Mr. Dustin Rhoades, CEO and Owner, Ability Tech — Chair Shaheen, Ranking Member Ernst, and Members of the Committee

Summary

Written testimony of Dustin Rhoades, CEO and Owner of Ability Tech, dated November 15, 2023 and addressed to Chair Shaheen, Ranking Member Ernst and Members of the Senate Committee on Small Business and Entrepreneurship, on challenges facing veteran-owned small businesses. The testimony describes Ability Tech, an Iowa company building adaptive technology, and its nonprofit foundation. It identifies access to capital and government contracting as hurdles and reports rising costs, including a 50% increase in the cost of aluminum. It states that awareness of SBA programs for veterans has been limited and describes help from the Small Business Development Center and the Iowa State University Pappajohn Center for Entrepreneurship. It asks the committee to pursue streamlined communication, tailored training, flexible funding and mentorship for veteran entrepreneurs.

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Full text

Mr. Dustin Rhoades
CEO and Owner, Ability Tech

Chair Shaheen, Ranking Member Ernst, and Members of the Committee: Good afternoon and
thank you for the opportunity to testify today about the challenges and opportunities facing
veteran owned small businesses.

With profound gratitude, I stand before you as the CEO of Ability Tech, a company committed to
revolutionizing accessibility through innovative technological solutions. Our journey is deeply
personal and began with my son, who was born missing 97% of his brain. In 2019, I created a
piece of adaptable technology to enable him to play baseball. That inspired us to found Ability
Tech and create adaptable technology for individuals from all walks of life. This, coupled with a
sincere aspiration to impact the live of individuals with disabilities, is what got us here today.

Our mission at Ability Tech is both simple and profound: to serve each unique individual, to
support the disabled community, and, importantly, to alleviate the financial burdens faced by
families dealing with disabilities. We understand the fixed-income limits that many of these
families confront. We believe that families and caregivers shouldn't have to choose between
medical treatments, bills, therapies, or the quality-of-life inventions that could transform their
world. At Ability Tech, we do our best to build affordable adaptive tech and work with families
on a budget to ensure they can get the technology they need.

Additionally, we established the Ability Tech Foundation. This nonprofit organization allows
compassionate individuals and organizations to sponsor families, lightening the load of financial
strain and providing life-changing solutions. Our Blessing Bag project was born out of the
simple belief that parents and caregivers, often stranded in hospital rooms far from home, should
have one less worry on their minds.

Pursuing entrepreneurship as a veteran has unique challenges. The transition from military
service to the unpredictable nature of the business world was a constant challenge during the
early days of our venture. Access to capital emerged as a formidable hurdle, compounded by our
rural location and the niche nature of the adaptive technology industry. Convincing traditional
lenders of the societal impact of our business model became a mission in itself, given the smaller
percentage of the population composing our demographic.

Our journey has been enriched by local resources such as the Chamber of Commerce, the Small
Business Development Center (SBDC), and the Iowa State University Pappajohn Center for
Entrepreneurship. These entities have played a pivotal role in our growth, providing essential
guidance, networking opportunities, and resources. Yet, challenges persist, particularly in
accessing capital and navigating the intricate landscape of government contracting.

Government contracting emerged as a pivotal part of our growth strategy. Events like Senator
Ernst's Entrepreneur Expo in Iowa and the Iowa State University Pappajohn Center for
Entrepreneurship’s Iowa Veterans Entrepreneurship Conference opened our eyes to the
possibilities within government contracting. However, the bureaucratic landscape, particularly
dealing with language and the time commitment involved, demanded a steep learning curve. We
commend the efforts made to ensure taxpayer funds are allocated to American companies, but the
process requires further simplification and support, especially for small businesses.

The current economic inflation has impacted our business. Rising costs across the board have led
us to adapt our strategies to navigate these economic challenges. Our operational costs,
encompassing everything from raw materials to utilities, have increased. This directly impacts
our bottom line, prompting a review of our budgeting and expenditure strategies. We’ve had to
explore cost-effective alternatives without compromising the quality of our products and
services. For example, the costs of raw materials such as aluminum have seen a significant
increase of 50%, impacting our product pricing and profit margins.

While we acknowledge the role of the SBA in supporting small businesses, our awareness of its
programs, especially those dedicated to veterans, has been limited. The need for streamlined
communication and enhanced outreach cannot be overstated. Clear and efficient communication
channels, specifically targeted at veteran entrepreneurs, are crucial to ensuring that the resources
and programs available are effectively disseminated. Tailored training programs, flexible funding
options, and increased networking opportunities would contribute significantly to the success of
veteran-owned businesses.

Our engagement with the Small Business Development Center (SBDC) has been positive,
facilitated by a strong relationship with our local SBDC Director. However, we emphasize the
need for more local tailored resources for veteran-owned businesses. Initiatives like the
Pappajohn Center’s Veteran Entrepreneurship Conference have started addressing this gap on a
state level but require further support and expansion.

Our journey has been enriched by the guidance and mentorship of other small business owners
who have walked similar paths. Entities like the Siouxland Chamber of Commerce have played a
pivotal role in holding networking events and local business forums, fostering connections
within the business community. Senator Ernst’s Entrepreneurship Expo and the Papajohn
Center’s Veteran Entrepreneurship Conference provided invaluable opportunities for
engagement, sharing experiences, and receiving advice. However, the ongoing challenge lies in
finding seasoned mentors who are more experienced or established business leaders who
understand the need for support.

Looking ahead, our biggest priority is access to funding. As an early-stage small business
operating out of our garage, the demand for our products has outpaced our capacity. Our current
pace has put our current orders over one year out, and our requests for inventions have stretched
our timeline to 30 years. Our unique business structure demands innovative solutions, and
federal programs that back veteran-owned businesses to a certain percentage could significantly
aid our initial growth, particularly in securing funding to bring manufacturing to Iowa.

In conclusion, I urge the Senate Committee on Small Business and Entrepreneurship to explore
opportunities for better supporting veteran entrepreneurs and small business owners.
Strengthening small businesses, particularly those led by veterans, requires a multifaceted
approach. Streamlined communication, tailored training programs, flexible funding options,
increased networking opportunities, and mentorship initiatives are pivotal in fostering a
supportive ecosystem. As we collectively work towards these goals, we pave the way for a more
vibrant and resilient entrepreneurial landscape.

Thank you for your time and your consideration. I look forward to working with you to support
veteran entrepreneurs and small business owners.


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