February 12th, 2014 · Comments Off
On February 28, the SBA Office of Advocacy is visiting the state of Maryland, for the Voice of Small Business Forum to meet and learn from the state’s small businesses about the current business environment they are working in. It is the Office of Advocacy’s goal to engage, listen, and document the “big ideas, barriers, and best practices” that can influence policies to ensure future small business success.
The event will be held on Friday, February 28, from 8:00am to 4:30pm at the University of Maryland Baltimore County Research Center, 1450 S Rolling Road, Baltimore, MD 21227.
The six sessions will include discussions on:
- Clean Technology
- Business products, services and processes related to reducing/eliminating negative ecological impacts and improving use of natural resources
- New Economy
- Using the internet as a medium to support online business plans and domestic and international e-commerce
- Cyber Defense/IT
- Business innovators focused on supporting systems and networks that help ensure organizations anticipate and withstand system attacks
- Businesses addressing and innovating solutions for the life science and human health sectors
- NexGen Entrepreneurs
- Entrepreneurs and inventors younger than 35 who are establishing a presence in the small business arena
- Women, Veteran, Minority and Small Business Government Contractors
To register to attend and find out more about the event, visit the Voice of Small Business Forum website.
Note: This event was rescheduled from an earlier date due to bad weather.
Tags: State and Regional
February 5th, 2014 · Comments Off
On January 10, a group of intrepid New Englanders braved the weather (including a major highway closure due to ice and accidents) to join U.S. Senator Jeanne Shaheen (D-N.H.) and Acting SBA Administrator Jeanne Hulit for a roundtable discussion and business tour outside Manchester, New Hampshire. The day focused on women-owned businesses. While business owners’ concerns were diverse and wide-ranging, a single common theme emerged—the very limited availability of microloans.
Following the roundtable, Regional Advocate Lynn Bromley joined Senator Shaheen, Acting Administrator Hulit, and other SBA officials for a tour of two small businesses owned by women.
First was LaBelle Winery, where the roundtable was held. Winery owner Amy Labelle was named New Hampshire’s 2013 Woman Owned Small Business of the year, and for good reason. She and her husband, cellarmaster Cesar Arboleda, have grown their business from an idea 10 years ago to today’s ambitious enterprise. The business now employs 45 people in a facility that includes a store, café, tasting room, and the large post-and-beam function hall where the roundtable took place.
Before moving to her new location, LaBelle was bottling 18,000 gallons a year. One year and 27 stainless steel tanks later, she is producing 30,000 gallons. And she hopes to expand further.
LaBelle spent $5.3 million dollars on the new winery, a sum she calls “terrifying.” She calls her effort to secure financing a “study in persistence.” She and her husband pitched their plans to five banks before successfully arranging financing.
The second stop on the tour was Ion Beam Milling, a precision manufacturer of high-tech thin film products. These include standard microwave circuits as well as custom products built for specific applications.
Gail Quagan and her husband Bob founded Ion Beam Milling in 1982. Gail (the businesswoman) and Bob (the scientist) grew their business from a small facility with one miller, one machine, and two employees to today’s larger, modern facility with 13 full-time employees. CEO Jim Barrett now runs the day-to-day operations, Bob remains the chief science officer, and Gail the CFO.
As we were packing up to go, Barrett put in a plug for another local woman-owned business. Jim’s wife, Claudia Barrett, is the founder of a home-based coffee roasting business, CQ Coffee Roasters. That business is in full swing too—and fast outgrowing its space.
Pictured: In the lab at Ion Beam Milling, one of the company’s technicians explains their manufacturing process to the tour group. The group includes (from left) Ion Beam CEO Jim Barrett, Region I Administrator Seth Goodall, Sen. Jeanne Shaheen, Region I Advocate Lynn Bromley, and Acting SBA Administrator Jeanne Hulit.
—Lynn Bromley, Region I Advocate
Lynn Bromley is Office of Advocacy’s regional advocate for Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont. You can reach her at email@example.com.
Tags: State and Regional
January 22nd, 2014 · 2 Comments
On January 16, the Office of Advocacy filed a public comment letter with the Securities and Exchange Commission (SEC) regarding the agency’s proposed rule on crowdfunding. The proposed rule provides the framework for the practice of crowdfunding, a method of financing by which small businesses and startups may offer stocks to a wide variety of investors online through funding portals and broker dealers.
Advocacy based its comment letter on feedback from small businesses. Specifically, Advocacy hosted small business roundtables in New York City (December 16, 2013) and Washington, D.C., (January 15, 2014) to gather input from small business representatives about the proposed rule. Advocacy also hosted several conference calls on this issue.
Pictured: Assistant Chief Counsel Dillon Taylor facilitates a discussion of small business concerns with the SEC’s crowdfunding proposal at the New York City roundtable in December.
Based on small business stakeholders’ feedback, Advocacy’s comment letter expresses concern that the initial regulatory flexibility analysis (IRFA) contained in the proposed rule lacks essential information required under the Regulatory Flexibility Act (RFA). Advocacy’s comment letter notes that the IRFA does not adequately describe the costs of the proposed rule for small entities. In addition, the IRFA fails to offer significant alternatives which accomplish the SEC’s stated objectives and minimize the proposal’s significant economic impact on small entities.
Advocacy recommended that the SEC republish a supplemental IRFA for public comment before proceeding with the rulemaking and that the agency consider small business representatives’ suggested alternatives to minimize the proposed rule’s potential impact.
—Dillon Taylor, Assistant Chief Counsel
Pictured: Advocacy held a second roundtable in Washington, D.C., on January 15. Addressing the group is Samuel S. Guzik, a California-based securities attorney. Guzik provided a small business perspective on the SEC proposed rule.
Tags: Regulatory Policy
The Year in Review: Implications for Small Businesses
Two important economic indicators released late in 2013—employment and interest rates—give us some optimism about small business and economic growth trends. Both of these indicators are key to consumer spending, which drives two-thirds of our nation’s economic activity.
At 7 percent, the unemployment rate in November 2013 was at its lowest level since 2008. Small businesses are responsible for 63 percent or 4.3 million of the 6.9 million jobs created since the recovery began. Interest rates rose slightly during the year but remain at historical lows. This has benefited the interest-sensitive construction and automobile industries, which had suffered sharp downturns following the Great Recession. In November 2013, building construction employment reversed its downturn and increased 3.3 percent over the prior year; 85 percent of these jobs are in small businesses. While automakers are typically large businesses, 74 percent of jobs in motor vehicle and parts are found in small businesses; these have benefited from 5.4 percent employment growth in this sector.
In addition to these promising trends, lower interest rates and dwindling inventories have led to double-digit increases in home prices in major metropolitan areas. The S&P/Case-Shiller Index of property prices in 20 cities climbed 13.6 percent from October 2012, the biggest 12-month gain since February 2006. Home equity is an important source of capital for small business, so improvement in home prices and home equity should boost access to capital.
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Tags: Research & Statistics
December 20th, 2013 · Comments Off
Every year, the federal government spends hundreds of billions of dollars on products and services across the country, making it the largest goods purchaser in the United States. Although this is a great opportunity for small businesses, it is often times an unrealized one. Small businesses create 60 percent of the net new jobs in this country and employ half of the private-sector workforce. So if America provided more federal contracts to small businesses, it would grow the economy of the United States. The federal government is already working to encourage small business participation in the procurement sector.
For example, a new GSA program by the federal government will hopefully increase the availability of government contracts to small businesses. The reverse auction program puts a request of goods and services online and gives businesses the opportunity to bid on providing the goods and services. Through the auction process, federal agencies award contracts to the lowest bidder while increasing the savings to the American taxpayer.
Although the intention of the program is good, the results have had mixed reviews. Many believe it works for the purchase of goods or simple services. However, when entering into more complex agreements and services, some believe the program is flawed.
Last week, the Office of Advocacy’s Assistant Chief Counsel Major Clark testified on the subject during a joint hearing of two subcommittees, the House Small Business Subcommittee on Contracting and Workforce and the Veterans’ Affairs Committee’s Subcommittee on Oversight and Investigations. In his testimony, Clark stated that the Office of Advocacy is not in opposition to reverse auctions in the federal marketplace; however, the office is committed to making sure that small business stakeholders have full opportunity to participate.
Moving forward, Advocacy believes we can continue to encourage participation by small businesses in the federal procurement process. For this particular program, Advocacy believes it is necessary that the Office of Federal Procurement Policy give clear guidance for reverse auctions to small businesses. Once small businesses are able to fully understand how reverse auctions will be carried out, small businesses will be able to not only participate, but also, gain these lucrative contracts.
Tags: Regulatory Policy
December 12th, 2013 · Comments Off
The Environmental Protection Agency is in the process of revising the standards for municipal solid waste landfills required by the Clean Air Act. As a first step, EPA is conducting a Small Business Advocacy Review panel. This activity brings together the key rulemaking agencies and small business representatives of the industry that the rules will apply to. The panel lets the various parties discuss the approach to achieving air pollution reductions.
The topic of the panel, New Source Performance Standards (NSPS) for Municipal Solid Waste (MSW) Landfills, deals with the emissions of landfill gases, the result of biological materials decaying in landfills. These gases are mostly carbon dioxide and methane, but EPA regulates them because of the small amount of other organic chemicals also released that can endanger public health.
Staff from Advocacy, EPA and the Office of Management and Budget have met twice with small entity representatives (SERs) to discuss the major issues. After participating in these discussions, Advocacy staff wanted to get a better understanding of the issues facing small municipalities and small businesses owning or operating landfills.
At the invitation of one of the SERs, four Advocacy staffers visited two landfills on the Delmarva Peninsula. (Delmarva is the three-state landmass between the Chesapeake Bay and the Atlantic Ocean shared by Delaware, Maryland, and Virginia.)
The first landfill (pictured below) was a small and relatively new one located in Caroline County, Maryland. The operators were just installing the first set of landfill gas controls on its first “cell.” (A cell is a section of the landfill. Each landfill will have several cells, but will accept solid waste on only one cell at a time, building up the cell over a hundred feet before moving to the next cell.) The system of controls requires digging a trench into the compacted trash and laying perforated pipe to collect and move the landfill gases to well heads set in the side of the pile. From the well heads, landfill gas can be flared or, if there is enough volume, burned to generate electricity.
Pictured: In November, four Advocacy staffers got a firsthand account of how landfill operators comply with Clean Air Act requirements. Making the trip were Director of Interagency Affairs Charles Maresca, Assistant Chief Counsel David Rostker, and Economists Christine Kymn and Jonathan Porat. They are standing alongside perforated pipes which are buried in trenches to collect landfill gases and direct them to well heads.
The second landfill was a much larger and older facility; it had both open and closed cells with active control and energy recovery systems. The engineers at both sites were extremely generous with their time, patiently explaining the basics of landfill management and the complexities of dealing with EPA regulations.
Advocacy staff find that site visits like these are invaluable to understanding the issues small entities face in regulatory compliance and help Advocacy present the small entity view to regulating agencies.
—David Rostker, Assistant Chief Counsel
Tags: Regulatory Policy
November 25th, 2013 · Comments Off
In October, I participated on a panel at the national conference of the National Minority Supplier Development Council in San Antonio, Texas. The two-hour panel examined the changing environment in government and its impact on minority suppliers.
The Council promotes business opportunities for its 16,000 certified minority-owned businesses (mostly small), and connects them to its 3,500 corporate members. These include most of America’s largest companies, plus universities and other buying institutions. The importance of the minority business sector to overall health of the American economy should not be overlooked. Data shows that minority-owned firms are increasing in actual numbers and the amount of gross receipts. They are also creating jobs at a faster pace than non-minority businesses in a wide range of industries including professional, scientific and technical services, health care and social assistance, and construction. As these firms grow and build capacity the positive economic effects will be seen not only in minority communities but the country as a whole.
Other individuals on the panel included:
- Gloria Pualan, director of Small Business Liaison/Socio-Economic Business Programs, Northrup Grumman;
- Janice Williams-Hopkins, purchasing & supply management specialist for the U.S. Postal Service; and
- David Hinson, national director of the Minority Business Development Agency at the U.S. Department of Commerce
While each speaker discussed their individual programs, the main takeaways from the panel included:
- Government remains the largest purchaser of goods and services in the world. It has goals for doing business with small disadvantaged businesses. These goals should help increase opportunities for small and minority-owned businesses.
- Prime contractors seem to be increasingly willing to examine unique partnering opportunities with minority businesses to work on government contracts.
- The amount of help for small minority-owned businesses and subcontractors is growing. This is happening through the growth of mentor-protégée programs sponsored by government and corporations or prime contractors, as well as via other MBDA and SBA programs.
There was great information provided to attendees about the benefits of the federal government both as a customer and a resource to build their businesses. The Office of Advocacy is one of these resources. As the independent voice for small business within the federal government, we help small businesses by reviewing regulations before they become final and by performing and promoting economic research on small business and the economy. In addition, Advocacy’s Innovation Initiative is a project where we seek input from the innovation ecosystem on the challenges in starting and growing innovation businesses as well as solutions to these challenges.
I was glad for the opportunity to reach out to a traditionally underserved, yet growing, business sector.
—Mark Harrison, Entrepreneur-in-Residence
Tags: Research & Statistics · State and Regional
October 25th, 2013 · 1 Comment
Online attacks on the nation’s critical infrastructure are one of the most serious challenges to U.S. national security. Power generation, transportation and telecommunications are the backbone of U.S. critical infrastructure, and these sophisticated systems rely on information technology, which makes them susceptible to online attacks.
In February 2013, President Obama issued Executive Order 13636—Improving Critical Infrastructure Cybersecurity, outlining steps to reduce the risk of cyberattack on power, transportation, and telecom networks.
On October 22, the U.S. Department of Commerce’s National Institute of Standards and Technology (NIST) released its Preliminary Cybersecurity Framework. The framework is the first step in helping critical infrastructure owners and operators reduce the risk of cyberattack. It outlines a set of steps that can be customized to various sectors and adapted by both large and small organizations while providing a consistent approach to cybersecurity. It also helps identify and prioritize opportunities for improvement within the context of risk management and to assess progress toward cybersecurity goals.
Pictured: The framework core structure outlines the approach to assessing threats. From “Preliminary Cybersecurity Framework,” page 5.
In the near future, NIST will provide an opportunity for the public to submit comments on the framework. The Office of Advocacy will issue a Regulatory Alert when the public comment period opens. NIST plans to release the official framework in February 2014, as called for in the executive order.
Additional information about the preliminary framework is available on NIST’s website. For more information, call or email Assistant Chief Counsel Major Clark, (202) 205-7150.
—Assistant Chief Counsel Major Clark III
Tags: Regulatory Policy
September 27th, 2013 · Comments Off
- Pictured: Sarah Bresolin Silver, assistant chief counsel, and Doug Babbitt, executive vice president of Rutland Plywood Corporation, on a site visit to the Vermont small business in July.
The federal rulemaking process can be long and involved. The Office of Advocacy plays a small but important role in this process which is spelled out in the Regulatory Flexibility Act and several executive orders. The Environmental Protection Agency’s formaldehyde rulemaking is a current example of how the office makes sure small business is represented throughout a prolonged, complex process. (Table 1 contains a brief timeline.)
The topic of regulating formaldehyde in home building materials dates to 2005, when the trailers housing the residents displaced by Hurricane Katrina were found to have high levels of formaldehyde gas. The push for regulations was launched in 2008. In March of that year, 25 organizations and 5,000 individuals petitioned EPA to adopt the California Air Resource Board’s (CARB) airborne toxic control measures for formaldehyde in composite wood products nationally. In June, EPA announced a decision to grant some parts of the petition, and the agency issued an advance notice of proposed rulemaking in December.
Advocacy became involved in fall of 2010 when EPA convened a Small Business Regulatory Enforcement Fairness Act (SBREFA) panel. SBREFA requires that EPA seek input from affected small businesses before proposed rules are published. At this early stage, small businesses can help shape the regulatory approach, which is much more effective than asking for substantive changes after a rule has been proposed.
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Tags: Regulatory Policy · State and Regional
September 18th, 2013 · 1 Comment
Progress of the U.S.–Canada Effort to Streamline Regulatory Differences
On August 29, the Office of Management and Budget asked for comments on the U.S.–Canada Regulation Cooperation Council’s progress.
Background: In February 2011, President Obama and Prime Minister Harper announced the creation of the Canada–U.S. Regulatory Cooperation Council (RCC). The council is charged with addressing regulatory differences between the two governments and working to improve free and open trade that encourages jobs and growth in both countries. Now, the RCC wants stakeholder input for issues and/or sectors that should be considered for future cooperation between countries. Comments are due by Friday, October 11, 2013.
Affordable Care Act Reporting Requirement
On September 5, the Internal Revenue Service (IRS) issued a proposed regulation to implement the information reporting requirements under the Affordable Care Act (ACA).
Background: The regulation would require insurers, self-insured employers, government-sponsored programs, and entities that provide minimum essential coverage to report information on this coverage to the IRS and to covered individuals. As part of the effort to minimize the cost and administrative steps associated with the reporting requirements, the proposed regulations do not require reporting information that would not be needed by individual taxpayers or the IRS for purposes of administering the individual shared responsibility provisions or the credit for small employers. All small businesses that provide minimum essential coverage are affected by this rule. The comment deadline is November 8, 2013.
Tags: Regulatory Policy