U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

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

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

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

24–760 2017

SBA’S ENTREPRENEURIAL DEVELOPMENT 

PROGRAMS: RESOURCES TO ASSIST SMALL 

BUSINESSES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CONTRACTING AND 

WORKFORCE 

OF THE

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

MARCH 30, 2017 

Small Business Committee Document Number 115–013 

Available via the GPO Website: www.fdsys.gov 

SBREP-219A with DISTILLER


Congress.#13
(II) 

HOUSE COMMITTEE ON SMALL BUSINESS 

STEVE CHABOT, Ohio, Chairman 

STEVE KING, Iowa 

BLAINE LUETKEMEYER, Missouri 

DAVE BRAT, Virginia 

AUMUA AMATA COLEMAN RADEWAGEN, American Samoa 

STEVE KNIGHT, California 

TRENT KELLY, Mississippi 

ROD BLUM, Iowa 

JAMES COMER, Kentucky 

JENNIFFER GONZA ́ LEZ-COLO ́ N, Puerto Rico 

DON BACON, Nebraska 

BRIAN FITZPATRICK, Pennsylvania 

ROGER MARSHALL, Kansas 

VACANT 

NYDIA VELA ́ ZQUEZ, New York, Ranking Member 

DWIGHT EVANS, Pennsylvania 

STEPHANIE MURPHY, Florida 

AL LAWSON, JR., Florida 

YVETTE CLARK, New York 

JUDY CHU, California 

ALMA ADAMS, North Carolina 

ADRIANO ESPAILLAT, New York 

BRAD SCHNEIDER, Illinois 

VACANT 

KEVIN FITZPATRICK, Staff Director 

JAN OLIVER, Chief Counsel 

ADAM MINEHARDT, Deputy Staff Director and Minority Staff Director 

SBREP-219A with DISTILLER

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Hon. Steve Knight ................................................................................................... 1 

Hon. Stephanie Murphy .......................................................................................... 2 

WITNESSES 

Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA .................................. 5 

Ms. Antonella Pianalto, President and CEO, Association of Women’s Business 

Centers, Washington, DC .................................................................................... 6 

Mr. Charles Rowe, President & CEO, America’s Small Business Development 

Centers, Burke, VA .............................................................................................. 8 

Mr. Joseph C. Sharpe, Jr., Director, National Veterans Employment & Education Division, The American Legion, Washington, DC .................................. 10 

APPENDIX 

Prepared Statements: 

Mr. W. Kenneth Yancey, Jr., CEO, SCORE, Herndon, VA ........................... 22 

Ms. Antonella Pianalto, President and CEO, Association of Women’s 

Business Centers, Washington, DC ............................................................. 35 

Mr. Charles Rowe, President & CEO, America’s Small Business Development Centers, Burke, VA ............................................................................. 45 

Mr. Joseph C. Sharpe, Jr., Director, National Veterans Employment & 

Education Division, The American Legion, Washington, DC .................... 55 

Questions for the Record: 

None. 

Answers for the Record: 

None. 

Additional Material for the Record: 

None. 

SBREP-219A with DISTILLER

SBREP-219A with DISTILLER

(1) 

SBA’S ENTREPRENEURIAL DEVELOPMENT 

PROGRAMS: RESOURCES TO ASSIST SMALL 

BUSINESSES 

THURSDAY, MARCH 30, 2017 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

SUBCOMMITTEE ON CONTRACTING AND WORKFORCE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:01 a.m., in Room 

2360, Rayburn House Office Building, Hon. Steve Knight [chairman of the Subcommittee] presiding. 

Present: Representatives Knight, Murphy, Evans, and Clarke. 

Chairman KNIGHT. Good morning. Thank you for coming to the 

Subcommittee on Contracting and Workforce. We are—I will state 

this quickly—we will be voting today. And we are keeping an eye 

on the votes, but we are expecting, over the next probably 15, 20 

minutes, they are going to start voting. And so I will normally take 

a recess about 5 minutes into the voting so everybody has enough 

time to walk down there and vote and do all those things. 

But we will get going. Entrepreneurship in our Nation is truly 

an aspect of the American Dream. It is about hard work, long 

hours, and sacrifices all in the name of creating the newest product, the newest service, or the next great American company. The 

risks are high, but the rewards can be even greater. 

From the startup company in my home district in California to 

the entrepreneurs and innovators all over the country, small businesses employ approximately half of all workers in the United 

States. When startups are creating jobs and growing, so does the 

United States economy. However, the Nation experienced a downturn after the financial crisis in the late 2000s, and we are only 

now beginning to see a recovery materialize. 

Unfortunately, despite recent business optimism, the challenges 

and obstacles confronting entrepreneurs are still daunting. Instead 

of focusing their time and energy on growing their endeavors and 

creating jobs, small businesses are faced with a reality filled with 

rules, regulations, and a constrained lending environment. Recent 

reports identify healthcare costs, regulatory compliance, and burdensome Tax Code as the top hurdles impacting the Nation’s small 

businesses. Frequently short on time and wearing many hats within these new startups, entrepreneurs need guidance and assistance. 

This hearing today is about exploring the resources available to 

entrepreneurs, startups, and small businesses as they navigate a 

complex business ecosystem. We will hear about the technical asSBREP-219A with DISTILLER

2 

sistance and experts’ advice available to them through the Small 

Business Administration’s entrepreneurial development programs. 

With approximately 29 million small businesses in the United 

States, the programs within the SBA must operate efficiently and 

swiftly as the entrepreneurs they seek to help. 

I am looking forward to hearing about the details of these programs: How do they help entrepreneurs? How do they assist 

startups traversing the regulatory environment? How can the programs be improved to better assist small businesses? 

And that is always our mission here, is to see what we can do. 

If it means streamlining, then that is what it means. If it means 

that programs are working and we can help them, that is what 

that means. But our mission, at least in my opinion, is always how 

we can help small businesses to achieve and do more and employ 

and do all of those things that we are hoping that small businesses 

can do on a daily basis. 

So I appreciate all of you being here today, and I look forward 

to your testimony. 

I now yield to Ranking Member Murphy for her opening comments. 

Mrs. MURPHY. Thank you, Mr. Chairman. 

The SBA administers a portfolio of Entrepreneurial Development 

programs, including Small Business Development Centers, Women’s Business Centers, the Service Corps of Retired Executives or 

SCORE, and Veterans Business Outreach Programs. 

These initiatives provide aspiring entrepreneurs and existing 

businesses with invaluable counseling, training, technical assistance, and mentorship. Whether it is help creating a business plan, 

navigating the procurement process, marketing a new product, or 

identifying international trade opportunities, the SBA’s entrepreneurial development programs provide an array of services to help 

small firms navigate regulatory obstacles, grow, and thrive. 

The agency’s network of Small Business Development Centers, or 

SBDCs, is one such program. SBDCs operate in nearly 1,000 locations across the country and are located at colleges, universities, 

Chambers of Commerce, and local economic development corporations, allowing them to harness local community resources. 

In a single year, this initiative has helped more than 13,000 entrepreneurs launch new businesses, advise nearly 200,000 clients, 

provided training sessions for over 260,000 attendees, and helped 

clients obtain $4.6 billion in financing. Clearly, SBDCs are a vital 

part of our Nation’s entrepreneurial system. 

The SBA has also undertaken efforts to connect younger entrepreneurs with more experienced business men and women through 

the SCORE program, an expansive network of entrepreneurs, business leaders, and executives who volunteer as mentors to small 

firms both in person and online. 

SCORE has grown to become one of the federal government’s 

largest volunteer business advisor and mentoring programs, with 

over 11,000 business professionals at over 320 chapters nationwide. 

By offering advice from real world professionals, SCORE is helping 

many business owners within all categories of the entrepreneurial 

community. 

SBREP-219A with DISTILLER

3 

Small businesses are as diverse as our nation, and the SBA has 

entrepreneurial development initiatives targeted at specific demographic groups. Women’s Business Centers, or WBCs, are a critical 

initiative for female entrepreneurs. WBCs provide indepth counseling, training, and mentoring to small firms, resulting in substantial economic impact as measured by successful business 

startups, job creation and retention, and increased company revenues. 

Women business owners have used this program to develop business plans, obtain financing, and expand their operations. In Fiscal 

Year 2015, over 100 WBCs reached 130,000 clients and helped 700 

new businesses get up and running. 

Even though female entrepreneurship is on the rise, there remain significant gaps between men and women-owned businesses. 

As more women turn to entrepreneurship as a career path, it is 

critical that this initiative remain in place to close these gaps. 

Finally, there are a range of SBA programs targeted at our veterans, most notably the Veterans Business Outreach Centers, 

which serve over 60,000 clients each year. The VBOC program, 

along with Boots to Business and other veteran-oriented initiatives, 

ensure that our servicemembers have the tools they need to go into 

business for themselves. 

With respect to each of these programs, it is vital that taxpayer 

resources are being used wisely and to maximum effect. That is 

why this Committee has long pushed for clearer metrics and accountability, especially among the newer pilot programs at SBA. 

However, the stated goal of eliminating duplication should not be 

used as an excuse to underinvest in entrepreneurial development. 

I was disappointed to see that the Administration’s recent budget 

blueprint calls for a 5-percent reduction for SBA. It is my hope that 

this Congress will provide robust funding for SBA entrepreneurial 

development programs that have a proven track record of helping 

small businesses create jobs and stimulate economic growth. 

That is why Chairman Knight and I recently wrote a letter to 

the relevant Appropriations Subcommittee in support of these programs. Small businesses are the backbone of the American economy, and we should provide our entrepreneurs with the critical resources that they need to succeed. 

I look forward to hearing how these programs are helping meet 

that need and what we can do to improve them. I thank the witnesses for being here and for their insight, and I yield back. 

Chairman KNIGHT. Thank you very much. 

And if any other Committee members have a statement, we will 

take that in writing. 

We are going to go vote. So I am probably going to stop it right 

here before I get into everyone’s comments. And I don’t want to cut 

anyone off. So what I am going to do is allow members to go vote, 

and then we will start up as soon as votes are over and as soon 

as we can get back here. And then we can kind of have a good 

meeting all together. Okay. 

And we will reconvene, I would say, 5 or 10 minutes after votes. 

And we are in recess. 

[Recess.] 

SBREP-219A with DISTILLER

4 

Chairman KNIGHT. Okay. The Committee will reconvene. 

Thank you very much for your patience. I think we got through 

that fairly quickly. 

And we will go through to introductions. So today we have four 

witnesses. Our first witness is Kenneth Yancey. Mr. Yancey is the 

chief executive officer at SCORE, where he has directed the office 

for over two decades. Before taking on the leadership role at 

SCORE, he was the executive director at the National Business Association. With years of experience, Mr. Yancey can often be seen 

on national television networks and heard on national radio shows 

discussing topics focused on small businesses and entrepreneurship. And we thank you for being here. 

Ms. Antonella Pianalto. Our next witness is Ms. Antonella 

Pianalto. Ms. Pianalto is the president and chief executive officer 

of the Association of Women’s Business Centers. Having spent 

years at American Express leading legislative, regulatory, public 

policy, and advocacy efforts, along with the Company’s Small Business Saturday Initiative, she has years of experience of interacting 

and working with small businesses. 

She has also previously been a senior adviser to the U.S. Ambassador to the United Kingdom, a Deputy Assistant to the President 

for Presidential Personnel at the White House, and an Associate 

Administrator for Management and Administration at SBA. 

We thank you for being here. 

Third, I would like to introduce Mr. Tee Rowe. Our witness, Mr. 

Rowe, is the president and chief executive officer of America’s 

SBDC, the resource partner for the Small Business Development 

Centers. He joined America’s SBDC in 2009 after spending multiple years at the Small Business Administration, where he first 

served as the Assistant General Counsel for Legislation and Regulation and then as the Associate Administrator for Congressional 

and Legislative Affairs. Prior to his time at SBA, Mr. Rowe served 

the House Small Business Committee for numerous years. 

And we welcome you back. 

Now I would like to yield to the ranking member for her introduction to our final witness. 

Mrs. MURPHY. It is my pleasure to introduce Mr. Joseph 

Sharpe, Jr., the director of the Veterans Employment and Education Commission at the American Legion. Prior to being director, 

he served as the deputy director of the economic division, 

healthcare field representative, and assistant director of the Veterans Affairs and Rehabilitation Commission. 

In 1982, Mr. Sharpe entered the United States Army, where he 

served as a drug and alcohol counselor for the 2nd Infantry Division in South Korea. He was also appointed as the noncommissioned officer in charge of inpatient social work and psychiatry 

service at Walter Reed Army Medical Center. Later, during his 

military service with the Army Reserve Sergeant First Class, Mr. 

Sharpe was deployed twice overseas and received a bronze star 

medal. 

Mr. Sharpe is a graduate of the Johns Hopkins School of Advanced International Studies in Washington, D.C., where he earned 

an M.A. in international relations and economics. He also has two 

graduate certificates in international business and trade and in 

SBREP-219A with DISTILLER

5 

healthcare management from Georgetown University. Mr. Sharpe 

also earned his B.A. in sociology from the University of Maryland, 

College Park, Maryland. 

Welcome, Mr. Sharpe, and thank you for testifying today. 

Chairman KNIGHT. Thank you all for being here. 

So the way this works is you get 5 minutes or so. I am pretty 

lenient on that. But as the lights start to go in the order of a stoplight, then you will know where you are. 

So 5 minutes, and we will start with Mr. Yancey. 

STATEMENTS OF W. KENNETH YANCEY, JR., CEO, SCORE, 

HERNDON, VIRGINIA; ANTONELLA PIANALTO, PRESIDENT 

AND CEO, ASSOCIATION OF WOMEN’S BUSINESS CENTERS, 

WASHINGTON, D.C.; CHARLES ROWE, PRESIDENT & CEO, 

AMERICA’S SMALL BUSINESS DEVELOPMENT CENTERS, 

BURKE, VIRGINIA; JOSEPH C. SHARPE, JR., DIRECTOR, NATIONAL VETERANS EMPLOYMENT & EDUCATION DIVISION, 

THE AMERICAN LEGION, WASHINGTON, D.C. 

STATEMENT OF W. KENNETH YANCEY, JR. 

Mr. YANCEY. Subcommittee Chairman Knight, Ranking Member Murphy, members of the Subcommittee, thank you for inviting 

me today and for the opportunity to offer testimony updating the 

Committee on SBA entrepreneurial development programs, and 

specifically SCORE. I would ask that my written testimony be read 

into the record, please. 

As an independent board-directed nonprofit, SCORE is the Nation’s largest network of volunteer expert business mentors, with 

more than 10,000 volunteers across 300 chapters. We offer free and 

confidential mentoring and advice to current and aspiring smallbusiness owners, as well as low-cost or no-cost educational workshops. 

In 2010, SCORE made the decision to become data-driven. Since 

then, SCORE has developed measurement capability with a focus 

on quality and service metrics. We have developed systems and 

software that allow us to run all aspects of our operations in a 

more businesslike manner. 

Today, I will share just a few of the statistics that we use to 

measure our success, our impact, and our value to small-business 

owners and to the American economy. 

In 2016, SCORE helped clients create 54,000 new jobs—new 

businesses, excuse me, and add 79,000 new jobs. During 2016, during fiscal year 2016’s SCORE’s clients stayed in business. Ninetysix percent of SCORE’s clients who were operational for more than 

a year when they came to SCORE remained in business in 2017. 

SCORE is the most efficient, most effective business formation 

and job-creation engine funded by the Federal Government. Our 

cost to create a job is estimated at $133; our cost to create a business, $194. In 2016 alone, SCORE clients returned an estimated 

$46 in new tax revenue to the Treasury for every dollar appropriated to SCORE. 

Last year, SCORE volunteers donated 2.2 million hours and provided 542,000 total chapter services, nearly a 9-percent increase 

over the previous year. SCORE’s client satisfaction metrics have 

SBREP-219A with DISTILLER

6 

steadily improved over the last 6 years. SCORE’s 2016 client engagement and impact survey showed that 83 percent of clients are 

likely to recommend SCORE. 

SCORE’s 10,000 volunteer mentors represent approximately 

300,000 years of business experience and provide the practical 

knowledge and long-term emotional support that clients need to 

thrive in the small-business arena. SCORE recruits more than 

3,000 new volunteers annually. In 2016, 12 percent of our new volunteers were former clients. All new volunteers participate in extensive training and are certified in SCORE’s mentoring methodology. 

Diversity is a core value at SCORE. SCORE is working with diverse organizations to attract new clients and volunteers from 

underrepresented communities. Organizations include the National 

Urban League, African American Mayors Association, Immigrant 

Business, Veterans Business Network, the Latino Coalition, and 

the U.S. Black Chambers. 

Fifty-eight percent of SCORE’s clients were women last year; 35 

percent were minorities; and 11 percent were veterans. On the volunteer side, 27 percent of SCORE volunteers are minorities; 20 

percent are women, compared to 17 percent in 2015. The average 

volunteer age has decreased from 72, in 2012, to 67, in 2015, reflecting SCORE’s increased efforts to recruit active as well as retired entrepreneurs. 

As SCORE plans for the future, we continue to provide innovative solutions to meet our clients’ needs. Last year, SCORE produced two virtual conferences that helped more than 2,500 

attendees. Participants learned from speakers in a virtual environment, met sponsors and mentors, networked with each other in 

real time, and asked questions via live chat. Ninety-seven percent 

of the attendees of both conferences reported that the conference 

helped them. 

SCORE also successfully piloted video mentoring with support 

from the Kauffman Foundation. The program connects mentors 

and clients using services such as Skype to provide remote face-toface experience for entrepreneurs. Video mentoring clients showed 

the highest level of client engagement in SCORE, reporting client 

satisfaction of 4.3 out of 5. Based on SCORE’s demonstrated impact, we respectfully request support for a $13 million appropriation for SCORE in fiscal year 2018. This represents a $2.5 million 

increase. SCORE is scalable. With a relatively small investment, 

we can provide even greater value to the Federal taxpayer and to 

our Nation’s economy. 

Thank you again for your long support of SCORE and for allowing us to testify. I will be happy to answer questions at the appropriate time. 

Chairman KNIGHT. Very good. 

And, Ms. Pianalto, you are now recognized for 5 minutes. 

STATEMENT OF ANTONELLA PIANALTO 

Ms. PIANALTO. Thank you. 

Chair KNIGHT, Ranking Member Murphy, and distinguished 

members of the Subcommittee, thank you for the opportunity to 

testify before you today. 

SBREP-219A with DISTILLER

7 

My name is Antonella Pianalto, and I serve as the president and 

CEO of the Association of Women’s Business Centers, or AWBC. 

We support Women’s Business Centers, or WBCs, by providing 

training, programming, and advocacy to improve their services to 

women entrepreneurs. As the advocate for this critical program, it 

is an honor to be here today. 

The Women’s Business Center Program is a public-private partnership with more than 25 years of success in providing training, 

counseling, mentoring, and access to capital to women entrepreneurs. The WBC program was created by Congress as part of 

H.R. 5050, the Women’s Business Ownership Act of 1988. The bill 

noted that women as a group are subjected to discrimination in entrepreneurial endeavors due to their gender. Congress sought to 

remedy this with the creation of the WBC program. 

WBCs are the only resource partners mandated to serve socially 

and economically disadvantaged individuals. The program has increased from four demonstration sites to a network of 113 grants, 

leveraged to more than 150 locations in 48 States and territories. 

Unfortunately, resources for the program have not grown in parallel, and the more than 50 percent increase in centers over the 

last 15 years has been matched by only a 25-percent increase in 

funding. Nonetheless, WBCs have continued with their mission. In 

the last decade, WBCs have served more than 2 million women entrepreneurs leading to the creation and expansion of tens of thousands of new businesses and jobs. 

In 2016, our centers reached more than 145,000 clients and conducted over 93,000 hours of counseling and over 15,000 training 

sessions. Nearly half of the WBCs are direct lenders and, in 2015, 

assisted with nearly $429 million in capital infusion and, last year, 

helped to secure nearly $40 million in government contracts. In 

2015, 96 percent of clients reported revenue growth totaling $658 

million, creating nearly 25,000 jobs. 

WBCs make a concerted effort to reach underserved populations. 

Forty-five percent of clients in 2016 were minorities, and a recent 

survey found that 64 percent of clients were economically disadvantaged. The majority of WBCs provide programming in two or more 

languages, and overall services are provided in more than 35 languages. 

Finally, the WBC program has been a good investment of taxpayer dollars. Federal dollars are matched more than three to one, 

surpassing the required match. For every invested dollar, the program returns $46 to the economy. 

As the program has grown in size and influence, some have expressed the opinion that WBCs duplicate services provided by other 

resources. I would like to address that. What makes WBCs unique 

is the depth and breadth of our services. Women come to WBCs because we address four critical areas: competence, confidence, capital, and connection. 

Women view their local WBC as a trusted advisor and partner 

for the lifetime of their company. Clients consistently say that they 

come to the WBCs not just for the business education but for the 

supportive environment that helps build self-efficacy and confidence in their ability to succeed. Evaluation data indicate that 

women who receive business assistance from WBC programs build 

SBREP-219A with DISTILLER

8 

larger businesses, create more jobs, and have a significantly higher 

survival rate than the national average. 

For example, Chair Knight, Women’s Economic Ventures, which 

serves the Simi Valley, developed the Thrive in Five program. Clients participating in this 5-year program show median sales of 

$400,000 and have created an average of five jobs. Moreover, 95 

percent of the clients who were in poverty at intake have moved 

out of poverty. More examples from dozens of centers are included 

in my written testimony. 

The program does need modernizations. Since the early years of 

the program, the grant amount from SBA has decreased as much 

as 15 percent. Similarly, while the networks of centers span the 

country, too many communities do not have access to the unique 

services provided by WBCs. In addition to allowing for the expansion of existing centers, new centers are needed in geographies 

unaddressed by the program. 

Finally, the program continues to suffer from burdensome requirements. For example, up until 2015, OMB regulations forbade 

WBC directors from fundraising while on the job, even though they 

were required to match the Federal funds. The challenges the program faces have legislative solutions. The AWBC is tremendously 

grateful to Chair Knight’s recent introduction of H.R. 1680 and to 

Representative Lawson for cosponsoring. We endorse it wholeheartedly. 

The AWBC supports the recently introduced H.R. 1774 sponsored 

by Ranking Member Vela ́zquez and cosponsored by Chair Chabot. 

Many of this Subcommittee’s members have cosponsored similar 

legislation in the past, and for that, we are grateful. 

The legislation strengthens centers in three ways: It increases the program authorization to $21.75 million, modernizes grant levels to $185,000, and streamlines certain administrative requirements. In addition to reauthorization, the upward trajectory of the 

program is deserving of more Federal funds. While not the purview 

of this Subcommittee, we have requested $21.75 million for fiscal 

year 2018. 

In the formation of the WBC program, Congress determined that 

barriers warranted the creation of a network of centers to assist 

women entrepreneurs. Those challenges persist, as must the commitment of the new Congress to advancing policies that foster 

women’s business ownership. 

We appreciate this Committee’s dedication to the modernization 

of SBA’s resource partners and your willingness to hear from us. 

The WBC program is a proven and effective public-private partnership and fills a growing need for the distinct population we serve. 

Thank you for the opportunity to testify, and I am happy to answer any questions. 

Chairman KNIGHT. Thank you very much. 

And we will go to Mr. Rowe. 

STATEMENT OF CHARLES ROWE 

Mr. ROWE. Thank you, Mr. Chairman, Ranking Member Murphy, members of the Subcommittee. My name is Tee Rowe, president of America’s SBDC representing the 63 SBDC networks, their 

nearly 1,000 centers, and over 4,500 professional staff. 

SBREP-219A with DISTILLER

9 

SBDCs are primarily hosted by colleges and universities and 

have a mandate to cover the entire State they operate in. Our host 

institutions and partners contribute matching funds to exceed the 

Federal funding by some $20 million every year. SBDC funding is 

allocated as a result of the statewide mandate on a population 

basis with a minimum funding level for smaller States. 

We serve small businesses at all stages: About 60 percent are existing businesses; 40 percent are startups; 45 percent of SBDC clients are women; 38 percent are minorities; and 10 percent are veterans. 

Last year, the SBDC served over 192,000 counseling clients and 

delivered over 1.2 million hours of counseling. The majority of our 

advisers have business degrees and past entrepreneurial experience; many, in fact, have been serial entrepreneurs. 

SBDC services are not monolithic. They are basic services that 

SBDCs offer: business planning, marketing, et cetera. But it is the 

specialized offerings that make SBDCs different. Our accreditation 

process requires SBDCs to survey the needs of small-business community and tailor their services accordingly. In essence, SBDCs are 

63 laboratories dedicated to small-business growth. I can’t list everything they offer, but I would like to share some of the specialized services. 

Intensive entrepreneurship. These programs offer weeks of training and counseling and are geared to businesses with high-growth 

potential. They aren’t limited to a certain size of type of business, 

and SBDCs often find that certain startup businesses can benefit 

a lot from intensive training. 

Incubators and accelerators. SBDCs support and host incubators 

and accelerators all across the country, just to name a few: Pennsylvania, Kentucky, Colorado, Arizona, California, and the list goes 

on. I googled it, and I got shocked by how much my guys are doing. 

And with an SBDC, an incubator client receives not just the peer 

mentoring but engagement with a highly trained adviser and that 

higher education is a critical component in today’s economy. 

Export assistance. Under the JOBS Act a few years ago, SBDCs 

expanded their capacity, certified more export counselors than were 

required by the act, and retained those staff when the funding 

lapsed. We now have over 640 export counselors and many are 

NASBITE-certified global business professionals. 

We also offer training in export regulations, shipping compliance, 

and the like, and we are working in Latin America and the Caribbean to help those countries develop their own Small Business Development Center networks. 

Veterans assistance. SBDCs have assisted hundreds of thousands 

of veterans. In 2015 and 2016, SBDCs counseled and trained over 

60,000 veterans. Several of our States have specialized programs. 

New York has a comprehensive veterans program that includes an 

online training program with coursework and live SBDC advising 

at the same time. 

A sample of the impact from that at the Watertown SBDC—and 

that is a small one—they assisted 884 veterans in the last 4 years 

resulting in 31 business starts and 197 new jobs. And we also work 

proudly with SBA to carry out the Boots to Business program, 

which is a great first step for vets interested in small business. 

SBREP-219A with DISTILLER

10 

Disaster assistance. SBDCs are an integral part of SBA’s disaster 

assistance effort. We set up the business recovery centers and help 

staff them in support of SBA. But we also do more than that, and 

an example of SBDC innovation and disaster is the Florida SBDC’s 

app ‘‘Disaster,’’ which features resources to help small businesses 

prepare for and recover from disasters, and you can download that 

off of Google Play for free. 

Finally, procurement assistance. SBDCs offer assistance in certifications, searching for contract opportunities, and bid proposal 

compliance. We have got a longstanding relationship with the Procurement Technical Assistance Centers. Many PTACs are actually 

part of or colocate with SBDCs, leveraging all of our infrastructure. 

And the results, well, in 2015, our most recent impact survey, SBDCs helped their clients access $4.7 billion in capital. The longterm clients alone created over 100,000 jobs that year and $6.8 billion in sales. That generated $607 million in revenue for States and 

the Federal Government, about $2.50 for every dollar spent on the 

program, and that is just the long-term clients who are a third of 

the total clientele. 

Now, SBDCs don’t exist in a vacuum. We work with SCORE, 

Women’s Business Centers, and VBOCs every day. We share space. 

We refer clients. And we believe that SBA has the best toolbox of 

entrepreneurial assistance around. This hearing couldn’t be better 

timed, in my opinion. 

The new Administrator has an opportunity to assess our programs and work with us to maximize their effectiveness. We need 

to evaluate our goals, metrics, and data systems to see if we are 

providing the best assistance possible and work toward that goal. 

Again, thank you very much for inviting me to testify. I look forward to your questions. 

Chairman KNIGHT. Thank you very much, Mr. Rowe. 

And, Mr. Sharpe, you are now recognized for 5 minutes. 

STATEMENT OF JOSEPH C. SHARPE, JR. 

Mr. SHARPE. Thank you. Chairman Knight, Ranking Member 

Murphy, and members of the Subcommittee, on behalf of the National Commander, Charles E. Schmidt, and the American Legion, 

we thank you for the opportunity to present American Legion’s 

views on the Small Business Administration’s entrepreneurial development programs. 

The American Legion views small business as the backbone of 

the American economy. It is the mobilizing force behind America’s 

past economic growth and has given the United States a competitive advantage in the global market. 

Small-business development will continue to be a major factor in 

our Nation’s economic national security well-being as we move further into the 21st century. We know that giving veterans the resources they need to start businesses will assist in stimulating the 

Nation’s economic recovery. 

Veterans, when compared to their civilian counterparts, are more 

likely to start a business and are generally more successful in creating lasting small businesses. Therefore, encouraging and supporting veterans is the first step to recovering from a near 40-year 

low in entrepreneurship in the United States. 

SBREP-219A with DISTILLER

11 

Consequently, the American Legion supports increased funding 

for SBA’s Office of Veterans Business Development. Its mission is 

to provide enhanced outreach, specific community-based assistance 

to veterans and self-employed members of the Reserve and National Guard. 

The veteran community’s demand for self-employment resources 

is outpacing the 20 VBOCs SBA currently funds. With additional 

funding, the VBOCs could expand their presence to all 50 States 

and Puerto Rico while expanding their role in outreach to local 

State and government entities to advocate for veteran-owned small 

businesses in the local marketplace. 

One example that I would like to bring to your attention is what 

is currently occurring here in the District of Columbia. The historic 

Walter Reed Army Medical Center closed a few years ago. The 

property was purchased by the U.S. State Department and the District of Columbia for a mere $26 million. 

As of today, the District of Columbia has hiring quotas for District residents but nothing for veterans. It has small-business requirements to include special recognition for women and minorities, small-business owners, but again, nothing for veterans. 

Advocacy on the local level by a VBOC’s staff could have alerted 

city officials to the need to include and notify some of the 9,000 

small veteran businesses in the District of Columbia of opportunities such as Walter Reed and others. 

Shifting points, the first step to opening a small business is having access to capital. Even when the economy is strong, access to 

capital is one of the largest impediments facing any small business, 

hindering wishful and flourishing entrepreneurs. 

One of the leading barriers to small-business financing is requiring debt to be secured by the equity and fixed assets. Most veterans leaving military service lack the kind of equity necessary for 

traditional bank loans. After all, we all know we joined the military 

not to get rich but rather for the service of the Nation. 

One solution to aid veterans is to reintroduce legislation, such as 

the Senate bill 1870, the Veterans Entrepreneurial Transition Act 

of 2016, or the VET Act. If passed, this commonsense bill would 

create a 3-year pilot program that would allow veterans and 

servicemembers to turn their GI Bill education benefits into financial capital to start a veteran-owned business. It is ideas like this 

that drive our economy forward, and it is veterans who will lead 

the way. 

In conclusion, the mission of the American Legion’s National Veterans Employment and Education Commission is to take actions 

that affect the economic well-being of veterans. Small businesses 

continue to be a primary job generator and a major trainer for 

American employees. 

The American Legion reiterates that the Small Business Administration Office of Veterans Business Development should be the 

lead agency to ensure that all veterans are provided with self-employment development assistance. 

Chairman Knight, Ranking Member Murphy, and distinguished 

members of the Committee, thank you for allowing the American 

Legion to present our views on this very important issue. I look forward to answering any questions you may have. Thank you. 

SBREP-219A with DISTILLER

12 

Chairman KNIGHT. Thank you very much for all the testimony. 

And I am going to go into a couple questions here. I will take 

5 minutes, and we will go down the line, and if we want to do a 

second round, we can certainly do that. 

A couple questions just came to mind, Ms. Pianalto. What we 

have tried to work on in the last year and a half or 2 years—I have 

been here just over 2 years now—is access to capital, and how we 

can make sure that women-owned businesses, disadvantaged 

owned businesses, veteran-owned businesses are getting access to 

capital, just kind of leveling out the playing field so that they— 

when they go in, that there is that ability. 

So can you give us some ideas of what you do and where we can 

go as a Committee? Again, I am speaking for myself, but I think 

that the Committee would be very good on this that—if we can aspire to more access to capital and making sure that women-owned 

businesses have that, then they are going to flourish. 

Ms. PIANALTO. Thank you for the question. 

Two things come to mind, and I will reiterate what I mentioned 

in my testimony. Almost half of the Women’s Business Centers are 

microlenders. They are either CDFI or SBA microlenders. So, you 

know, focus on that is still very important. And we do have a concern that the CDFI in the current proposal, the administration’s 

proposal, that program is zeroed out, and that would be devastating to the community. 

But the other thing just goes back to just education. And I think 

what is important is having the ability to help women through that 

process of what—where are the available lenders, especially on the 

smaller scale, and then helping them through that process for the 

more—you know, the businesses that are able to go to a financial 

institution. 

I am sure you know the statistic of only 4 percent of commercial 

business loans go to women-owned businesses, 4 percent. So it is 

a problem. 

Chairman KNIGHT. And we appreciate that. You know, a lot of 

these—I have worked with SBDC many times, and a lot of it is getting the people to the group, getting them to understand that there 

is help for you, but you have got to go there. Now that the World 

Baseball Classic is over, maybe people will go to WBC more, and 

it will be higher on the Google list. 

But it is the truth that there is a lot of help out there, and there 

is a lot of government help that people just don’t know. A lot of our 

job is to make sure that they have that access to either going to 

WBC, SBDC, or their VBOC or whatever. 

And so I am going to go to you, Mr. Sharpe. We have two VBOCs 

in California, and one is in the north, and one is in the south, and 

we have a big State. And I am sure that Mrs. Murphy would have 

a similar—she has got a big State too; that it is tough for our veterans, unless they are going to go online, unless they are going to 

do a virtual thing, which I appreciate Mr. Yancey telling us about 

the virtual conferences. 

But the VBOCs are either in Sacramento or in Carlsbad, and 

that is—about a 9-hour drive in between those two, is very difficult. So how can we make it so veterans have more access, maybe 

not building more VBOCs but having more access to being able to 

SBREP-219A with DISTILLER

13 

go in and get their help that they need on being an entrepreneur 

and expanding their business? 

Mr. SHARPE. Thank you for that question. 

When the American Legion first wrote the GI Bill back in the 

1940s, the GI Bill was never meant to sit in a classroom. It was 

always for gainful employment. So we have always felt like those 

veterans that choose to start a business should be able to use their 

benefits to start a business. I think that is one of the first steps 

that we need to take to assist veterans. 

California and Florida are huge States. We have been very concerned with the veteran population in both States. That is why we 

really push SBA to put a second VBOC in California. And there 

needs to be more public/private partnerships in those two States 

also to assist those veterans. 

We do believe that more VBOCs are necessary, and the reason 

why we believe that is basically what happened here in the District 

of Columbia with the Walter Reed Medical Center. When we attended one of the meetings with the developers, there seems to be 

a lack of concern with the military. 

Walter Reed has been around for 102 years. It was the flagship 

for the Army. It served thousands of veterans. There is a deep sentiment with veterans with that institution, and to not be considered to be part of the redevelopment is an issue that we see across 

the country. That is why we believe the VBOCs are so important 

because you have veterans helping veterans. 

Chairman KNIGHT. And I appreciate that. I appreciate you 

bringing up the VET Act. We would like to look at that more extensively. 

When I got out of the service 30 years ago and then went into 

college, that is what it was there for: to go into college. I think you 

have seen some changes over the years, that we would like people, 

if you are going to go and get your certification to be a welder, if 

you are going to go into a setting that is going to go into a job, then 

that is a good use of a GI Bill. 

College is not for everyone, and some people want to do other 

things in the automotive industry or whatever it is. In my district, 

there is a lot of aerospace. There is no doubt about that. And we 

want people to be able to transfer into something they want to do, 

and that might not mean a 4-year degree. 

Mr. SHARPE. Exactly. 

Chairman KNIGHT. And so I think that that is a good use of the 

money that we are trying to get our veterans into employment. 

So I have taken a little extra time. So everyone will be up to 

that. 

And I will go to the ranking member, Mrs. Murphy. 

Mrs. MURPHY. Thank you, Mr. Chairman. 

You know, my first question is for Ms. Pianalto. Part of the mission of the WBC is to expand into economically distressed areas. 

Could you explain how you make the decision for what areas you 

place a WBC and also the same question for the rest of the panel? 

Ms. PIANALTO. Thank you for that question. So, first of all, it 

is the SBA that makes the decisions on where the WBCs are 

placed, and it is a grant proposal process. So the SBA, if they determine there are funds available to open new centers, then they 

SBREP-219A with DISTILLER

14 

will issue a request for proposal, and they will identify States 

where they think there are gaps in Women’s Business Centers. 

And then they hope that an organization will submit a proposal 

that will be, you know, acceptable and then they have to make the 

determination. Last year, there were three new centers granted a 

grant. They don’t yet know based on the funding what will be 

available this year. 

But it is more of a process of, will there be an organization in 

a particular State that will qualify for a grant rather than identifying where the needs are and proactively looking at what we 

might be able to do from a community to establish a center there? 

So it is not an ideal process. 

Mr. YANCEY. We look at two different ways to have this started: 

First, we are requested by a community to come in and bring a 

chapter. And we would look at the community, look at need, look 

at resources that were already available. Is there an SBDC? Is 

there a Women’s Business Center? How effective are they at serving the need? Does it make sense? 

And then we would look to an anchor organization to help us find 

local volunteer leadership that we could then build on with our 

chapters in the vicinity and support from our office. 

When we haven’t been requested, we will look at areas where we 

believe that there is a need, again, based on knowledge and understanding of the market, resources that are already available, and 

then we will send somebody out to develop community partnerships 

and support. 

Obviously, our success is really based on finding a nucleus of volunteer leaders in a community and supporting them to grow, providing them with the tools and the materials and the marketing 

initiatives and our own support, both presence and dollars, if required, to help them get started. 

Last year, we opened 11 new chapters, and those—it is the first 

year that we have opened chapters in quite some time. 

Mr. ROWE. When SBDCs—as I said earlier, we have a statewide 

mandate. So we are trying to cover, say, the entire State of Texas 

or Florida or Georgia. We will try and place—much in the same situation that Ken’s in—where we can find a partner, a host institution. 

Now, for example, in Mississippi, we were having some problems, 

but we wanted to get coverage in the delta. And we worked out an 

agreement with Jackson State, which is a Historically Black College and University there. But what we find sometimes is we get 

conflicting messages from SBA. 

In our Houston regional SBDC, we had an agreement with a Historically Black College and University, and we started getting pressure because they weren’t meeting the goals that SBA wanted out 

of the center. And our director for the region was: ‘‘Well, I am not 

going to just pull out and abandon that area. We will work to get 

it up. But you just can’t leave it and go.’’ So, for SBDCs, it is always a question of finding the right partners and then getting as 

much resources as we can into those areas. 

I will say that rural areas are the hardest thing for us because 

we have got so much area to cover. We have the mandate, and we 

SBREP-219A with DISTILLER

15 

want to do it, and honestly, rural America needs more help, frankly, than the suburbs do. 

Mr. SHARPE. I agree with what everyone else has had to say. 

That is also a concern for us as well. 

One issue, again, is, you know, trying to reach our veterans. The 

American Legion is in, you know, all States and in various territories, and right now, we are really concerned with places like 

Puerto Rico. Our department there, we have an unemployment rate 

between 16 and 25 percent. We have been doing a lot of job fairs 

there, but we would like to also do some business development 

workshops. The economy is in crisis. We are doing a job fair May 

18. We have about 65 companies that are coming. About 400 

servicemembers usually attend National Guard, reservists. But the 

command just told us the other day that one out of four reservists 

is unemployed. And if they are employed, we are finding that many 

of them are underemployed, and that is including our rural areas. 

So that is why we feel so strongly that business development is the 

key to bringing our economy back. 

Mrs. MURPHY. Great. Thank you. 

And I see that I am out of time. So I yield back. 

Chairman KNIGHT. Thank you very much. 

And we will go to Mr. Evans for his questions. 

Mr. EVANS. Thank you, Mr. Chairman. 

I too would like to thank the panel and what you have offered 

today. 

The question I would like to start out with: Could each of you 

give one or two items on your congressional wish list that you 

think would immediately help small businesses? 

Ms. PIANALTO. Increased funding. That—I mean, obviously, if 

we had more funds available for the centers and the various resource partners, that would certainly go a long way. I think another—perhaps another point is SBA being—working with us a little bit more in terms of programming but also even metrics. Congresswoman Murphy mentioned clearer metrics earlier. That is a 

serious issue for SBA and the partners having to work with them. 

I will just note one item as an example in the Committee’s 

memo. We are listed as creating more than 750 small businesses 

throughout the Nation. That metric is only on the Women’s Business Center counseling clients, which are only 15 percent of our clients. SBA doesn’t measure—doesn’t do metrics on our training clients, which are 85 percent of what we do. So I think some work 

there needs to be done. 

Mr. YANCEY. It is very easy to support the need for funding. 

Programs like ours to expand and grow and serve, as we all want 

them to, do require some level of investment and we will all work 

hard to match that investment with private sector dollars so that 

we can be effective. 

Someone mentioned a little bit earlier access to capital, and I 

will divide that into access to capital and access to debt. Startup 

small businesses don’t have access to capital, often don’t have access to debt. And Mr. Sharpe mentioned in the veteran community 

how those that are separating don’t have the collateral or the equity that is required, and that is not uncommon among many startup businesses. 

SBREP-219A with DISTILLER

16 

The opportunity to make that more available through the 

MicroLoan Program and other similar programs, I think, is very 

important. The idea of making debt more widely available for small 

businesses, our banks are doing better but still not fulfilling that 

need completely. 

Credit cards aren’t a great option but used too often to the detriment of the small businesses. And I think that encouraging community lenders to be more involved and to be more accessible and 

more willing to support those small businesses is pretty critical 

these days. 

Mr. ROWE. Well, you know, I will certainly echo what Antonella 

said. What I would really like to dive in on for a second is I think 

the biggest problem we have sometimes is focus. We know where 

the problems are. We can look at studies from organizations like 

the economic innovation group, and they can show us the counties 

that are having trouble with small-business formation and job 

growth, et cetera. 

But what we don’t always end up with is a coordinated strategy 

to utilize all of the resources we have to focus on assisting those 

areas, whether they are rural counties or inner city communities. 

And that, in a certain way, is kind of a tragic waste. We are all 

producing great results, but sometimes we are getting pushed to 

produce results so much that you tend to focus where you can get 

results rather than focusing on where you really need to offer help. 

Mr. SHARPE. For the American Legion, of course, we would like 

to see more VBOCs, and we would like to see them, besides giving 

veterans training, but be more involved in advocacy. They need to 

be engaged with the local market. If we had one in the District of 

Columbia, they would have known of all the huge projects that are 

taking place here, which is not happening most places. 

I think that would really change the dynamics of economic development. If they were more engaged with what is happening in the 

local area and being able to advocate to those businesses that they 

are serving, these are opportunities for you. And, of course, access 

to capital and being able to use your GI Bill for capital. 

Mr. EVANS. Thank you, Mr. Chairman. 

I yield back the balance of my time. 

Chairman KNIGHT. Thank you very much. 

And we will go to Ms. Clarke for her questions. 

Ms. CLARKE. Thank you, Mr. Chairman. 

And I thank our ranking member, Mrs. Murphy, our panelists for 

your expert testimony this morning, and a pleasant good morning 

to everyone. 

As everyone on this Subcommittee knows, small businesses are 

the lifeblood of our economy. They allow hardworking women and 

men across this Nation to harness their entrepreneurial spirit for 

the benefit of themselves, their families, and our country. 

Indeed, the 28 million small businesses in the United States account for 54 percent of all U.S. sales. This would not be possible 

if it were not for the hard work and dedication of the women and 

men at the Small Business Administration. 

And at the heart of the SBA lies its entrepreneurial development 

programs. These programs include Small Business Development 

Centers, the Service Corps of Retired Executives, the Women’s DeSBREP-219A with DISTILLER

17 

velopment Centers, and the Office of Veteran Business Development. Each of these offices play an important part in ensuring that 

the promise of small-business ownership remains open to hardworking Americans across our country. 

However, this is not to say that their functioning could not be 

improved. I remain concerned that we do not have sufficient 

metrics to judge the performance of SBA programs and remain interested in learning how we can make the SBA as efficient as possible. 

And so my first question goes to Mr. Yancey. I commend the improvement your program has seen in increasing the racial and gender diversity of both clients and volunteers. However, the gender 

diversity of volunteers remains low, at just 20.3 percent. Could you 

please describe the efforts you have made to recruit volunteers 

from different backgrounds and what you are planning to do to improve this number? 

Mr. YANCEY. Yes, ma’am. Thank you very much for a very important question. 

Several things are happening for us as we work to improve the 

diversity of both our volunteer corps as well as our clients. I think 

one of the most important and one of the most effective processes 

that we have found is to work with and partner with other organizations who represent some of these underserved communities: our 

partnership with the National Urban League, the opportunity to do 

webinars in conjunction with the urban league that are promoted 

to their members as well as to our clients, both organizations having the opportunity to refer clients back and forth, resulting in new 

volunteers and new clients for both of us. The same thing with the 

African American Mayors Association and the same thing with the 

Latino Coalition—and our friend representing the Latino Coalition, 

Mr. Gutierrez, is back here—those are good opportunities for us to 

attract both clients as well as volunteers. 

The other thing on the volunteer corps, I mentioned that we 

were—in 2016, 12 percent of our new volunteers are former clients. 

Our client base is diverse, and it makes sense for us to be reaching 

out to a group of people who have benefited from the program previously. And in so doing, we are also improving the diversity of the 

program. 

In 2016, 30 percent of our new volunteers were women, which is 

obviously higher than the percent now, the same way with minority volunteers. So we are making progress. Quite frankly, it is not 

fast enough for me or our board or anybody else, and we are open 

to suggestion. We are open to additional referrals, support, and appreciate you continuing to push on this important topic. 

Ms. CLARKE. Well, I thank you for the update. 

Mr. Rowe, one of the critical programs SBDCs provide is disaster 

recovery and preparedness assistance. Could you please describe 

some of the specific services you provide in this area? And let me 

just sort of preface this also by saying thank you, because I come 

from Brooklyn, New York, and in the wake of Superstorm Sandy, 

the SBDCs were really a lifeline. 

Mr. ROWE. Well, thank you, ma’am. 

One of the biggest efforts we make is helping the SBA identify 

the locations to set up their business recovery centers and then foSBREP-219A with DISTILLER

18 

cusing our efforts on staffing those centers and helping the small 

businesses get organized and get through the process. 

I am sure all of the members on the Committee know that about 

90 percent of the disaster loans are actually home loans. Only 10 

percent are business loans, but that 10 percent tends to take about 

four times as long. Doing a disaster home loan is actually pretty 

simple; it is like doing a second mortgage. Doing a business loan 

is actually often incredibly complicated. 

So we spend a great deal of time with small businesses that have 

been affected, helping them through all that paperwork, and sometimes it is a huge forensic issue. You know, it is reconstructing 

your sales figures, et cetera, which is why we put a lot of effort into 

disaster preparedness. 

Now, in the case of Superstorm Sandy, I don’t think as many 

folks were expecting it as might expect it in, say, Florida, when you 

are going to get a hurricane. But we are constantly pushing on the 

disaster preparedness front because disasters aren’t just, you know, 

a natural occurrence. You could have a fire and wipe yourself out. 

Ms. CLARKE. Thank you. 

I yield back, Mr. Chairman. I thank you for your indulgence. 

Chairman KNIGHT. Thank you very much. 

And I am going to go to the ranking member. If members have 

another round of questions, we can go through these. And I am 

going to go to the ranking member, and I will bat cleanup after everyone is done. 

Mrs. MURPHY. Thank you, Mr. Chairman. 

As I mentioned in my opening remarks, the administration’s recently released budget blueprint suggests reducing the SBA’s budget by 5 percent. And while it didn’t specifically name any of the 

programs for consolidation, it suggested that the programs should 

be consolidated if they are duplicative. 

Could you describe the impact of such a consolidation on the 

services that you provide to clients? And this is for all of the members. 

Mr. YANCEY. These programs are quite different beyond just 

who we serve. The way the grants operate, the back end, the partnership, service-to-the-community approach, we have never felt 

that consolidation of entrepreneurial development programs would 

be a healthy process. 

In fact, I believe that often our best work is done in conjunction 

with our colleagues at the Small Business Development Centers or 

the Women’s Business Centers or the veterans centers, where we 

might come in and provide very specific expertise around a business. If you had a high-end restaurant and I had a restauranteur 

that had a fine-dining restaurant, we might be able to provide specific information that could be useful. 

Putting them all together would, I think, create an administrative challenge that is well beyond the challenges that we face individually. And the cost would not be less than what you find with 

the programs administering themselves. 

Ms. PIANALTO. I would just absolutely agree with Ken. We do 

serve different needs, and we do work very closely together. And 

some of that is—you know, depends on the individuals in all of our 

organizations as well as with the district office of SBA. So there 

SBREP-219A with DISTILLER

19 

could always be improvement with coordination, but we all serve 

very different purposes, and I do not think consolidation would be 

helpful at all. 

Mr. ROWE. My concern with the whole concept of consolidation 

is, if you are seeking efficiency, that is one thing, but never make 

the mistake of thinking that small business is some monolithic 

thing. They are all different. It is like the little placard my sisterin-law has at the house: ‘‘You are unique, just like everybody else.’’ 

There are 28 million, 29 million small businesses in the United 

States. We probably touch, in the course of the year at SBDCs, a 

little under 1 million in various ways. That leaves 27 million, and 

I don’t think that Ken and Antonella or the VBOCs got to the other 

27 million. 

You know, the problem, again, in my mind is, are we making 

sure we are all working together and thinking about what we are 

trying to achieve. You know, it is great to talk about efficiency. 

Sometimes you have to think about the economy, though, as kind 

of a big sloppy machine too. 

Mr. SHARPE. I agree with everything else that has been said. 

But the mission of the American Legion is to ensure that veterans, 

when they leave the military, that they and their families are gainfully employed and economically independent and they are also 

able to contribute to their communities. 

We have been a big supporter of the Veterans Business Development Office in SBA, and the part of that that we like the most is 

that the VBOCs are beholden to that office. So anytime we have 

issues with veteran entrepreneurship in any part of the country, 

we can always go to that office, get stats, find out what is happening, be able to contact those VBOCs directly. It’s like a holistic 

approach to small business for us, and that also helps our mission 

in ensuring the veterans are taken care of. 

Mrs. MURPHY. Thank you. 

Chairman KNIGHT. And I will jump in real quick. There is a 

couple things that I am sure is on everyone’s mind. Budget is always something that we look at. I would hope that we are looking 

at making sure that everything that is happening now is funded 

before we expand. And I think that is probably the best way you 

can do, especially when you are talking about government, and 

sometimes government is a weird animal to work with and finite 

dollars and all of those things. But we want to make sure that the 

programs that are working today are fully funded so that people 

know, okay, I know there is SCORE here. I know there is SBDC 

or WBC or VBOC here. I know that, and I am happy. 

The second part is working together. I think that, whether you 

are a veteran in Los Angeles and you say, ‘‘Golly, my closest VBOC 

is, you know, 230 miles away,’’ that is not okay, but they still have 

other resources that they can go to. They can go to their SBDC. 

They can go to their WBC. And they can go to SCORE and say, 

‘‘I need help.’’ And, conversely, people can work throughout. So I 

like the fact that it is working together, and I like the fact that you 

do have different kind of resources that everyone brings together. 

Mr. Sharpe, did you have something? Oh, I thought you pressed 

your button. 

Mr. SHARPE. No, no. 

SBREP-219A with DISTILLER

20 

Chairman KNIGHT. And I think that that has kind of got to be 

the mission, especially when we go into budgets, because it is one 

of the reasons I don’t sit on Appropriations, because I don’t want 

to deal with that stuff. I want to deal with policy and what is good 

for America. And sometimes Appropriations are, ‘‘Yes, this is good 

for America; we just don’t have the dollars to do it.’’ And I would 

rather not be the bad guy on that. 

So I am going to go to Mr. Evans for his second round. 

Mr. EVANS. Mr. Chairman, I will yield. I don’t have any other 

questions. Thank you. 

Chairman KNIGHT. Thank you very much. 

And Ms. Clarke. 

Ms. CLARKE. Thank you once again, Mr. Chairman. 

Mr. Pianalto, in your testimony, you mentioned that WBCs 

would be the appropriate body to provide third-party certification 

for women-owned business. Could you please describe some of the 

issues in the current certification system and how moving certification to WBCs would alleviate that? 

Ms. PIANALTO. Thank you for that question. And I will just 

clarify—— 

Ms. CLARKE. I am sorry, Ms. I am sorry. Excuse me. 

Ms. PIANALTO. Pardon? 

Ms. CLARKE. I just wanted to make sure I got the gender correct there. 

Ms. PIANALTO. So the current structure is that women can be 

self-certified through the SBA, or they can go to four third-party 

certifiers. The 2015 NDAA eliminated the self-certification process, 

and SBA is working through the rulemaking on that right now. 

What we are suggesting is that, not that the WBCs take that 

over, but that you expand the availability of third-party certifiers. 

And we feel the WBCs, some of which—we have four WBCs who 

are regional partners of one of the third-party certifiers right now, 

and many of the WBCs are also helping with that self—the certification process. But we think the WBCs—it makes perfect sense for 

them to be—play a greater role in the certification process. 

Ms. CLARKE. So just to get a better sense, do you think it is important that women have access to programs like WBCs that specifically focus on increasing female entrepreneurship? And with 

those relationships with the third-party certifiers, do you see that 

as being sort of a network that would expand access? 

Ms. PIANALTO. We think that the current list—available certifiers needs to be expanded. And we think the WBCs play—would 

be able to play a great role in that. 

Ms. CLARKE. Very well. I thank you. 

And I yield back, Mr. Chairman. 

Chairman KNIGHT. Thank you very much, Ms. Clarke. 

And I appreciate all the members for coming today. Of course, 

the ranking member is always here. 

Ms. Clarke and Mr. Evans, thank you very much for attending. 

And I want to thank the panel for their expert sharings of what 

it is to be an SBA and what it is to help small businesses and the 

entrepreneurial attitude today. I believe it is important to hear directly from the groups and organizations offering their expert advice to entrepreneurs all across the Nation. 

SBREP-219A with DISTILLER

21 

These programs are extremely important to millions of small 

businesses trying to grow and create jobs. With a burdensome business environment, you assist risk-taking entrepreneurs as they 

charge ahead. 

As this Subcommittee looks to enhance the workforce for our Nation’s small businesses and the resources available to them, we will 

use this conversation moving forward, and we will continue to advance bills working and advancing WBCs and bills of that nature 

to try and help your work with our small businesses. Much like the 

guidance you provide to small businesses on a regular basis, we 

thank you for the advice you have provided us today. 

I ask unanimous consent that members have 5 legislative days 

to submit statements and supporting materials for the record. 

Without objection, this hearing is now adjourned. 

[Whereupon, at 11:48 a.m., the Subcommittee was adjourned.] 

SBREP-219A with DISTILLER

22 

A P P E N D I X 

SBREP-219A with DISTILLER


Insert offset folio 22 here 24760.001

Statement to the 

Ken Yancey 

Chief Executive Officer 

SCORE Association 

Small Business Committee 

United States House of Representatives 

Subcommittee on Contracting and Workforce 

March 30, 2017 

Subcommittee Chairman Knight, Ranking Member Murphy, and members of the subcommittee, 

my name is Ken Yancey and I am the CEO of SCORE. Thank you for the opportunity to offer 

testimony updating the committee on entrepreneurial development programs, including SCORE, 

at this hearing, entitled "SBA's Entrepreneurial Development Programs: Resources to Assist 

Small Businesses." Thank you as well to the United States Small Business Administration (SBA) 

for your continued support. 

First and foremost, I wish to thank you for 53 years of support for SCORE, which directly 

benefits the small businesses owners that SCORE volunteers serve in their local communities. 

About SCORE: Mission, Vision and Values 

SCORE is the nation's largest network of volunteer, expert business mentors, with more than 

I 0,000 volunteers across 300 chapters offering free and confidential advice and low or no-cost 

educational workshops to current and aspiring small business owners. 

A nonprofit resource partner of the SBA, SCORE was founded in 1964 by a group of retired 

executives then known as the Service Corps of Retired Executives. In the 1970s, SCORE 

expanded its services to offer workshops and seminars on a variety of topics related to small 

business. In 1996, SCORE ventured online to provide small business advice via email. Today, 

more than 10 million entrepreneurs have been mentored by SCORE or attended SCORE 

workshops. 

SCORE's mission is to foster vibrant small business communities through mentoring and 

education. SCORE envisions every person having the support necessary to thrive as a small 

business owner. 

SCORE has a strong set of core values, which we define as: 

Clients Matter: Our clients' success is our success. 

Small Business Matters: Small business is the engine of our national economy through 

business formation, job creation and wealth building. Small businesses and their support 

are critical to vibrant communities in our society. 

Giving Back Matters: We give volunteers, stakeholders and sponsors the ability to give 

back to communities through their support of SCORE. Successful small business owners 

understand the importance of giving back to their communities. 
23 

SBREP-219A with DISTILLER


Insert offset folio 23 here 24760.002

• Volunteers Matter: SCORE is comprised of volunteer business people helping small 

business people solve business problems. Volunteers give freely of their time, energy and 

knowledge to help others. 

• Experience Matters: The truest measure of our mission and our service is ensuring that 

our clients have a positive experience. A volunteer's experience also matters, as their 

relevant knowledge, wisdom and experience serve our clients through mentoring and 

education. Finally, the volunteer experience with SCORE matters, and we ensure that 

volunteers find value and satisfaction while engaged with SCORE. 

• Relationships Matter: In relationships, we act with integrity, respect, honesty, purpose, 

and professionalism. We listen with an open mind, encourage and openly communicate 

with all people seeking help from SCORE. Personal, long-term relationships are a driver 

of small business success. Community alliances are critical to the success of SCORE. 

• Diversity Matters: We believe in the importance, value and power of diversity- diversity 

of people and diversity of thought. The diversity of race, gender, ethnicity, geography, 

and experience is important and valuable in SCORE. We strive to achieve diversity of 

our volunteer corps, staff, board and clients. 

• Lifelong Learning Matters: We believe that small business owners who are lifetime 

learners adapt to change more readily and are more successful. Volunteers who are 

lifelong learners remain active, and achieve personal satisfaction and growth. 

SCORE's Impact on Small Business and the Economy 

In FY2016, SCORE helped its clients to create 54,072 new businesses and add 78,691 new, nonowner jobs to the American economy. 

During FY2016, SCORE's services kept clients in business. 96% of SCORE's 2016 clients who 

were in operation for more than one year when they came to SCORE remain in business, while 

84% of clients who started or acquired a business while receiving services from SCORE stayed 

in business. SCORE also helped to grow revenue in 64% of its small business mentoring clients. 

SCORE remains the most efficient and effective business formation and job creation engine 

funded by the federal government. Our cost to create a job is estimated at $133.43, while the cost 

to create a business is just $194.35. This efficiency in creating jobs and businesses provides a 

tremendous return on all federal dollars invested, and, in fact, makes money for the American 

taxpayer. 

• In FY20 16 alone, SCORE clients returned an estimated $45.75 in new tax revenue to the 

federal treasury for every $1 appropriated to SCORE. This efficiency far exceeds the 

return on investment generated by any other job creation initiative or business creation 

initiative funded by the federal government. 

• SCORE maximizes every dollar received from the federal government, because our 

10,000+ mentors and field organizers are all volunteers, with just 24 full-time, paid staff 

members. Many of them small business owners themselves, these volunteer mentors 

operate 300 chapters across the U.S. 

Other examples of SCORE's powerful impact on American small businesses include: 

2 
24 

SBREP-219A with DISTILLER


Insert offset folio 24 here 24760.003

• In FY2016 SCORE provided 541,526 total chapter services through mentoring, 

workshops and educational programming, nearly a 9% growth from the previous 

fiscal year. 

• 142,610 unique clients received SCORE mentoring services in FY2016, 

representing an 11.4% growth in total mentoring sessions. 

• SCORE volunteers donated 2.17 million hours to mentoring clients, planning and 

executing educational workshops, and running their local chapters. 

• 237,712local workshop attendees benefited from SCORE's educational 

programming in FY2016. 

• Believing in the importance, value and power of diversity, SCORE strives to 

attract a volunteer corps, staff, board and clientele of varied race, gender, 

ethnicity, geography and experience. 

o 58% of SCORE's FY2016 clients were women; 35% were minorities; 

11% were veterans; 9% were people with a self-identified disability. 

• Believing that lifelong learning matters, a large portion of the www .score.org 

website is dedicated to providing educational resources for clients. 2,982,519 

unique visitors accessed the www.score.org website during FY2016, utilizing 

24/7 online mentoring and thousands of expert resources and business tools. 

o 7.4% of visitors to the www.score.org website later converted to a service, 

such as mentoring or taking an online workshop. This conversion rate is 

likely even higher than the reported rate, since it does not include clients 

who later registered for local workshops. 

• The SCORE national office provides ongoing workshops in both live webinar 

formats and on-demand training housed on the www.score.org website. Clients 

attended 119,957 online workshop sessions in FY2016. Of these attendees, 82,422 

sessions were accessed through the online archives of more than 460 past 

workshops, while 37,535 attendees watched live. On average, 28% of those 

attendees went on to request mentoring services from SCORE. 

• At least once a week on average, SCORE hosts live webinars in conjunction with 

sponsors and subject matter experts. Designed to complement local workshops 

provided by SCORE chapters, these webinars cover areas that lack robust 

workshop programs and reach audience members who prefer to learn virtually. 

Client Satisfaction 

Throughout SCORE's 53 years of operations, the central guiding principle of client satisfaction 

has remained unchanged. Over the past eight years, SCORE has been able to determine the rate 

of client satisfaction through data-driven measures that focus on service (outputs), as well as 

quality and impact (outcomes). At the foundation of this organizational focus on data are three 

key goals and programs: 1) Service Quality Improvement 2) Client Relationship Management 

and 3) Impact Measurement. 

SCORE continues to shift from defining itself as a "volunteer service organization" to a 

"business organization led by volunteers." It strives to manage chapter operations like a business, 

and focuses on quality service metrics, including client engagement and Net Promoter Scores 

3 
25 

SBREP-219A with DISTILLER


Insert offset folio 25 here 24760.004

(NPS). NPS measures client satisfaction based on the quality of the client-mentor relationship, 

and willingness to recommend SCORE. The survey is issued after a client's ftrst and ftfth 

mentoring sessions. The results are used to identifY and promote best mentoring practices. 

Net Promoter Scores indicate that the vast majority of clients are very willing to 

recommend SCORE services to others. In FY2016, SCORE's NPS climbed to a new alltime high of82.26, a 1.86% increase from FY2015. 

For the past ftve years, SCORE has issued a Client Engagement and Impact survey through 

PricewaterhouseCoopers. For the three years prior to that time period, the survey was conducted 

through Gallup. 2016 results showed the following: 

• 83% ofFY2016 clients stated that they are "Likely to recommend SCORE." 

• 77% ofFY2016 clients agreed with the statement: "SCORE helped me." 

• 78% ofFY2016 clients agreed with the statement: "SCORE is critical in helping to foster 

vibrant small businesses in my community." 

• SCORE's overall client engagement rate in FY2016 was 4.09 on a ftve-point scale, and 

an even higher 4.11 for mentoring services alone. 

• SCORE's overall client satisfaction steadily improved for six consecutive years, 

culminating in the greatest gain yet, year over year, in FY2015. FY2016 results have held 

those improvements- across a significantly larger sample of 20% more responses. 

Media Buzz 

SCORE builds awareness of its services through earned and organic media outreach, public 

service announcements, and online marketing, including search engine optimization and social 

media. 

• Media coverage of SCORE shows a potential exposure of 12.6 billion readers or viewers 

in FY20 16, with an average of 922 media mentions of SCORE per month. 

• SCORE connects with small business owners across several social media channels, 

including Facebook, Twitter, Linkedln, YouTube, Google+ and Instagram. 

o SCORE's Facebook page has more than 42,000 likes and earned 927,461 

impressions per month in FY20 16, with and an average of 17,497 engagements 

per month. 

o SCORE's Twitter account has more than 38,000 followers, earning a total of 

2,668,400 impressions in FY2016, with a potential reach of25,437,237 from 

retweets and a potential reach of64,732,915 from mentions. 

o SCORE's YouTube channel has amassed 471,000 total views. 

Volunteer Corps 

SCORE's corps of more than I 0,000 volunteer mentors has a profoundly positive effect on 

SCORE's clients, as well as the communities housing these small businesses, and the U.S. as a 

whole. By creating meaningful, often long-term relationships with our clients, SCORE mentors 

help clients start new businesses or operate existing small businesses more efficiently and with 

4 
26 

SBREP-219A with DISTILLER


Insert offset folio 26 here 24760.005

greater success. Mentors provide the personal experience, practical knowledge and emotional 

support that clients need to thrive in the small business arena, helping them to think through 

business problems and offering information and strategies for improvement. At SCORE, 75% of 

mentoring is still accomplished face-to-face, while 25% takes place online or over the telephone. 

SCORE recruits more than 3,000 new volunteers annually, 12% of whom were former clients in 

FY2016. New volunteers complete an online on-boarding process that includes a mentoring 

certification. As of January 2016, every SCORE volunteer mentor has been required to complete 

a certification course on mentoring best practices, ensuring that clients receive the best possible 

service. 

As mentors take the extra time to closely listen to clients, they understand each business's unique 

needs and challenges, resulting in a transformational relationship, as opposed to a merely 

transactional relationship. Conversations between SCORE mentors and their clients are strictly 

confidential, with all mentors signing a Code of Ethics and Conduct that addresses the protection 

of each client's information and business ideas. 

Mentors employ the SLATE methodology in their mentoring sessions, which stands for: 

• Stop and Suspend Judgment 

• Listen and Learn 

• Assess and Analyze 

• Test Ideas and Teach with Tools 

• Expectation Setting and Encouraging the Dream 

For the past four years, SCORE has used a Volunteer Engagement Survey to measure volunteer 

satisfaction and gather insights on how to improve the volunteer experience. SCORE mentors 

report a high degree of satisfaction with their volunteer efforts, expressing that they are confident 

they are having a positive impact on their local communities. In FY2015, 77% of mentors were 

categorized as Champions, defined as highly engaged volunteers, with a high intent to continue 

volunteering. This is an improvement from the last two years. Mentors enjoy membership in a 

prestigious group with a proven track record of success, and they value mentoring as a lifelong 

learning opportunity that allows them to give back. Volunteer engagement has improved each 

year since the survey was implemented. 

SCORE volunteers undergo continuing education and training to keep their mentoring and 

interpersonal skills sharp. As part of the "Lifelong Learning Matters" program, the inaugural 

Volunteer Virtual Conference was held on March 2, 2017 with nearly 1,000 volunteers attending 

live educational webinars or accessing the recorded sessions afterwards. Some SCORE chapters 

held viewing parties to watch the presentations together and facilitate additional discussions. 

Volunteer Diversity 

As stated above, diversity matters at SCORE. SCORE's commitment to diversity among its 

client base extends with equal passion to its recruitment of volunteer mentors. Celebrating 

diversity in demographics, as well as diversity of thought, SCORE looks to engage mentors from 

varied backgrounds. 27% of SCORE's FY2016 volunteers were minorities. 20.3% ofFY2016 

5 
27 

SBREP-219A with DISTILLER


Insert offset folio 27 here 24760.006

volunteers were women, as compared to 17% in FY2015. The average volunteer age has 

decreased from 72 in FY2012 to 67 in FY2015, reflecting SCORE's increased efforts to recruit 

active, as well as retired entrepreneurs. 

This increase in diversity among SCORE volunteers is reflected on SCORE's FY2016 paid staff, 

of which 67% were women and 33% were minorities. Of the SCORE Board of Directors for 

FY20 16, 50% were women and 31% were minorities. 

SBA Relationship 

SCORE was originally established by the SBA in 1964 and has been a resource partner with the 

SBA in the 53 years since. Our relationship is collaborative, with the two organizations working 

together to support small business owners through a variety of initiatives, a few of which are 

listed below. The SBA also serves as the number one third-party referral site of traffic to 

SCORE's website, and is helpful in directing media inquiries to SCORE's media relations desk. 

SCORE is pleased to work with and support the SBA in a variety of initiatives: 

• Boots to Business: SCORE mentors have taught 2,699 modules of this entrepreneurial 

education and training program since its inception. Offered by the SBA as part of the 

Department of Defense's Transition Assistance Program (TAP), Boots to Business 

teaches veterans how to evaluate business concepts, develop a business plan and access 

SBA resources that can help them obtain start-up capital and additional technical 

assistance. 

• Emerging Leaders: SCORE chapters around the country are proud to support the SBA's 

Emerging Leaders Initiative by providing mentoring services and educational support. 

This federal training initiative supports small business executives on a growth trajectory 

in historically challenged communities by providing them with the organizational 

framework, resource network, and encouragement required to build sustainable 

businesses and promote economic development within urban communities. 

• National Small Business Week: SCORE is proud to manage the fiduciary partners for 

this weeklong event, which celebrates and supports entrepreneurs nationwide with 

educational resources and events. In FY2016, SCORE also hosted five live webinars for 

more than 4,000 attendees on topics ranging from small business fmance, to technology 

and human resources for small businesses. 

• SBA district events: Throughout the year, SCORE chapters nationwide partner with 

local SBA chapters on a broad variety of initiatives and educational workshops for 

entrepreneurs and small business owners. 

SCORE also works closely with other SBA resource partners including the Small Business 

Development Centers, Women's Business Centers, Veteran Business Centers, SBA District 

Offices and other resources from local, state and federal entities. 

Other Partnerships 

6 
28 

SBREP-219A with DISTILLER


Insert offset folio 28 here 24760.007

SCORE's corporate partnerships and sponsorships endow special projects that support small 

business owners and promote small business growth. 

Sam's Club 

A generous grant from Sam's Club allowed SCORE to launch the American Small Business 

Championship, which is now in its fourth year. The 2017 Championship selected 102 small 

businesses- two in every state and the District of Columbia from a nationwide pool of 1,563 

applicants and will reward them for their dedication to the success of their business with a 

$1,000 Sam's Club gift card to purchase supplies that help build their business, an all-expensespaid trip to a business training and networking event in Dallas, SCORE mentoring, and 

publicity throughout the year. This fall, three grand champions will be selected from the group 

of 102 state-level Champions and awarded $25,000 each. A judging panel of small business 

experts will name the grand champions based on how effectively they utilized their initial prizes 

to grow their respective businesses. 

The Ewing Marion Kauffman Foundation 

SCORE has partnered with the Ewing Marion Kauffman Foundation to produce a video 

mentoring program that expands the reach of SCORE mentoring by serving more entrepreneurs 

who live in remote locations or juggle full-time work with starting a business. Connecting 

mentors and clients virtually, but still providing a face-to-face experience using video chat 

software such as Google Hangouts, Skype and Team Viewer, this program has served 1,257 

clients to date. It has also helped SCORE research how volunteer mentors' core capabilities can 

work effectively using videoconferencing technology. Video mentoring clients showed the 

highest level of engagement compared to other types of mentoring clients, reporting client 

satisfaction scores of 4.30 on a 5-point scale. 

MassMutual 

MassMutual has worked with SCORE for more than six years. MassMutual and SCORE share a 

commitment to providing education, training, access and resources to multi-cultural small 

business communities. MassMutual has supported euhancements to www.score.org through 

Spanish-language tools, templates and content. In addition, MassMutual has provided training 

and resources for SCORE's volunteers and small business clients. SCORE and MassMutual are 

also partners in delivering educational events for Hispanic small business owners, as supported 

by The Hispanic National Bar Association. 

Verisign 

Verisign sponsors SCORE's Virtual Conference series, which allows individuals in diverse 

geographic locations to remotely participate in an online environment that offers the look and 

feel of an in-person conference event. Combining the educational elements of a conference with 

the networking and interactive features of a trade show, virtual conferences allow participants to 

listen to keynote speakers, visit virtual booths to download materials, meet sponsors and 

7 
29 

SBREP-219A with DISTILLER


Insert offset folio 29 here 24760.008

mentors, and ask questions via a live-chat feature. Sessions are also recorded and available on 

demand after the conference. 

The inaugural Power up Your Small Biz Virtual Conference on May 26, 2016 drew 1,366 unique 

attendees. The average length of stay in the virtual environment was 4 hours and l 0 minutes. 

98.4% of attendees reported that the conference helped them learn more about technology for 

their small business. 

The second virtual conference, held on October 27,2016 on the subject of technology and 

cybersecurity drew 1,297 live attendees. The third virtual conference will be held in June 2017. 

Canon U.S.A. 

For the past three years, Canon has sponsored Simple Steps for Starting Your Business, a fivepart series of three-hour workshops.designed to provide new business owners with the tools, 

information and advice they need to start a successful business. These workshops are offered live 

and in-person through SCORE chapters across the U.S., or in online modules. 

Since inception, Simple Steps for Starting Your Business has been offered 789 times to more 

than 10,000 in-person attendees, equating to more than 2,000 hours of training. 

This year, SCORE and Canon are also offering a new workshop series called Simple Steps to a 

Well-Run Business, catering to in-business clients who want to ensure they are operating at their 

full potential. This program concludes with follow-up roundtable discussions that are facilitated 

by a SCORE mentor. 

Non-Profit and Membership Organizations 

SCORE also works to build partnerships with other non-profit and membership organizations, 

and to cultivate alliances that support the communities and clients served by these groups. A few 

examples of these alliances include: 

• National Urban League (NUL): SCORE and NUL work together to support economic 

empowerment for communities of color by collaboratively producing and promoting live 

webinars. SCORE services are also offered through the NUL website. 

• African-American Mayors Association (AAMA): Through this new partnership, SCORE 

supports local officials and the communities they serve. Members of the AAMA 

represent diverse geographic areas, from big cities to small, rural communities. The 

AAMA collaborates with local SCORE chapters to forge alliances that best serve their 

cities. 

Future Planning 

As SCORE plans for the future and strategizes growth opportunities, overarching goals include 

identifying and helping underserved clients, improving both the quality of mentors and the 

quality of the client to mentor matching process, adding chapters and increasing capacity, and 

8 
30 

SBREP-219A with DISTILLER


Insert offset folio 30 here 24760.009

systematically engaging the SCORE community. Additional goals are outlined in the Strategic 

Plan and the Futures Project (below): 

Strategic Plan 

SCORE has developed a Strategic Plan for 2015-2017 designed to improve organizational 

quality at all levels. The main objectives are: 

Strategic Objective l: Grow the number of new clients using SCORE. 

• S 1.1 Increase awareness of SCORE, as indicated by the number of web visits, and 

answers to a brand awareness survey. 

• S 1.2 Increase new clients of SCORE through national marketing and promotion efforts, 

as indicated by total new mentoring requests via www.score.org and total online 

workshop attendees. 

• S 1.3 Increase new clients through local chapter marketing and referral relationship 

building, as indicated by new unique clients and the number of new local referral 

relationships. 

• S 1.4 Develop new clients and relationships in underserved markets and existing 

channels, as indicated by the number of new national relationships, client diversity (race, 

etlmicity and gender) and client demographics (age, segment and geography). 

• S 1.5 Improve lead-to-client conversions, as indicated by online conversion (defined as 

website leads that translate to client requests) and clients who have not yet been mentored 

receiving mentoring. 

Strategic Objective 2: Improve quality at every level (mentoring, administrative, leadership, 

recruiting, and education/services). 

• S 2.1 Provide quality tools, products and services to meet the needs of the client, as 

indicated by the number of new products, tools and services, the post-webinar survey, 

Net Promoter Score and the client engagement survey. 

• S 2.2 Increase total clients through relationship building, as indicated by the percentage 

oflong-terrn versus one-time clients. 

• S 2.3 Develop and disseminate on-going training to improve SCORE services, as 

indicated by the percentage of certified mentors, the number of new training programs 

with participation goals and the Volunteer Engagement Survey. 

• S 2.4 Recruit and retain the highest quality volunteers, as indicated by the number of new 

volunteers, the individual volunteer Net Promoter Score and diversity. 

• S 2.5 Identify and cultivate the highest quality volunteer leaders, as indicated by Chapter 

Chair and District Director Questions in the Volunteer Engagement Survey and the 

Leader SCOREcard. 

• S 2.6 Build, align, engage and motivate the national office to anticipate and respond to 

stakeholder needs, as indicated by 360 reviews of CEO and senior staff and the Volunteer 

& Staff Engagement Survey data. 

Strategic Objective 3: Develop a culture nationwide that supports SCORE's values, beliefs and 

actions. 

9 
31 

SBREP-219A with DISTILLER


Insert offset folio 31 here 24760.010

• S 3.1 Clearly define and develop understanding of SCORE's values across the entire 

organization, as indicated by volunteer engagement. 

• S 3.2 Create an environment that is consistent with SCORE's values, as indicated by 

Volunteer Engagement Survey and Client Engagement Survey data, increased diversity 

among SCORE volunteers, and the number of chapters with set and achieved goals, 

based on market demographics for volunteers. 

• S 3.3 Create an environment of accountability, as indicated by volunteer-level Net 

Promoter Scores, chapter-level client engagement scores and minimum standards met. 

Strategic Objective 4: Develop sustainable funding. 

• S 4.1 Develop multiple private funding channels, as indicated by total funds raised and 

the percentage of funding raised by new channels. 

• S 4.2 Achieve sufficient federal funding to reach goals, as indicated by the total funds 

appropriated to SCORE. 

• S 4.3 Ensure all funds are spent in pursuit of SCORE's mission, as indicated by budget 

approval and by Form 3 (changes in chapter cash balances and reported usage of funds by 

pre-defined areas/buckets). 

Futures Project 

In May 2015, the SCORE Board of Directors commenced a Futures Project that attempts to 

analyze the next two decades of changes in small business, entrepreneurial education, adult 

learning, volunteerism and nonprofit management. We believe that small business will remain 

critical to our country's economic success in the next two decades. We believe that SCORE will 

need to meet the future needs of our clients through a connected network of relationships and 

resources, both inside and outside of SCORE, to help small businesses thrive. To accomplish our 

desired future state, our volunteer mentors will become part of this connected network. They will 

use their knowledge and resources along with the network's resources to serve clients more 

efficiently and effectively. These relationships strengthen all aspects of the small business 

community: SCORE's small business clients, its strong corps of mentors and other volunteers, its 

local presence in communities, and its relationships with a growing number of partners. 

Mentoring will continue to function as SCORE's primary means of supporting and guiding small 

businesses, while an expanded network will provide clients with greater access to specialized 

expertise and resources. 

Funding Request 

Based on the impact demonstrated above, SCORE respectfully requests a $13 million 

appropriation in FY2018. This represents a $2.5 million increase in funding as compared to 

FY2017. 

SCORE will use funds to continue its efforts to serve more clients; to improve mentoring and 

administrative quality; and to attract, support and maintain one of the skillful and dedicated 

volunteer corps ever assembled. 

10 
32 

SBREP-219A with DISTILLER


Insert offset folio 32 here 24760.011

For FY20 18, SCORE is developing an aggressive outreach effort that includes expansion in 

major metropolitan areas (with an emphasis on underserved portions of these areas), expansion 

into rural communities in partnership with the U.S. Department of Agriculture, a "small startup" 

initiative, and an initiative targeted at non-employer firms. 

With this additional investment, we project a 6-8% increase in total services in FY20 18. We 

subsequently expect an 8-10% increase in FY2019 and FY2020. We project growth in client 

impacts (businesses formed and jobs created) and improvement in client engagement and clients' 

willingness to recommend SCORE. With our increasing centralization of processes we expect to 

reduce the financial management burden and risks at the chapter level. Centralization will also 

lead to even greater quality and consistency of services across all chapters and improve our 

ability to produce useable data for stakeholders, management and the marketplace. 

Appropriated funds will be used to serve and support our clients in the following ways: 

Client Services: 

• Develop new chapters in specific markets of opportunity including major metropolitan 

areas, rural communities, inner cities and other underserved areas. 

• Reduce the administrative burden on chapters and volunteers to allow greater focus on 

client needs. Centralize chapter-level administrative support services including clerical 

support, client intake, leadership development, mentor training tools and resources. 

• Improve the diversity of SCORE volunteers and clients. Develop and implement new 

processes for chapters to attract new constituencies both volunteer and client to improve 

diversity. 

Volunteer Training and Education: 

• Continuously improve training tools and materials to impact client service quality. 

Include additional tools to address the small start-up portion of the market and the needs 

of non-employer firms. 

• Improve access to volunteer talent and other resources across all of the SCORE 

organization. Implement a comprehensive database of all SCORE mentors' skills and 

capabilities that is instantly accessible to better serve volunteers and clients' unique 

needs. 

• Continue the development of a SCORE culture focused on a quality, successful client and 

volunteer experience. Expand SCORE's National Leadership Conference to all SCORE 

volunteers to improve networking and sharing of best practices for client success. 

Marketing and Communications: 

• Use social and other forms of digital media to reach and attract new clients and 

volunteers. Provide centralized digital marketing (website and social media management) 

for all chapters. 

11 
33 

SBREP-219A with DISTILLER


Insert offset folio 33 here 24760.012

• Develop and organize content and resources to allow simple and instant access for clients 

and volunteers. Develop targeted web based centers of excellence for specific industries 

(restaurant), business disciplines (marketing, exit), and segments (startup, non-employer). 

• Support SCORE chapters with their goal of becoming an integral part of the economic 

development fabric of the community they serve. Develop and implement local chapter 

marketing initiatives including referral and word of mouth campaigns. 

• Use referral partner networks to attract clients and volunteers at all levels of the 

organization. Form joint marketing initiatives with national and local partners. 

Technology and Website: 

• Use systems and technology as the primary infrastructure to enable the client experience, 

volunteer experience, association management and stakeholder reporting. Continue 

development and implementation of the next generation of the SCORE Association 

management software system. 

• Properly protect all client, volunteer and other data used, stored or managed by SCORE. 

Implement a data security audit and plan to insure all client and volunteer data is as well 

protected based on industry standards. 

Staffing: 

• Improve SCORE's ability to appropriate! y manage all forms of funding in a manner 

consistent with all applicable rules, policies and regulations. Add one senior level 

accounting position. 

Administration: 

• Improve SCORE's ability to appropriately manage all forms of funding in a manner 

consistent with all applicable rules, policies and regulations. Software licensing fees for 

centralized chapter level accounting system. 

• Customization, integration, implementation of centralized chapter level accounting 

system to reduce chapter administrative burden and lessen financial risk related to cash 

control. 

• Additional contractor accounting support. 

Governance: 

• Continue to provide appropriate oversight of SCORE in a manner consistent with all 

applicable rules, policies and regulations. 

SCORE is a uniquely American organization that synthesizes two historic national ideals: 

entrepreneurial spirit and volunteerism. Since 1964, SCORE has provided expert volunteer 

business mentoring to more than 10 million entrepreneurs and small business owners. In 2015, 

SCORE set a goal is to help 1 million additional entrepreneurs by 2020. While this is an 

ambitious goal, it will help to guide a continual pattern of growth and expanded services. 

12 
34 

SBREP-219A with DISTILLER


Insert offset folio 34 here 24760.013

Small businesses account for 99.7 percent of all employer firms and generate more than 50 

percent of the non-farm private gross domestic product. They employ more than half of all 

private sector employees. In this way, these small businesses are the engine of America's job 

creating economy, the fabric of our local communities, and the embodiment of the American 

dream. 

SCORE is scalable, with a relatively small investment, and can provide even greater value to the 

federal taxpayer, and to our country's economy. For this reason, a $13 million appropriation is 

thoughtfully requested, despite the difficult economic environment. These funds would be 

maximized to serve and support our clients by growing our volunteer corps, expanding our reach, 

and creating even greater economic impact in communities across the country. 

SCORE exists to help entrepreneurs achieve their dream of success, and to strengthen the 

economy of this great nation. We appreciate the support of this committee, as well as your 

personal support of SCORE. 

I would be pleased to answer any questions you may have, and to provide any additional 

documentation as requested. Thank you, again, for this opportunity to testizy. 

Respectfully submitted, 

Kenneth Yancey 

CEO 

SCORE Association 

13 
35 

SBREP-219A with DISTILLER


Insert offset folio 35 here 24760.014

P\)ASSOCIATION OF 

~ WOMEN'S BUSINESS CENTERS 

Testimony of 

Antonella Pianalto 

on behalf of the 

Association of Women's Business Centers 

to the 

U.S. House of Representatives Small Business 

Subcommittee on Contracting and Workforce: 

SBAJs Entrepreneurial Development Programs: 

Resources to Assist Small Businesses 

March 30, 2017 
36 

SBREP-219A with DISTILLER


Insert offset folio 36 here 24760.015

Testimony of Antonella Pianalto: SBA's Entrepreneurial Development Programs: Resources to Assist 

Small Businesses 

Good morning. Chair Knight, Ranking Member Murphy, and distinguished Members of the 

Subcommittee, thank you for the opportunity to testify before you today. My name is Antonella Pianalto, 

and I serve as the President & CEO of the Association of Women's Business Centers. 

The Association of Women's Business Centers (AWBC) supports the national network of Women's 

Business Centers {WBCs) by providing training, mentoring, programing, and advocacy with the goal of 

improving services to women entrepreneurs. We are pleased to announce to the Committee that for the 

first time, the AWBC's membership includes every WBC throughout the United States. As the advocate 

for this critical program, it is an honor to be here today. 

First, let me thank the Committee for holding this hearing. It has been many years since Congress has 

heard about the progress we are all making to serve American small businesses. Each Small Business 

Administration (SBA) resource partner provides services in distinct ways, and many of those differences 

stem from the original statutes that created our programs. 

As you know, the Women's Business Center program is a public-private partnership with more than 25 

years of success in providing training, counseling, mentoring, and access to capital to women 

entrepreneurs across the country. Our network reaches into communities- urban and rural alike- to 

assist America's job creators in launching and growing their own businesses. 

Women's Business Centers are focused on being an effective and efficient resource for one of the fastest 

growing sectors of the economy. Our continued growth leaves an enormous footprint of successful 

business owners and job creators. In fiscal year 2016, our centers reached more than 145,000 clients 

and conducted over 93,000 hours of counseling and over 15,000 training sessions in over 35languages. 1 

In 2015, the most recent data, WBCs assisted with nearly $429 million in private capital infusion and last 

year helped to secure nearly $40 million in government contracts for women-owned businesses.' 

The WBC program continues to fulfill its Congressional mandate of ensuring that women's 

entrepreneurial drive is fueled by adequate training and resources to keep the small business engine of 

the economy thriving. Nonetheless, Congress should act to strengthen and modernize the program, in 

turn supporting women business owners nationwide. 

1 Fiscal year 2016 data provided to AWBC on request by SBA and to be formally published in the FY18 Budget Justification to 

Congress. Language details found in SBA OED 2015 Report, p. 36 (see footnote 2). 2 US Small Business Administration. Office of Entrepreneurial Development 2015 Yeor in Review, p. 39. Available online at 

https:Uwww.sba.gov/sites/default/files/resources articles/2015 OED Year In Review.pdf. Hereafter SBA OED 2015 

Report. Federal contracting data provided by SBA via Entrepreneurial Development Management Information System 

(EDMIS). 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 
37 

SBREP-219A with DISTILLER


Insert offset folio 37 here 24760.016

History of the WBC Program 

The Women's Business Center Program was created by Congress as part of H.R. 5050 (P.L. 100-533), the 

Women's Business Ownership Act of 1988; landmark legislation that advanced the entire women's 

business agenda. The legislative history of that bill noted that despite making enormous contributions 

to the American economy, "women, as a group, are subjected to discrimination in entrepreneurial 

endeavors due to their gender ... adversely impacting the ability to raise or secure capital, to acquire 

managerial talents, and to capture market opportunities."' Congress sought to remedy this through, 

among other items, the creation of the WBC program and centers throughout the country to provide the 

necessary business assistance. 

In its first year, the WBC program received $2 million and funded four centers. After ten years, the 

program grew to 70 centers and $12 million in funding. Since then, in line with the explosive growth of 

women business owners, the program has increased from those four "demonstration sites" to a proven 

network of 113 grants leveraged to more than 150 locations in 48 states and territories. Unfortunately, 

resources for the program have not grown in parallel- and the more than 50% increase in centers over 

the last fifteen years has been matched by only a 25% increase in funding.4 

Throughout its quarter-century history the program has continued to be the source for counseling, 

training and access to capital for hundreds of thousands of women every year. In the last decade alone, 

WBCs have served more than two million women entrepreneurs leading to the creation and expansion 

of tens of thousands of new businesses and jobs. 

Women Entrepreneurs and the WBC Program Today 

The most recent federal data, collated from the U.S. Census 2012 Survey of Business Owners, captures 

a snapshot of the explosion of women entrepreneurs. The census found 9.9 million women business 

owners in 2012 with $1.4 trillion in annual receipts-an 18.7% increase from 2007. 

Today, women own more than thirty-five percent of all businesses and, according to the Small Business 

Administration, are starting new ventures at four times the rate of men.5 More recent, but not federallyreleased data, like the American Express OPEN 2016 State of Women-Owned Business Report, estimate 

more than 11 million women-owned businesses employing nine million Americans and generating $1.6 

trillion in receipts.• 

3 P.L.100-533, available at https:Uwww.gpo.gov/fdsys/pkg/STATUTE-102/pdf/STATUTE-102-Pg2689.pdf. 4 1n 2000, the WBC program received $12 million and had 70 centers. In 2015, the program had grown to more than 105 

grants (>50%) but only increased to $14.5 million {21%). 

'SBA OED 2015 Report, p. 3 6 American Express OPEN 2016 State of Women-Owned Business Report {2016). 

http:Uwww.womenable.com/content/userfiles/2016 State of Women-Owned Businesses Executive Report.pdf 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 
38 

SBREP-219A with DISTILLER


Insert offset folio 38 here 24760.017

The newest generation of business owners span the spectrum of industry. Their businesses are as diverse 

as their owners, and require WBCs to provide a wide variety of services- including training, counseling, 

and mentoring- to help their clients start or grow their enterprises. Nearly half of Women's Business 

Centers provide direct loans, while 77% aid in procuring government contracts. As mentioned earlier, 

these efforts had measurable impact: in 2015, WBCs helped clients obtain new financing, totaling $429 

million. In 2016, WBCs helped clients secure nearly $40 million in government contracts. 

WBCs serve women entrepreneurs in every stage of the business continuum. In 2015, the SBA found 

that WBC client businesses averaged seven years in age and that 15% were start-ups while 26% were in 

business more than ten years.7 The services provided to those businesses had a profound impact on the 

outcome of the company. According to the SBA Office of Entrepreneurial Development (OED) 2015 

report, 96% of clients reported revenue growth, totaling a staggering $658 million dollars.8 This led to 

one in ten businesses hiring a new employee, creating nearly 25,000 jobs. The annual reviews of the 

program submitted to Congress by the SBA show that 2015 was not an outlier; since FY2010, WBCs have 

surpassed their SBA job creation and training goals.9 

WBCs have played a role in fueling the growth of minority businesses as well; 45% of clients in 2016 were 

minorities. Focus on minority women is critical as businesses owned by women of color have more than 

doubled since 2007, increasing by 2.8 million. Nearly 8 out of every 10 net-new women-owned firms 

launched since 2007 were started by a woman of color.10 This diversity has been matched by expanded 

abilities of the centers. Sixty-four percent of WBCs provide programming in two or more languages and 

overall, WBC services are provided in more than 35 languages. 

This differentiation of services has not impacted the ability of every center to provide high quality 

training and counseling to all its clients. As the National Women's Business Council (NWBC) found: 

Successful outcomes {clients served, businesses started, jobs created) are not dependent on the size, age 

or location of the center: rural centers were as successful as those located in urban areasi high poverty 

locations had as many successful outcomes as did lower poverty locations; and stand-alone centers were 

as successful as those that were co-located with other organizations.11 

A good explanation for this is that centers design their own programs and delivery models that best meet 

the needs of their community. Most WBCs are "hosted" within a larger economic development 

organization or university, however, older and, for the most part, larger WBCs are stand-alone 

7 SBA OED 201S Report, p. 38 8 1bid, p. 39. 9 U.S. Small Business Administration (2016). FY 2017 CONGRESSIONAL BUDGET JUSTIFICATION AND FY 2015 ANNUAL 

PERFORMANCE REPORT, p. 61. https:l/www.sba.gov/sites/default/files/FY17-CBJ FYlS-APR.pdf. Hereafter SBA FY2017 

Congressional Budget Justification. 10 American Express OPEN 2016 State of Women-Owned Business Report (2016). 

http://www.womenable.com/content/userfiles/2016 State of Women-Owned Businesses Executive Report.pdf 11 Womenable {2006). The Performance, Progress and Promise of Women's Business Centers in the United States: A 

Summary of Three Research Studies, p. 2. Available at 

http://www. womenable.com/content/userfiles/ResearchinBrief WBC studies. pdf. Hereafter Womenable WBC Report. 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 

4 
39 

SBREP-219A with DISTILLER


Insert offset folio 39 here 24760.018

organizations which provide a robust diversity of services that often include a variety of sector-specific 

expertise and access to capital. 

Finally, and perhaps most critically, the WBC program has been a proven good investment of taxpayer 

dollars. Private sector fundraising, enhanced by the visibility of the SBA partnership, helps to match 

federal dollars more than three to one.12 For every one federal dollar invested in the program, the WBC 

program returns $46 to the economy. 13 The proven return on the program is underscored by the key 

fact that WBCs serve a unique population that otherwise would not receive the targeted training and 

counseling needed. 

Serving A Unique Population in Distinct Ways 

The WBC program was created because existing programs were not adequately meeting women's needs 

for services that addressed unique challenges. As the program has grown in size and influence, some 

Members of Congress have expressed the opinion that WBCs duplicate services provided by other 

resource partners. 

The reality is that many clients receive services from more than one resource partner, and in fact, the 

SBA encourages resource partners to collaborate. What makes WBCs unique is the depth and breadth 

of our services. Women come to WBCs because we address four critical issues: competence, confidence, 

capital, and connection. Women view their local WBC as a trusted advisor and partner for the lifetime 

of their company. If other resource partners are serving more women than they used to, they should be 

- millions more women are starting businesses. That does not mean other programs can or should 

replace WBCs. 

The statute that created WBCs expressly requires that the program serve a significant number of 

economically and socially disadvantaged individuals, including women and minorities-the only resource 

partner expressly required to do so. As a result, WBCs make concerted efforts to reach underserved 

populations. A recent AWBC survey found 64% of visitors were economically disadvantaged.14 

A study of WBC clients done by the Center for Women's Business Research found that, aside from 

general business management information, gaining financial management skills, and learning about the 

legal aspects of organizing a business, what the clients valued highly from their experience in the center 

was finding a community of other women with whom to build relationships. Unlike a "transactional" 

short-term course - after which a prospective business owner is on their own -women's business 

centers provide a venue for ongoing learning and relationship-building. 

This finding is echoed in the AWBC sponsored study among WBC leaders. In that study, the WBC leaders 

reported that while one of the key strengths of the program is allowing tailoring of programming to fit 

12 AWBC 2013 Economic Impact Survey {latest available data). The survey found average center revenues to be $635,668, of 

which a maximum could be $150,000 from SBA. 13 SBA OED 2015 Report, p. 39. In 2015, the program received $14.5 million in federal funding and generated $678 in 

revenue growth for client companies. 14 AWBC 2013 Economic Impact Survey {latest available data). 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 
40 

SBREP-219A with DISTILLER


Insert offset folio 40 here 24760.019

local needs, there are practices common to all WBCs that differentiate it from other types of 

entrepreneurial training, which include: providing a safe place to learn; peer support; mentoring 

opportunities; and offering a sense of community that clients could not find in other places they went 

to for business assistance. 

In its own evaluations of the program in 2015, SBA concluded as much. From the FY2017 Congressional 

Budget Justification: 

Many WBCs provide multilingual services and offer flexible hours, including evening and weekend, allowing 

mothers with children to attend training classes. WBCs predominantly use long-term training courses to 

maximize the delivery of services to primarily nascent entrepreneurs. Many of the trainings focus on 

business and financial planning that help women entrepreneurs gain financialliteracy. 15 

In the 2015 EOD Impact Report, "WBCs create tailored programs that meet the needs of the clients in 

their community. WBCs are responsive to the unique needs of their local community."16 

WBC clients consistently say that they come to the WBCs not just for the business education and 

consulting, but for the supportive environment that helps build self-efficacy and confidence in their 

ability to succeed. The evidence bears this out. Evaluation data from WBC programs indicate that women 

who receive business assistance from their programs build larger businesses, create more jobs and have 

a significantly higher survival rate than the national average. 

For example, Chair Knight, Women's Economic Ventures, which serves constituents in the Simi Valley, 

developed the Thrive in Five® program. Clients participating in this long-term program show median 

sales of $400,000 and have created an average of five jobs. Client businesses show an 80% survival rate 

after five years as opposed to 50% for all businesses in the U.S. and over 40% have employees compared 

to only 12% of all woman-owned firms. Moreover, 95% of clients who were in poverty at intake have 

moved out of poverty. 

Such success is visible throughout the program where local centers tailor their efforts to clients. REI 

Women's Business Center, in Durant, Oklahoma, offers the opportunity for their clients to expand 

markets by a regular trip to nearby Dallas, Texas and the 15 floor, 5 million square feet Dallas Market 

Center. In Portland, Oregon, Mercy Corps Northwest Women's Business Center partners with a regional 

corrections facility to offer entrepreneurial training to returning citizens, as well as a six-week business 

foundation course entirely in Russian to serve a local immigrant population. The Denver Women's 

Business Center in Colorado, offers the "ProBono Patent Initiative" in partnership with the U.S. Patent 

and Trade Office (USPTO), to develop patents for low-income inventors. Finally, Women's Business 

Development Center in Chicago, Illinois created the Developing Your Childcare Business course designed 

to provide business insight to prospective and existing child care entrepreneurs for home and centerbased businesses. More examples are included in the appendix from dozens of centers, to add the 

breadth of the WBC program to the Congressional Record. 

15 SBA FY2017 Congressional Budget Justification, p. 60. 16 SBA OED 2015 Report, p. 36. 

Testimony of Antone!la Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 

6 
41 

SBREP-219A with DISTILLER


Insert offset folio 41 here 24760.020

According to the U.S. Census Bureau, 71% of women-owned businesses generate less than $25,000 in 

annual revenues and only 11% have employees other than the owner. Given such unrealized potential, 

and the proven ability of centers to drive growth with their clients, more women need access to WBC 

programming. 

In summary, WBCs provide a critical blend of training and counseling services and access to capital aimed 

at serving a broad cross section of the population including minority, socially and economically 

disadvantaged women, as well as men.17 The WBCs strategic approach is relational: they establish longterm relationships with clients and serve them from inception through the life cycle of their businesses, 

creating a cycle of value added services. WBCs services are distinctly different, yet complementary to 

services provided by other SBA resource partners. 

Moving the WBC Program Forward 

The aforementioned growth in women entrepreneurs makes the WBC program more relevant than ever. 

Everyday thousands of would-be job creators, existing business owners, and innovators seek WBC 

assistance to move their business forward. 

Many centers are ten or more years old and are established and respected resources in their 

communities. Their grant size from the SBA, however, despite ongoing success, has remained flat or 

decreased since the program's creation in 1988. These centers consistently demonstrate an ability to 

effectively and efficiently serve entrepreneurs and deserve a modernization of the grant system and 

access to additional resources to expand their impact. 

While the network of centers spans the country, too many communities do not have access to the unique 

services provided by WBCs. In addition to allowing for the expansion of existing centers, new centers are 

needed in geographies so far unaddressed by the WBC program. 

Moreover, the program continues to suffer from arbitrary requirements and limitations that constrain 

the ability of centers to succeed. Up until 2015, for example, the Office of Management and Budget 

(OMB) regulations forbade WBC Executive Directors from fundraising while on the job-despite 

requiring a match of federal dollars. Other OMB requirements, notably the Uniform Administrative 

Requirements, Cost Principles, and Audit Requirements for Federal Awards (2 CFR 200, "omni-circular"), 

place an undue burden on small grantees like WBCs. Such policy incoherence should be addressed by 

Congress and the Administration as appropriate. 

The challenges the program currently faces has legislative solutions. The AWBC is tremendously grateful 

to Chair Knight's recent introduction of H.R. 1680, the Women's Business Center Improvement Act of 

2017, and to Representative Lawson for co-sponsoring the legislation. We endorse it wholeheartedly. 

17 Numerous federal statutes including the 1964 Civil Rights Act (P.L. 88·352), as well as judicial decisions based on the 14'" 

amendment of the Constitution require federally funded programs to provide services regardless of race1 sex, or national 

origin. Grant proposals for the WBC program, for example, require a non-discrimination statement. In our view, the 

attendance of male entrepreneurs is a testament to the quality of services provided. 

Testimony of Antone!la Pianalto before House Subcommittee on Contracting & Workforce 

March 30,2017 

7 
42 

SBREP-219A with DISTILLER


Insert offset folio 42 here 24760.021

The AWBC also supports the recently introduced Developing the Next Generation of Small Businesses 

Act of 2017 sponsored by the broader Committee's Ranking Member Nydia Velazquez and co-sponsored 

by Chair Steve Chabot. Many of this Subcommittee's members have co-sponsored similar legislation in 

the past, and for that we are grateful. 

The legislation would greatly improve the ability of WBCs to serve women entrepreneurs in three key 

ways: 1) increased program authorization; 2) modernized grant levels; and 3) streamlining of 

administrative requirements. 

First, the bill re-authorizes the program up to $21.7S million for FY2018. This will allow Congressional 

appropriators the much-desired ability to allocate additional funding for the WBC program. 

Second, since the program was established in 1988, the total amount of the grant available from SBA to 

qualified WBCs is $150,000 a year. Adjusted for inflation, according to the Bureau of Labor Statistics, that 

amount in 2017 dollars would now be $308,879.18 The legislation would begin to ameliorate this issue 

by increasing the grant level to $185,000 and allowing for additional grant funding to be available to 

centers with proven impact. 

Third, the legislation would remove certain unnecessary requirements that force resources to be 

diverted from training and counseling to back-office bureaucracy. For example, if a Center raises more 

money than is required to meet the federal match (up to $150,000) that additional money is subject to 

federal spending guidelines and verification requirements even though it is not taxpayer money. This is 

a key inefficiency in the program and actually provides a disincentive for Centers to overmatch federal 

funds. 

In addition to re-authorization, the upward trajectory of the program is deserving of more federal 

funding. While not the purview of this Subcommittee, the AWBC would note it has requested $21.75 

million for FY18 in the Financial Services and General Government Appropriations Subcommittee. 

Increased funding for the program is critical. The $17 million allocated in fiscal year 2016 allowed the 

SBA, for the first time in more than ten years, to fully fund grants at the statutory $150,000 level. In fact, 

for several years, centers received less than $120,000 each year due to funding limitations-effectively 

a 15% funding cut after the initial grant. Ensuring adequate resources is a key component to continuing 

the growth of the program and women's entrepreneurship more broadly. 

How Congress Can Help Women Entrepreneurs 

Beyond strengthening the WBC program, Congress can support women business owners in two key areas: 

access to capital and access to markets. 

18 US Bureau of Labor Statistics Inflation Calculator available at https:Uwww.bls.gov/data/inflation calculator.htm. 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 
43 

SBREP-219A with DISTILLER


Insert offset folio 43 here 24760.022

Access to Capital 

Research conducted on behalf of the National Women's Business Council (NWBC) indicates that women 

start businesses with roughly half as much capital as their male counterparts.19 Today, women receive 

just 7% of venture capital funds and less than 5% of conventional business loan dollars. Researchers and 

economists speculate that if women were fully engaged in their businesses, it would raise Gross 

Domestic Product (GOP) by more than seven percentage points/0 and if women started businesses with 

the same amount of capital as men, they could create 6 million jobs in five years. 21 

To realize all this potential, Congress should ensure that existing programs that are proven to provide 

capital to women business owners continue. Budget proposals to eliminate key programs like the 

Community Development Financial Institution (CDFI) Fund could have devastating impacts on women 

and minority entrepreneurs. 

Other options, like modernizing credit scores and Intellectual Property (IP) protections impact women 

business owners as well. One of AWBC's partner organizations, Women Impacting Public Policy (WIPP) 

has laid out legislative proposals in their 2017 Economic Blueprint report. We would encourage 

legislators to consider many of those policy options. 22 

Access to Markets 

Ensuring women business owners have access to additional markets, including global markets through 

export and procurement markets through federal contracts, is paramount to continued growth. The 

federal contracting market, with complex rules and jargon, has often deterred many women 

entrepreneurs with goods and services the government needs. 

In addition to helping secure government contracts, Women's Business Centers assist women business 

owners with the Women-Owned Small Business (WOSB) certification process. Four WBCs are regional 

partners of one of the SBA-approved third-party certifiers and perform certifications, while others assist 

with site visits for third party certifiers. 

WBCs can play a greater role in the certification process. later this year, the SBA is expected to release 

new regulations about the certification of women-owned businesses. Expanding the certification options 

for women should be the goal of the agency as well as leveraging the already existing network of more 

than 100 WBCs to expedite certification. Congressional attention to this issue can help increase the 

availability of assistance and bring more women business owners into the government market. 

19 National Women's Business Council. Available at https://www.nwbc.gov/facts/access-capital. 20 McKinsey Global institute (2015). The power of parity: How advancing women's equality can add $12 trillion to global 

growth. Available at http:flwww.mckinsey.com/g!obal-themes/employment-and-growth/how-advancing-womens-egualitycan·add·12·trillion-to-global-growth. 

21 Candida G. Brush, et al (2014). Women Entrepreneurs 2014: Bridging the Gender Gap in Venture Capital. Available at 

http://www.babson.edu/Academics/centers/blank-center/global-research/diana/Documents/diana-project-executivesummary-2014.pdf. 

22 Women Impacting Public Policy {2017). 2017 Economic Blueprint: A Way Forward. Available at 

www.wipp.org/resource/resmgr/economic blueprint/WJPP Economic Blueprint 2017.pdf. 

Testimony of Antonella Pianalto before House Subcommittee on Contracting & Workforce 

March 30, 2017 

9 
44 

SBREP-219A with DISTILLER


Insert offset folio 44 here 24760.023

Conclusion 

In the formation of the WBC program, Congress determined that ongoing limitations on access to capital 

and markets warranted the creation of a network of centers to assist women entrepreneurs. Those 

challenges persist, as must the commitment of a new Congress to advancing policies that foster 

innovation and women's business ownership. 

We appreciate this Committee's dedication to the modernization of SBA's resource partners and your 

willingness to hear from the programs that are serving entrepreneurs across the country. The WBC 

program is a proven program, an effective public-private partnership, and fills a growing need for the 

distinct population we serve. 

The directors and staff at WBCs are committed to helping women and their families prosper and achieve 

financial security through business ownership. In my visits across the country, from California and North 

Carolina, to Florida and New York, I remain in awe of our centers incredible power to bring a dream, an 

innovation, or an idea to fruition. 

We urge Congress to advance the efforts already underway by this Committee to strengthen the WBC 

program and provide the necessary investment women entrepreneurs need to reach their full potential. 

Thank you for the opportunity to testify and I am happy to answer any questions. 

About the AWBC 

The AWBC (www.awbc.org) is a non-profit 501(c){3) organization founded in 1998 to support the national 

network of Women's Business Centers (WBCs) with programming and advocacy. Each year, our members 

leverage WBC grants to operate mare than 150 locations throughout the United States. WBCs have more 

than 25 years of success in providing business training, counseling, mentoring, and access to capital to 

women entrepreneurs. The WBC program is a public-private partnership with the U.S. Small Business 

Administration. 

Testimony of Antonella Pianatto before House Subcommittee on Contracting & Workforce 

March 30, 2017 

10 
45 

SBREP-219A with DISTILLER


Insert offset folio 45 here 24760.024

Testimony 

of 

C. E. "Tee" Rowe 

President/CEO 

America's SBDC 

March 30, 2017 

Committee on Small Business 

Subcommittee on Contracting and Workforce 

Hearing on Entrepreneurial Development Programs 
46 

SBREP-219A with DISTILLER


Insert offset folio 46 here 24760.025

Chairman Knight, Ranking Member Murphy, 

Thank you for inviting America's SBDC to testify today. My name is "Tee" Rowe, I am the 

President of America's SBDC, the Association that represents the nationwide small 

business development center (SBDC) system of 63 networks with roughly 1,000 locations 

and over 4,500 dedicated professional counselors, advisors, specialists and support staff. 

For 37 years SBDCs have been providing services to small business owners and aspiring 

entrepreneurs. Over the years our member networks have developed a wide variety of 

services for small businesses of all sizes that are adapted to meet the needs of their states 

and regions. 

How and Where SBDCs work 

SBDCs operate out of host institutions, primarily colleges and universities, and they 

operate (with some exceptions) statewide. California and Texas are the exceptions, they 

have six and four regional networks respectively. The host institution manages the 

operations of its SBDC network through the lead center. The satellite centers are located at 

other colleges, community colleges and chambers of commerce. Many SBDCs are based at 

the business schools of their respective colleges providing the ability to leverage the skills 

and knowledge of the professors with practical experience of our advisers. 

Those host institutions and their partners contribute matching funds that equal or exceed 

the federal funding. Federal funding for SBDCs is allocated based on population census 

figures with a minimum funding level for smaller states (VT, NH, SD, etc.) 

SBDCs provide services to small businesses at all stages of development. The mix of 

businesses usually varies depending on the state or region and their unique characteristics. 

A good rule of thumb is that SBDCs have a roughly 60/40 mix of existing and nascent (startup) entrepreneurs. Annually, these ratios vary due to economic conditions and external 

factors such as disasters or market conditions. About 45% of our clients are women, 38% 

are minorities and roughly 10% of our clients are veterans. 

C. E. Rowe 
47 

SBREP-219A with DISTILLER


Insert offset folio 47 here 24760.026

The amount of time SBDCs spend with each client varies. Our extended engagement 

clients receive a minimum of five hours of counseling with the average running much 

higher. SBDCs served over 192,00 counseling clients in 2016 and devoted over 1.2 million 

hours to them, an average of 7 hours. longer term clients can span multiple years and 

usually involve ongoing assistance in areas such as intellectual property, new technologies 

or manufacturing. SBDCs manage their resources to meet the needs of the client, and as 

we all recognize, each client is unique. They can present challenges that range from 

specific and manageable to substantial and time-consuming. 

Our advisers 

Whether you call them advisers, counselors, coaches or consultants SBDC staff have a 

common goal -small business success. The majority of our advisers have business degrees 

and past entrepreneurial experience. Many are serial entrepreneurs who are now giving 

back to small business community. Some may specialize in certain areas of expertisefinance, accounting, management, etc. 

SBDC Services 

SBDCs services are not monolithic. There is no "cookie cutter" answer to small business 

growth and success. There are certain basic services that an SBDC will always offer. Help 

with business planning, working on financial packages (I often say that SBDCs' biggest job is 

teaching people to speak "banker"), basic business licensing, marketing and accounting, 

etc. It is the more intensive or specialized offerings that make SBDCs a little different. 

To accomplish their mission SBDCs rely on keeping track of the service needs of their 

clients and developing curricula or services to meet those needs. That responsiveness is 

not accidental, it dates back to Congress' original design of the program and has been 

consistently restated in every legislatively approved action since then. In addition, the 

accreditation standards of the SBDC program, authorized by Congress, require SBDC 

networks to survey and monitor the needs of the small business community and tailor 

their services accordingly on a continuous basis. In that way, we see SBDCs as 63 

laboratories dedicated to small business growth. 

C. E. Rowe 2 
48 

SBREP-219A with DISTILLER


Insert offset folio 48 here 24760.027

Each SBDC develops these offerings based on their assessment and analysis of their state 

or region, as required by the SBDC accreditation process. In addition to accreditation, 

SBDCs are also subject to regular annual program reviews and biennial financial reviews. 

These are conducted by SBA and they monitor program performance, service delivery and 

adherence to program goals. 

I can't give you a full breakdown of everything an SBDC offers, it varies too much from 

state to state. However, I would like to share a sampling of some of the specialized services 

SBDCs offer to our clients. There just isn't enough time to tell you about all the counseling 

and training that SBDCs provide. 

Intensive Entrepreneurship 

In addition to our one-on-one counseling/advisement and mentorship, SBDCs also offer 

intensive training courses in combination with one-on-one counseling to our more 

seasoned clients. A quick survey of SBDCs found that at least half of our 63 networks 

offered these intensive training courses for businesses. The only thing SBDCs lack is 

incremental resources to expand those offerings without reducing other highly valued 

services to targeted constituents. Every one of our nearly 1,000 centers can't provide such 

services but, we work hard to make those services as widely available as possible, again 

based upon community need. 

These programs offer multiple weeks of training and counseling and are geared to existing 

businesses that are in that high-growth potential group. We often encourage our local 

hosts, representing many of the finest higher education institutions in the nation, to 

augment the value of those programs for the small business owners. Candidly, this seems 

to make sense for us and our higher education partners. 

However, these courses are often not limited to a certain size of business or ones that have 

experienced supernormal growth. SBDCs often find that certain nascent businesses can 

benefit as much or more from intensive and broad training. We base some of this belief on 

our experience but it's backed up by findings from the Kauffman Foundation. In a July 

2010 study, Tim Kane, PhD, a Senior Fellow at the Kauffman Foundation found that startups are as likely to be job creators as existing businesses. This matches some of our own 

analysis which considers the resources required to assist each category and the resultant 

outcomes achieved by the respective group. Fundamentally, SBDCs understand this 

observation, an understanding derived from the simple premise that business education 

should be based on knowledge gaps and not size or industry. 

C. E. Rowe 3 
49 

SBREP-219A with DISTILLER


Insert offset folio 49 here 24760.028

Incubators 

SBDCs work with and host incubators all across the country. With SBDC support, an 

incubator-based client receives not only peer mentoring but also direct engagement with 

highly trained and dedicated advisors. As higher education has become more broadly 

recognized as a critical component in today's technical and informational economy, our 

host institutions have been launching incubators as well as engaging faculty, staff and 

students in entrepreneurial activities. SBDCs are involved in this effort in almost every 

corner of our nation. To name just a few of our incubator/accelerator sites- they are in 

Pennsylvania, Alabama, Colorado, Arizona, Ohio and California. 

Export Assistance 

Under the Small Business Jobs Act, Congress provided funding to expand the SBDC capacity 

to assist small businesses that were new to exporting. For SBDCs, this was not an unfunded 

mandate but an opportunity to add significantly to our arsenal of expertise. SBDCs secured 

certification for more export counselors than 'required' in the legislation and worked hard 

to retain every qualified staff member when the Jobs Act funding expired. Currently SBDCs 

have over 640 certified export counselors nationwide. Many of them are NASBITE 

(National Association of Small Business International Trade Educators) Certified Global 

Business Professionals. That certification requires coursework and training in Global 

Business Management, Global Marketing, Supply Chain Management and Export Finance. 

In addition to export counseling our networks also offer training. Among the offerings are 

training sessions in Export Regulation supported by the US Census Bureau, Foreign Corrupt 

Practices Act compliance, shipping compliance, etc. 

Our SBDC members have also encountered the substantial interest nations around the 

world have to develop their own domestic SBDC network. Many nations are developing 

their own networks of service centers patterned on the SBDC program. We are working in 

Central and South America, and the Caribbean to assist these efforts. (There is already a 

thriving SBDC network in Mexico with over 110 centers) We have also begun developing 

relationships in the Middle East to help them expand entrepreneurship. 

C. E. Rowe 4 
50 

SBREP-219A with DISTILLER


Insert offset folio 50 here 24760.029

last year America's SBDC, the University of Texas San Antonio SBDC network, lnBIA (the 

International Business Incubator Association), and CENPROMYPE (the Center for 

Promotion of Small Business of SiCA) began working on a three-year grant from the US 

Department of State to promote the expansion of the SBDC model through South and 

Central America. 

Support for veterans has been a part of the SBDC mission since the program was founded 

and over the years SBDCs have assisted hundreds of thousands of veterans either with 

their existing businesses or in starting new businesses. To accomplish that mission SBDCs 

have developed programs nationwide based on initial training and followed up with 

intensive one- on-one counseling for veteran business owners. Veterans represent 

approximately 10% of the SBDC assistance provided annually. Overall, SBDCs counseled 

and trained over 30,000 veterans in 2015 and in 2016 respectively. Of those veterans over 

18,000 were service disabled. 

Several states developed their own veterans' programs. In New York, for example, the 

SBDC has a comprehensive veterans' small business assistance program, providing 

targeted business training, counseling, and mentoring for veterans and service-disabled 

veterans. There are dedicated Veterans' Business Advisor in the centers at the 

Farmingdale, Buffalo, and Albany SBDCs. In addition, all of the 24 Regional Centers in the 

state-wide network prioritize assistance to veterans. 

In Brooklyn they work with the New York City Mayor's Office of Veteran Affairs and the 

Mid-Hudson SBDC works with the Wounded Warrior Unit at the US Military Academy at 

West Point on joint programs for returning wounded veterans. The Mohawk Valley, 

Onondaga and Jamestown SBDC have all established an annual Veterans events supported 

by numerous regional organizations that provide breakout workshops, dozens of 

exhibitors, networking sessions, and matchmaking for Government Contracting. 

c. E. Rowe 5 
51 

SBREP-219A with DISTILLER


Insert offset folio 51 here 24760.030

In addition, NY has the EntreSkillsTM for Veterans, an online training program available 

anywhere (including currently deployed troops) that combines online education with an SBDC 

advisor that electronically counsels each assigned veteran. This web-based interactive 

educational program teaches veterans how to be successful entrepreneurs and small business 

owners. The program takes veterans through cumulative stages as it helps them refine and 

develop a small business concept, address legal and marketing issues, prepare financial 

statements, and, ultimately, prepare a complete business plan. This program is currently being 

further enriched and we submitted it to SBA as part of our proposal for expanding Boots to 

Business. 

Just a sample of the impact from NY- At the Watertown SBDC they trained and counseled 

884 veterans over the last 4 years resulting in 31 businesses starts, 197 jobs created and 

economic impact of $5.97 million. 

SBDCs also work with SBA's Office of Veterans' Business Ownership to carry out the Boots2-Business program. That program has been very successful and SBDCs see it as a good 

introduction point for one-on-one counseling and continuing assistance. SBDCs believe 

that our veterans deserve the very best we can offer and will do everything they can to 

deliver the assistance they need to succeed and fulfill the American dream. 

Disaster Assistance 

A little noticed service SBDCs provide is disaster recovery and disaster preparedness 

assistance. SBDCs are an integral part of the SBA's disaster assistance effort, helping to 

identify locations for Business Recovery Centers, getting BRCs set up and then staffing 

them in support of the SBA's Office of Disaster Assistance. Our role is particularly 

important because in the aftermath of a disaster small business owners are rarely ready to 

face the difficulties of restoring their businesses. Responding to the information needed 

for an SBA disaster loans can be stressful and SBDCs have long experience helping ease 

that burden and support the disaster recovery effort. That's often where our preparedness 

assistance is most important. Without a good resiliency plan a small business can be 

ruined to the point of no return but, with SBDC help, much of the pain from a disaster can 

be eased. 

C. E. Rowe 6 
52 

SBREP-219A with DISTILLER


Insert offset folio 52 here 24760.031

Of course, all states have disasters but Florida seems to get a healthy share. The Florida 

SBDC has developed Bizaster, available in both English and Spanish, a mobile disaster 

assistance app for Android and iOS. The application features risk assessments, 

customizable checklists, and other resources in a user-friendly and accessible format and is 

available at no cost. This is a new tool to help businesses prepare, respond, and recover 

from natural and man-made disasters. Bizaster can be downloaded from the App Store or 

via Google Play. That's just another example of how SBDCs adapt their services to the 

needs of their communities. 

Procurement Assistance 

Many SBDCs, particularly those in areas with large federal purchasing centers (MD, VA, TX, 

CA, Fl) offer counseling and training in the intricacies of federal procurement. They offer 

help with certification, searching for contracting opportunities and bid proposal 

compliance. SBDCs also have a longstanding relationship with the Procurement Technical 

Assistance Center program at the Defense logistics Agency. Many PTACs operate out of or 

are co-located with SBDCs. That enables them to leverage their capacity. 

In addition, many SBDCs assist small businesses with state and local contracting 

opportunities, a gateway to larger federal contracting opportunities. 

Cybersecuritv 

Recently, I testified before the full committee on the ongoing effort between SBA, DHS and 

America's SBDCs to develop a national cybersecurity strategy to assist small business in 

protecting themselves and their clients from cybercrime. In our centers in New York, Delaware, 

Florida, Texas and others we are developing programs to not only advise and inform our clients 

but spread the information and training capacity throughout our networks. They are providing 

materials and sharing best practices with their colleagues to spread the skills nationwide. 

In Florida, our network is collaborating with Ridge Global, the firm founded by former DHS 

Secretary Tom Ridge, to develop a series of training videos on cybersecurity. The New York 

SBDC has developed a cybersecurity planning guide which we are working to disseminate to 

other states to help them build their capacity. In Michigan, besides training, our network is 

launching a media campaign day to spread awareness. 

C. E. Rowe 7 
53 

SBREP-219A with DISTILLER


Insert offset folio 53 here 24760.032

SBDCs began developing these cybersecurity resources on their own over the last few 

years. SBDCs got into this area because we realized it wasn't enough to teach small 

business about the opportunities the internet provides. It is also necessary to warn them 

about the dangers it can present. 

SBIR/STIR 

The SBIR/STIR programs are a vital path for small business to access federal research and 

development funds and use them to commercialize innovative new technologies and 

products. However, the application and review process can be daunting. Many of our 

SBDCs have built specialized programs to help their clients understand the process and 

access these funds. The SBDCs in Delaware, Arkansas and Missouri have built impressive 

programs to help small businesses understand the program announcements, write better 

applications and turn their concepts into realities. 

What does the SBDC program accomplish? 

In 2015 (our most recent impact survey) SBDCs helped their clients access 4.7 billion 

dollars in capital. Their long-term clients alone created over 100,000 jobs, and the average 

cost of generating each job was $2,459. Those clients achieved 6.88 billion dollars in new 

sales and that generated roughly $607 million dollars in revenue, $342 million to the states 

and $265 million to the federal government. That's about $2.47 for every dollar spent on 

the program, and that's just from the long-term clients- about one-third of the total SBDC 

clients. 

The role of ED partners 

I have spoken about SBDCs on their own but, the program does not exist in a vacuum. 

SBDCs work with SCORE, Women's Business Centers and VBOCs every day. We share 

space, refer clients and fill gaps in each other's services. It is our belief that SBA has the 

best "toolbox" of entrepreneurial assistance around, and when coupled with the lending 

partners (7a, 504, SBICs) an unbeatable combination. 

C. E. Rowe 8 
54 

SBREP-219A with DISTILLER


Insert offset folio 54 here 24760.033

This hearing couldn't be better timed. The new Administrator has an opportunity to assess 

and analyze the programs at her disposal and work with us to maximize their effectiveness. 

We need to identify the gaps in coverage- geographic and content. Who is doing what 

right? Who is doing what wrong? Are the goals, metrics and data systems up to the job? 

The recovery from the 2008 recession left a lot of holes in our economy. Many counties 

and communities have not recovered. How will we focus our efforts, reach them and build 

their small business infrastructure? 

SBA and its resource partners have an excellent arsenal of talent to bring to bear on these 

problems. The biggest obstacle we have is failing to listen to one another and recognize 

our respective strengths and weaknesses. 

Thank you again for asking me to testify, I look forward to your questions. 

C. E, Rowe 9 
55 

SBREP-219A with DISTILLER


Insert offset folio 55 here 24760.034

STATEMENT OF 

JOSEPH C. SHARPE, JR., DIRECTOR 

NATIONAL VETERANS EMPLOYMENT & EDUCATION COMMISSION 

THE AMERICAN LEGION 

BEFORE THE 

SUBCO:\IMITTEE ON CONTRACTING AND WORKFORCE 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF REPRESENTATIVES 

ON 

ENTREPRENEURIAL DEVELOPMENT PROGRAMS 

RESOURCES TO ASSIST SMALL BUSINESSES 

MARCH 30, 20l7 
56 

SBREP-219A with DISTILLER


Insert offset folio 56 here 24760.035
57 

SBREP-219A with DISTILLER


Insert offset folio 57 here 24760.036

STATEMENT OF 

JOSEPH C. SHARPE, JR., DIRECTOR 

NATIONAL VETERANS EMPLOYMENT & EDUCATION COMMISSION 

THE AMERICAN LEGION 

BEFORE THE 

SUBCOMMITTEE ON CONTRACTING AND WORKFORCE 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES HOUSE OF REPRESENTATIVES 

ON 

ENTREPRENEURIAL DEVELOPMENT PROGRAMS 

RESOURCES TO ASSIST SMALL BUSINESSES 

MARCH 30, 2017 

Chairman Knight, Ranking Member Murphy and Members of the Subcommittee, on behalf of 

National Commander Charles E. Schmidt and The American Legion, the country's largest patriotic 

wartime service organization for veterans, comprising over 2.2 million members and serving every 

man and woman who has worn the uniform for this country, we thank you for the opportunity to 

present The American Legion's views on Small Business Administration's (SBA's) 

Entrepreneurial Development Programs: Resources to Assist Small Businesses. 

The American Legion views small business as the backbone of the American economy. It is the 

mobilizing force behind America's past economic growth and has given the United States a 

competitive advantage in the global economy. Small Business development will continue to be a 

major factor in our nation's economic and national security well-being as we move further into the 

21st Century. 

Reports from SBA show that businesses with fewer than 20 employees account for 90 percent of 

all U.S. firms and are responsible for more than 75 percent of all new jobs. These small businesses 

generated over a trillion dollars in income and employed 56.8 million people or 48 percent of the 

private workforce in 2013. According to the Small Business Administration, there are anywhere 

from 24 to 28.2 million small businesses in the U.S. and 99.7 percent of all finns are small 

businesses. Just as small business is the backbone of the economy, veterans are the foundation of 

America. Thus, providing veterans with every small business resource and opportunity is not only 

integral to our economy, but also vital to our country. Listed below are several facts regarding 

veteran business owners according to the Small Business Administration, Office of Veteran 

Business Development: 1 

• Veterans are 45 percent more likely to be self-employed 

• According to the U.S. census, about 2.4 million, or 1 out of 10 of all U.S. small 

businesses are veteran-owned 

1 SBA Office of Advocacy: Frequently Asked Questions- https:Jiwww.sba.oov/sites!defauitltilcs/FAO Sept 20l2.odf 

3 
58 

SBREP-219A with DISTILLER


Insert offset folio 58 here 24760.037

• Veteran-owned small businesses generate over $1.2 trillion in receipts2 

The American Legion recognizes the benefits of American 

entrepreneurship, not only for the overall American economy 

but also for the transitioning servicemember seeking to develop 

their own business and becoming local job-creators. 

According to the Department of Veteran's Affairs, due to the 

experience veteran's gain in the military, the success rate of 

veteran-owned businesses is higher than other nonveteranowned businesses. 3 The current War on Terror has had a 

devastating impact on the military and has exacerbated this 

country's veteran unemployment problem, especially within 

the National Guard and Reserve components of our military. 

Unfortunately, many of the thousands of veterans who are 

currently leaving the service are from the combat arms and 

non-skilled professions that are not readily transferable to the 

civilian labor market. 

The American Legion knows that giving veterans the resources 

U.S. Entrepreneurship Near 40-

YearLow 

"Being the next Mark Zuckerberg 

requires Americans to be gutsy and 

start companies. Lately, they're not 

doing it. New business creation in 

the U.S. is at a nearly 40-year 

low ... The Great Recession was a 

great killer for entrepreneurship. 

Americans didn't start new 

businesses because few had the 

money or the guts to do it in those 

gloomy days. But the expectation 

was that America's great 

entrepreneurial spirit would rush 

back as the economy recovered." 

they need to start businesses will assist in stimulating the -CNN Money, September 8, 2016 

Nation's economic recovery. As previously stated, veterans, 

when compared to their civilian counterparts, are more 

successful at creating a lasting small businesses. Encouraging and supporting veterans is the first 

step to recovering from a near 40 year low in entrepreneurship in the United States.4 

Reaffirm Support of the Small Business Administration's Office of Veterans Business 

Development: 

The American Legion supports increased funding of the SBA's Office of Veterans Business 

Development (OVBD) in its initiatives to provide enhanced outreach and specific communitybased assistance to veterans and self-employed members of the Reserves and National Guard. The 

American Legion continues to support legislation that has allowed OVBD to enter into contracts, 

grants, and cooperative agreements to further its outreach goals and development of a greater 

nationwide community-based service delivery system specifically for veterans, and members of 

the Reserve components along with active-duty servicemembers that are transitioning to civilian 

life. 5 These endeavors make a significant impact on the gainful employment needs of our veterans, 

transitioning servicemembers and our Reserve component members of the Armed Forces. The 

OVBD budget for FY 2017 is currently 12.3 million, which includes staffing in Washington, DC, 

2 SBA Otlice of Veterans Business Development Resources- https://www.sba.gov/offices/headguarters/ovbd/resources/370491 

3

North Dakota Department of Veterans Affairs- http://www.nd.gov1

veteranSJbenefits/entrepreneurs!J..in 

""http;i/money.cnn.com/2016/09/08/news/economyius-startuDs-near-40-year-lowl 

5 American Legion Resolution No. 153: Support EtTort of the Small Business Administration's fSBA> Office of Veterans Business Developml.'!nt 

4 
59 

SBREP-219A with DISTILLER


Insert offset folio 59 here 24760.038

Boots to Business Programs for transitioning servicemembers and veterans, and 20 Veteran 

Business Outreach Centers (VBOCs) across the country. 

Expansion ofVBOC Roles: 

The VBOC Program is designed to provide entrepreneurial development services such as business 

training, counseling and resource partner referrals to transitioning servicemembers, veterans, 

National Guard & Reserve members and military spouses interested in starting or growing a small 

business. The veteran community's demand for entrepreneurial resources is outpacing the 20 

VBOCs SBA currently funds. The average number of staff who conduct the day-to-day business 

of operating a VBOC consists of two fulltime counselors. A large part of how the VBOCs are 

nominated for the grant is based on matching funds. Consequently, additional duties include 

spending a fair amount of time fundraising. While the SBA provides operational funding, most 

VBOCs have to raise another 50 percent of their annual budget in order to meet the demand for 

resources or to provide the level of service required. It's also worth noting that VBOCs on college 

campuses cannot fundraise. 

The American Legion believes that if the VBOCs were 

funded to the maximum capacity or were juggling less 

number of states within their region, they would be able 

to meet the veteran entrepreneurial demand for services. 

Furthermore, this would allow them to expand their role 

in outreach to goverrunent entities to advocate for 

veteran-owned small businesses. 

The American Legion recommends additional funding of 

$18 million for the OVBD- there is a need for: 

• 51 VBOCs, one for each state and Puerto Rico 

• Increase funding for Boots to Business 

• Increase funding for Boots to Business Reboot 

"An emphasis on helping existing 

businesses scale to a greater degree 

offers enormous and largely 

untapped potential to create new 

jobs and generate economic 

development" 

The State of Small Business in 

America 2016 issued by Babson 

College 

• Develop a training program such as Boots to Business Reboot for established business 

owners to sustain, improve financial performance and expand their businesses 

• Create a two or three-day extensive training program as a follow-on for Boots to Business 

focused exclusively on legal and goverrunent regulations 

• Create a government-wide Veteran Business Development Program for Service-Disabled 

Veteran-Owned Small Businesses (SDVOSBs) in Federal Contracting 

• Develop a training program that provides business owners with information about 

accessible and affordable technology resources 

• Develop a two-day or three-day advanced training class on Cybersecurity and protecting 

Intellectual Property 

• Increase staff at the VBOC's for advocacy work on the local level with city, town and state 

representatives. For example, the old Historic Walter Reed Army Medical Center closed a 

few years ago- it was purchased by the U.S. State Department and the District of Columbia 

for a mere $26 million. As of today, the District of Columbia has hiring requirements for 

district residents for that property, but nothing for veterans. In addition, it has small 

5 
60 

SBREP-219A with DISTILLER


Insert offset folio 60 here 24760.039

business requirements to include special recogmtton for women and minority small 

business owners, but again nothing for veterans. Advocacy on a local level could have 

notified the city officials the need to include some of the 9,000 small veteran businesses in 

the District of Columbia, so they could have been involved in the redevelopment of that 

property and potentially others in the community. 

• Hire a staff person for the OVBD that has federal contracting expertise and federal 

authority to assist veterans with procurement issues with other govermnent agencies. 

• Make two-year renewable grants program to create and operate incubators and accelerators 

that provide technical assistance and training to covered individuals on how to become 

successful entrepreneurs 

SBA is authorized by 15 U.S.C. 637(b)(l7) to make grants to, and enter into contracts and 

cooperative agreements with, educational institutions, private businesses, veterans' nonprofit 

cormnunity-based organizations, and Federal, State, and local departments and agencies for the 

establishment and implementation of outreach programs for disabled veterans, veterans, and 

members of a Reserve component of the Armed Forces. The Small Business Act also specifically 

requires the Associate Administrator of OVBD to increase veteran outreach by ensuring that 

VBOCs regularly participate, on a nationwide basis, in the workshops of the Transition Assistance 

Program. 

Since its inception in 1953, SBA has served to aid, counsel, assist, and promote the interests of 

small businesses; while SBA is best known for its financial support of small businesses through 

its many lending programs, the agency also plays a critical role in providing funding to 

organizations that deliver technical assistance in the form of counseling and training to small 

business concerns. 

SBA's OVBD mission is to empower veteran entrepreneurship by formulating, implementing, 

administering, and promoting policies and programs to equip veteran, servicemember, Reserve 

component, and military spouse owned small businesses with counseling, training and education, 

access to capital, and contracting to civilian life that are exploring self-employment. 

• The Boots 2 Business Program is a one to two-day Introduction to Entrepreneurship course 

taught in classrooms on military installations and an eight-week online Foundations 

Entrepreneurship course taught by a consortium of entrepreneurship professors and 

practitioners. 

• Comprehensive Feasibility Analysis: VBOCs provide assistance in identifying and 

analyzing the strengths and weaknesses of the business plan to increase the probability of 

success. The results of the analysis are utilized to revise the strategic planning portion of 

the business plan. 

• Mentorship: VBOCs conduct, as appropriate, on-site visits with clients to ensure adherence 

to their business plans. 

• VBOCs review monthly financial statements to determine whether a revision of the 

business plan is warranted or that desired results are attained. 

• Business Plan Preparations: VBOCs assist clients in developing and maintaining a fiveyear business plan. The business plan includes such elements as the legal form of the 

6 
61 

SBREP-219A with DISTILLER


Insert offset folio 61 here 24760.040

business, equipment requirements and cost, organizational structure, strategic plan, market 

analysis, and a financial plan. Financial plans include financial projections, budget 

projections, and funding requirements. 

Since 2013, some of the performance metrics of the VBOC concluded that: 

• Over 98,7 42 veterans received small business counseling 

• Approximately 114,085 veterans received business related training 

• Roughly 3,130 jobs created 

• Nearly 400 new business start-ups 

• 703 Boots to Business training classes for transitioning service members6 

In communication with some of the VBOCs, a key element seems to be clear: VBOCs are in 

demand to satisfy the resource needs of our nation's veteran entrepreneurs. For instance, the 

VBOC in Michigan has helped 25 veteran-owned small businesses with their start-up goals, 

assisted 57 veterans obtain various business certifications, and helped veteran business owners 

receive $3.4 million in contract awards. Other VBOCs have voiced similar achievements. 

However, all are seeking additional funds to further increase their outreach efforts. VBOCs in 

Arizona, Illinois and New Mexico have created a workshop roadshow, where each one goes to the 

surrounding Native American reservations to reach the rural population of Native American 

veterans. 

The American Legion's goal is to make sure that veterans have all the resources possible when 

looking to start their own business. The American Legion believes that VBOCs have been 

instrumental in developing veterans into entrepreneurs and should receive more funding to allow 

them to assist more veterans. 

Service-Disabled Veteran-Owned Small Businesses (SDVOSBs) 

As a late-comer to becoming a preferred group in federal contracting, SDVOSBs were not 

recognized until2005. There are many government entities that use loopholes to exclude veterans 

from set-aside programs that derive their budget from general revenue. One example of exclusion 

is with the procurements made for services to improve the DC, VA, MD Metrorail. By law, the 

federal government is mandated to award no less than 3 percent of all federal contracts to 

SDVOSBs. The reason veterans are excluded is because this funding stream goes directly to the 

states and therefore are not susceptible to SBA's small business goal tracking. The American 

Legion believes that this is one of the most egregious exclusions of veteran-owned small 

businesses. We urge Congress to prevent this from happening ever again by mandating that states 

who receive federal funding adhere to the 3 percent procurement rule for veterans. 

Access to Capital 

6 Small Business Administration's Office of Veteran Business Development 

7 
62 

SBREP-219A with DISTILLER


Insert offset folio 62 here 24760.041

The first step to opening a small business is having access to capital. Even when the economy is 

strong, access to capital is one the largest impediments facing any small business, hindering both 

wishful and flourishing entrepreneurs. Most business owners consistently identify access to capital 

as the top issue effecting their businesses. Currently, to raise capital, aspiring business owners 

resort to obtaining investors or they risk using their personal funds. One of the biggest barriers to 

small businesses financing is requiring debt be secured by equity in fixed assets. This mismatch in 

debt-equity hinders startups and expanding businesses and generally veteran entrepreneurs 

typically do not have the assists necessary to acquire sizeable loans. Most veterans leaving military 

service lack the kind of equity necessary for traditional bank loans. Another barrier to capital for 

small businesses is that banks are often reluctant to work with the small business community, as 

smaller loans generally are less-profitable for a bank. 

In the I 14th Congress S. 1870: VET Act of 2016 was introduced. If enacted this bill would have 

amended the Small Business Act to direct SBA to create a three-year pilot program that would 

allow veterans and servicemembers to tum their G.I. Bill education benefit into financial capital 

to start a veteran-owned small business. The program would allow up to 250 veterans eligible for 

GI Bill benefits who apply to the program, and are approved, to start a new business or purchase 

or expand an existing business or franchise. This is a grand idea that very well may allow veterans 

to determine their future, take control of their benefits, lower the veteran unemployment rate and 

furnish veterans with a sense of self all while providing for their families and stimulating their 

local economy. According to the latest Bureau of Labor Statistics, the unemployment rate for most 

veterans is under 5 percent; however those statistics do not take into the account inner city 

unemployment, which is still over 9 percent. Native American Reservation unemployment can be 

as high as 50 percent, and it is all too high in our territories such as Guam and American Samoa. 

In Puerto Rico, the unemployment rate for veterans is anywhere from 16 percent to 25 percent. 

Through our employment activities and public outreach in Puerto Rico, we found out that some of 

our nation's National Guardsman and Reservists are homeless. Also, many of our veterans and 

Reservists living in rural America are underemployed and suffering from financial stresses that 

decrease their quality oflife. Regarding Reservists, this is problematic, due to its potential negative 

effect on readiness within the military. Moreover, a significant number of servicemembers come 

from depressed areas in the U.S. and many transitioning servicemembers go back home to these 

depressed areas. Creating new ventures is indeed a critical component of a healthy, innovative, 

and growing economy. Those seeking to foster economic development in any particular 

geographic area encourage startup companies as a means to create new jobs, boost tax revenue, 

and stimulate innovation. 

Conclusion 

The mission of The American Legion's Veterans Employment & Education Commission is to take 

actions that affect the economic well-being of veterans, including issues relating to veterans' 

employment, home loans, vocational rehabilitation, homelessness, and small business. Small 

business continues to be a primary job generator and a major trainer for American employees. The 

small firm workplace includes a considerable amount of young and entry-level workers. It is vital 

that veteran-owned and service-disabled veteran-owned businesses receive a fair and proportionate 

amount of federal contracts so these veterans can build and maintain successful businesses. The 

8 
63 

Æ 

SBREP-219A with DISTILLER


Insert offset folio 63 here 24760.042