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47–055 PDF 2009

FULL COMMITTEE HEARING ON 

THE STATE OF THE SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS AND THEIR ROLE 

IN PROMOTING AN ECONOMIC RECOVERY 

COMMITTEE ON SMALL BUSINESS 

UNITED STATES 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

HEARING HELD 

FEBRUARY 11, 2009 

Small Business Committee Document Number 111-005 

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


Congress.#13
HOUSE COMMITTEE ON SMALL BUSINESS 

NYDIA M. VELA ́ ZQUEZ, New York, Chairwoman 

DENNIS MOORE, Kansas 

HEATH SHULER, North Carolina 

KATHY DAHLKEMPER, Pennsylvania 

KURT SCHRADER, Oregon 

ANN KIRKPATRICK, Arizona 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

MELISSA BEAN, Illinois 

DAN LIPINSKI, Illinois 

JASON ALTMIRE, Pennsylvania 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

PARKER GRIFFITH, Alabama 

DEBORAH HALVORSON, Illinois 

SAM GRAVES, Missouri, Ranking Member 

ROSCOE G. BARTLETT, Maryland 

W. TODD AKIN, Missouri 

STEVE KING, Iowa 

LYNN A. WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BLAINE LUETKEMEYER, Missouri 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

MICHAEL DAY, Majority Staff Director 

ADAM MINEHARDT, Deputy Staff Director 

TIM SLATTERY, Chief Counsel 

KAREN HAAS, Minority Staff Director 

(II) 

STANDING SUBCOMMITTEES 

Subcommittee on Contracting and Technology 

GLENN NYE, Virginia, Chairman 

YVETTE CLARKE, New York 

BRAD ELLSWORTH, Indiana 

KURT SCHRADER, Oregon 

DEBORAH HALVORSON, Illinois 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

PARKER GRIFFITH, Alabama 

AARON SCHOCK, Illinois, Ranking 

ROSCOE BARTLETT, Maryland 

TODD AKIN, Missouri 

MARY FALLIN, Oklahoma 

GLENN THOMPSON, Pennsylvania 

Subcommittee on Finance and Tax 

KURT SCHRADER, Oregon, Chairman 

DENNIS MOORE, Kansas 

ANN KIRKPATRICK, Arizona 

MELISSA BEAN, Illinois 

JOE SESTAK, Pennsylvania 

DEBORAH HALVORSON, Illinois 

GLENN NYE, Virginia 

MICHAEL MICHAUD, Maine 

VERN BUCHANAN, Florida, Ranking 

STEVE KING, Iowa 

TODD AKIN, Missouri 

BLAINE LUETKEMEYER, Missouri 

MIKE COFFMAN, Colorado 

Subcommittee on Investigations and Oversight 

JASON ALTMIRE, Pennsylvania, Chairman 

HEATH SHULER, North Carolina 

BRAD ELLSWORTH, Indiana 

PARKER GRIFFITH, Alabama 

MARY FALLIN, Oklahoma, Ranking 

LOUIE GOHMERT, Texas 

(III) 

Subcommittee on Regulations and Healthcare 

KATHY DAHLKEMPER, Pennsylvania, Chairwoman 

DAN LIPINSKI, Illinois 

PARKER GRIFFITH, Alabama 

MELISSA BEAN, Illinois 

JASON ALTMIRE, Pennsylvania 

JOE SESTAK, Pennsylvania 

BOBBY BRIGHT, Alabama 

LYNN WESTMORELAND, Georgia, Ranking 

STEVE KING, Iowa 

VERN BUCHANAN, Florida 

GLENN THOMPSON, Pennsylvania 

MIKE COFFMAN, Colorado 

Subcommittee on Rural Development, Entrepreneurship and Trade 

HEATH SHULER, Pennsylvania, Chairman 

MICHAEL MICHAUD, Maine 

BOBBY BRIGHT, Alabama 

KATHY DAHLKEMPER, Pennsylvania 

ANN KIRKPATRICK, Arizona 

YVETTE CLARKE, New York 

BLAINE LUETKEMEYER, Missouri, Ranking 

STEVE KING, Iowa 

AARON SCHOCK, Illinois 

GLENN THOMPSON, Pennsylvania 

(IV) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

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

Graves, Hon. Sam .................................................................................................... 2 

WITNESSES 

Dorfman, Ms. Margot, CEO, U.S. Women’s Chamber Of Commerce .................. 3 

Wolfe, Mr. Chuck, President, Claggett Wolfe Associates, Auburn, CA ............... 5 

Cartwright, Mr. Jerry, State Director, Florida SBDC, University Of West 

Florida, Pensacola, FL ......................................................................................... 7 

Gregg, Ms. Carol A., President & Owner, Flexible Staffing, Chillicothe, MO .... 9 

Wrigley, Ms. Barbara, Executive Director, Association Of Women’s Business 

Centers, Springfield, VA ...................................................................................... 11 

Blackburn, Mr. Ron , President, Aspira ................................................................ 13 

APPENDIX 

Prepared Statements: 

Dorfman, Ms. Margot, CEO, U.S. Women’s Chamber Of Commerce .................. 24 

Wolfe, Mr. Chuck, President, Claggett Wolfe Associates, Auburn, CA ............... 29 

Cartwright, Mr. Jerry, State Director, Florida SBDC, University Of West 

Florida, Pensacola, FL ......................................................................................... 34 

Gregg, Ms. Carol A., President & Owner, Flexible Staffing, Chillicothe, MO .... 41 

Wrigley, Ms. Barbara, Executive Director, Association Of Women’s Business 

Centers, Springfield, VA ...................................................................................... 44 

Blackburn, Mr. Ron , President, Aspira ................................................................ 50 

(V) 

(1) 

FULL COMMITTEE HEARING ON: 

THE STATE OF SBA’S ENTREPRENEURIAL 

DEVELOPMENT PROGRAMS 

AND THEIR ROLE IN PROMOTING 

AN ECONOMIC RECOVERY 

Wednesday, February 11, 2009 

U.S. HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SMALL BUSINESS, 

Washington, DC. 

The Committee met, pursuant to call, at 1:00 p.m., in Room 

2360, Rayburn House Office Building, Hon. Nydia Vela ́zquez 

[chairman of the Committee] presiding. 

Present: Representatives Vela ́zquez, Dahlkemper, Schrader, Ellsworth, Sestak, Bright, Halvorson, Graves, Buchanan, Luetkemeyer, 

and Coffman. 

Chairwoman VELA ́ ZQUEZ. I call this hearing of the House Small 

Business Committee to order. 

Even during times of prosperity, starting and running a small 

business is an enormous undertaking. From drafting their first 

business plan to learning how to navigate the Tax Code, entrepreneurs are on a perpetual learning curve. Historically, SBA has 

helped simplify the process through its entrepreneurial development programs, or ED. Today those initiatives have the potential 

to play an even more critical role by encouraging small business 

growth and creating new jobs for American workers. 

Much of the debate surrounding the new stimulus hinges on the 

importance of creating jobs. Once enacted, the bill will help entrepreneurs do exactly that. But even after restoring stability, challenges will remain. With a renewed emphasis on SBA’s entrepreneurial development programs, small firms will be able to take full 

advantage of the Recovery Act. 

In today’s hearing, we will explore the role that these programs 

play in advancing economic recovery. Entrepreneurial development 

is critical to small business success. In fact, firms that receive this 

kind of assistance are twice as likely to succeed as those that don’t. 

From executive mentoring to veterans’ business initiatives, they 

help new and experienced entrepreneurs gain access to the tools 

they need to flourish. But perhaps, most importantly, this program 

fosters job creation and economic growth. That is exactly what we 

need today—job creation—so that we can get this economy growing 

again. 

2 

Following the recession of the mid-1990s, small firms created 3.8 

million new jobs. Not surprisingly, that era was marked by an 

enormous uptake in entrepreneurship. In fact, 25 percent of laidoff managers over the age of 40 went on to start their own small 

businesses. Fortunately, there is no shortage of that same entrepreneurial spirit today. Each month, 400,000 new companies crop up 

across the country. That is 400,000 entrepreneurs looking to create 

new industry here in the United States. 

Imagine if each and every one of those businesses had advisors 

to help them draft viable business plans. That is the kind of guidance that small firms could really use, and that is the kind of support that entrepreneurial development programs provide. 

The challenges facing small firms are different today than they 

were in the past. In order for entrepreneurs to have the same catalyzing effect they had in the 1990s, they will need all the tools 

available. This is particularly true for businesses in low income 

communities. Those are the areas that have been hardest hit by 

the recession and are most in need of economic development. 

ED programs provide small firms with the resources they need 

to expand. Just last year, entrepreneurial development helped generate 73,000 new jobs and drove $7.2 billion into the economy. 

Through programs like Mentorship and Distance Learning, SBA 

has helped countless small firms get off the ground. At the same 

time, it has counseled thousands of experienced entrepreneurs looking to expand. And at the end of the day, every one dollar spent 

on these programs puts another $2.87 back into the economy. That 

is a 287 percent return on investment—doing much better than 

Wall Street, believe me. 

[Laughter] 

And just the kind of economic stimulus we need right now. 

It is no secret that times are tough. In January alone, 600,000 

Americans were laid off. That figure tops off the 3.6 million positions shed since the recession began. The writing is on the wall. We 

need to stop the losses, and we need to replace the jobs that are 

already gone. 

While there is no silver bullet solution to our economic troubles, 

small businesses promise the surest path to recovery. Entrepreneurial development programs can help jumpstart that recovery. 

So let me take this opportunity to thank all of the witnesses for 

taking time, especially now when small businesses need you to be 

out there providing the technical assistance and the kind of business planning guidance that they need, to be with us to offer your 

insights as to how these programs are doing and what type—given 

the times that we are in, what type of changes or modifications we 

need to make to get these programs to be more effective, cost effective, and efficient. 

So I look forward to hearing from you today, and now I yield to 

the Ranking Member, Mr. Graves, for his opening statement. 

Mr. GRAVES. Thank you, Madam Chair, and thank you for holding this hearing examining the SBA’s entrepreneurial development 

programs and the challenges that entrepreneurs face in this volatile economic climate. And I, too, would like to thank all the witnesses for being here. I know some of you traveled a long way. We 

do appreciate your input and appreciate your being here today. 

3 

I think everyone can agree that a good business plan is the cornerstone of any successful small business. Creating and executing 

a business plan requires extensive business knowledge and ingenuity, including the ability to predict potential obstacles to success 

that may unfold at just about any time. 

The entrepreneurial development programs of the Small Business Administration provide new and existing entrepreneurs with 

solid business knowledge to provide continued guidance to aid their 

growth. Entrepreneurial development programs have become a critical tool for many small businesses across America. Whether it is 

helping a small business owner export a product, develop a marketing scheme, or obtain financing, that entrepreneur is almost always more successful after working with a small business development center, SCORE, or a women’s business center. 

Today’s current economic climate provides an even more difficult 

path to success than it has before. Small businesses are finding it 

increasingly difficult to meet their bottom line, much less become 

a thriving business. Creative methods are being employed by entrepreneurs throughout the country as they try to figure out for themselves how to survive in this new economic climate. 

As small businesses work to survive, the entrepreneurial development programs of the SBA need to be reassessed in order to ensure that they are providing the most effective assistance to small 

businesses. As we begin to look at the current state of the SBA’s 

entrepreneurial development programs, I believe it is important to 

retool programs to meet the demands of today’s environment. We 

also must examine the entrepreneurial programs outside the SBA 

and look for ways to consolidate efforts in order to provide the best 

service for all small business owners. 

Again, I want to thank the Chairwoman for having this hearing 

today, and look forward to hearing what our witnesses have to say. 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Graves. 

And now it is my pleasure to welcome back Ms. Margot Dorfman. 

She is the CEO and founder of U.S. Women’s Chamber of Commerce. Ms. Dorfman has championed opportunities to increase 

women’s business growth, career, and leadership advancement. She 

is here to testify on behalf of the U.S. Women’s Chamber of Commerce, which was founded in 2001 to increase economic growth opportunities for women. 

Welcome. 

STATEMENT OF MARGOT DORFMAN 

Ms. DORFMAN. Thank you. Chairwoman Vela ́zquez, Ranking 

Member Graves, members of the Committee, I thank you once 

again for this opportunity. 

I am here today on behalf of the U.S. Women’s Chamber of Commerce, representing over 500,000 members and the millions of 

small businesses who are in need of assistance as they seek to grow 

profitable businesses to provide income for themselves, their families, and their communities. America needs entrepreneurial development programs that match our challenging economic times. We 

cannot afford to simply rubber-stamp existing programs and add 

increases to an old budget. 

4 

We are in a fragile economic crossroad that demands our government focus every taxpayer dollar towards productivity and assisting that entrepreneurs receive quality expedient education and financial assistance. Over the last 50 years, the SBA entrepreneurial 

development system has grown into a fragmented array of programs, which has resulted in a disorganized overlapping and efficient delivery of service through a system that is ill-prepared to effectively address the challenges of our economy. 

Looking to the past, the evidence of failure is profound. During 

the last decade, the most impressive new spirit of entrepreneurship 

came from our new minority and women entrepreneurs. But while 

the number of new minority and women-owned firms grew dramatically, the average revenues generated by these firms actually 

declined. 

Even though the number of women-owned firms grew 42.3 percent between 1997 and 2006, their combined annual sales grew 

only by 4.4 percent. The average annual sales for a women-owned 

firm dropped 36 percent. 

Minority business owners have seen the same lackluster results. 

Over the last decade, the number of minority-owned firms increased 35 percent, but their gross receipts only increased 13 percent. The average annual sales for a minority-owned firm dropped 

16 percent. 

Another disturbing statistic should be noted. While entrepreneurship has long been considered a pathway to increased wealth in 

America, the marked decline in the fulfillment of this promise has 

shown in the period of 1984 and 2004. A 2007 SBA report finds 

that families owning businesses are significantly less likely to be 

high-income earners in 2004 than in 1989. 

The collapse of the U.S. manufacturing base, Katrina, and 9/11 

have shown us that our entrepreneurial needs are experiencing regional shifts, and tragedy can strike at an instant, creating the 

need for urgent responses. For the first time, women now exceed 

men in the labor force, because many of the manufacturing and 

higher paying jobs have vanished. Many men may now turn to entrepreneurship to help feed their businesses and small families. 

If we are to serve the needs of American entrepreneurs, we must 

commit to a top to bottom restructuring of the delivery of the entrepreneurial services of the SBA. The myriad of entrepreneurial development programs should be unified into one centrally managed 

organization that has the flexibility to provide services when and 

where they are needed. 

With one unified system, the SBA can provide a much stronger, 

coordinated response than the current patchwork system. One example is the Women’s Business Center Program. It is clear women 

business owners are among those emerging market businesses that 

have not been well served, and it is paramount that these firms 

work side by side with male business owners for a number of important reasons. 

Studies have shown that there are real differences in the backgrounds and resources available to male business owners. Male 

business owners have a greater history of entrepreneurial experience than women, better business networks, and greater access to 

5 

capital. These are attributes to which women should be exposed instead of segregated. 

The SBDC network should be used as the foundation for a new 

unified delivery platform that includes women and minority entrepreneurs, along with broad community accountability for the effectiveness of their outreach and delivery of value. This network 

should be transformed into a broad-based system of flexible entrepreneurial centers, which include consistent quality education, 

counseling, incubators, and access to capital, and the implementation of a top-tier e-learning system. 

And Congress should define an external process to measure the 

results of SBA entrepreneurial programs, looking at both micro and 

macro views. It is vitally important for Congress to act now to 

unify, streamline, modernize, and right-size the SBA entrepreneurial development programs. 

Thank you. 

[The prepared statement of Ms. Dorfman is included in the appendix at page 24.] 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Our next witness is Mr. Chuck Wolfe. Mr. Wolfe is the President 

of Claggett Wolfe Associates in Auburn, California. Mr. Wolfe 

founded two technology startups and has worked with numerous 

small businesses in planning, marketing, and capital acquisition. 

Claggett Wolfe Associates provides management and economic development consulting to small and medium-sized businesses, academic institutions, and domestic and foreign public officials. 

Welcome, and you will have five minutes. 

STATEMENT OF CHUCK WOLFE 

Mr. WOLFE. Thank you, Madam Chairwoman, and honored members of the Small Business Committee. As you said, my name is 

Chuck Wolfe, and I am the President of Claggett Wolfe Associates, 

an economic development consulting firm specializing in working 

with public, private, and academic clients around the world to basically develop strategies and programs to support small and medium enterprise development. I am also a serial entrepreneur and 

have started and operated five businesses over the last 25 years. 

To put things in context, my perspective comes from having 

worked with or evaluated 30 SBDCs and SCORE chapters in 14 

states over the last 18 years, also serving as a small business counselor and instructor, running a nonprofit business assistance organization, and co- authoring a book on best practices in business incubation. 

As to the state of SBA’s entrepreneurial development programs, 

I see that the SBA has a wide range of existing programs and resources to assist small businesses. If someone from the outside 

were to review each program’s mission, objectives, and offerings, 

they would conclude that this is an ideal setup for helping our entrepreneurs and small business owners. 

Unfortunately, only 20 to 25 percent of the programs I have encountered meet this standard. In addition, I have found valuable 

information and online courses on program-affiliated websites. 

However, most are inconsistent in their offering, general in their 

content, and difficult to navigate. In general terms, we have found 

6 

that the SBA’s entrepreneurial development programs have a topdown, one-size-fits-all approach that is reactive versus proactive. 

In addition, most programs are not fully integrated into the 

broader economic development efforts or customized to meet the 

needs of specific industry segments. There are many causes for 

these conditions, ranging from lack of funding, the methods used 

to allocate funding and track performance, the inefficient use of resources, and the organizational structure of SBA itself. 

But what I wanted to talk about was the role, as I see it, for the 

SBA entrepreneurial development programs in promoting an economic recovery. There are many areas that need improvement, but 

there are also many tools already in the toolbox. To maximize the 

impact of SBA’s programs, I would recommend the following actions. 

First, align the programs more effectively with local, regional, 

and state economic development efforts in the industries they have 

targeted for economic stabilization and growth. Second, establish a 

more proactive program delivery structure involving client filtering, 

customization of service offerings and defined milestones, and active outreach by program staff who serve more as facilitators and 

coaches rather than as technical service providers. 

Third, build an extensive topic and industry-specific provider network that can be accessed by any SBA program provider to meet 

a business’ needs regardless of their location. Fourth, develop and 

implement a system to train and/or certify SBA program staff, volunteers, and outside service providers, by skill area, industry specialization, and experience in small business. 

Fifth was develop a more comprehensive and integrated web 

platform that supports all SBA programs. This would utilize technology such as video conferencing, e-mail, blogs, to link network 

providers to client businesses regardless of location. Another part 

would be to provide relevant web content aggravated by industry 

segment, stage of business development, and level of need. Another 

component would be to provide a more consistent home page format for the SBDC and WBC websites that allows for state and 

local content and imagery but conveys a consistent brand. 

Next would be to design all websites to promote solutions, such 

as marketing, finance, and human resources, not programs, in a familiar fashion, the way that the Kaufman Foundation has developed with its eVenturing website, and Inc Magazine has developed 

with its inc.com website. 

The sixth point was to develop and implement a centralized customer rating and usage system for all program resources and services similar to the star rating system used by YouTube and eBay. 

The system should have both public and private reporting areas designed to collect user input and improved program performance 

while protecting individual counselors, service providers, and program staff. 

We are living in the age of Google, Facebook, Wikipedia, and 

other web-based platforms that have changed the way people interact and do business. And we need to refresh SBA’s programs, services, and delivery, in line with those changes. 

Our need is now, and it will be important to respond quickly to 

support the startups and existing small businesses that will play 

7 

an important part in our economic recovery. Madam Chairwoman, 

I commend you and the members of the Small Business Committee 

on your efforts to support our economic recovery, and I thank you 

for the opportunity you have given me to present my testimony. 

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

at page 29.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Wolfe. 

Our next witness is Mr. Jerry Cartwright. Mr. Cartwright is the 

State Director for the Florida Small Business Development Center 

Network in Pensacola, Florida. Mr. Cartwright has been with the 

SBDC program for 25 years and serves on the Association of 

SBDC’s Board of Directors. 

The Florida network is the only statewide economic development 

technical assistance provider. The program focuses on enhancing 

trade opportunities for small- scale enterprises. 

Welcome, sir. 

STATEMENT OF JERRY CARTWRIGHT 

Mr. CARTWRIGHT. Thank you, Madam Chair. I currently serve as 

the Chairman of the Board of the Association of Small Business 

Development Centers, and I am very honored to be here today to 

have you hear our views. 

Some 900 individual SBDC service centers and approximately 

5,000 professionals are in place providing expert counsel in management and technical areas critical to— 

Chairwoman VELA ́ ZQUEZ. Excuse me, sir. Do you have the mic 

on? Is it? 

Mr. CARTWRIGHT. Yes, I did. How is that? Small businesses are 

adjusting to survive in a historic decline in spending, which means 

potentially greater layoffs and closures. Madam Chair, your efforts 

to increase funding for the SBDCs has increased assistance to 

small businesses. However, state revenues have declined sharply, 

and SBDC budgets are being cut to help balance budgets. 

Compared to 2001, SBDC national counseling is down by some 

60,000 businesses, directly due to declining capacity. Training programs are down by 109,000, also due to a decline in capacity and 

a shift in priorities to long-term counseling. During this same period, many states have closed operations and/or eliminated business consultants. 

Some have seen host institutions leave the program at a time 

when small business assistance is critically needed, and SBDCs are 

being inundated with unemployed, and existing small businesses 

seeking greater assistance. Management and technical assistance 

can make the difference for potentially millions of small businesses. 

Key management and fundamental principles and practices can 

assist many businesses to survive what would otherwise be failure 

in difficult times. The critical issue is the management decisions 

these small business owners and aspiring entrepreneurs will make 

in an economic and business environment in which they are unfamiliar. Small business owners know their business. However, they 

have little training or experience in how to manage a business in 

times like these. 

Many are not prepared to take advantage of the significant opportunities of the stimulus package. Many of the small business 

8 

owners who face the most difficult decisions in this economy are 

women and minority business owners. SBDCs across the country 

are successfully engaged in outreach to these segments of the community, with counseling exceeding the national percentage of business owners. 

More can be done, and with enhanced resources new and more 

innovative approaches will be developed to address these needs by 

the SBDC network. SBDCs have a proven track record of responding to crises—9/11, hurricanes in the Gulf Coast and south, floods 

in the Midwest, and fires in California. We view this economic crisis similarly. 

As policymakers, you decide the priority of small business management assistance. SBDCs facilitate the access to capital, securing 

government contracts, and services to the underserved or minority 

community, the three major priorities of the national SBDC program. We propose to allocate 75 to 80 percent of all incremental 

funding to these urgent needs of the small business community. 

Madam Chair, you are acutely aware of the impact of the national SBDC program. A return on investment of over $2.26 for 

every federal dollar invested, over 73,000 jobs created last year, 

and a local leverage of federal dollars of 2 to 3 to 1 for every federal 

dollar. 

We appreciate the confidence that you gave—showed in the 

SBDC program by indicating that $140 million in funding was appropriate for FY09. The approved appropriations level of $110 million, if Congress approves, will greatly aid in rebuilding our national capacity. A funding level corresponding to the current authorized level would allow SBDCs to increase the level and scope 

of assistance that we believe is required to meet the needs of small 

businesses during this critical economic crisis. 

This is an investment in the small businesses of the future. By 

expanding SBDC’s network capacity, essential information, analysis, and decision making tools will be more readily available to 

small businesses to improve survivability, efficiency, and growth. 

We are poised, once again, to rapidly respond in the economic crisis. 

I want to thank you for the opportunity to share our views, and 

I would be happy to answer any questions. 

[The prepared statement of Mr. Cartwright is included in the appendix at page 34.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Cartwright. 

And I now recognize the Ranking Member, Mr. Graves. 

Mr. GRAVES. Thank you, Madam Chair. I wanted to introduce 

our next witness. It is Carol Gregg from Chillicothe, Missouri. Ms. 

Gregg holds a Bachelor’s Degree from Central Missouri State University and is the founder, owner, and president of Flexible Staffing, with locations in Chillicothe, Sedalia, and Warrensburg, Missouri. 

As a successful small business, Flexible Staffing has placed more 

than 800 Missourians in positions throughout the state. And like 

so many of our small businesses, she is the CEO and president and 

also sweeps at night. 

[Laughter.] 

9 

So I want to thank her for being here, and appreciate her coming. 

STATEMENT OF CAROL A. GREGG 

Ms. GREGG. Madam Chair, and members of the Committee, 

thank you for inviting me. I am president and owner of Flexible 

Staffing. I have offices in Chillicothe, Warrensburg, and Sedalia. I 

also have an onsite office in Kingsville, Missouri. I have been an 

SBTDC client since January 2000, and I have worked continuously 

with the Northwest Missouri State University and Chillicothe, Missouri office ever since. 

The SBTDC office provided me with the assistance to develop 

cash flow charts and create a business plan to start my business. 

I started Flexible Staffing in May 2003 and reached the tipping 

point of success in 2007. I set the goal of growing to $10 million 

in sales from my 2007 sales high of about $3 million. In 2008, we 

had sales of almost $5 million. The focus of our growth objective 

has reinforced my positive outlook, caused me to be able to identify 

opportunities, even in difficult times, and highlighted the need for 

continuous improvement in procedures and personnel. 

Having a plan with growth focus has mentally prepared me to 

adjust to the changing circumstances while maintaining an opportunity-driven approach to running my business. Because we are located in the rural areas of Missouri, this approach plays out in 

adding experienced, capable professionals to my staff as they become available, and being able to replace the parting expertise with 

a minimum of disruption. 

Finding people with talents where I have weaknesses is the key 

to my success. This approach plays out in soaking up advice from 

expanding networks of expertise and experience. These networks 

come from state and national trade associations, local and state 

SHRM organizations, and two local entrepreneurial groups. 

In Chillicothe, we have 20 to 30 businesses that meet every six 

weeks to share ideas, discuss issues, and receive updates on what 

is affecting small businesses in our area. Both groups have bank 

support and support from the NWMSU SBTDC office. In addition, 

I have been able to rely on networking relationships within cooperating businesses within my industry. 

When I realized that I had reached the point where I could stop 

worrying about survival of my business, and focus on growth, I 

scheduled a meeting with Mr. Jim Houseworth, my mentor, banker, and entrepreneurial, and Mr. Steve Holt, the Director of the 

NWMSU SBTDC Chillicothe office. They helped me to review my 

2007 financials, they recommended a new CPA that would better 

serve my needs, and listened to my growth plans identifying new 

action steps. 

Mr. Holt later ran and delivered market comparison reports and 

allowed me to better gauge the market opportunity for the new 

markets that I was considering. He also provided background information on the competition already serving those new markets and 

generated business-to-business new customer market contact lists. 

My plan for growth has changed slightly in the last six months 

due to the downturn in manufacturing and light industrial industries in Missouri. I have needed to think outside the box. I believe 

10 

that going through diversifying my business is my best option, and 

to do it very quickly. In September 2008, I started a new division 

in my Sedalia office called Flexible Consulting, which contracts mechanical, electrical, and chemical and industrial engineers. 

We now have three recruiters in that office. In my Warrensburg 

office, I am hopeful to soon begin Flexible Medical Staffing. There 

is an opportunity that has been knocking on my door for the last 

two years to do medical staffing within the rural areas of Missouri. 

Again, due to the economy, my belief is growing through diversification. I am currently moving forward to take advantage of 

these opportunities at an accelerated pace. 

This past week I have moved to a new location, which gives me 

room to house five medical recruiters, and we will be serving hospitals and clinics throughout Missouri. With this being said, all 

three of my offices will still do light industrial and clerical staffing. 

I have used the SBDC for market research, and I have plans to 

work with them on updating financial analysis and market analysis within the new medical staffing facility. 

I view the medical industry as being somewhat recession-proof 

with a constant skilled labor shortage. I need to hire an experienced medical professional to manage this new venture, and hopefully Flexible Medical Staffing will be up and running soon. 

The economic downturn has provided the motivation and the opportunity to address this new business opportunity. Anticipating an 

extended downturn will require new cash resources, and I have negotiated an expanded line of credit in advance to meet my potential 

needs. Expecting to emerge from the downturn stronger than the 

recession started, I am having my staff concentrating on getting 

our house in order by documenting our policies and procedures and 

providing extensive training to shorten our learning curve. 

I am also positioning myself to eliminate weaknesses in my management staff when opportunities arise. We have not laid off any 

staff yet, but we are retraining for these new opportunities. 

To provide my staff with the highest expertise and training in 

our industry, I have negotiated with our other businesses to share 

their talented employees in our company. For instance, I needed a 

trainer supervisor for the Flexible Consulting side of our business. 

By sharing in the expenses of that individual, this will enable both 

companies to have a quality, high-paid employee that can meet the 

needs at half the cost. 

Chairwoman VELA ́ ZQUEZ. Ms. Gregg, time has expired. 

Ms. GREGG. Sorry. 

Chairwoman VELA ́ ZQUEZ. But during the question and answer 

period you could expand on— 

Ms. GREGG. Okay. 

Chairwoman VELA ́ ZQUEZ. —because I am really interested in listening to your story, and I just must congratulate you for your expansion and the insight to go and get the support, the technical assistance, that led you to grow your business. 

Ms. GREGG. Thank you. 

[The prepared statement of Ms. Gregg is included in the appendix at page 41.] 

Chairwoman VELA ́ ZQUEZ. Our next witness is Barbara Wrigley. 

She is the Executive Director to the Association of Women’s BusiVerDate Aug 31 2005 16:27 Feb 26, 2009 Jkt 000000 PO 00000 Frm 00016 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47055.TXT DARIEN
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ness Centers in Northern Virginia. Ms. Wrigley has more than 20 

years’ experience as a manager and advisor to women entrepreneurs. The Women’s Business Center of Northern Virginia was 

founded to provide training and support to women seeking to start 

or grow their own businesses. 

Welcome. 

STATEMENT OF BARBARA WRIGLEY 

Ms. WRIGLEY. Thank you so much. Good afternoon, Chairwoman, 

Ranking Member Graves, members of the Committee. Thank you 

for the opportunity to speak with you today. I do have the privilege 

of serving as the Executive Director of the Women’s Business Center of Northern Virginia, as well as Vice Chairman of the Board of 

Directors for the Association of Women’s Business Centers. 

The AWBC is a not-for-profit organization representing women’s 

business centers and those that we serve. It was founded 10 years 

ago to support entrepreneurial development among women as a 

means to achieve self-sufficiency and to create wealth through education, training, counseling, mentoring, technical assistance, and financing opportunities. 

My remarks today will summarize our more complete written 

testimony, which I understand will be entered into the official 

record, and I will focus on three main points. Point one, recognition 

of the significant improvement in the WBC program in the past 18 

months. 

We are grateful for the wisdom and support of leaders in the 

House and the Senate for securing our permanent funding in 2007. 

Now that WBC directors no longer have to worry about the very 

existence of their centers, they are concentrating on better serving 

their clients and growing their programs. 

WBCs have had a remarkable record of achievement over the 

past 20 years. Across the country, we annually provide entrepreneurial training, technical assistance, and counseling to over 

150,000 clients, including a significant number that are minority 

and socially disadvantaged. For example, here in Northern Virginia, fully 25 percent of my client base is low-income women. 

How have we done with the SBA’s annual $13.5 million investment in the WBC program? Research from the National Women’s 

Business Council found that there has been an extraordinary 14 to 

1 return on investment. There has been significant improvement in 

our relationship with the SBA, in particular with the Office of 

Women’s Business Ownership. We are now working on issues as 

partners and continue to address in a much more communicative 

and much less adversarial manner the ongoing management of the 

program. 

Point two, planning for the future and the need to improve current operational challenges. We look forward to establishing relationships with the newly-appointed SBA personnel to deal with 

some of our current operational challenges and to plan for future 

improvements. At present, we are having a difficult time fulfilling 

the growing demand for our services in the face of significant cuts 

in the per center program budget. 

Annual allocations have fallen from an average of $150,000 per 

center per year to between $80,000 and $100,000. For example, my 

12 

center has a total budget of less than $300,000. We are dealing 

with a 25 percent cut from the SBA this year, yet we have trained 

and counseled over a thousand clients in the last three months, a 

14 percent increase from a year ago. 

We are concerned that there has not been consistency in the way 

funding allocations have been made to WBCs nationwide, nor has 

there been sufficient transparency. We believe that all awards 

should be made public, and we recommend that the funding level 

should consistently average $150,000 per center per year. We, 

therefore, request a full appropriation of $17,100,000 to fund our 

centers. 

Secondly, the AWBC feels that a comprehensive system to evaluate, improve, and actually certify women’s business centers should 

be developed. This would include training for new and underperforming centers, benchmarking, and sharing best practices. We recommend an additional appropriation of a half a million dollars, so 

that such a certification model could be developed and tested. 

And, third, while there has been significant improvement in the 

speed with which grant monies are disbursed through automated 

drawdowns, the overall administrative burden remains high and 

continues to need further review. 

Point three, the current economic crisis and the vital role of 

WBCs in our nation’s economic recovery. Women’s business centers 

are on the frontline of the economic crisis. We are seeing more and 

more clients coming through our doors who have been downsized, 

pink-slipped, or who are underemployed and looking for ways to 

put their economic futures in their own hands. 

WBC directors are also reporting greater desperation among our 

clients. We are ready, willing, able, and are already serving as a 

source of information and inspiration to these clients. One of my 

award-winning clients reports to me, ‘‘The current economic situation is having a significant negative impact on my business. From 

2004 to ’06, my company saw 125 percent plus sales growth from 

year to year. In 2008, however, total sales revenue dropped 40 percent. The significant decline in sales puts a lot of pressure on my 

company to implement severe cost-cutting measures, delay introduction of new products, and resist the introduction of new technologies.’’ 

The director of the women’s business center in Indiana wrote to 

me, ‘‘Some folks seem simply desperate, and they just don’t know 

what else to do, so they are looking at creating their own jobs.‘‘ 

Several people expect to put a business plan together over the 

weekend. When I tell them to expect more like six months, they 

seem to get more depressed. 

And the director of the women’s business center in San Francisco 

echoed many when she wrote to me, ‘‘We are seeing more and more 

people who are already in business coming to us to help them find 

ways to survive.’’ 

Many women’s business centers have responded with innovative 

strategies, such as providing incubator offices, day-to-day work 

spaces, low-cost meeting room and conference room rentals, and increasing access to our computer labs, responding to increased interest in peer support and networking gatherings, providing more 

skill-specific, just-in-time, and distance learning training, designing 

13 

and offering new classes such as how to recession- proof your business, marketing on a shoestring budget, building alliances and 

partnerships to stay ahead in tough times. 

Another innovative example is the women’s business center in 

West Virginia, which has been working with partners to hold 

events in shopping malls, where up to 30,000 visitors per weekend 

learn low-cost ways to make money through direct sales businesses. 

While we are being innovative and responsive, the key challenge 

at the present time is to increase the flow of capital to our clients, 

not just those seeking to start a business but especially to our clients who are already in business. Capital has dried up, and our clients are suffering. 

Within my own parent company, the Community Business Partnership, our business finance center has gotten only one SOHO 

loan approved since October 1st, whereas a year ago 16 loans were 

approved in the same four- month cycle. 

Chairwoman VELA ́ ZQUEZ. Ms. Wrigley, time is up. But, again, 

during the period of question and answers— 

Ms. WRIGLEY. Thank you. 

Chairwoman VELA ́ ZQUEZ. —you can expand. Thank you. 

[The prepared statement of Ms. Wrigley is included in the appendix at page 44.] 

Chairwoman VELA ́ ZQUEZ. Our next witness is Mr. Ronald 

Blackburn. He is the President and CEO to ASPIRA Association, 

Inc. Under his leadership, ASPIRA has opened more than 20 community technology centers across the country, providing internet 

access to thousands of Latinos in low-income areas. Also, he has 

helped shape federal education legislation, most recently the Higher Education Act. 

ASPIRA is a national nonprofit organization devoted solely to the 

education and leadership development of Latino youth. 

Welcome. 

STATEMENT OF RON BLACKBURN 

Mr. BLACKBURN. Thank you so much, Madam Chair. I am President and CEO of ASPIRA, as you mentioned, the largest national 

Hispanic organization in the country, and the only one dedicated 

exclusively to education. And we are also well-known for the use 

of technology in education, which is what I am going to talk about. 

But, first, I have to say how proud I am as a Puerto Rican to 

have Congresswoman Vela ́zquez not only to be chair of this Committee, but to be the newly-elected chair of a congressional Hispanic caucus. Congratulations. 

I want to thank the Committee for the opportunity to present 

some ideas regarding a topic that has become critical in these very 

uncertain times. How can we use technology, especially distance 

learning, to enhance the effectiveness of the SBA in providing 

training and support to entrepreneurs and small businesses around 

the country? 

We know the enormous potential of technology, and the Internet 

is a tool to deliver training and technical assistance. And I believe 

that a robust, well-designed, comprehensive, and nimble online distance learning program at the SBA has the potential to reach thouVerDate Aug 31 2005 16:27 Feb 26, 2009 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47055.TXT DARIEN
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sands of business owners and potential business owners and reduce 

the burden on the SBA assistance centers. 

It is important to note, however, that there is a major issue that 

potential entrepreneurs and small businesses face, and it is the 

cost of broadband, especially in low- income communities. Without 

assessing—because broadband hasn’t been employed in their communities or because the cost of broadband is too high, online training programs have little value. 

To address this issue, I would like to propose and recommend to 

the Committee the creation of an eRate type program, specifically 

for small businesses to access and cover part of the cost of 

broadband. We already have this subsidy for schools and libraries, 

and the Telecommunications Industry Association advanced this 

notion before this Committee in January. 

There are two major issues in developing a distance learning program the SBA must address. One is the quality of the courses offered online, including the depth of each course and the teaching 

methods used to deliver the course. And, second, the number and 

relevance of the courses that are actually available. 

Now, effective online training programs have several key characteristics. One, the content of the courses is interesting, relevant to 

the learner’s needs, is of sufficient depth of the learner to master 

the subject matter. I will just give you an example. You cannot 

learn how to develop a business plan or the intricacies of securing 

a business loan in 35 minutes. 

They progress from the basics of the subject matter to more advanced topics in several well thought out steps or modules. They 

are interactive, where the learner becomes a participant in his own 

learning using tools that engage the learner in learning activities 

in practice. This requires a learning management system, which 

the SBA does not have. 

They use a variety of teaching methods, including a combination 

of video, webcast, webinars, audio, and text. They are asynchronous, which means that the learner can access the program 

at—the courses at any time from anywhere and complete it at their 

own pace. 

The learner is provided ongoing support through a learning process where the learners can ask questions as they go through the 

course, with access to a tutor as well as other learners, where 

learning is assessed, and usually feedback is provided to the learner throughout the learning process. Usually, the learner ends up 

with a product. 

Regarding the variety of courses, the SBA courses should be extensive, and the program should be capable of deploying 

coursework quickly to meet the emerging challenges to business. 

The distance learning program should also be able to move quickly 

with the times, creating and offering courses that direct emerging 

needs, such as the current economic downturn. Of course, given the 

demographics and the fact that the SBA serves Puerto Rico as well, 

the coursework should be available at least in Spanish, if not in 

other languages. 

Distance learning is very cost effective. Developing courses and 

having them online today is actually quite cheap, especially with 

15 

all of the open source, free, and secure network platforms that are 

available. 

The second major issue is deployment. How do you reach potential entrepreneurs especially in lower income communities? A tried 

and true strategy for reaching local communities is through its 

community-based organizations. This is especially true in the 

Latino community. As you mentioned, Madam Chair, ASPIRA has 

150 community technology centers across the country, with computer labs connected to high- speed Internet lines. 

These centers can serve as entry points for potential entrepreneurs in small business where they can learn to use a computer, 

the Internet, have access to the courses, have local coaches that 

can help them and refer them, all in an environment that is familiar, comfortable, and which they trust. Extensive national partnerships between the SBA and community organizations would go a 

long way in providing the SBA access to communities, and this 

would be mostly at little or no cost to the SBA. 

The SBA is going to be an effective promoter of new business and 

an effective partner in sustaining and growing existing small businesses. It is essential that it take advantage of the power of technology as a training and assistance tool, that it invest the resources 

it needs to create a robust, comprehensive, online education program, and that it partner with communities to reach thousands 

who have the potential to start or grow businesses, and, hence, create jobs. 

Thank you very much. I will be glad to answer any questions you 

have. 

[The prepared statement of Mr. Blackburn is included in the appendix at page 50.] 

Chairwoman VELA ́ ZQUEZ. Thank you, Mr. Blackburn. 

I would like to address my first question to Mr. Cartwright. As 

we all know, SBA lending has declined significantly in the past 

year. The credit crunch is posing tremendous challenges to small 

businesses in this nation. We read the papers, we listen to the 

news, and all we hear is the credit crunch that small businesses 

have. The secondary market is frozen. 

What role can SBDCs play in assisting businesses as they seek 

capital in this difficult economy? 

Mr. CARTWRIGHT. Madam Chairwoman, that is a very good question. You are absolutely correct that access to capital is at the 

worst level we have ever seen. I think the national figures are SBA 

loans are off by 57 percent. I would believe that in the two districts 

that we have in Florida—Jacksonville and Miami—they are at 

least at that level. 

SBDCs across the country rely on SBA tools, they rely on SBA 

loan programs, to present those to small businesses. I think the reality is that there are—what we see now is a lot of other non-bank 

lenders, credit unions, savings and loans, also getting into that 

market. And SBDCs, as I would guess all of the other SBA entrepreneurial development programs, try to do what is best for the 

small business owner or entrepreneur who is starting a business. 

They shop the best deal possible for businesses. 

I believe that with the—in terms of the SBDC’s case, with the 

rebuilding of the capacity of SBDCs, you would see a higher level 

16 

of marketing of SBA programs, as long as there is an increased 

funding of those critical SBA loan programs. 

Chairwoman VELA ́ ZQUEZ. Let me ask, Mr. Wolfe, how can entrepreneurial development services be designed to ensure that new 

firms can access capital at a time when credit is so tight? 

Mr. WOLFE. Madam Chairwoman, the credit issue right now is 

not a matter of people always being aware of the money. Many people are aware of SBA funding at this point. The challenge is, internally, they don’t know how or what types of funding they need. 

They don’t have properly-structured financials. They don’t have insights in terms of, why are they declining in sales? How might they 

recover those declines? And, as a result, they present to a lender 

a very high-risk credit. 

And if you are looking at adapting, I think the focus is to reach 

out with the programs, actively go out to the businesses. They are 

not going to tell you that they are having trouble until you actually 

develop a level of trust with them. And then, work with them to 

look at what is happening within their operation, what types of 

capital or debt they currently have, is it appropriate for what they 

are using it for, which what we are finding is it is not. They are 

using lines of credit to make capital purchases, which is a very bad 

thing to be doing. 

And then, look at what other sources there are—community development block grant funds, EDA funds, SBA funds. Private lenders are looking for ways to mitigate risk, but they need someone 

who can validate the strength of a business, the strength of a business model, the strength of an adjustment to the economy, and 

then how are they going to move forward, since most of them now 

no longer have collateral. 

Chairwoman VELA ́ ZQUEZ. Mr. Blackburn, the needs of small businesses are constantly changing, and SBA programs must be flexible 

to adapt to those changes. 

Mr. BLACKBURN. Certainly. 

Chairwoman VELA ́ ZQUEZ. For example, last year energy costs 

were crippling small business owners, and today it is the lack of 

credit. So, in your opinion, does the small business training network have the ability to adapt and meet the new needs of small 

entrepreneurs? 

Mr. BLACKBURN. Well, basically, the platform that you have now 

is a very static platform. There are some courses that can easily 

be put up, but they are really not as intense as they should be. As 

I mentioned before, you can’t really develop a business plan in a 

35- minute course, a PowerPoint course. I mean, there are 22 

courses in there, but they really don’t have the depth to assist a 

small business owner or a potential entrepreneur to either develop 

a business plan or a marketing plan or how to survive in these 

times. 

I think that some of the investment that would be put into distance learning would be a tremendous savings in terms of not having to provide those same—that same guidance counseling to entrepreneurs in the centers. So, right now, it is not adaptable. It could 

be much more adaptable if it had a learning management—based 

on a learning management platform. And I think that the SBA 

should have the vision to be able to harness the technology. 

17 

I mean, distance learning is a $31 billion business in this country. And every university, every college and university in the country, has a sound distance learning program. There is no reason why 

the SBA cannot have that. 

Chairwoman VELA ́ ZQUEZ. Thank you. Mr. Graves. 

Mr. GRAVES. Thank you, Madam Chair. 

My first question is for Ms. Wrigley. You said that you helped 

businesses recession- proof. How do you recession—I mean, I am 

just curious. That sounds like a great tool to be able to offer small 

businesses. 

Ms. WRIGLEY. Well, what I was talking about was that a number 

of women’s business centers have developed classes to help their 

clients be recession-proof. So right now one of the main things that 

my clients have been asking for is information, for example, on social networking. They have been asking for more immediate, quick, 

real-time training in Quickbooks Pro and other things like that. 

I think, you know, as these clients come in, the most immediate 

way that we can be of assistance to them is just to know that we 

are there to talk to them, that we can help them with their 

cashflow, that we can help them in understanding some of the 

steps that they need to take to better market their services, to form 

some alliances for example. 

So it is really—you know, taking these existing clients, having 

them come in and say, ‘‘Yes, we are really here for you.’’ 

Mr. GRAVES. Ms. Gregg, you are kind of in a unique situation I 

guess because not only are you a small business, but you also provide staffing to other businesses. And you said you are going to 

come through this downturn stronger than ever. And I would like 

to kind of have you explain that, because that is kind of exciting, 

given a lot of the, you know, horror stories that we have heard. 

And you might also expand on some of the businesses you work 

with providing staffing, how they are going to do as a—you know, 

do you think they can come through this thing stronger than ever? 

Or are we going to lose a lot of businesses out there? 

Ms. GREGG. Well, Ranking Member Graves, you know, I am a 

pretty positive person, and I refuse to think negative. I am going 

forward as quickly as I can. Like I said, I am expanding on opportunities, so that I can survive. Right now, our focus, since we are 

in rural Missouri, has been light industrial and clerical. Light industrial is hurting tremendously out in the rural areas, as I know 

they are hurting everywhere. 

As far as if they are going to make it, I don’t know. Most of my 

clients right now still are optimistic that they are going to start up. 

They might have started up hard and heavy after the first of the 

year. They are looking at March, second quarter, with startups, 

and we are all hopeful. 

I am just trying to expand my business as quickly as I can in 

order to survive, because I don’t believe light industrial is going to 

feed us well anymore. And that is why we started the Engineering 

Department, and we are hoping to start Flexible Medical Staffing 

soon. 

So did that answer your question? 

Chairwoman VELA ́ ZQUEZ. Would you yield for a second? 

Mr. GRAVES. Yes, Madam Chair. 

18 

Chairwoman VELA ́ ZQUEZ. When did you make the decision to get 

into medical services staffing? And did you do—did you do some research that led you to make that determination? 

Ms. GREGG. Yes. 

Chairwoman VELA ́ ZQUEZ. That that is an area where you can 

grow your business? 

Ms. GREGG. Yes. I have had opportunities that have come to me, 

because I am the local person who is doing staffing. I have had hospital CEOs come to me. I have been researching for two years. The 

SBDC has—small business development center has been helping 

me. They have been doing market analysis for me. 

They have also looked at the competitors within my field. In 

rural areas, there is not a lot of people doing staffing in the medical field, so that is an opportunity. 

Chairwoman VELA ́ ZQUEZ. Thank you. 

Thank you for yielding. Any other questions? 

Mr. Schrader. 

Mr. SCHRADER. Thank you, Madam Chair. Ms. Dorfman, you had 

talked about the somewhat fragmented nature potentially of some 

of the small business development services, and, you know, a lot 

of overlapping regulation and opportunities. It makes sense, certainly. You know, everyone wants to be efficient and pool resources 

where possible. 

How do you juxtapose that with a lot of communities, this body, 

and state legislators, wanting to focus on making sure women and 

minorities get special access, or at least are aware? Veterans? How 

do you—how do we juxtapose those two, the efficiency versus making sure different groups really get access? 

Ms. DORFMAN. Well, again, I think it is in the best interest of 

a woman-owned firm to get the highest quality and consistency of 

the education and the resources that are out there. And to be able 

to provide that, you really do need to unify. The e- learning that 

has come up here, that is paramount. 

If we can streamline some of the more I would say fundamentals, 

that can be done from e-learning and then have very specific focuses on those areas where there are—it is a little bit more complex and there needs to be some specialized assistance. For instance, women-owned firms typically find it very difficult to get access to capital. 

Well, so that is one area we are going to have to have a specialist 

in there to walk them through that process to make sure that, first 

of all, there is funding available, but, second of all, making sure 

that their financials are prepared the proper way to get in there. 

And then, have somebody actually at the bank to hold the bank accountable for lending to women as well. 

And I really believe, again, that we need as a unified system to 

really look at the demographics within the community and see 

what the needs for the community are. Right now, we are hearing 

that some communities are faring better than others, because there 

is not that consistency. But if we can come from a macro level, and 

really provide good, consistent, quality interface for the business 

owners, I think you are going to really—the investment that we are 

making is going to just grow exponentially. 

19 

Mr. SCHRADER. Along the same lines, both you and Mr. Cartwright, and it was referenced in the Speaker’s memorandum about 

performance measures, you know, a lot of times we measure outputs as opposed to outcomes. And I was fairly involved in that in 

my home State of Oregon, trying to shift our budgeting to, you 

know, performance-based rather than just measuring widgets that 

were produced. 

So to that extent, one of the basic questions I would always ask, 

particularly the SBDCs, was, you know, how do we know you are 

doing a better job than a business that does not start up with 

SBDC assistance? And is there a way we can measure this, among 

many other measures that might be appropriate? Could you comment on where we are in that development, what role this body 

may have in assisting you in developing appropriate actual outcomes? 

Ms. DORFMAN. Sure. One reference that was stated here was we 

saw a thousand clients in the last three months. We hear that from 

the SBDCs and our interface, that that is part of how they have 

to measure, how many bodies got through their doors. Well, we 

want to know what percentage was the growth of revenues for 

those companies, and how many new employees have been hired? 

That is going to really measure their growth. 

And, again, when you take a look from a macro level, you can 

really see the communities across the board, where there is success 

versus where there is challenges, and where we need to get in and 

maybe get more assistance to them. 

Mr. SCHRADER. Mr. Cartwright, could you comment on that and 

how, again, we might—is that rule-driven? Are we the culprits? 

Who is to be responsible perhaps for that interpretation? 

Mr. CARTWRIGHT. Actually, I don’t know if there is a culprit or 

not, but I can tell you—you make a very good point, and I will tell 

you that the SBDCs actually do measure those kinds of things that 

are critically important. We conduct—each SBDC conducts their 

own state economic impact analysis, where we do get down to what 

was the revenue increase by business and number of jobs that they 

created, or the number of jobs that they retained due to assistance. 

That is reported by the small business owner. 

We also have a national impact study that is done by Dr. James 

Chrisman at the University of Mississippi that, as an association, 

we encourage every SBDC state and regional program to participate in. That study compares the Oregon SBDC and its outputs to 

the average Oregon business. Dr. Chrisman— 

Mr. SCHRADER. Is that outcomes or outputs, sir? 

Mr. CARTWRIGHT. Both. 

Mr. SCHRADER. Okay. 

Mr. CARTWRIGHT. Both. And that research is done by Dr. 

Chrisman, so it is not the SBDC that is taking a look at those figures. It is Dr. Chrisman. So we—that information is readily available. 

Mr. SCHRADER. We had trouble getting—just as a comment—I 

apologize for going slightly over—we had a little trouble getting 

that information in Oregon, so I would be interested in that data, 

if that is available. 

Mr. CARTWRIGHT. Okay. 

20 

Mr. SCHRADER. Thank you, Madam Chair. 

Chairwoman VELA ́ ZQUEZ. Mr. Coffman. 

Mr. COFFMAN. Thank you, Madam Chairwoman. There was some 

discussion about e-learning, putting information out, and as a 

former small business owner, where time was a premium, and I 

didn’t necessarily have time during the day to attend something, 

but maybe I could look at information online at nights, such as 

writing a business plan, which was my downfall, but I survived 

somehow. I wonder if some of the members could comment on that. 

Mr. BLACKBURN. Well, I can certainly comment on the importance of the program to be interesting, to be in depth, to be able 

to show you step by step how to develop a business plan. And it 

is something you can’t do during the day, it can’t be live. You have 

to be able to access it whenever you have the opportunity to access 

it. 

And it should be able to walk you through the steps of developing 

a good business plan, so that when they get to the center you already have a product that you can take to the center for review. 

And just—and mentioning how to be updated, how to change with 

the times, I can see, for instance, the SBA having webinars and 

webcasts on the impact of the stimulus package on small business. 

And this is something that is being discussed today, and that 

could be on tonight, for a small business person to know, if they 

approve X, Y, and Z, will I have more access to credit? Those are 

the important topics. And others as well. I mean, there are hundreds of potential courses that can be provided for business owners, 

for people who are thinking of starting a business, for people who 

are already there but haven’t gotten the credit yet to start their 

own business. 

So I think it is a critical tool that almost everybody else is using, 

and it is very simple to use. Just ask our children. I mean, they 

are doing very, very well. And to exchange with other business people. 

You can mention chatrooms, you can mention groups, you can 

mention all sorts of means of communicating with other small business people in your same field, or in others. Those are important 

for learning. 

Mr. COFFMAN. Madam Chairwoman, if I could continue. 

Chairwoman VELA ́ ZQUEZ. Yes. 

Mr. COFFMAN. Ms. Gregg, you had talked about relocating your 

business from Missouri to Colorado. 

(Laughter.) 

Out of all of the services that were provided to you, if you had 

to identify one as being the most significant, what would that be? 

Ms. GREGG. I had started businesses in the past. However, I had 

never done cashflows before, and actually had something to take to 

the bank when I went to borrow money. And so I would say learning how to do cashflow charts was the top of my line. I have had— 

I have done lots of conferences on how to grow, but I think learning 

how to do cashflows would be the thing that I lacked and I needed 

help with. 

Mr. COFFMAN. Madam Chairwoman, one more question. 

What are you seeing out there, any of the panelists, in terms of 

the credit crisis right now? And from the grass roots of our finanVerDate Aug 31 2005 16:27 Feb 26, 2009 Jkt 000000 PO 00000 Frm 00026 Fmt 6633 Sfmt 6633 G:\CLERKS~1\HEARINGS\TRANSC~1\47055.TXT DARIEN
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cial system, are, in your view, small businesses locked out of it that 

wouldn’t otherwise qualify for credit during normal economic 

times? 

Mr. WOLFE. I will touch that. Actually, right now, there are very 

viable businesses that are being locked out, because the local and 

regional banks have just basically tightened up. Even with SBA 

lending, I interviewed five lenders in the last two months, and they 

indicated that there has been some restrictions, and basically SBA 

has been looking at the documentation and not always honoring 

the guarantee. 

So the banks are running scared right now as to whether or not 

they can even utilize the guarantee. So they are tightening up their 

own credit, they are pulling lines of credit from existing businesses 

that are very solid, because they don’t know what kind of reserves 

they need to have in place, because they are not sure how their 

portfolio is going to go, they don’t know if their collateral is upside 

down. 

So there is a really—everyone is tightening up. Everyone is pulling back. And what has to happen is we have to rebuild confidence. 

And that is what I think the opportunity is, to go out and rebuild 

confidence in sound business, with information, with the whole concept—I mean, education is great, but someone has got to get out 

there and reach out to the businesses, not wait for them to walk 

in the door. They are not going to walk in the door. 

And when I teach lending, I tell them, the good deals are going 

to—you are not going to find the good deals unless you get out on 

the street and knock on doors, because those business people are 

too busy running their business. 

Chairwoman VELA ́ ZQUEZ. Well, Mr. Coffman, just for one second. 

If SBA is not honoring the guarantee, I want to know, because they 

cannot do that. 

Mr. COFFMAN. Yes. Okay. 

Chairwoman VELA ́ ZQUEZ. And time is up, since we have votes on 

the floor. Ms. Dahlkemper. 

Ms. DAHLKEMPER. Thank you, Madam Chair. 

I just have a quick question to any of you who would like to answer this. Is there any regional issues that we should be looking 

at as we look at this entire, you know, picture here? We certainly 

have different issues in the northeast versus the southwest and 

some of those areas. Are there any regional issues that we should 

be looking at as we look at these programs that we are not identifying at this point as we look at economic recovery? 

Mr. BLACKBURN. I can think of not regional issues, but community issues. 

Ms. DAHLKEMPER. Okay. 

Mr. BLACKBURN. In other words, where is the diversity of the 

country? And where are small businesses suffering the most? And 

if you look at the country that way, it is sort of different from looking at the geographical regions, the small businesses that are in 

inner cities versus those that are in rural areas or in suburbs, how 

can you better support businesses that I am sure are suffering in 

low income communities, whether they are urban, rural, or suburban? 

22 

So I would try to look at it more in terms of the particular community that they are in rather than their region. There may be 

some regional issues, but I would look at those first. 

Ms. DAHLKEMPER. Would anyone else like to comment on that? 

Mr. WOLFE. I would like to say also I think, really, there needs 

to be a focus on industry, specific industry segments, because a lot 

of the retailers and the service businesses aren’t going to survive 

if the people don’t have money. So you have got to look at where 

people are targeting recovery, and that is a national issue. 

So if it is in clean technology, it could be in tourism, it could be 

in manufacturing, but it has to be tailored to those industries 

where there is the chance and opportunity for recovery, and that 

support them and can go across. And that is where all of the programs tie in. And it doesn’t matter where they are located; it just 

matters on having resources for the industry. 

Ms. DAHLKEMPER. Thank you. 

Chairwoman VELA ́ ZQUEZ. I have another question, and I believe—well, probably we are going to pass the stimulus package by 

the end of this week, hopefully. And there is going to be a lot of 

money for IT-related initiatives, and a lot of money for infrastructure. And so small firms are expected to play a big role in all of 

these projects. 

And it is likely that many companies forego—these opportunities 

due to the complexity of the federal procurement process. And I 

hear back in my district, and every member here, they hear from 

small businesses who are having problems accessing the federal 

procurement marketplace. 

So my question to the SBDCs that are represented here: would 

you think that it would be useful to establish a specialized program 

so that SBDCs can hire experts in federal procurement and provide 

that type of assistance? 

Mr. CARTWRIGHT. Madam Chair, I totally agree with you. SBDCs 

are—under their scope of work currently provide procurement assistance, government contracting. That is not the primary focus, 

however, of our programs. And with that enhanced capacity, I 

would say, yes, you could see much more contracting take place 

throughout the country. 

Chairwoman VELA ́ ZQUEZ. Yes. And the women’s business centers? 

Mr. WOLFE. Absolutely. 

Chairwoman VELA ́ ZQUEZ. Okay. 

Ms. WRIGLEY. I happen to be fortunate to be in a location where 

we have a small business development center adjacent to our women’s business center, as well as a finance center and an incubator, 

all under one roof. And so we are sending more people—more of 

our women, once they grow up their businesses to be ready to do 

federal contracting, particularly here in the Washington area, to 

our SBDC and to the procurement technical assistance program. 

But I think you are exactly right. Women are confused about 

this, and it is a wonderful marketplace right now. Those that have 

gotten in are doing work. 

Chairwoman VELA ́ ZQUEZ. Last year, we spent $400 billion— 

Ms. WRIGLEY. That is right. 

23 

Chairwoman VELA ́ ZQUEZ. —yet small firms lost out when they 

were not able to get the 23 percent contracting goal. 

Anyway, I want to thank all of you for your testimony and your 

presence here today. 

I ask unanimous consent that members will have five days to 

submit a statement and supporting materials for the record. Without objection, so ordered. 

And this hearing is now adjourned. Thank you. [Whereupon, at 

2:19 p.m., the Committee was adjourned.] 

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