objection, so ordered. 

This hearing is now adjourned. 

[Whereupon, at 1:36 p.m., the Committee was adjourned.] 

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