Testimony of Zach Luse, CEO and Founder, Paragon Digital Marketing — Streamlining and Coordinating Support for Rural Small Business

Summary

Written testimony of Zach Luse, CEO and Founder of Paragon Digital Marketing, before the U.S. Senate Committee on Small Business and Entrepreneurship at a hearing titled Streamlining and Coordinating Support for Rural Small Business, dated September 18, 2024. The witness describes starting and growing a digital marketing business in Keene, New Hampshire, including renovating a historic building with financing and technical assistance from the NH Community Development Finance Authority. The testimony states that PPP Loans and an EIDL Loan from the SBA were crucial to the business, and describes a pending USDA REAP Grant application and a STEP Grant awarded after the NH Export Accelerator program. It closes with suggestions for coordination among federal programs, including on-the-ground generalist advisors and exceptions to energy usage history requirements for vacant spaces.

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            Testimony of Zach Luse, CEO and Founder, Paragon Digital Marketing
              U.S. Senate Committee on Small Business and Entrepreneurship
              Streamlining and Coordinating Support for Rural Small Business

                                       September 18, 2024

Thank you, Chairwoman Shaheen, Ranking Member Ernst, and all members of this committee. It is an
honor to be here with you today to share my story of entrepreneurship in rural America and working
with government agencies to start and grow my businesses.

I grew up in the small town of DeWitt, Iowa where my dad owned a photography studio.
Entrepreneurship is in my blood. I started my first business in the 3rd grade building wood benches
and selling them out of the front window of my dad’s studio. I ended up in Keene, New Hampshire in
2010 as a trailing spouse and in 2012, I turned my side hustle into Paragon Digital Marketing. Paragon
is a digital marketing agency focused on serving small to mid-size businesses across the country. We
manage ad campaigns, do search engine optimization, email marketing and build websites that help
our clients grow their businesses.

Starting a company that provides its services remotely over the internet came with its challenges in
a rural area where, at the time, access to broadband was very limited. I attended round tables and
wrote several letters on access to broadband and I greatly appreciate Chairwoman Shaheen’s work
on this issue. Thank you for all you’ve done to address this critical need!

As Paragon has grown, the need for a larger office space with suitable internet access was a major
challenge in downtown Keene. In 2018, I looked at an old church that had sat vacant for nearly a
decade right off Central Square in Keene with fiber internet on the poles across the street. That’s
where my story begins. After a lot of research into what it would cost to renovate the space and
make it energy efficient, I threw caution to the wind and bought the building. It’s a beautiful 13,000
square foot, red brick building, built in 1869 that is on the National Register of Historic Places. I had no
idea how much work was ahead of me but after lots of Googling, emails and conversations, I
connected with the NH Community Development Finance Authority (CDFA). I ended up utilizing a low
interest loan from NH CDFA’s Energy Fund that included American Recovery and Reinvestment Act
(ARRA) Funds to finance a new roof and 33Kw solar array. NH CDFA offered technical assistance,
connected me with the right people and agencies to get energy audits and rebates. I had to finance
parts of the project through the NH Business Finance Authority that weren’t covered by the federal
funds. I was also the first business in Keene to apply for community revitalization property tax
incentives (RSA 79-E) to help offset the initial investment in saving this building. I worked with so
many different organizations that had different processes, different requirements and everything
was in silos, it was hard to find information and navigate everything, all while I was running a
business and raising small children. Without the assistance of the state’s CDFA to help navigate
everything, I don’t think I would have been able to complete this project on my own.

We moved into our space in June of 2020 amid a lot of uncertainty. PPP Loans and an EIDL Loan from
the SBA were crucial to the continued success of Paragon. The new office has turned out better than
I could have imagined, the solar produces more power than we need to heat, cool and run our
business. This has made my business stronger and more resilient; I have no energy bills so when
energy costs spiked a couple years ago, it didn’t impact my business at all.

My story continues with my next venture, an indoor beer garden in the large sanctuary on the second
floor of the church building. I’m in the process of applying for a USDA REAP Grant to offset the cost of
installing a geothermal heating and cooling system. With the grant I’ll be able to replace the large oil-
fired steam boiler with a zero-carbon heating system. This will help in the cold winters when all the
businesses profits would have been burnt up in the oil boiler trying to heat the space, reducing energy
cost and making this new business more resilient while solidify the survival of this historic building
for another 150 years. I’m working with Clean Energy New Hampshire for technical assistance for the
USDA Grant which, again, has really helped with navigating the process. I’ll likely apply for a NH
Department of Energy Grant as well, but that grant is on a completely different timeline and
completely different process for applying. The long approval times for both the USDA and NH
Department of Energy grants will delay the opening of this new business but I feel the benefits of
this energy project are worth the delays.

I recently completed the NH Export Accelerator program in which the NH Small Business
Development Center (NH SBDC) brought together resources from the U.S. Commercial Service, NH
Smal Business Administration District Office and NH’s Office of International Commerce. I worked
with SBDC Advisors to develop an export plan to export Paragon’s services to businesses and
organizations in Brazil and I’ve just been awarded a STEP Grant to help put my plan into action. I leave
in a week for a trade mission to Brazil, the U.S. Commercial Service has setup meetings with
prospective clients, and I already met virtually with the first one earlier this week. This is a great
example of NH SBDC bringing together resources and funding from different agencies, helping
businesses navigate the resources and develop a plan. I didn’t know many of these resources
existed and it would have taken me a lot of time to research and connect with the people at each
agency.

This type of multi- agency coordination and assistance is critical for small businesses like mine.
However, business resource providers like SBDC, while they’re well acquainted with SBA programs
and very knowledgeable about business development issues, they don’t always have the staff
capacity to be aware of every program that could benefit rural entrepreneurs. Enhanced
coordination and communication among federal government programs that support small business
is critical. Additional resources for rural businesses, and the organizations that support us, would be
hugely beneficial. With this support we will be better prepared to navigate the landscape of federal
resources available to us. We’ll then have time to do what we do best, run our businesses, create
jobs, build wealth for families in our communities, and help grow the American economy.

Through much of Paragon’s journey I’ve been a proud client of the NH Small Business Development
Center. I turned to the NH SBDC for support and assistance applying for PPP and EIDL loans and have
continued to work with their business advisors ever since. The NH Export Accelerator opened a great
opportunity for Paragon to start exporting its services. When I decided to start my second business,
they paired me with an advisor that has expertise in the service industry for assistance with market
research, financial projections and business planning. I’ve also utilized their cyber security
preparedness program among other programs. My business advisors have been an incredible asset to
both of my businesses and have connected me to numerous resources and opportunities over the
years.

I have one final story to share from my role as a trustee of Savings Bank of Walpole, our region’s
community bank. We have approved some amazing opportunities for local entrepreneurs that were
backed by SBA and USDA programs. A recent one that really stuck with me included two farm hands
that used USDA programs and loan guarantees to purchase the dairy farm they worked on from the
retiring owners. This would not have been possible with the USDA backing and I imagine it will change
the trajectory of the new owners’ lives while keeping the dairy farm in production for many more
years to come. I’m curious to learn more about the potential synergies between USDA and SBA
lending programs that could stand to benefit rural small businesses.

In summary, my business would not be where it’s today and I wouldn’t be starting a second business
if it weren’t for the resources from Federal, State and Local programs that support rural businesses.
As a small business owner in a rural area, I’ve faced unique challenges, including limited access to
broadband, lack of educational institutions in the area with programs related to my business, a
limited number of service providers in the area to support my business needs, and shortages of
qualified workers that are more severe than what is seen in more populated areas. My business is
stronger and more resilient because of these programs. Unfortunately, these programs exist in silos
which can make it hard to find information, understand requirements and eligibility and navigate
without the help of someone who has been through the process.

Some ideas I have for more coordination between federal agencies and general improvement to
federal programs that could make it easier for rural businesses to connect with and utilize these
resources include:
    • Having staff on-the ground that serve as generalists or advisors that have an awareness of
        all the programs, how they can be utilized, can build bridges between the silos, provide
        technical assistance, and facilitate communication and questions with the various agencies.
    • More programs like NH SBDC’s Export Accelerator that bring together resources from
        various stakeholders focused on solving specific problems for rural businesses.
    • I appreciate that the USDA Grants have quarterly cycles but REAP Grants can take several
        months to get approved right now. The timing and cycles of some of these programs don’t
        always line up with real world business needs.
    • Specific to energy efficiency resources, I understand why 12 months of energy usage is
        required so the effectiveness of the funds can be measured by actual energy saved but not all
        projects will have historical energy usage. In my case both my projects are spaces that had
        been vacant for many years, and I didn’t qualify for most of the incentives because I didn’t
        have any heating history. Exceptions for vacant spaces or adaptive reuse of spaces to use
        energy modeling or other methods to show energy savings would be very helpful.

I appreciate all that you do to support small businesses like mine. Thank you for the opportunity and
privilege to share my story and insights today.


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