The Small Business Watchdog

As the voice of small business in government, Advocacy invites you to post your thoughts on this moderated blog, provided as a forum for the small business community.

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February 2015 Issue of The Small Business Advocate Newsletter Released

February 20th, 2015 · Comments Off

The Office of Advocacy has released the February 2015 issue of The Small Business Advocate newsletter. This edition features Advocacy’s newly released Small Business Profiles for the States and Territories, and includes the United States profile in full. In addition, the newsletter contains regulatory news and a summary of the Report on the Regulatory Flexibility Act FY 2014. The newsletter can be found on Advocacy’s website here.

In This Issue:

Economic News
Small Business Profiles Offer Valuable Insight into States’ Economies, 1
U.S. Small Business Profile, 3

Regulatory News
Comments Submitted on Proposed DoD Rule, 2
Revisions to Ozone Air Quality Standards Proposed by EPA, 2
EPA Proposes Air Emission Standards for Brick Production, 7

Advocacy News
Miriam Segal Joins Advocacy’s Economic Team, 2

New Advocacy Publications
Advocacy Releases RFA Report and Annual OER Report, 8

The Small Business Advocate, February 2015

Comments OffTags: Regulatory Policy · Research & Statistics · State and Regional

Small Business Profiles Offer Valuable Insight into States’ Economies

February 2nd, 2015 · Comments Off

Small Business Profiles for the States and Territories

The Office of Advocacy released a new report, Small Business Profiles for the States and Territories, an annual snapshot of state-level small business activity which includes information on the number of firms, employment, demographics and other topics using the most recently available government data.

“The United States’ 28.4 million small businesses play a vital role in our economy,” said Christine Kymn, Advocacy’s chief economist and director of economic research. “Small businesses represent 99.7 percent of all U.S. businesses with employees and employ about 56 million members of the nation’s private-sector workforce. The Office of Advocacy notes that this year’s state profiles signal improving conditions for small businesses and in turn, their respective state economies. We hope to see further improvements in 2015.”

Some highlights of the profile include:

  • Small businesses with fewer than 100 employees have the largest share of small business employment.
  • The top three small business industries with the most jobs include health care and social assistance, accommodation and food services, and retail trade.
  • In 2013, 630,357 establishments opened, and 79.5 percent survived through 2014.

The report includes breakdowns of the top 10 states in a variety of categories. These top ten lists provide valuable insights into which individual states are showing upward trends in small business growth.

For example, Montana tops the lists of states with the highest share of small firm employment in 2012, with 67.6 percent, followed by Wyoming with 62.3 percent and South Dakota with 59.2 percent (Table 1).

Also of note are the states with the highest self-employment rate in 2013. Montana and Vermont top the list, each with 13.6 percent of citizens self-employed, followed by South Dakota with 13.1 percent (Table 2).

The states with the most small establishments surviving for a year (2013-2014) are Washington, with 87.4 percent, followed by Delaware with 84.7 percent and Wisconsin, with 83.1 (Table 3).

North Dakota has the highest rate of private sector employment growth from October 2013-2014. Second highest is Texas and third is Utah (Table 4).

In addition to the detailed state profiles, Advocacy has also made available on their website extensive additional data on business turnover, income and finance, and exporting. You can also find statistics broken down by industry type and the top industries by demographic group.

The state profiles can be found on Advocacy’s website here.

Table 1, Table 2

sp table 3-4

Comments OffTags: Research & Statistics

Federal Agency Compliance with the Regulatory Flexibility Act Saved Small Businesses at Least $4.8 Billion in FY 2014

January 23rd, 2015 · Comments Off

The Office of Advocacy has released the Report on the Regulatory Flexibility Act FY 2014. The report is a requirement of the Regulatory Flexibility Act (RFA), which directs the Chief Counsel for Advocacy to monitor federal agency compliance with the RFA and report on it at least annually. This year’s report finds that the Office of Advocacy’s efforts at ensuring RFA compliance helped save small entities at least $4.8 billion in first-year regulatory costs in FY 2014, while ensuring that agencies were able to meet their regulatory goals.

The report can be found here: Report on the Regulatory Flexibility Act FY 2014

And the research summary can be found here: Small Business Research Summary No. 428

Comments OffTags: Regulatory Policy · Research & Statistics

January 2015 Issue of The Small Business Advocate Newsletter Released

January 20th, 2015 · Comments Off

The Office of Advocacy has released the January 2015 issue of The Small Business Advocate newsletter. This edition features a roundup of the new leadership of the Congressional small business committees. The message from Chief Counsel for Advocacy Winslow Sargeant details his accomplishments during his tenure at the Office of Advocacy. In addition, a recent SBREFA panel on infectious diseases submits its final report to OSHA. The newsletter can be found on Advocacy’s website here.

In This Issue:

Legislative News
New Congress Brings New Leadership to Small Business Committee, 1

Message from the Chief Counsel
A Bittersweet Farewell, 3

Regulatory News
SBREFA Panel on Infectious Diseases Submits Final Report to OSHA, 2

January 2015 Small Business Advocate

Comments OffTags: Regulatory Policy

Office of Advocacy Releases the Annual Report of the Office of Economic Research, FY 2014

January 15th, 2015 · Comments Off

The Office of Advocacy has released the Annual Report of the Office of Economic Research, FY 2014. In fiscal year 2014, Advocacy produced 23 contract and internal research reports on a variety of topics including access to capital, employment, environment, minority-and women-owned businesses, procurement, retirement, taxation and veterans. This annual report provides details about and a link to each of OER’s publications from FY 2014. The full report can be found on Advocacy’s website here.

OER Annual Report, FY 2014

Comments OffTags: Research & Statistics

November-December 2014 Issue of The Small Business Advocate Newsletter Released

December 18th, 2014 · Comments Off

The Office of Advocacy has released the November-December 2014 issue of The Small Business Advocate newsletter. This edition features a recent trip to the Denver Biz Tech Expo where Chief Counsel for Advocacy Winslow Sargeant was the keynote speaker. Also covered is Region III Advocate Ngozi Bell’s recent visit to West Virginia for the Women and Technology Conference. In addition, Assistant Chief Counsel Kevin Bromberg received an award from the EPA recognizing him for his work with the agency on underground storage tanks. We also look at two recently-released economic studies and several regulatory matters. The November-December issue of The Small Business Advocate can be found on Advocacy’s website here.

In This Issue

Regional News:
New Technology Trends on Display at the Denver Tech Expo, 1
Women and Technology Examined at West Virginia Conference, 4

Message from the Chief Counsel:
Startup Accelerators Show Promise in Addressing Public Policy Goals, 3

Regulatory News:
Advocacy Comments on DOJ Movie Theater Rules, 2
Comments to EPA on Petroleum Refinery Rules, 2
Energy Efficiency Standards for Ice Makers Addressed, 2
Comment Letter to CFPB on Home Mortgage Rules, 6
Regulatory Alert on Proposed IRS Rules, 7

Advocacy News:
New to Advocacy, 4
Assistant Chief Counsel Recognized by EPA, 5

Economic News:
Report Studies Financial Health of Veterans, 7
New Fact Sheets Released, 8

nov-dec_newsletter

Comments OffTags: Regulatory Policy · Research & Statistics · State and Regional

Small Business Lending Report Released

December 16th, 2014 · Comments Off

The Office of Advocacy released its annual report on small business lending.  Small Business Lending in the United States, 2013 describes trends in the small business lending market in general. It also provides data on more than 6,000 U.S. lenders, showing the emphasis on small business lending in their portfolios.

The report covers the time period June 2012 to June 2013 using Call Report data from the FDIC, and supplements this with Community Reinvestment Act data from 2012. During this period, small business lending improved, but at a slower pace than large business lending. Soon afterward, small business lending entered positive territory. A data update is provided to cover these trends, extending into the first quarter of 2014.

The report and research summary are available on Advocacy’s webpage at https://www.sba.gov/advocacy/small-business-lending-united-states-2013.

Lending study chart

Comments OffTags: Research & Statistics

September-October 2014 Issue of The Small Business Advocate Released

October 15th, 2014 · Comments Off

The Office of Advocacy released the September-October 2014 issue of The Small Business Advocate newsletter. It features Advocacy’s regional advocates’ tour of 1776, a Washington, D.C.-based organization that seeks to nurture local startup businesses by connecting them with a variety of resources. The message from the chief counsel explores the issue of the gender gap in STEM fields. In addition, rulemakings by the DOJ, CPSC, EPA, FCC, DOL and NOAA are discussed. Finally, the newsletter introduces Advocacy’s new staff members.

Articles in this issue include:

Regional News:
1776 Offers Startups Resources and Connections in the Heart of D.C.
Message from the Chief Counsel:
Leveling the Playing Field in STEM
Regulatory News:
Small Movie Theater Owners Discuss Proposed DOJ Accessibility Rules
Advocacy Responds to CPSC on Infant Carrier Rules
Letter Addresses Rule Redefining “Waters of the U.S.”
Advocacy Comments to FCC on Net Neutrality Proposal
Advocacy Raises Concerns about EPA Landfill Rules
Regulatory Alerts
Advocacy News:
New Staff Members Join the Office of Advocacy

Sept-Octnewsletter

Comments OffTags: Regulatory Policy · Research & Statistics · State and Regional

Innovative Funding Model from Silicon Valley Could Change How Non-Profits and Socially Responsible Firms Do Business

October 8th, 2014 · Comments Off

By Jonathan Porat, Regulatory Economist

Startups such as Dropbox, Reddit, and Airbnb have become aspirational success stories for entrepreneurs. They have made people’s lives easier, disrupted established industries through simple innovations, and in some cases received billion-dollar valuations. Some people however may not be aware that these high-growth and high-value startups have all taken advantage of an innovative funding mechanism for small businesses: the accelerator program. Now, startups in the non-profit sector are taking note and hoping to use this model traditionally leveraged by the tech sector to advance important public policy goals.

To paraphrase recent research from Cohen and Hochberg, accelerator programs are short-term mentorship programs for groups of startups that culminate in a demo day or a public pitch to large groups of investors. Often accelerators are for-profit entities that will provide mentorship services as well as some seed funding and additional resources in exchange for an equity stake in a participating startup. While accelerators have been around for almost a decade, due to the success of prototypical accelerators such as Y Combinator (the accelerator behind the companies mentioned at the top of this post), their popularity has surged.

Catalyzed by accelerator success stories and investors’ increasingly favorable view of them, the non-profit sector has started experimenting with this innovative model. Startups in the non-profit sector may have difficulty getting early-stage venture capital funding making these entrepreneurs hungry for an alternative.

One exemplar of this type of new “social accelerator” program is Conscious Ventures Lab, a benefit corporation located in Howard County, Maryland. In September, Conscious Ventures held its first demo day for its first cohort of five companies: all startups with social-welfare goals. These included one startup designed to connect women entrepreneurs to resources and funding sources and another that provides a curated marketplace for socially conscious consumers. The local economic development authority has even partnered with the accelerator to work toward its economic development and public policy goals. It will be interesting to see from these early efforts what lessons can be learned about future applications of the accelerator model in the non-profit and public sectors.

Clearly, the accelerator model has a lot of potential to be used to grow small businesses and could act as an agent of change in meeting public policy goals. However, there is no guarantee of success when participating in one of these programs. More importantly, there are still many unanswered questions about the accelerator model. There is little authoritative data available on accelerators, and it is unclear how to evaluate their success. In addition, possible unintended consequences and policy resistance of applying this model outside of the tech sector have been largely unexplored.

To add to the scarce research on this topic, on October 16th the Office of Advocacy released the new research report, Innovation Accelerators: Defining Characteristics among Startup Assistance Organizations, plus an issue brief. This research highlights key questions around accelerators as well as further explores the relevance of these programs for small businesses and policymakers. Advocacy looks forward to continuing to contribute to research and discussions on small business marketplace innovations.

Pictured: Jeff Cherry, executive director of Conscious Venture Lab, discusses its social and entrepreneurial mission. The lab has partnered with the Economic Development Authority of Howard County, Maryland. Photo: HCEDA.

Pictured: Jeff Cherry, executive director of Conscious Venture Lab, discusses its social and entrepreneurial mission. The lab has partnered with the Economic Development Authority of Howard County, Maryland. Photo: HCEDA.

Potential investors, supporters, and entrepreneurs turned out for Conscious Venture Lab’s first demo day in September. The audience heard pitches from five graduates of the first CVLab cohort, as well as a panel discussion on why non-profits should be part of the conscious capitalism movement. On the panel were Lawrence Twele, Howard County Economic Development Authority; Mike Couch, MakingChange; Bill Strathmann, Network for Good; Jeff Cherry, Conscious Venture Lab. Photo: HCEDA.

Potential investors, supporters, and entrepreneurs turned out for Conscious Venture Lab’s first demo day in September. The audience heard pitches from five graduates of the first CVLab cohort, as well as a panel discussion on why non-profits should be part of the conscious capitalism movement. On the panel were Lawrence Twele, Howard County Economic Development Authority; Mike Couch, MakingChange; Bill Strathmann, Network for Good; Jeff Cherry, Conscious Venture Lab. Photo: HCEDA.

Comments OffTags: Research & Statistics

Advocacy Helps Guide Small Food Importers through FDA Regulations

September 24th, 2014 · 3 Comments

By Yvonne Lee, Region 9 Advocate

Jacklyn Sher’s parents were refugees from Laos who came to the United States in 1976 with nothing but hope for a better life for their family. They worked hard—their first job was as night janitors at a fast food restaurant—and saved enough money to buy an old station wagon. The Shers then started delivering soy sauce to southern California food businesses. Twenty-seven years later, HC Foods is a successful food import and distribution company serving food businesses throughout the western U.S. This family-owned business now employs 25 workers and the Shers are most proud that they can provide for their employees health insurance, 401(k) and other benefits.

Recently Jacklyn was one of over 100 food importers, distributors and business owners who participated in an SBA National Ombudsman Regulatory Fairness Hearing in Cupertino, California, that the Office of Advocacy helped convene. It was the first time that most of these business owners have attended a government meeting and spoken before a government body about their experience with federal regulatory compliance and enforcement. For the past two years, Advocacy’s Assistant Chief Counsel Linwood Rayford and regional advocates have worked with food businesses like HC Foods to make sure they were aware of, and engaged with, the regulatory reviews under the U.S. Food and Drug Administration’s (FDA) Food Safety Modernization Act (FSMA). This law was enacted in 2012 to ensure all food available to American consumers—domestic and imported—adheres to high safety standards.

Food importers told Advocacy that they support the goals of FSMA since their businesses depend on food safety as it directly affects their bottom line. However, they said that any new regulations must take into account the differences between independent small operations like theirs and large businesses. Food importers said they are particularly interested in FSMA’s Foreign Supplier Verification Program (FSVP). The proposed FSVP regulations would require importers to verify that the importer’s foreign suppliers produce food in compliance with processes and procedures, including risk-based preventive controls, that provide the same level of public health protection as those required under the domestic requirements of the Food, Drug and Cosmetic Act.

Small importers assert that the new program’s verification requirement would create an undue economic burden on small firms since they wouldn’t have the needed human and financial resources that larger corporations have to meet compliance. While these businesses told Advocacy they welcome their role in ensuring food safety, they said that the regulations need to be flexible, practical and reasonable to reflect the small food businesses’ resource challenges. Moreover, as more regulations under FSMA are implemented, they suggest that the final rules need to be enforced fairly and with transparency.

Advocacy has facilitated several public forums where small business stakeholders dialoged with FDA officials over the FSMA’s foreign facility re-inspection, importer re-inspection fee rates, importer risks and food transport safety provisions. The Asian Food Importers Alliance told Advocacy the discussions were positive and it would be the first time they would submit a comment letter to a federal agency.

As the FSMA’s regulations progress, Advocacy will continue to work with food importers and other industry stakeholders to ensure they have the opportunity to add their voice throughout the process.

→ 3 CommentsTags: Regulatory Policy · State and Regional