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Mr. Michael Chodos

Associate Administrator, Office of Entrepreneurial Development, United States Small Business Administration


Chair Landrieu, Ranking Member Snowe and members of the Committee. Thank you for the opportunity to testify before this Committee today.

We at the SBA appreciate your strong support of the Agency as well as your continued leadership on issues impacting America’s small businesses.

As Associate Administrator for Entrepreneurial Development, I’ve led my office’s focus on three key areas: First, we’ve strengthened SBA’s entrepreneurial education, counseling, mentoring and training resources to better support America’s small businesses. Second, we’ve developed new and effective ways to connect our entrepreneurship resources with service members and veterans, women-owned businesses, and young, “encore” and underserved entrepreneurs. Third, building on Administrator Mills’ pioneering work in this area, we’ve worked with state and local governments and over 16 other federal agencies to support and develop 43 regional innovation clusters.

SBA’s Entrepreneurial Development programs and partners are deeply embedded in local and regional economic development eco-systems across America. We support over 1 million clients annually as they start and grow their small businesses. From underserved, urban and rural communities to mainstream and high growth small businesses, and in all regions and industries, we provide the path to growth. We have more than 14,000 business counselors, mentors and trainers available through over 1000 Small Business Development Centers, 106 Women’s Business Centers, and over 350 SCORE chapters. Since 2009, we’ve also provided intensive entrepreneurship training to over 1,300 small businesses in 27 cities across America through our groundbreaking e200/Emerging Leaders program.

As this Committee knows well, SBA-supported counseling, training and mentoring makes a difference: Those who receive our entrepreneurship support are more likely to start businesses, their businesses are more likely to survive, and they are better prepared to obtain financing and to plan effectively for future business growth. This past year alone, the clients we assisted started almost 16,000 new businesses and accessed over $4 billion in new capital.

But we and our partners don’t just support innovation, we practice it. That’s why for this past year we’ve made collaboration and coordination a key goal and objective across all our Resource Partner and cluster networks. We’re the Front Door to success -- and also to the federal government -- for over 1 million small businesses a year. We want to make sure we maximize the benefit our small business customers receive from all the different experts within our Network, while also getting the best bang for

the buck with taxpayers’ money. In addition, in direct coordination with our Resource Partners, we are working on better ways to measure and report out comparative performance metrics across the entire Network. We believe that transparency leads to ongoing self-reflection, innovation and improvement, and we look forward to great progress on this front in the coming year.

In addition to in-person training and counseling, the SBA continues to expand its online engagement with small businesses. Since 2009, more than 2.5 million people have accessed the courses, assessments and tools available on SBA.gov on topics as diverse as business planning, market and competitive analysis, use of social media, and navigating the federal contracting landscape.

One of SBA’s top priorities is making sure tools are in place for helping small businesses receive federal contracts. We strongly support permanently increasing the size of the SBA surety bond guarantee from $2 million to $5 million, as called for in the SUCCESS Act. Another important contracting piece of the SUCCESS Act and the RESTART Act is the women-owned contracting provision, which would remove caps on contract awards under the women-owned small business program. We believe this will allow more federal contracts to flow to women-owned small businesses.

Over the past four years, SBA has developed new partnerships and programs that expand the Agency’s reach to more small business owners in more communities across the country. For example, we know that veterans over-index in entrepreneurship. So, working with the Departments of Defense, Veterans’ Affairs and Labor, we recently launched Boots to Business in pilot locations at selected military facilities across the country. When fully rolled out, Boots to Business will provide an introduction to the opportunities and realities of small business ownership and entrepreneurship as an optional track for the 250,000 service members transitioning each year through TAP.

In addition, we’re working with AARP to train and counsel more than 100,000 “encore entrepreneurs” this coming year on opportunities to use their experience and skills to start and grow businesses. We’re also working with the Department of Labor to pilot Start Young, an entrepreneurship training program for young people, at 13 Job Corps sites across the country. We’ve engaged with Historically Black Colleges and Universities and other Minority Serving Institutions to help traditionally underserved young entrepreneurs access life-long entrepreneurship training and support in our Network. And working with the Department of State, we’re developing increased expertise across our SBDC network to bring thousands of new small businesses into exporting.

Increasing exports among small businesses is a major focus of the SBA, and thanks to the exporting provisions of the Small Business Jobs Act of 2010, the Agency has had new resources and tools to put towards this priority. We are working with agencies across the Administration to build on our recent successes in this area, and look forward to continuing to work with this Committee on these efforts.

Finally, our regional clusters drive economic growth by connecting small business innovators with targeted technical support in our Network as well as with investment and funding partners and procurement and supply chain opportunities. After Year One of taxpayer investment, we saw positive impacts on small businesses in payroll increases, access to capital, and revenue growth. We have also focused intensively on data collection and rigorous analysis of our clusters’ impact.

I have reviewed the SUCCESS Act, the TEAM UP Act, the RESTART Act, and the other pieces of legislation that are before this Committee. We share a common commitment to providing small businesses with the tools they need to start, grow and create jobs. Our Resource Partner and Clusters network has an extraordinarily diverse range of experts in every part of the small business eco-system, and I look forward to working with this Committee in the months ahead on the proposed legislation and other efforts to help improve and increase the ways in which we help small business grow and prosper. Thank you again for the opportunity to testify and I am happy to answer any questions you might have.