Military to Main Street: Serving Veteran Entrepreneurship (House Small Business Committee hearing, June 8, 2022)
Summary
Transcript of the June 8, 2022 House Committee on Small Business hearing Military to Main Street: Serving Veteran Entrepreneurship, Small Business Committee Document Number 117–057. Chairwoman Nydia Velázquez and Ranking Member Blaine Luetkemeyer gave opening statements. Witnesses were Dr. Michael Haynie of the Syracuse University Institute for Veterans and Military Families, Brenton Peacock of the Florida Veterans Business Outreach Center at Gulf Coast State College, Laurie Sayles of Civility Management Solutions for the Women Veterans Business Coalition, and Joe Shamess of Flintlock Capital. The appendix carries prepared statements, questions from Byron Donalds with answers from Peacock and Shamess, and letters from CUNA and from NAFCU with DCUC. The committee adjourned at 11:51 a.m.
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MILITARY TO MAIN STREET: SERVING VETERAN
ENTREPRENEURSHIP
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION
HEARING HELD
JUNE 8, 2022
Small Business Committee Document Number 117–057
Available via the GPO Website: www.govinfo.gov
U.S. GOVERNMENT PUBLISHING OFFICE
47–738 WASHINGTON : 2022
HOUSE COMMITTEE ON SMALL BUSINESS
NYDIA VELÁZQUEZ, New York, Chairwoman
JARED GOLDEN, Maine
JASON CROW, Colorado
SHARICE DAVIDS, Kansas
KWEISI MFUME, Maryland
DEAN PHILLIPS, Minnesota
MARIE NEWMAN, Illinois
CAROLYN BOURDEAUX, Georgia
TROY CARTER, Louisiana
JUDY CHU, California
DWIGHT EVANS, Pennsylvania
CHRISSY HOULAHAN, Pennsylvania
ANDY KIM, New Jersey
ANGIE CRAIG, Minnesota
BLAINE LUETKEMEYER, Missouri, Ranking Member
ROGER WILLIAMS, Texas
PETE STAUBER, Minnesota
DAN MEUSER, Pennsylvania
CLAUDIA TENNEY, New York
ANDREW GARBARINO, New York
YOUNG KIM, California
BETH VAN DUYNE, Texas
BYRON DONALDS, Florida
MARIA SALAZAR, Florida
SCOTT FITZGERALD, Wisconsin
MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director
(II)
CONTENTS
OPENING STATEMENTS
Page
Hon. Nydia Velázquez ............................................................................................. 1
Hon. Blaine Luetkemeyer ....................................................................................... 2
WITNESSES
Dr. Michael Haynie, Executive Director of the Syracuse University Institute
for Veterans and Military Families, Syracuse University, Syracuse, NY ....... 6
Mr. Brenton Peacock, Director, Florida Veterans Business Outreach Center
at Gulf Coast State College, Panama City, FL .................................................. 7
Ms. Laurie Sayles, President & Chief Executive Officer, Civility Management
Solutions, Greenbelt, MD, testifying on behalf of the Women Veterans
Business Coalition ................................................................................................ 9
Mr. Joe Shamess, Founder & General Partner, Flintlock Capital, Great Falls,
VA .......................................................................................................................... 11
APPENDIX
Prepared Statements:
Dr. Michael Haynie, Executive Director of the Syracuse University Insti-
tute for Veterans and Military Families, Syracuse University, Syracuse,
NY .................................................................................................................. 37
Mr. Brenton Peacock, Director, Florida Veterans Business Outreach Cen-
ter at Gulf Coast State College, Panama City, FL ..................................... 42
Ms. Laurie Sayles, President & Chief Executive Officer, Civility Manage-
ment Solutions, Greenbelt, MD, testifying on behalf of the Women
Veterans Business Coalition ........................................................................ 48
Mr. Joe Shamess, Founder & General Partner, Flintlock Capital, Great
Falls, VA ........................................................................................................ 53
Questions and Answers for the Record:
Questions from Hon. Donalds to Mr. Peacock and Answers from Mr.
Peacock .......................................................................................................... 57
Questions from Hon. Donalds to Mr. Shamess and Answers from Mr.
Shamess ......................................................................................................... 58
Additional Material for the Record:
CUNA (Credit Union National Association) ................................................... 59
Joint Letter from NAFCU (National Association of Federally-Insured
Credit Unions) and DCUC (Defense Credit Union Council) ..................... 60
(III)
MILITARY TO MAIN STREET: SERVING
VETERAN ENTREPRENEURSHIP
WEDNESDAY, JUNE 8, 2022
HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
Washington, DC.
The committee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building, Hon. Nydia Velázquez
[Chairwoman of the Committee] presiding.
Present: Representatives Velázquez, Crow, Davids, Phillips,
Bourdeaux, Carter, Houlahan, Kim of New Jersey, Craig, Luetke-
meyer, Williams, Stauber, Meuser, Tenney, Garbarino, and Fitz-
gerald.
Chairwoman VELÁZQUEZ. Good morning. I call this hearing to
order.
Without objection, the Chair is authorized to declare a recess at
any time.
I would like to begin by noting some important requirements.
Standing House and Committee rules will continue to apply during
hybrid proceedings. All Members are reminded that they are ex-
pected to adhere to these rules, including decorum.
House regulations require Members to be visible through a video
connection throughout the proceeding, so please keep your cameras
on. Also, remember to remain muted until you are recognized to
minimize background noise.
In the event a Member encounters technical issues that prevent
them from being recognized for their questioning, I will move to the
next available Member of the same party and I will recognize that
Member at the next appropriate time slot provided they have re-
turned to the proceeding.
More than 200,000 service Members transition from military to
civilian life every day. These veterans take skills gained during
their service and go on to make a substantial impact across many
areas of American life. Some go to school, some pursue new voca-
tions in the private sector, and many go on to start small busi-
nesses.
As Members of this Committee know, starting a small business
is not for the faint of heart. It takes courage, wits, and leadership
to achieve the American dream of owning a successful enterprise.
That is precisely why the men and women that serve our country
in the military are naturally suited to become entrepreneurs.
Former service Members own approximately 1.8 million busi-
nesses across the United States, most of which are small. These
(1)
2
businesses employ millions of workers, are responsible for over $1
trillion in revenue, and do so much for their communities.
That is why it is concerning to see that veteran self-employment
rates have declined from 16 percent in 1998 to 11 percent in 2018.
To reverse this trend, we must do all we can to reduce barriers to
entrepreneurship for those that have served our country.
Like all entrepreneurs, veteran business owners express concern
about their ability to access capital. They also cite other issues
such as not knowing how to get started, accessing technical assist-
ance, and finding a mentor.
Fortunately, the SBA has a range of counseling, training, and
lending options tailored to the needs of veterans and their families.
Today, I want to look closely at these programs and discuss ways
to improve these offerings to operate more effectively and reach
more veterans.
During the 117th Congress, we have taken steps to empower vet-
erans and military families who want to start or grow their busi-
nesses. For example, last summer, our Committee passed the Vet-
eran Entrepreneurship Training Act of 2021, which was introduced
by Representative Brad Schneider and Vice Ranking Member Wil-
liams.
The bill would codify the Boots to Business Program, which of-
fers transitioning service Members and military spouses informa-
tion about self-employment and business ownership.
The legislation passed the House last fall, and a companion bill
was recently reported favorably by the Senate Small Business and
Entrepreneurship Committee. We hope the bill will pass the Senate
soon.
This is a prime example of the actions that Congress can take
to make it easier for veterans to get their businesses up and run-
ning.
Today, I look forward to hearing from representatives from
across the veteran entrepreneurial ecosystem about the challenges
veteran entrepreneurs face and how SBA programs can continue to
improve. I hope that your testimony will shed light on how these
offerings helped, where they fell short, and what Congress can do
to ensure these programs meet veteran entrepreneurs’ needs.
I would now like to yield to the Ranking Member, Mr. Luetke-
meyer, for his opening statement.
Mr. LUETKEMEYER. Thank you, Madam Chair, for calling to-
day’s hearing.
Last month was Military Appreciation Month, and we celebrate
all who served our country and risked their lives for our freedom.
We also mourn the loss of those who gave their lives in service to
our country.
I want to start off by thanking all our nation’s veterans, service
Members, and their families for their sacrifice to our great country,
including those testifying before us today.
As we all know, veteran-owned small businesses exemplify a re-
siliency unlike any other. These brave men and women not only
served our country in one of the highest regards, but also came
home and continued to support their communities through entre-
preneurship and employing fellow veterans.
3
There are more than 350,000 veteran-owned businesses in this
country and they provide an estimated 4 million jobs. From my
interactions and conversations with veteran-owned business own-
ers, they give back to their communities, they hire and support fel-
low veterans, and they greatly contribute to our economy.
During National Veteran Small Business Week in November, I
was honored to host a veteran small business showcase and round-
table. Over a dozen veteran entrepreneurs brought items that rep-
resented their businesses to the capital and shared their stories. So
today I would like to take a moment to share some of those amaz-
ing veteran-owned small business stories.
Four Brothers Mead, located in the great state of Missouri, is a
veteran-owned and operated family company bringing people of all
backgrounds and ethnicities together through Mead.
The four brothers, which also, by the way, includes brothers-in-
laws here, include Bryan Becker, a veteran combat medic and ser-
geant; Chris Schulte, who is currently serving in active reserve sta-
tus as a military police staff sergeant; Joe Luck, a U.S. Army vet-
eran staff sergeant; and Dan Luck, an Air Force veteran and
former air transportation airman.
Valhalla’s Forge LLC is a veteran and family-owned company
that makes custom tables, flags, shields, plaques, and more with a
focus on giving back to families of the fallen and retirees. After 20
deployments and 15 awards for his service, including a Bronze
Star, Retired Navy Seal Chief Warrant Officer James Hintzke is
the CEO of this inspiring business.
Soulcial Kitchen was founded by Brigadier General (Ret.) John
Michel, who served 26 years in the Air Force and led NATO’s ef-
forts to build the Afghan Air Force. He continues to serve others
through his hospitality park, which features restaurants, bars, food
trucks, and a dog park. He also supports other veteran entre-
preneurs and created the first food truck entrepreneur program.
I would also like to recognize other veterans who attended the
showcase and roundtable and shared their stories.
Brian Bufka, United States Navy veteran and owner of 1st Place
Printing; Christine Lantinen, an Army veteran reservist and presi-
dent of Maude, Inc.; David Haydel, a veteran Marine Corps reserv-
ist and owner of Haydel’s Bakery; Donald Miller, retired U.S. Navy
veteran and assistant director of the Veterans Business Outreach
Center in Norfolk, Virginia; Jerome Johnson, retired Army Lieu-
tenant Colonel and a Dunkin’ Donuts, Baskin-Robbins franchisee;
Joseph Lindenmayer, U.S. Marine Corps veteran and CEO of Cali-
fornia Closets Gulf Coast; Richard Cope, a U.S. Marine Corps com-
bat officer veteran and CEO of KGM Technologies; Robert Holt,
U.S. veteran and founder of Southern Draw Cigars, LLC; Scott
Matheny, a service-disabled Marine Corps veteran and the presi-
dent and founder of Semper Tek, Inc.; Timothy Shirley, a veteran
Marine Corps staff sergeant and owner of Hive and Honeybee; and
Wes Hester, a service-disabled U.S. veteran and CEO of Foxhole
Technology.
And we also have with us today Mr. Shamess, who will testify
here in a moment and was at that event as well.
As you can tell by the names of some of these companies, their
veterans still think in military terms.
4
In addition to these veteran entrepreneurs, there are countless
others who deserve our deepest thanks and applause.
Again, we will have Mr. Shamess here shortly, but he was an Air
Force Special Operations pilot and National Guard pilot. He is the
cofounder of Flags of Valor and a founder and general partner of
Flintlock Capital. Veteran entrepreneurs like Mr. Shamess are the
definition of American values, service, and innovation.
It is incredible to hear the stories of how veteran small business
owners have used their experiences and skills they have learned in
the service to run a successful business. However, I have also
heard about the unique challenges that veteran entrepreneurs face.
In addition to skyrocketing inflation, supply chain disruptions,
labor shortages and burdensome regulations, veteran-owned small
businesses face added challenges in accessing capital and re-
sources.
The SBA has counseling, capital, and contracting programs that
are designed to assist veteran entrepreneurs in addressing these
challenges. It is important that Congress conducts oversight and
ensures that these programs effectively serve small businesses, in-
cluding veteran-owned businesses.
For this reason I introduced the Improve the SBA Act, which will
increase accountability at the SBA, empower entrepreneurs
through counseling, enhance access to capital opportunities, and
improve federal contracting programs. Additionally, after receiving
feedback from veteran small business owners regarding access to
capital, I wrote a letter requesting the GAO to conduct an analysis
of the effectiveness and efficacy of the SBA’s Access to Capital Pro-
gram, specifically as it relates to veteran-owned businesses.
Further, Vice Ranking Member Williams and Congressman
Schneider introduced the Veteran Entrepreneurship Training Act,
which codifies the Boots to Business Veteran Training Program.
As Republican leader of the House Commitmtee on Small Busi-
ness, I will continue to advance policies that empower our veteran
entrepreneurs, ensure the SBA resource partners are meeting their
needs, and maintain the integrity of contracting programs, and
support access to capital. I look forward to continuing to learn from
our veteran entrepreneurs in how we can support their growth and
prosperity.
It should also be noted that Secretary Yellen has still not been
to this Committee and fulfilled her statutory duty which I ask the
Chairman to look into again.
With that, Madam Chair, I yield back.
Chairwoman VELÁZQUEZ. Thank you, Mr. Luetkemeyer. The
gentleman yields back.
I would like to take a moment to explain how this hearing will
proceed.
Each witness will have 5 minutes to provide a statement and
each Committee Member will have 5 minutes or questions. Please
ensure that your microphone is on when you begin speaking and
that you return to mute when finished.
With that, I would like to introduce our witnesses.
Our first witness is Dr. Michael Haynie. Dr. Haynie is Syracuse
University’s Vice Chancellor for Strategic Initiatives and Innova-
tion, and also the Barnes Professor of Entrepreneurship. Dr.
5
Haynie served 14 years as an officer in the United States Air Force
and in 2011, he founded Syracuse University’s Institute for Vet-
erans and Military Families, the nation’s first interdisciplinary in-
stitute created to inform and advance the policy, economics, and
wellness concerns of America’s veterans and families. Welcome, sir.
Our second witness is Mr. Brenton Peacock. Mr. Peacock is the
Director and Business Analyst for the Veterans Business Outreach
Center (VBOC) serving the State of Florida. Mr. Peacock was
awarded Regional Certified Business Analyst of the Year in 2009
and again in 2012, then Regional Consultant of the Year in 2014.
A successful entrepreneur himself, Mr. Peacock’s work experience
includes 14 years in business counseling and teaching. Welcome.
Our third witness is Ms. Laurie Sayles. She is the President and
CEO of Civility Management Solutions and AmeriCorp veteran.
After serving 10 years in the Marine Corps, Ms. Sayles founded Ci-
vility Management Solutions in 2012 to optimize the performance
and productivity levels of customers. Civility Management Solu-
tions is an SBA certified 8(a). VA verifies the service-disabled vet-
eran, economically disadvantaged woman, and women-owned small
businesses. Welcome back, Ms. Sayles.
I will now yield to the Ranking Member, Mr. Luetkemeyer, to in-
troduce our final witness.
Mr. LUETKEMEYER. Thank you, Madam Chair.
I am honored to introduce our witness, Mr. Joe Shamess, Amer-
ican entrepreneur and hero. Mr. Shamess began his military serv-
ice as a cadet at the United States Air Force Academy and served
11 years as an Air Force Special Operations pilot and 7 years as
an Air National Guard pilot. During his service, he flew an impres-
sive 168 combat missions and was one of the first pilots to stand
up operations in East Africa against al-Qaeda to fight the War on
Terror. In addition to his notable military service, Mr. Shamess has
been an entrepreneur since he started his first business at age 15.
In 2015, he cofounded Flags of Valor with U.S. Army paratrooper
veteran Brian Stoerts. Flags of Valor is the example of the Amer-
ican dream. They started out as a two-person garage operation and
have transformed into a successful American-made, veteran-owned
manufacturing small business known across the country for their
craftsmanship. To fulfill their commitment to give back, Flags of
Valor reports that they have created more than 70 veteran jobs and
raised $1.7 million for veterans and first responder charities. Mr.
Shamess is also the founder and general partner of Flintlock Cap-
ital, an investment management company with a focus on investing
in veteran-led companies. I first had the privilege of meeting Mr.
Shamess during National Veteran Small Business Week when I
hosted a Veteran Small Business Showcase and Roundtable. He is
a true patriot and a champion of America’s small businesses and
manufacturing. Mr. Shamess, we are glad to have you back on
Capitol Hill before the Full Committee. Your extensive experience
and passion for empowering veteran entrepreneurs will benefit this
conversation immensely. Again, thank you for your service. Thank
you for joining today.
I would also like to thank our other witnesses for their service
and thank you for being here with us as well.
Madam Chair, with that I yield back.
6
Chairwoman VELÁZQUEZ. Thank you.
Thank you all for being here. I would like to begin with recog-
nizing Dr. Haynie for 5 minutes.
STATEMENTS OF DR. MICHAEL HAYNIE, EXECUTIVE DIREC-
TOR OF THE SYRACUSE UNIVERSITY INSTITUTE FOR VET-
ERANS AND MILITARY FAMILIES, SYRACUSE UNIVERSITY;
BRENTON PEACOCK, DIRECTOR, FLORIDA VETERANS BUSI-
NESS OUTREACH CENTER AT GULF COAST STATE COLLEGE;
LAURIE SAYLES, PRESIDENT AND CHIEF EXECUTIVE OFFI-
CER, CIVILITY MANAGEMENT SOLUTIONS; JOE SHAMESS,
FOUNDER AND GENERAL PARTNER, FLINTLOCK CAPITAL
STATEMENT OF MICHAEL HAYNIE
Mr. HAYNIE. Chairwoman, Ranking Member, and Members of
the Committee, thank you so much for the opportunity to be here
and share my experiences relative to the military-connected busi-
ness ownership community.
First, I want to express my appreciation to this Committee for
your longstanding history of support to veteran-owned business in
the United States. I have been engaged with the veteran business
ownership community for more than 15 years and over that time
this Committee has been a consistent and thoughtful partner to
those of us who have been working to advance veteran business
ownership in the United States. Your support to service Members,
veterans, their families has been instrumental to the well-being of
the veteran community. And as a veteran myself, I would like to
say thank you for that.
Over the past decade, Syracuse University’s D’Aniello Institute
for Veterans and Military Families, or IVMF for short, has applied
a data-driven lens to the challenge of understanding the opportuni-
ties and the pitfalls associated with the transition from military to
civilian life. And one consistent finding of that work has been the
strong pull to business ownership common among many veterans.
This is not something new. Over the past 75 years, veterans have
been over indexed to business ownership in the United States rel-
ative to other segments of American society.
For that reason alone, public and private sector champions
should continue to collaborate on pathways appropriate to realize
the potential inherent in empowering veterans to serve this nation
yet again now as America’s next great generation of business own-
ers and leaders.
In fact, that potential will be on display Friday, right here at an
event in Washington, D.C., when the Institute for Veterans and
Military Families, in partnership with the team at Inc. and the Inc.
5000 will announce and honor the 2022 Vet100, the 100 fastest-
growing, veteran-owned businesses in America.
This year’s Vet100 includes changemakers like Venus Quates.
Venus is an Air Force veteran who founded her firm LaunchTech
in 2016 to provide technology and mission support solutions to cus-
tomers in the space and health care and financial services sectors.
Venus participated in the IVMF’s Veteran Women Igniting the
Spirit of Entrepreneurship Program back in 2018 and after that
her business took off. On Friday, Venus will be recognized by Inc.
7
and the IVMF as the number three fastest-growing, veteran-owned
business in America, and as one of the 10 fastest-growing, women-
owned businesses, veteran or not, in all of the United States.
We will also recognize United States Marine Corps veteran Chris
Dambach and his business, Industry Standard. Chris separated
from the Marine Corps in 2010 and launched a small residential
lawncare business with some used lawnmowers and a truck he bor-
rowed from his brother-in-law. In 2012, an SBA advisor rec-
ommended that Chris participate in the IVMF’s Entrepreneurship
Boot Camp for Veterans with Disabilities Program, and in quoting
Chris, ‘‘That program changed my approach to running and grow-
ing my business.’’ After that experience, Chris expanded to
hardscaping, and then janitorial services, then to construction, and
like Venus, today, Marine Corps veteran Chris Dambach is the
founder and owner of one of America’s fastest-growing, privately-
held firms.
I share these stories only to make the point that working to-
gether we have a collective opportunity to transform the same lead-
ership and ingenuity that served our military so well on the battle-
field into an engine of new venture creation in America. And that
opportunity is strong and compelling, certainly and in part due to
the good work of this Committee. The resources and supportive
services enabling a transition pathway for service Members to busi-
ness ownership, both across the public and private sector are vast-
ly, vastly improved relative to what they were a decade ago.
That said, we know from the community we serve that there is
more work to do. Each year, our institute conducts a national sur-
vey of military-affiliated entrepreneurs. This is the largest primary
data collection of military business owners outside of the federal
government in America. And our intent is to better understand the
barriers of economic, social, cultural barriers to business ownership
for those who have served in the military.
We just released the 2022 version of that study, and I just want
to highlight one thing that came from that study of many things.
And that relates to women veterans and female military spouses.
Today, women are pursuing military service at an unprecedented
rate, and their service often equips them with unique skills and
abilities that are aligned with the civilian labor market. However,
too often our women veterans have faced unique challenges bridg-
ing those skills to traditional employment. If there is an upside to
that troubling story, it is that many of them turn at very high
rates to business ownership. Small business ownership enables
military connected women to pursue professional opportunities and
careers in the face of some of those barriers. Consequently, collec-
tive action to create inclusive pathways to business ownership for
military-connected women should be a national priority. If we do
this, all Americans will benefit.
With that, I will end my formal remarks.
Chairwoman VELÁZQUEZ. Thank you, Dr. Haynie.
Now we recognize Mr. Peacock for 5 minutes.
STATEMENT OF BRENTON PEACOCK
Mr. PEACOCK. Good morning. Thank you for having me today.
Thanks for your support of veteran-owned small businesses.
8
The Florida Veterans Business Outreach Center is one of 22 Vet-
erans Business Outreach Centers or VBOCs serving the United
States. Each VBOC is assigned geographical territory. Our terri-
tory is Florida. We are hosted by Gulf Coast State College in Pan-
ama City Florida, home to Tyndall Air Force Base and Naval Sup-
port Activity Panama City. We report to the North Florida SBA
District Office in Jacksonville and the South Florida SBA District
Office in Miami, Florida. We provide business consulting services
to active duty military Members, veterans of all eras, and all
branches of the U.S. Military including National Guard and Re-
servists, U.S. Coast Guard Members, military spouses, and widows
of veterans who wish to start a business.
The Florida VBOC is the initial VBOC established following a
successful proposal to Public Law 106-50, cited as the Veterans En-
trepreneurship and Small Business Development Act of 1999. Our
competencies include teaching Boots to Business classes, start-up
instruction, assisting first-time business owners as they transition
or retire from military service, and assisting veterans and military
spouses with the process of government contracting. We are cur-
rently in the last year of our 5-year program cycle before rebidding
on the project for the next funding cycle.
I will share with you statistics on Boots to Business classes,
numbers of consulting sessions, and the number of clients we have
assisted, as well as veteran business startups, and accomplish-
ments made by our veteran clients in winning government con-
tracts.
Boots to Business. There are 14 Florida Military Installations
that participate in the Transition Assistance Program (TAP) with
Boots to Business (B2B). The Boots to Business classes are man-
aged by TAP Personnel and the SBA Office of Economic Develop-
ment specialist/veteran representatives, who coordinate the logis-
tics of the program for the North and South Florida District Offices
for scheduling. The Boots to Business classes are taught at each
base on a quarterly basis or more often if the number of separating
or retiring military Members requires it.
Since May of 2018, the Florida VBOC Office has taught 165
Boots to Business classes and has instructed 909 Boots to Business
modules to over 3,200 separating or retired military Members and
spouses.
Nathan Pollock is an Army veteran who completed the Boots to
Business class. His plan was to open an upscale cigar lounge with
his spouse. He worked at a cigar lounge after his separation to
learn best practices before relocating to New Port Richey, Florida.
The VBOC office assisted Nathan with business plan research from
IBISWorld, business plan revision, assistance with applying for
business licenses, and eventually assisting him with finding a lend-
er and closing on an SBA Loan to open Patriot Stogies, LLC in
March 2022. Nathan proudly served our country for 20 years as an
Army helicopter pilot. Nathan said, ‘‘The VBOC was able to find
me a lender who could support my business, and they quickly got
me a commitment letter. Additionally, the VBOC was able to set
me up with a free consultation with an attorney to discuss a zoning
issue with my building’s sign. I appreciate the advice and counsel
9
I have received from the entire VBOC team with the assistance
they have provided me along the way.’’
Start-Up Counseling. We have provided over 13,000 counseling
sessions to 11,000 veterans and military spouses during the cur-
rent program. We assisted in the creation of 498 businesses by as-
sisting with feasibility studies and helping develop business plans
during the program period. Veterans and military spouses with our
guidance have started businesses ranging from drone-operated
home inspection companies, to retail candy stores, and purchasing
franchises. Jo Kegley, a U.S. Navy veteran, reached out to the
VBOC as a resource to help grow her weight-loss business. The
VBOC staff guided her in registering her LLC, provided informa-
tion on becoming Woman-Owned Small Business (WOSB) Certified,
and provided a letter of recommendation to apply for funding. Jo
is the founder of Flip Flop Diet, a sustainable eating and scheduled
cheating diet and weight loss maintenance plan. After separating
from the military, she documented and tested the Flip Flop Diet
using her proven strategies to help family and friends lose weight
and now plans to offer her diet to the public. ‘‘I am so grateful for
all of the assistance and ongoing support that I receive from VBOC.
The VBOC has certainly contributed to the development of the Flip
Flop Diet and to my success in receiving initial seed funding to
launch my business. I recommend their services to any veteran
that is in business or is thinking about starting one.’’
Government Contracting. The Florida VBOC has a unique
strength in assisting veterans and military spouses by being com-
petitive in government contracting at the federal, state, and local
level, as well as bidding on and winning subcontracts to prime con-
tractors.
The Florida VBOC story is one of 22 unique stories defined by
local economies and the veterans and military spouses who reside
therein. They are bound by their common desire to own and oper-
ate successful veteran-owned small businesses. Thank you.
Chairwoman VELÁZQUEZ. Thank you, Mr. Peacock.
Now Ms. Sayles, you are recognized for 5 minutes.
STATEMENT OF LAURIE SAYLES
Ms. SAYLES. Yes, ma’am. Chair Velázquez, Ranking Member
Luetkemeyer, and Members of the Committee, thank you for the
opportunity to testify today.
My name is Laurie Sayles and I am a United States Marine
Corps veteran and the founder of Civility Management Solutions
located in Greenbelt, Maryland.
CivilityMS is a professional consulting services firm working in
both the government and the commercial space.
Currently, I serve as Chair of the Women Veterans Business Co-
alition (WVBC) and I am testifying today on their behalf.
The WVBC brings together diverse stakeholders to provide a
strong, collective voice for policies that will strengthen businesses
owned by women veterans. While federal actions are designed to be
helpful to all veterans, women carry an important and respected
voice on behalf of those who have served.
Currently 2 million women veterans live in the United States
and comprise nearly 20 percent of serving military personnel and
10
10 percent of the veteran population. As the number of women
serving in the military has increased, so has the number of women
veterans who start businesses.
Entrepreneurship has always been in my blood. Raised in the
1960s in a low-income household from Chicago, I have always
known and learned the need to earn my own way. Starting a busi-
ness has been an extremely rewarding part of my life and I at-
tribute many of my business successes to the lessons I learned
serving in the United States Military.
Once I was introduced to government contracting in my civilian
career, I knew I had found my destiny in entrepreneurship as I
saw it as the wealth transfer. There are numerous SBA resources
that helped me along the way. When I first considered starting my
business, I sought out SCORE Mentor. My mentor, a retired Gen-
eral of the United States Army, gave me incredible guidance on the
steps of developing my company. Navigating our federal con-
tracting system can be difficult, and resources from my local PTAC
focused on how I could successfully do business with the federal
government.
As a woman Marine, I know the importance of training. The
CivilityMS team has taken advantage of the SBA’s 7(j) training
and found it valuable. However, I would encourage the SBA to con-
sider having two tracks in 7(j), one for businesses who are in the
beginning phases and one for the program for advanced companies
that are small, to continue to thrive throughout their business
lifecycle and the SCORE mentors offer us.
One additional training program that has crucial to the success
of my business is the Veteran Institute for Procurement (VIP). I
am thrilled to see the expansion of the program, especially at no
cost to veterans.
While I speak highly of many of the SBA’s programs, I also know
that there are many veteran-owned businesses unable to access
these resources because of their location. For example, I applaud
the expansion of VBOCs, which play an integral role in supporting
veteran-owned small businesses throughout their entrepreneurial
journey. However, I did not utilize VBOC because there was not
one in Maryland, and I am glad to say that our state will be adding
one soon.
One area of particular concern as a Black woman that is a serv-
ice-disabled veteran is the fight to access capital. Women still re-
ceive only 4 percent of commercial dollars that are loaned. Like
many small businesses, I initially tried working with the large
businesses, large banks, but like many, I gave up quickly. I sought
out alternative lenders. I was fortunate to connect with an SBA
7(a) lender to obtain a small loan and then later take advantage
of the Paycheck Protection Program during the pandemic.
While these funding streams have been helpful, government con-
tractors face unique challenges. It would be helpful to the veteran
business contracting community if SBA was able to come up with
a line of credit methodology for companies that have federal cus-
tomers.
To address some of the particular challenges faced by women vet-
erans, WVBC suggests the following recommendations:
11
One, first, increase incentives for prime contractors and the fed-
eral government to award more contracts to women veteran-owned
small businesses.
Two, second, change the restrictive re-marriage eligibility re-
quirement for Survivor Benefit Plan (SBP) beneficiaries.
And third, allow veterans to use the GI Bill benefits to start a
business. All veterans, and particularly women veterans, are an
important sector of our economy. By 2040, women veteran popu-
lation is projected to grow to 18 percent.
Our businesses face unique challenges that require unique sup-
port to grow and thrive. We applaud the SBA and this Committee
for continuing to support veteran business owners. And thank you
for holding this important hearing. And I look forward to any ques-
tions.
Chairwoman VELÁZQUEZ. Thank you very much.
Now we recognize Mr. Shamess for 5 minutes. Welcome.
STATEMENT OF JOE SHAMESS
Mr. SHAMESS. Thank you, Chairwoman Velázquez, Ranking
Member Luetkemeyer, and the Members of the Committee, espe-
cially you, Ranking Member Luetkemeyer for hosting the events
that you have hosted and then the events also in conjunction with
Leader McCarthy. They have really highlighted not just veteran
entrepreneurs but also the challenges facing small business in
America. So thank you for that.
As a founder and general partner at Flintlock Capital, in addi-
tion to my work owning and operating other businesses, I can tell
you that I have gotten a sample, a wide swath of what it is to be
a business owner in America, from manufacturing to tech, to also
empowering future entrepreneurs to grow the businesses of tomor-
row. And looking at all the things that I get to witness today, the
outlook is still positive but it is a very challenging environment.
What inspires me is what I have seen in the way that these small
businesses are managing inflation just as an example. They are
ringing out everything they possibly can in their businesses to be
able to stay ahead of it and to be able to continue to operate. And
the small business community despite all of that continues to move
forward. And I think that speaks volumes about the American spir-
it of free enterprise. And that is something I am very proud of.
Looking at the veteran ecosystem in business, access to capital
is certainly something that has come up multiple times. There is
absolutely a challenge there, and there are 7(a) options you can get
through the SBA and other programs.
I worked with the last Congress with Representative Tulsi
Gabbard’s office on H.R. 4991, a bill specifically designed to ad-
dress this issue. And to your point, to create an opportunity to ac-
cess capital through your Post-9/11 GI Bill as an option.
And so one of the things that we worked on was how you could
shape that. And there are already funding limitations associated
with the bill of what the earned credit, the earned amount is based
on what state you live in. And if the spirit of the Post-9/11 GI Bill
is to create education opportunities, to create an opportunity for
economic upward mobility for example, there are very few things
that create more opportunity for economic upward mobility than
12
business ownership. And so that is not just for the individual. That
is the family. That is the community. That is everybody that is in-
volved in that.
And so I would ask that this Committee look at bringing that bill
forward in a bipartisan way. I know that on her departure it was
handed to Representative Panetta’s office in California, but to this
day it still has not moved forward. So to have that reintroduced I
think would be fantastic for the small business community, espe-
cially the veteran small businesses.
Additionally, I think you can hear today about all the resources
that are out there but what happens is there is a disconnect be-
tween those resources and the veteran that needs that information,
whether it is access to capital or just how do I do this? And the
compliance alone, whether you are looking at it from a federal stat-
ute or a state statute level, I do not care if you are a one man
falafel stand or you have a 1,000 employee manufacturing com-
pany, compliance is a lot. Right? And so there are a lot of resources
that can help entrepreneurs, especially veteran entrepreneurs navi-
gate that. But they are spread out across so many organizations
and so many public-private partnerships that are doing good work
but they are all doing it in their own pocket. Syracuse University,
for example, has become a great resource and one that I have
looked to over the years, but that is because I knew about them
and what they were doing. A lot of people do not.
And so what I would ask is that you task the Government Ac-
countability Office with doing a total review of the programs that
are currently available, whether it is SBDCs, the Small Business
Administration, SCORE, the VA, DARPA, the non-dilutive funding
that is available for business startup that is absolutely outstanding
for a lot of these businesses, public-private partnerships, and pro-
vide a report that is actionable for TAPs programs and other
things, whether it is the VA or DoD to be able to bring this to bear
for the veteran community.
The last thing I want to say is there is a bigger issue here and
it is not just related to small business ownership. And I think it
is what I would regard as a little bit of a higher calling when it
comes to supporting veteran entrepreneurs. And that is we have a
voluntary military, right? And so how does the military grow and
how does it recruit? And one of the best ways it does that is by see-
ing people that have served and the impacts they make in their
communities.
So, as the number of military service Members as a percentage
of society continues to go down, there is no better way to dem-
onstrate their impact, both from a national level, national security
level, but also inside their communities by seeing them start and
run businesses. Because they are employing their neighbors. They
are a great example. And the values that made them successful in
uniform, those same values transfer back to the community. And
that is a win for everybody involved. Thank you.
Chairwoman VELÁZQUEZ. Thank you, Mr. Shamess.
Now I recognize myself for 5 minutes.
Mr. Peacock, last November the House passed H.R. 3469, the
Veteran Entrepreneurship Training Act of 2021. The bill will codify
the Boots to Business Program for the next 5 years. Why should
13
we codify the Boots to Business program for our veterans and their
spouses as they transition out of the military service?
Mr. PEACOCK. The business program provides a good pathway
to entrepreneurship by showing kind of a top of the waves intro-
duction to opening and starting their own business. Also now as we
think veterans maybe signed up, joined the military at age 18.
Maybe you worked a part-time job packing groceries, maybe deliv-
ering papers, but you certainly probably have not owned a busi-
ness.
The Boots to Business program which helps military service and
things that were learned in military service to owning a small busi-
ness and being the founder of your own company. It is a good re-
source. I think it helps that veteran, that military spouse to be able
to see what they have learned through their military service and
apply that to business ownership and operations. And I think it
should be required for anyone to be separating or retired from mili-
tary service as well as the spouse to attend the complete program
to get a full understanding of what is available from the SBA.
Chairwoman VELÁZQUEZ. Thank you. Thank you. Thank you.
Dr. Haynie, prior to the pandemic, veteran entrepreneurship had
been declining. However, in a recent hearing, SBA Administrator
Guzman testified that there have been 9.1 million new business ap-
plications since the beginning of 2020. What trend have you seen
since the beginning of the pandemic with regard to veteran entre-
preneurship?
Mr. HAYNIE. You know, throughout history, you can see trends
in startup and entrepreneurship in general for all Americans that
are aligned with economic conditions also as a function of access to
the traditional labor market. I think one of the things we saw with
the COVID pandemic was restricted access to the traditional labor
market as a consequence, again, for all Americans, business owner-
ship and self-employment became a path to a career and an income
and stability in the family. You will see all the way back to World
War II, you can align trends in business ownership specifically for
veterans. But also for other segments of society that may be are
shut out sometimes of the normal traditional economic model up
and down over time. It is the case that throughout that 75 year pe-
riod, veterans have been over indexed.
There was a study done by the federal government 7 years after
World War II. Fifty-four percent of the 12.5 million veterans that
returned from World War II, 54 percent within 7 years had
launched a small business in this country. So I think it is abso-
lutely the case that this community will continue to be pulled to
and drawn to small business ownership over time.
Chairwoman VELÁZQUEZ. Thank you.
Ms. Sayles, you have utilized many of the SBA resources
throughout your entrepreneurship journey. What are the benefits
of SBA’s entrepreneurial ecosystem, and where can improvements
be made to better meet the needs of veteran entrepreneurs?
Ms. SAYLES. Thank you for the question.
Well, I would say that having more offerings throughout the
country, because there are certain areas where people are denied
that ability. Now, thanks to the world of technology now there is
more potential of getting some training and things of that nature
14
but being able to access that without any cost is also a major thing.
Because you are starting a business so your cost is low, of course,
and to be able to go get the training necessary and be taught. And
as a veteran, one thing that makes us the greatest in the world,
right, military, is because of training. So we understand the ability
to get it. We just need to have access.
Chairwoman VELÁZQUEZ. Dr. Haynie, SBA announced this
year that nonprofit entities are eligible to provide Boots to Busi-
ness courses at military installations outside of the continental
U.S. Can you speak to the importance of providing Boots to Busi-
ness training to military service Members and their spouses where
they are stationed no matter the geographic location?
Mr. HAYNIE. I can. I particularly have a bias here I will admit
right up front. I wrote the original Boots to Business curriculum
when it was first proposed. Very passionate about that pathway. I
think pure and simple, just because you happen to be a service
Member who is transitioning from serving this country in uniform
to civilian life stationed overseas, you should not have a different
set of opportunities afforded to you because of that fact. You can
look at, for example, we are flying training teams to U.S. Navy
ships at sea to conduct Boots to Business training because those
sailors, many of them when their ship comes into port, their con-
tracts have expired and they are on their way out the door. It is
the same for those overseas locations.
Chairwoman VELÁZQUEZ. My time has expired. Thank you so
much.
Now I yield to Mr. Luetkemeyer for 5 minutes.
Mr. LUETKEMEYER. Thank you, Madam Chair.
Mr. Shamess, in your testimony you challenge us to, and I quote,
‘‘Do no harm and avoid policies that may erode the resilience of the
entrepreneur.’’
I appreciate that challenge. Do you believe increasing taxes or
adding more regulations would cause harm to the American entre-
preneur?
Mr. SHAMESS. Without a doubt it would cause harm to the
American entrepreneur. I made slight mention of this in my intro-
duction about just how difficult compliance is. And then when you
add state compliance, it is really a tenuous situation. Additional
taxes erode the incentives for small business ownership in the first
place. And so creating a tax policy that incentivizes business for-
mation, incentivizes business growth, these are all things that not
just affect the entrepreneur but affect the entire community and
we have seen that play out. So I would absolutely agree with that
statement.
Mr. LUETKEMEYER. Can you make that more personal? How
has this affected your business itself?
Mr. SHAMESS. Well, as an example, when operating Flags of
Valor, when the tax policy changed during the last administration,
we were able to use some of the additional tax benefit we had or
additional income that we had to invest in our equipment. And so
that single thing allowed us to go from being a largely handheld
tool operator to being able to use truly high-tech laser and CNC
equipment in a full commercial suite that was offset by the benefits
we received. And now today, fast forward, that same organization
15
is now employing a whole new team in technical manufacturing;
right? So what does that mean for the employee? Well, now they
are getting higher level skills, skills that are transferrable through
additional industries, and it is allowing us to produce more things
here in the United States that is very unique; right? I mean, Made
in America still matters. And so anything that we can do to sup-
port that I think is going to be beneficial to our communities.
Mr. LUETKEMEYER. Your comment was that it provided you
with income. They allowed you to keep your income is what that
tax cut did. You got to keep the money that was yours that you
made and be able to reinvest it. I thank you for that comment.
You made mention of the jobs that you created. Can you tell me
how you structure your hiring process to attract veterans just spe-
cifically? Or I assume you attract a lot of other folks, but I am sure
you try to go after veterans in particular.
Mr. SHAMESS. We do. We certain have and continue to do. But
what is really unique about the veteran community compared to
many others is there are certain bonds that are created in military
service. There is an esprit de corps that exists that makes veterans
want to be around other veterans. And so veteran entrepreneurship
means veteran jobs. Veteran jobs is not quite the problem it was
10 years ago, 15 years ago when we were in the heat of the post-
9/11 conflicts. Nonetheless, we still want to create opportunity for
those men and women in uniform as they depart. And so the cul-
ture that exists inside a veteran-run company is something that is
very difficult to replicate outside of a veteran-run company. And it
is a natural attraction for veterans that want to continue to be a
part of that culture while changing their life and serving outside
the uniform.
Mr. LUETKEMEYER. Ms. Sayles, you mentioned that there are
2 million women vets. This morning I spoke to the Women’s Small
Business Coalition I guess it is, and all the ladies in there were
very vociferous in some of their concerns. But it was great to be
speaking with them. But there is a whole new subset when you are
talking about women veterans. Do they have some unique issues
that we need to be concerned about, or is being a veteran is being
a veteran?
Ms. SAYLES. Well, sir, yes. Being a women that served in the
military, because it is such a small amount of us in general when
you look at the broader base, there are just certain things that we
are challenged with as a woman being surrounded by men all the
time. So you have to gauge yourself up for that and continue to go
through the course of serving in your uniform. But some of the
challenges that come out of that leave the women in a different
type of mindset when they return to civilian lifestyle. Some were
to the point that I know many, way too many, that do not desire
to go to the VA just because they do not like the idea of not being
considered a veteran, you know, first of all. And then secondly, just
some of the attention that they receive that they do not request.
So they have learned at the VA hospitals throughout the country
to make some adjustments for women that are coming that are
women veterans to be serviced there. And yet, some of that same
kind of information that they are receiving though actually affects
16
their entire life. So yes, those are extra challenges that we have to
deal with as women that served in the military.
Mr. LUETKEMEYER. Thank you.
Dr. Haynie, you alluded to some studies or some information that
you were aware of. Prior to the pandemic versus after the pan-
demic, are you seeing more veteran-owned business startups or
less?
Mr. HAYNIE. So I think the best data for this actually comes out
of the Kauffman Foundation. In the index, they have focused on
startups for all Americans. And then they break that data out by
different demographic markers. Veterans at the start of the pan-
demic it was a very, very steep and dramatic increase in the pool
to self-employment and business ownership. What we are seeing
now is I think a slight decline as a function of reopening of society
and reopening of traditional jobs and careers. That said, the num-
bers are still high relative to other segments of American society.
Mr. LUETKEMEYER. I thank you for that. And again, I thank
each of you for your service to our country. Thank you very much.
Madam Chair, I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Georgia, Ms. Bourdeaux,
for 5 minutes.
Ms. BOURDEAUX. Thank you, Chairwoman Velázquez, for hold-
ing today’s hearing.
For the American service men and women, the transition to civil-
ian life can be difficult, especially so if they struggle to find a pur-
pose upon return. One estimate is that 53 percent of veterans do
not know what career they want to pursue when they transition
back to becoming civilians.
Because of this, one of the community projects that I have se-
cured funding for is an organization called Hire Heroes in my dis-
trict and it would dedicate $720,000 to help veterans find gainful
employment. However, through their service, veterans are
unequipped with many of the skills that mark a successful entre-
preneur, including high performance in stressful situations and
natural leadership abilities. And as a professor of public policy who
has taught many veterans coming out of service, I can testify that
they are often the best students. They are very focused and very
disciplined in their work. Having these veterans and under-
standing this experience, I am very, very interested in making sure
that they make this transition appropriately and have access to the
resources that they need if they want to pursue small businesses.
So this leads me to my question. One of the things I have also
found as I have met with small businesses around my community,
they often do not know all the resources that are available to them.
And some of that came up in some of the testimony.
So starting with Dr. Haynie, we have all sorts of great resources
available to people—VBOCs, SBDCs, WBCs, SCORE, among many
others. These are resources of free, low-cost counseling and training
for small businesses. How do we go about doing better outreach to
letting small businesses, and particularly these veteran-owned
small businesses know what resources are available to them?
Mr. HAYNIE. Thank you very much for the question. And I
think, as my fellow panelists alluded to, I fully agree that the num-
17
ber one, as a matter of fact, the data supports the number one
challenge that folks express getting out of the military is not off the
top employment or healthcare, et cetera. It is actually navigating
the resources available to them. And it is not just what is avail-
able. It is also what they are eligible for. What they qualify for.
There are so many qualifications and restrictions and limitations
on what you can access as a function of combat veteran or not,
post-9/11 veteran or not. I think we have to do, and why I think
a hearing like this is so important is we have to elevate the con-
versation related to veteran business ownership in the country in
a way where those who are in a position to serve or serving now
this community become networked in what I would describe as
akin to a healthcare network. And that we sort of manage the co-
ordination and the navigation of veteran-owned businesses through
this network of resources that starts at the local community level,
extends at the state level, and to federal resources primarily from
the SBA.
Ms. BOURDEAUX. This is a follow-up to that. I am curious
about Syracuse University’s institute and who you have partnered
with in the community. I know you have a Community Navigator
Pilot Program, something very important to my community as well,
a diverse community with a lot of immigrant small businesses, as
well as minority veteran businesses. And one of the things I have
been encouraging the SBDC and other small business-serving insti-
tutions to do is to partner with unique community partners to get
the word out. I was just curious about these kinds of partnerships
and what you might have built in Syracuse.
Mr. HAYNIE. Yes, ma’am. The partnerships are key to every-
thing we do. As a matter of fact, the nonprofit that you mentioned,
Hire Heroes, in your district is one of our partners. A program un-
related to veteran business ownership but that we run called On-
ward to Opportunity, which is a credentialing and certification pro-
gram for those leaving military service. Our employment partner in
that effort is your local nonprofit Hire Heroes.
Ms. BOURDEAUX. That is great to hear. I think that is about
all the questions.
I just actually want to raise one more thing that is an interesting
partnership that I have come across which is the Centers for Med-
icaid and Medicare Services, which does a lot of advertising around
the Exchange which is health insurance, and that is also very im-
portant, health insurance for small businesses. I have been talking
with them about doing better outreach through organizations like
our Community Navigators, our SBDCs, some of these different
small business organizations so that we could get out word about
how people can purchase insurance on the Exchange and I found
a lot of small businesses needed that help as I talked with them.
And so I just one of many efforts to try to put together creative
partnerships to serve.
Thank you so much. I yield back the balance of my time.
Chairwoman VELÁZQUEZ. The gentlelady yields back.
Now we recognize the Vice Ranking Member of the Committee,
Mr. Williams, from Texas, for 5 minutes.
Mr. WILLIAMS. Thank you, Madam Chairwoman, and Ranking
Member Luetkemeyer, and all the witnesses today. I think it is
18
fantastic that you are here and our country cannot thank our vet-
erans enough for their extraordinary courage, patriotism, sacrifice.
And I have the honor of representing Fort Hood in Texas. It is a
great place. And when we hire veterans, employers do not need to
teach them about discipline or work ethic. Veterans just need to be
provided with an opportunity and they will succeed.
I have been in business 51 years, small business owner, and one
of the neat stories I have is in Texas we had severe flooding last
year and I went by to thank the National Guard for being first on
the scene. And I was shaking hands of some of our Members and
I come to one young man and I shook his hand and I thanked him.
And he looked at me and said, Congressman, my family is starving.
He said, I have three children. We cannot eat. I said, What do you
do? He said, Well, I work on Humvees. And I said, Can you fix
them on the fly? He says, I can. Well, as it would be, I am an auto-
mobile dealer. I own car dealerships. So I said, if you can fix a
Humvee on the fly, can you fix a Dodge pickup on a lift? And he
said he could. And we hired him and he started out very little
training. We started out at $12 per flat rate hour and he got up
to $35 per flat rate hour and started his own business. So this is
the kind of thing that can happen with veterans that are just really
a little cut above. And I employ several hundred people in Texas,
and a huge majority of my employees are veterans that have
stayed with us. So that is a little story that just again reiterates
how great our veteran workforce is and always can be.
Mr. Shamess, good to see you again. Thanks for your story. In
your testimony you stated that more government involvement
tends to lead to more compliance and more spending. And if Demo-
crats continue to push for massive tax cuts—that is all they talk
about, let’s raise taxes, raise taxes, and they push for increased
government regulations which will harm main street businesses.
They do. And American families. I see it every single day in my
business. The federal government should not be overwhelming vet-
eran entrepreneurs with excessive red tape.
So can you, and you have touched on it, but this is important be-
cause this is what we talk about and this is what the debate is,
but can you elaborate on what higher taxes—higher taxes and
more regulation burdens will impact your ability to plan as a small
business owner because you are coming out of the greatest tax cuts
we have ever had which created a lot of jobs and now you are hav-
ing to play defense on possible tax increases and more government
involvement. So how does that affect how you plan for the future?
Mr. SHAMESS. That is a great question. And great to see you
again as well. It is like you are operating on shifting sands is how
it feels. And I will use an example from Flags of Valor just to kind
of paint a picture of this.
When you are dealing in a high inflation environment and all
your raw materials are going up and you are a manufacturer. And
your labor costs are going up which in some cases is a good thing
because you are taking care of your people. And then you are pay-
ing payroll taxes. And then you are paying personal property taxes.
And then you are paying your state licenses and fees that you
have. You are taking that $1 of income and you are carving big
chunks out of it, almost like with a sledge hammer you are carving
19
that dollar up. By the time that dollar gets down to being a bottom
line dollar in profit, you have lost so much of the power of that dol-
lar that you earned from the very beginning. And now take that
as a business owner and that same, whatever is left you are paying
your federal taxes. You are paying your state income taxes. You are
paying your personal property taxes. It goes on and on. By the time
it is all done, you are looking at less than 50 cents on the dollar
of profit. And inside the business you are looking at maybe a 10
percent bottom line margin if you are lucky. And right now I can
tell you, small businesses are not getting 10 percent bottom lines.
And so you are just eroding all the incentive in the system for you
to continue to grow and hire.
Mr. WILLIAMS. Well, tax cuts do work and hey need to be made
permanent. And we are going to be fighting for that. And then you
have Mr. Inflation running around which so sky high. So it is real
problems.
It is a great privilege, as I said, to work for Fort Hood and our
veterans. And our veterans made great sacrifices to protect and de-
fend this country. And it is our responsibility to ensure that they
are equipped and pursue their business goals once they transition
into civilian life. And earlier this year, Congress did pass the Vet-
eran Entrepreneurship Training Act which helped codify the Boots
to Business program. And also, I think we must assist in providing
opportunities to build a career ahead of time, and at this time, sig-
nificant changes in these brave individual lives.
So real quick, can you tell us the major hurdles veterans face
while trying to break into the private sector and start their own
business? The challenge is to say I am going to be a business per-
son. What is the biggest challenge?
Mr. SHAMESS. I will be as fast as I can. When you take that
oath of office, and I did it on my 18th birthday, it is not just that
you are going to risk for your country. You basically put everything
else off for that entire period of time. So there is no preparation
whereas most people in the private sector, they are working in a
company. They are getting exposure to an industry. They are learn-
ing an industry so they can start a business. In the military, you
do not have that. And so you need that exposure. You need that
transition program like we are talking about, bringing those re-
sources together.
Mr. WILLIAMS. Thank you. I yield back.
Chairwoman VELÁZQUEZ. Time has expired. The gentleman
yields back.
Now we recognize the gentlelady from Pennsylvania, Ms.
Houlahan, for 5 minutes.
Ms. HOULAHAN. Thank you, Madam Chair. And thank you to
everyone here for your testimony and for the conversation.
I am an Air Force veteran myself, and I am an entrepreneur as
well having built a variety of different businesses from scale to
sale. I am very excited to participate in today’s experience and to
talk about the local veteran-owned businesses in my community
which is just outside of Philadelphia, Pennsylvania.
Last month, I had the opportunity to participate in a roundtable
discussion with Secretary Mcdonough who visited my community
and several veteran entrepreneurs as well at the Coatesville VA
20
Center, which is also in my district. I was particularly struck by
the story of Robin Gilmore, an Air Force veteran himself and a
service-disabled veteran as well. He is a small business owner of
a media production business. With his passion for producing video
content, Robin established and grew his small business following
his years of military service. And as his business grew, Robin was
able to adapt the company’s online presence but he needed tech-
nical assistance and expertise with regard to website design, opti-
mization, and social media.
So as with many small business nationwide, the COVID pan-
demic also brought him a number of opportunities and challenges,
including a significant drop in his business. So Robin sought assist-
ance and reached out to Kutztown University Small Business De-
velopment Center, which helped him to revitalize his website to at-
tract customers, to build new clients, and to increase his appear-
ance on all platforms. In short, with the help of the SBDC, Robin
was able to take his business online and to the next level. So to
this day, he continues to refer other local businesses and local own-
ers to these valuable resources.
Robin’s story certainly demonstrates the effectiveness and impor-
tance of SBA’s free and low-cost resource partners and entrepre-
neurial development resources, especially in times like these when
a business owner may not have the tools or expertise in certain
areas to pivot or to grow or to navigate through this complex envi-
ronment.
My question is for you, Dr. Haynie. With Robin’s story in mind,
what more do you think that the Small Business Administration
can do to increase awareness of the SBA resource partners and en-
trepreneurial development resources amongst particularly our vet-
eran community? And what else can we do here in Congress to be
able to increase attention to these services?
Mr. HAYNIE. Well, thank you for the question. As someone born
in Doylestown, Pennsylvania, I appreciate the first question coming
from you to me.
You know, I think one of the things is we have to continue to
focus on expanding the scope and scale of those services. You know,
the service you heard from Ms. Sayles about the fact that there
was not a VBOC in the State of Maryland until just recently is a
good example of what I think is missed opportunity. In aligning
those resources in a way where there is a look at sort of veteran
population density, that is easily done and understood. But also,
you know, one of the things that we learned from COVID is that
our use of technology expanded access to services to veterans that
live in rural communities, veterans that live, you know, so bal-
ancing that focus of hard physical infrastructure with an expanded
opportunity to bring virtual services and resources to veterans in
rural communities and other places where they cannot access that
physical infrastructure I think would be important.
Ms. HOULAHAN. That is a fascinating lesson learned from a
really bad situation with COVID is that I think all of us had to
very rapidly become much more technologically adept and kind of
comfortable using technologies.
Mr. HAYNIE. That is correct.
Ms. HOULAHAN. And that is something worth pursuing.
21
With what remains of my time, my question is for Mr. Peacock.
I am also really interested in exploring how the SBA can increase
assistance for not just women veterans but also for female military
spouses as well. I grew up in a military family and my mom was
possibly the most talented of all of us and really struggled with her
opportunity to grow and flourish as a small business owner and op-
erator as we moved around. Would you be able to help us under-
stand what are the needs for women veterans and female military
spouses and how can we help them in adapting their businesses?
Mr. PEACOCK. I think a greater emphasis on attending Boots
to Business with their veteran partner would help. Every business
is going to be a family-owned business. And maybe you have trav-
eled around with your spouse all over the country, all over the
world, and after 20-something years that family is going to retire.
And you kind of think that you are going to maybe buy an RV, see
the 50 states, whatever, but he wants to open up a motorcycle re-
pair shop in the garage. You have got to have a come-together
meeting to make the business work. So if the veteran is starting
a business or the spouse is starting a business, one of them is going
to be the support personnel for the other. So having the spouses
attend the Boots to Business program will be a great way to orient
them to business ownership, a business that will support the vet-
eran or for their own business as the spouse. I think that would
be a great way to introduce them, get them tied in.
Ms. HOULAHAN. My time has expired. I appreciate your time,
everyone, and I yield back.
Chairwoman VELÁZQUEZ. The gentlelady yields back.
Now we recognize the Ranking Member of the Subcommittee on
Economic Growth, Tax, and Capital Access, Mr. Meuser, from
Pennsylvania.
Mr. MEUSER. Thank you very much, Madam Chairwoman. And
thank you all. You are really a great group of witnesses. And
thanks for being here. And certainly, thank you for your service
and for your entrepreneurialism and being job creators.
Joe Shamess, Mr. Shamess, we met last November as well, so
certainly very good to see you again. And I really appreciate what
you had to say about putting, entering into service, into the mili-
tary, putting everything else on hold. And that is why it is so im-
portant once you come back into civilian life, having some support
in transitioning for business. That just makes a tremendous
amount of sense. So this hearing is important and we want to learn
as much as we can to improve such support services.
So Mr. Shamess, let me start with you. As a veteran entre-
preneur, what do you find, what has been the most helpful resource
for veterans for the transition? Which department, which set of re-
sources has been in your view most helpful to you and maybe most
helpful to other veteran entrepreneurs that you speak with?
Mr. SHAMESS. I would imagine it would be true for everyone on
this panel but it has been mentors or network. It has been the peo-
ple. And so having access to people. The resources in terms of ac-
cess to capital or just general information is really important, too.
But having someone that you can actually talk to is probably the
single-most important thing.
22
Mr. MEUSER. Interesting. And is there a formal network or is
it——
Mr. SHAMESS. Well, most people end up building it themselves
but there are programs, like SCORE, as Ms. Sayles mentioned.
Mr. MEUSER. Right.
Mr. SHAMESS. There are programs out there. It is the commu-
nication. It is not that the resource is absent per se; it is that is
misunderstood or it is not properly communicated to the person
that needs it.
Mr. MEUSER. Okay. So that could probably be improved, the
level of outreach and access to information. Access to capital, on a
scale of one to 10, how much of a challenge is that?
Mr. SHAMESS. Statistically, it is listed as number one. And I
would agree with that for most people. I think if you are pursuing
a 7(a) and they are going to collateralize everything that you have,
being SBA backed, it helps but most people do not have much. So
you are going to collateralize everything that you have and then
you can get your SBA 7(a). Having access to capital through some-
thing like H.R. 4991, the Post 9/11 Veteran Business Acceleration
Act, right, so getting your Post-9/11 GI Bill benefit to use towards
business ownership, I mean, that would be a rocket ship. That
would be absolute explosive capital for a lot of small businesses.
Mr. MEUSER. Okay. Well, we will definitely look to pursue that.
For all the witnesses, and Ms. Sayles, you mentioned your list
of three including expanding access or support for women entre-
preneurs, veteran entrepreneurs, as well as the GI Bill, making
that available for small business. Do you have a suggestion in that
regard?
Ms. SAYLES. Yes, sir. Since we have earned those funds to come
to us, it would be awesome, like for example, I was an entre-
preneur before I joined the Marine Corps. So when I got out I was
not so much focused on the college degree. And nowadays, let’s be
honest, many are staying 25-30 years so they have their master’s
degree when they get out. So what are they going after with a GI
Bill now at 40 years of age? But being able to take those funds and
now distribute them between starting a business with capital, as
well as using some of those funds for a place like Syracuse, for ex-
ample, to be able to get the education that they need. Because as
much as we get great leadership skills and resilience and tenacity,
we are never taught how to negotiate. So it is things like that that
are simple for a lot of people that are civilians that as a military
person that we need to be educated on. And so real core training
would be ideal.
Mr. MEUSER. All right. Great. And I know, Dr. Haynie, you
brought that up as well, more support services for women entre-
preneurs. So I am glad to hear that.
Just on more of the aggregate issues facing small businesses, vet-
eran and nonveteran, dealing with the high cost of gasoline, deal-
ing with the rise of inflation, dealing with the prospect of higher
taxes, you know, all of that, supply chain disruptions. You know,
I talk with small businesses. I have been a small business person
for over 20 years as well. It is very, very challenging in general.
Does anybody just want to comment on some of the challenges? We
spoke about taxes at bit. And Mr. Shamess, you spoke about your
23
level of margin; right? Two or 3 percentage points makes a big dif-
ference. I mean, that in cases is 30 to 40 percent. If you are work-
ing off of 8 percent net income, right, 3 or 4 percent goes right from
the bottom line.
Mr. SHAMESS. Yes. It will wipe out small businesses. Certain
small businesses entirely because they are reluctant to pass the in-
creased costs on to the consumer. And especially if you are in a
consumer discretionary industry, the last thing you want to do is
raise your price. And so you wait as long as you can and then fi-
nally you have to. And if you are struggling that much, the con-
sumer is probably also struggling because of all the same things
you just mentioned. And it will lead to disruption of a lot of small
businesses.
Mr. MEUSER. Thank you all very much. And very much, thank
you for your service.
I yield back, Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentlelady from Kansas, Ms. Davids,
Chairwoman of the Subcommittee on Economic Growth, Tax, and
Capital Access, for 5 minutes.
Ms. DAVIDS. Thank you. Thank you, Chairwoman Velázquez,
and thank you to both you and to our Ranking Member for holding
this very important hearing today.
The transition from military service to civilian life can be chal-
lenging in many ways for veterans and their families. And then es-
pecially when it comes to finding a new career path. And we have
heard that over and over again today. I tis actually one of the rea-
sons why in the last Congress I introduced the SERVE Act, which
was a bipartisan effort that passed the House to support entrepre-
neurship endeavors for veterans and also reservists. And this bill
would require the SBA to develop a plan for outreach and pro-
motion of the variety of programs available to veterans, reservist,
and their spouses. It also requires a report on the ability of our vet-
eran small business owners to access credit which is one of the big-
ger challenges for any entrepreneur starting and maintaining a
business. The 2021 National Survey of Military Affiliated Entre-
preneurs found that 49 percent of the respondents to that survey
had a difficult time acquiring initial capital to start their busi-
nesses and that 41 percent continued to find financing to be a chal-
lenge. I would love Dr. Haynie for, you know, you to explain or tell
us why might veterans and military-affiliated entrepreneurs have
such a difficult time accessing capital?
Mr. HAYNIE. So it is a great question. It is a very complex ques-
tion to answer because there are many factors that play into it. I
think some of my fellow panelists have addressed some of this. You
know, this idea of putting everything on hold when you raise your
hand and volunteer for service, that means that you are not build-
ing. You know, my service, I was an Air Force acquisition con-
tracting officer. When I would look at who I was going to award
a contract to, the first thing I would look at is past performance
and past history. Without past performance, past history, it be-
comes difficult then. It is a catch-22. You cannot build that history,
build that experience until you get that work. And so I think part
of it is you are starting from scratch, to answer the question. I
24
think part of it is you also, and this is why I think it is so impor-
tant the work this Committee does and related for supportive serv-
ices and resources, starting a business is not the same thing as
transitioning to a traditional job where if you do not like that job
you quit that job and find a different one. Because of what small
business ownership is, you know, and particularly as it relates to
capital, often it is your own capital. The resources that you have
and that you are collateralizing, if you will, to make this business
work. You have to have the supportive services and resources like
Boots to Business and other programs available to those service
Members such that they are prepared for this experience to the ex-
tent to which that is possible.
So I think all of that plays into, you know, some of these chal-
lenges. But not even the tip of the iceberg in terms of the whole
story.
Ms. DAVIDS. Yeah, thank you.
And then Ms. Sayles, I would love to hear you kind of follow up
maybe on some of the challenges that you faced when accessing
capital as an entrepreneur. But also, there is another piece to this
which I kind of talked about earlier with the SERVE Act. I am cu-
rious whether or not you were aware of the programs like Boots to
Business or the Entrepreneurial Development Programs. Like, how
early were you aware of those and maybe what do you think we
can do better on that?
Ms. SAYLES. I am glad I do not look my age. But actually, when
I got out, TAP did not exist and Boots to Business did not exist.
I had to go to the newspaper and find a job. Today, you have the
access to the Internet and that is very much so a great way of edu-
cating all of us on getting information but it is still such a lack of
information that is shared within the veteran community as a
whole.
And so when it comes to those programs, I found myself learning
about them once I became diligent about becoming a veteran entre-
preneur in government contracting. Then the door swung open with
the SBA SCORE mentor telling me about everything.
But when it comes to capital—to address that, even if you have
a decent credit score, and I got the being the minority, I got the
being a woman, and then I’m also a service-disabled veteran. I hit
all three of those categories. And it is not that you may not be able
to get lending, but it is the amount of money they are going to
charge me to obtain it. So, the margin as he did so well in breaking
down how you take that dollar and the different chunks that come
out of it, and so there is just a lot of lenders that are taking advan-
tage of the fact of you being a new business. And they come up
with all these wonderful alternative ways to give you money but
it is just that you pay a very, very high price for them.
Ms. DAVIDS. Thank you. And I think a lot of folks recognize
that that service can sometimes be a huge barrier to growing and
maintaining your business as you look at your capital spent.
All right. Well, thank you all so much. I appreciate your service
to our country, and of course, the entrepreneurial spirit that you
are showing up with. Thank you all. I yield back.
Chairwoman VELÁZQUEZ. Time has expired.
25
Now we recognize the gentleman from New York, Mr. Garbarino,
for 5 minutes.
Mr. GARBARINO. Thank you, Chairwoman. Thank you to the
Ranking Member for holding this hearing.
I first want to start with Mr. Joe Shamess. Your testimony men-
tions multiple resources for veteran entrepreneurs. As a Member of
the veteran entrepreneur community, can you share with us what
you believe is the most helpful resource for veterans looking to
transition from service to starting a business? And can you also ad-
dress, you know, and this is something I heard from my Veterans
Council from veterans returning home that the ability and the
knowledge and the access for veterans to the actual programs and
whether or not you think there is easy access to them.
Mr. SHAMESS. Sure. I briefly mentioned this earlier about the
network. And when you put everything on hold and you compare
that, let’s just say you do a 4- or 6-year enlistment or 5- to 10-years
as an officer, whatever you’re doing. Your counterpart in the pri-
vate sector has 5 years, 10 years of building the network in the in-
dustry that they are interested in. Or maybe it is a sister industry.
But the point where they get to launch that business, they are well
equipped. They may even be well capitalized. They have all of
these assets available to them. And number one is people. And so
using the SCORE as an example, having access to mentors, that
is one channel. But it is not necessary enough. And so bringing all
those resources together in a way that is digestible, understand-
able, that can be communicated to the veteran community at the
right time, or earlier even possibly, would be an optimal 1:19:13xxx
solution.
Mr. GARBARINO. So I am just doing a better job at reaching
out. What is there right now that the veterans can go to when they
come home and they want to transition into a small business? Do
they go to their local small business development center? I mean,
do they go to their local SBA region director? I mean, or are there
programs, does the SBA reach out through the VA? Through the
VA or through the American Legions or the VFW Posts? Are any
of those options out there and do you think that would work or not?
Mr. SHAMESS. Well, what you are describing is exactly the
problem. Is that there are all of these pieces of information held
by specific entities and they are all essentially good things. But the
inability to get all of that in one place that is usable by the entre-
preneur is the problem. There are a ton of resources. It is not about
necessarily creating additional resources. It is about synthesizing
them in a way that is digestible and understandable that the vet-
eran can have access to them.
Mr. GARBARINO. I appreciate that. That is exactly what I
heard when I held my meeting with my Veterans Business Council
or my Veterans Council and we talked about the SBA. They said
there might be information out there and programs out there but
we do not know about them and it is very hard for us to find out
about them. So, I think that is something that we need to work on
with the SBA and Congress.
Just maybe for the panel, where should Members of Congress
focus? We are hearing a lot of small business leaders right now are
coming to us and, you know, some of them are saying it is hard
26
to get capital. Some of them are saying it is hard to get workers
who are trained or have the education to do what they need them
to do. Where should be focusing most, especially when dealing with
veterans? And anybody can jump on this. Is it access, more access
to capital? Is it more access to education or training? What should
we do? Anybody can jump in.
Mr. HAYNIE. So I will take a swing at this. So I think the access
to education and training for me is a necessary condition. It is not
sufficient. It is a necessary condition.
I will bring up one thing that I think the Committee could focus
on and potentially start asking some questions. We mentioned the
unemployment crisis of the 2009, 2010, 2011, 2012, you know, was
brought up earlier in the hearing. Unemployment related to vet-
erans. And the private sector did some remarkable work stepping
up and stepping forward and creating veteran employment pro-
grams in this country, really not seen since World War II. The next
horizon, if you will, is to open up the supply chains of private sec-
tor companies, particularly Fortune 500 companies to veteran-
owned businesses. I think we often look at government and govern-
ment contracting as the objective for veteran-owned businesses.
But the reality is if you look at the supply chains of this country’s
largest private sector businesses, they represent a remarkable op-
portunity to grow and catalyze veteran-owned business in this
country. And I think that could be a unique opportunity to begin
engaging with the private sector on how it is that they can be part
of this effort to grow this community.
Mr. GARBARINO. Great answer. I appreciate that. And I know
I am running out of time. I have ran out of time. So I yield back.
But thank you, Doctor, for that answer.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Colorado, Mr. Crow,
Chairman of the Subcommittee on Innovation, Entrepreneurship,
and Workforce Development for 5 minutes.
Mr. CROW. Thank you, Chairwoman.
For Ms. Sayles, I just wanted to get a sense from you. I am a
fellow veteran as well. I just wanted to get a sense from you as to
how we can better prepare our service men and women while they
are still in uniform for that next step in their career.
So, for so long, and I know Mr. Shamess probably shares this
view, too, the military says, well, our job is not to train people for
when they leave the service. But you know, not every private be-
comes a general. This is not our system. And if we send people
back out, maybe we should set them up for success. So how can the
military better do that? I know the United Association has this
Veterans in Piping program where it is an 18-week program to
train them to have skills when they come out. Are there any other
examples or ideas that you might have?
Ms. SAYLES. The only thing I will definitely address would be
knowing that more recent veterans, and they talk about the TAP
program. But in the end, it added no value to them. Many of them
do not feel like they really received anything that helped them with
the transition. Because the transition is very broad. It is just basic
communications. You know, when do you stop saying I am going
to the head? So there is a lot of things that are part of that transi-
27
tion that are very, very real to the veteran community. So I would
really go for the fact of lengthening the amount of time of the TAP
program because if they have made a decision to get out, then of-
fering them the opportunity to assist them in that transition would
be hugely beneficial with just the basics of communication.
Mr. CROW. That is a great point. I am an infantry officer so we
called it a latrine, not a head. But, you know. I get your point.
Mr. Shamess, a fellow Afghan veteran, you are in the capital
business; right? Private equity or hedge fund, is that——
Mr. SHAMESS. Venture.
Mr. CROW. Yeah. So, venture capital. So you invest in busi-
nesses to help promote them; is that accurate?
Mr. SHAMESS. That is correct.
Mr. CROW. Okay. So, the businesses that you invest in, so you
are not, you do not hire the employees directly. You are not hiring
machinists directly; right? Other people are doing that?
Mr. SHAMESS. I have done that but not now.
Mr. CROW. Yeah, not now. And you are not shipping product. It
is the other companies that are doing that; right?
Mr. SHAMESS. Correct.
Mr. CROW. And you are not manufacturing things. It is the busi-
nesses you are investing in; right? So do they use roads? Yes or no?
Mr. SHAMESS. Absolutely.
Mr. CROW. Do they use bridges?
Mr. SHAMESS. Sure.
Mr. CROW. Do they use broadband?
Mr. SHAMESS. Absolutely.
Mr. CROW. Do they have to hire people out of apprenticeship
programs?
Mr. SHAMESS. Yes.
Mr. CROW. How are those things paid for?
Mr. SHAMESS. Are you saying this from a tax——
Mr. CROW. Yeah, where do roads and bridges and broadband
and apprenticeship programs and K through 12 schools, how do
those things get paid for?
Mr. SHAMESS. Well, naturally with taxes.
Mr. CROW. Yeah. So, I mean, I appreciate your point that no-
body likes high taxes. I do not like high taxes. But there is more
that goes into running a business than just the level of the taxes.
I talk to manufacturers all the time in my community and they
say workforce is actually the biggest thing. They cannot find quali-
fied employees because our education system is defunct, because
our apprenticeship programs do not work. Our bridges are falling
apart. We do not have broadband.
So, we need to have a more nuanced conversation than just taxes
are bad or taxes are too high. My point is, let’s have an actual con-
versation with my colleagues about what is the right level of tax
to provide the service that we need for a robust, competitive envi-
ronment that can help your businesses succeed? So I am willing to
have that conversation.
Thank you, Chairwoman. I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Minnesota, Mr. Stauber,
for 5 minutes.
28
Mr. STAUBER. Thank you, Madam Chair.
Dr. Haynie, real quick. You had made a comment just moments
ago about supply chain. Would the supply chain issue be reduced
if it was manufactured and made in the United States, a product?
Mr. HAYNIE. So I am clearly a big supporter of bringing manu-
facturing back to the United States. I believe that, you know, what
I was referring to is how can veteran-owned businesses play a role
in bringing that manufacturing back in part. But also, how can our
U.S.-based large companies think beyond their traditional process
to open their supply chains up so that veteran-owned businesses
can be suppliers to those companies.
Mr. STAUBER. But if it was made in the United States and
manufactured in the United States, would the supply chain issue
be reduced?
Mr. HAYNIE. I absolutely believe so. Yes.
Mr. STAUBER. Thank you.
And to the veterans, thank you for your service. I will be very
blunt. I get to spend the rest of my life with what I think is the
greatest veteran, my wife of 25 years, an Iraq War veteran. So
thank you for your service, and that comes from the bottom of my
heart.
Mr. Shamess, I have a question for you. First off, it is great to
see you again. We saw you last November with the Flags of Valor
and what have you. So I appreciate what you do.
A couple things. How have the gas prices impacted your business
and inflation?
Mr. SHAMESS. Good question. And thank you for the question.
Regarding that in relation to what was also just asked, I do also
have Flags of Valor, which is an operating business that is making
stuff in the United States for the record. And so inflation is ter-
rible. It is crushing. It is high. And everything, it is not just hiring
the workforce. It is the gasoline. It is the wood cost. It is adhesives.
It is everything. And then, of course, the cost for us to get a prod-
uct to the end user is also higher. And so at every turn the prices
are going up.
Mr. STAUBER. What would be the additional cost to the end
user from let’s say 2 years ago?
Mr. SHAMESS. If we were to have raised prices in a linear way
with inflation, we would be needing to raise prices probably by
about 20 percent at this point, which is not reflected in the actual
inflation numbers. But if we were to take in all the total cost in-
creases.
Mr. STAUBER. Right.
The Biden administration, these are their own numbers. The
Biden administration has added in the year 2021, an additional
$201 billion of regulatory costs and 130 million in compliance hours
on small businesses. How does red tape hold your business back
from achieving even greater success?
Mr. SHAMESS. Well, one, it is time. And this was a big issue
in the early stages of COVID pandemic was the amount of compli-
ance that went into the Paycheck Protection Program, for instance.
Some people took advantage of that, unfortunately. But for the peo-
ple that were trying to do it the right way, and it improved over
time, but it was very confusing. And so if you are talking about just
29
filing your monthly sales and use tax to filing your 941s for payroll,
to even just following local code if you are a restaurant or whatever
you are. It took a tremendous amount of time. And to the entre-
preneur, they have both financial capital and they have time cap-
ital. And those both have a value associated with them.
Mr. STAUBER. Right.
Mr. SHAMESS. And so when you are sucking that much time
capital out of their ability to do their job, it is a huge cost.
Mr. STAUBER. So with the regulatory costs and the burdens put
on small businesses across this country, would you say that you
would be best keeping that money in your own pocket to invest in
your employees and technology and capital?
Mr. SHAMESS. Without question because it is an also risk re-
lated. And so if your incentives continue to go down, your appetite
for risk will also go down proportionately. Or maybe even more so.
And so to invest the extra dollar in your company, it becomes less
and less certain. And therefore, less and less likely.
Mr. STAUBER. I think as a small business owner of 31 years
myself, certainty is what we need. Certainty. And I think that is
important.
Again, thanks all of you for your testimony. And as the veterans
you are, thank you again for your service from the bottom of my
heart.
And I yield back, Madam Chair.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from New Jersey, Mr. Kim, for
5 minutes.
Mr. KIM. Thank you. Thank you, Madam Chair, for recognizing
me. Thank you for the panel here to talk through this important
issue. We certainly have been better focused in New Jersey on
what we can do for our veterans there. And as someone who is on
this Small Business Committee, this has been a big part of what
we focused on.
The one angle that we tried to go at this from is, you know, we
were looking at this infrastructure, the Investment and Jobs Act
signed into law, all these different opportunities that are going to
be available to the buildup across our country. I introduced some
bipartisan legislation called the Bill to Veterans Business Act
which would set a 3 percent veteran-owned small business con-
tracting goal for federal transportation projects, including construc-
tion, manufacturing, and professional services like architecture and
engineering.
This falls under the Department of Transportation, not SBA. But
I wanted to ask this panel here. What can SBA and other federal
partners do better to support veteran-owned businesses that want
to complete for federal contracts? I feel like this is an opportunity
that we have no been able to dive in as deep on and wanted to get
your perspective.
Mr. HAYNIE. Again, I will take a first swing at that one. You
know, I think the set aside incentives that exist already now at
DoD and VA and at many state levels, I think those are important
opportunity creators. I also know from my past experience as a
DoD procurement official that one of the challenges is many small
business and veteran-owned businesses as well face real barriers
30
to, it is why for many years DoD never met its set aside goal be-
cause they could not find qualified, in their definition, qualified vet-
eran-owned businesses to engage in procurement actions. The op-
portunity to get this right, you have to also engage prime contrac-
tors. You know, you have to extend those set aside goals as an obli-
gation to the large prime contractors and create an apprenticeship
kind of relationship between small and growing ventures and those
large prime contractors so that there is an opportunity to sort of
cultivate and nurture these small businesses as they begin to take
on federal contracts. Because if not done well, you actually could
do more harm to those small businesses than opportunity creating.
That is my view.
Ms. SAYLES. May I add something, please? The VA is now re-
leasing the verification for service-disabled, veteran-owned small
businesses is going over to the SBA. So ensuring that all federal
government agencies now adhere more to the law of that whereas
at the VA they tend to have 20 to 25 percent of their dollars spent
with service-disabled veterans. However, they have been able to
not meet the women requirement at 5 percent. So it clearly shows
that they are not awarding as much or looking more into the
women service-disabled veterans as far as even at the VA. But the
value of now going across the SBA is going to be great because now
every agency should be adhering to the law of the new rules com-
ing out of SBA for the veterans.
Mr. KIM. Yeah. No. Thank you for that.
Ms. SAYLES. And also, we should increase it to 5 percent.
Mr. KIM. Sure.
One thing I wanted to kind of connect the dots on here is, you
know, a lot of how we have been trying to get small businesses to
understand some of these opportunities, you know, has been about
some of these different organizations. You know, for instance, the
U.S. Coalition of State Veteran Chambers of Commerce has Mem-
bers in 20 different states, including New Jersey. We have been
able to work with this group on the ground in New Jersey to help
a lot of these veteran-owned businesses understand some of these
different opportunities available.
So I guess I just wanted to end on asking, you know, do any of
your organizations partner with the state veteran chambers? And
how can they better work with you to be able to maximize their op-
portunities here?
Mr. HAYNIE. So I think, sir, the short answer is yes. You know,
as the saying goes, business is local. And one of the things that we
are constantly advising veterans that go through our business own-
ership programs is to connect locally. Make connections with local
Chambers of Commerce, state level Chambers of Commerce, par-
ticularly as it relates to entities that have been created around un-
derserved Communities, the Hispanic Chamber of Commerce, for
example.
So I think, you know, one of the themes that has come across I
think this panel is the importance of networks. And we drive that
home at every opportunity. And the extent to which local networks
can be cultivated is extremely important.
Mr. KIM. Thank you. I will yield back to the Chair.
Chairwoman VELÁZQUEZ. the gentleman yields back.
31
Now we recognize the gentleman from Wisconsin, Mr. Fitzgerald,
for 5 minutes.
Mr. FITZGERALD. Thank you very much for being here. I am
over here in the corner if you can see me over here.
I spent 27 years doing ADT and Army Reserves and National
Guard. Retired as a lieutenant colonel. And I think this kind of
today is typical for the way things are oftentimes framed up which
is somebody enlists, they do their first 4 years, 6 years, whatever
it might be. And then if they for some reason want to transition
out of the military they kind of figure out, okay, what am I going
to do now? And can I find a job that is related to the MOS that
I had
During my time. I will just say during my time in the Army. But
what has not been discussed, which I had a ton of contact on over
my years in both the Guard and Reserve was that many of these
active duty soldiers transition into the Guard or Reserve. And
along with that, obviously, it is kind of the problem is right before
you and that is they also have a civilian job; right? So they are
doing their 2 weeks of AT every year and they are doing their reg-
ular drills. And during that period of time, a lot of people are either
going to tech college or some of them are in a 4-year institution
and ultimately end up in ROTC or some other avenue.
Has there been any study or any kind of 30,000 foot lock on, you
know, it is like people solve this problem on a daily basis. What
am I going to do in the civilian world? And they use the Guard and
Reserve a transition piece for them sometimes because they do not
want to leave the military. They love being in the military. Or, you
know, it is another way to supplement their income while they are
out there doing something like this.
So I am not sure, Mr. Shamess, do you want to, or anybody that
might have some experience with that Guard and Reserve piece?
Because I think it is kind of something right before us. And I do
not know that it is really being explored or analyzed at all.
Mr. SHAMESS. No, that is a great question. I would be happy
to answer it.
Mr. PEACOCK. I can answer that one. Okay. Go ahead. I had
something I wanted to say but please go ahead.
Mr. SHAMESS. So the Guard and Reserve I think is a great
transition point. In fact, I have been in the Guard for 8 years and
11 years on active. And so I absolutely appreciate the opportunities
that the National Guard, the Air National Guard in my case
present. And in some states there are great partnerships that exist
between the Guard and the private sector.
So, for example, in the State of West Virginia, if you join the
Guard, they will pay for you to go to college outside of your normal
GI Bill benefits you may earn if you attend school in state. And
then that creates opportunities for private companies to work with
the Guard and the State to basically create a funnel, a hiring fun-
nel, which is a really powerful thing if it is properly developed.
And the other thing I would consider, and I have been a skill
bridge partner in various companies, where we have created skill
bridge opportunities for military personnel in their last 6 months
of service to come work inside the company. It is a great thing. And
I do not know the answer to this, if it is allowed to be used for en-
32
trepreneurship. And if it is not, that would be an interesting sug-
gestion to possibly look at where can you use a skill bridge pro-
gram for you to spend 6 months with a partner, with a mentor
working to develop your business, especially if you have built-in ac-
cess to capital associated with that.
Mr. FITZGERALD. Yeah, I mean, other than combat arms, I
mean, there are so many other MOS in the Army that it is a very
direct and easy transition. I mean, if you are a mechanic in the
Army, there is a good chance you could open up your own garage
in the civilian side and also be an active Member of the Guard or
Reserve. So, and I watched this happen. I mean, there are all kinds
of Members that did this on a regular basis, so.
Any other comments on that point?
Mr. PEACOCK. I can say that the EIDL loan, the Economic In-
jury Disaster Loan was originally set up for Guard and Reservists
who deployed. They own a business and they are called out to de-
ploy. They can get the EIDL loan as a bridge loan. It was used dur-
ing COVID because it was already in existence. So if you have a
business and you are called up to active duty, you can get an EIDL
loan, which is like a bridge loan to cover you until the time you
get back, low interest rate, and it is a good program for those busi-
ness owners who are in the Guard and Reserve. So that is some-
thing as far as access to capital that is available now. Thank you.
Mr. FITZGERALD. Yeah, just in the couple seconds I have left,
the other thing is just, you know, a lot of my experience was in
training divisions or are techs themselves. So oftentimes, you
know, the focus on that is how do you create an Army trainer, and
then how does that trainer train troops? So there is this transition
where it is really you are creating a classroom environment. And
it is another place I think where we kind of miss the boat in that
all that experience is just kind of, you know, as soon as a person
leaves the military it is just gone. And it has always been frus-
trating to me to kind of see people that are just very good at that
and suddenly they do not qualify kind of on the civilian side. It is
another place I hope there is emphasis and I hope there is a place
where we can find a way of utilizing those skills because it is un-
fortunate when they are just kind of gone overnight, so.
Thank yo for being here today. I yield back.
Chairwoman VELÁZQUEZ. The gentleman yields back.
Now we recognize the gentleman from Louisiana, Mr. Carter, for
5 minutes.
Mr. CARTER. Madam Chair, thank you very much. And let me
thank you all for your incredible service. We can never say thank
you enough for the sacrifices that you make for our country, and
the least we can do is to create a smooth and seamless path for
you to enter into the world of entrepreneurism.
I happen to be the proud husband of a wife who is a career gen-
eral officer in the United States Army with multiple tours of duty
to Afghanistan and Iraq. So I know the pressure of a family left
behind when their spouse goes to war or to service. So hats off to
you.
Ms. Sayles, the issue that we hear often with veterans of small
businesses period is access to capital. Obviously, you overcame
that. Would you mind sharing how and what recommendations you
33
would give to service Members who are looking to perhaps enter
the world of business?
Ms. SAYLES. Earlier someone brought up the transition. Right?
So TAP going for a longer period of time could be a very good area
to start training them about the importance of having good credit.
Because, again, that is kind of the information you do not learn
while you are serving. And they do have a lot of, of course, compa-
nies right outside the gate that like to charge you a ridiculous
amount of money to purchase anything while you are actually in
uniform. So you do not get trained up in that area.
And then secondary to that would be even with having good cred-
it, the options of not having to pay more, much more than you
should to receive that credit in order to start your business and
have the capital I think is a big problem. And I brought that up
earlier in my testimony. The SBA should really consider even more
options of working with the existing lenders that are out there, the
larger banks, the alternatives, whomever, but just kind of lead the
way of actually establishing abilities for people to get access to cap-
ital where it does not cost them a lot of money in interest and fees.
Mr. CARTER. What about even maybe a little bit of leniency on
credit scores for service people?
Ms. SAYLES. I would actually support that thought, sir, as well
because, again, we were not taught when we were serving in the
military about certain aspects. Finance is one of the areas.
Mr. CARTER. Or even the ability to manage affairs when per-
haps going abroad or serving. Many times as I think Mr. Shamess
indicated, did you indicate that you took your oath of office at 18?
Mr. SHAMESS. I did.
Mr. CARTER. So, you know, a very young man relatively to
begin and so some of those things are a matter of the ball comes
really fast. And again, in our effort to provide as much resource
and as much leniency and as much appreciation for your incredible
service, I think that is one of those things that we should look at
through the various committees of the Congress. Thank you very
much.
And one question for Mr. Shamess. The training you received
through Boots to Business Program obviously prepared you. Can
you share a little bit more? And I was late so this has already been
asked. I will add a second part to that. Could you share a little bit
about that experience and what advice would you give to young
service people—young or old service people that are looking to ac-
cess resources like Boots to Business or others?
Mr. SHAMESS. So I was not a consumer of the Boots to Busi-
ness program. But I would encourage all of them to work within
basically everything we are describing today to find these re-
sources. And hopefully, they will be provided in a more seamless
way to them in the future. And I would encourage them to also rely
on their military training because there are some very unique
skills that come from military service. And I would tell them to ab-
solutely not discount those as they embark on their entrepreneurial
journey.
Mr. CARTER. So as my times winds down I will ask a silver bul-
let question. You are sitting here before this Committee and if each
of you had one request that could be honored from this Committee
34
or any other Committee of the U.S. Congress that would make your
business experience smoother, more accessible, more profitable,
what would that be?
Ms. SAYLES. Access to capital, sir. Because as a woman that has
a business in government contracting and as an 8(a) firm, I am un-
able to just say I can take on any contract from the relationships
I have built with no lack in trust within the federal government.
Because if I do not have the capital to support good months of pay-
ing those salaries to those individuals, I can be challenged with
being successful with it.
Mr. CARTER. Okay. Mr. Shamess?
Mr. SHAMESS. Make it easier on us from a compliance stand-
point. Stop changing rules. Allow us to operate and enjoy the bene-
fits but also struggle on our own to be entrepreneurs.
Mr. CARTER. Dr. Haynie?
Mr. HAYNIE. Create the ecosystem. You know, back to the navi-
gation challenge. How is it that we put in place and sustain a net-
work of resources on behalf of veterans such that when they make
that transition they understand what resources are available, not
just initially but at various stages of business venture creation and
growth.
Mr. CARTER. My time has expired. Thank you all very much.
I greatly appreciate it.
Chairwoman VELÁZQUEZ. Time has expired.
The gentlelady from New York, Ms. Tenney, is recognized for 5
minutes.
Ms. TENNEY. Thank you, Madam Chairman. I appreciate this.
Thank you so much to you for coming here and giving us some in-
sight. And I obviously thank you for your service. I get a lot of un-
solicited advice from my son who just left active duty in the Ma-
rines and is now a Reserve officer about just the transition period.
How to help and mentor young service Members. And you have all
sort of touched on access to capital as being one of the biggest
issues. And one of the things I see in the military and as a small
business employer as well, and you touched on it a little bit, Mr.
Shamess, is the skill set that many do not understand that comes
from military service. It is the commitment to service, the ability
to operate and complete tasks in sometimes a very stressful envi-
ronment. The work ethic, obviously. Task completion, ethics, and
all those rules that go with being a good service Member and to
receive the kind of step up. And also with some creativity and inge-
nuity.
In talking about access to capital though, I was going to maybe
sort of go down the line. You talk about access to capital. One of
the issues I have, and I come from a rural area. And Mr. Haynie
knows I am just around the corner. But it is actually, even though
Syracuse is big and I love your orange by the way.
Mr. HAYNIE. And I live in your district.
Ms. TENNEY. Oh, that is great. But we are all Syracuse fans.
Anyone that is in the vicinity. So, although I went to Colgate, so
my brother and my nephew are Syracuse graduates and we love all
our upstate schools. And we love our military. We have great mili-
tary opportunities, but a lot of it is in rural areas.
35
So when you talk about access to capital, you know, the oppor-
tunity to create jobs and get the types of jobs—no everyone in the
military is going to do a high tech job. How do we do jobs that are
maybe more capital intensive in industry that would take a little
more time to get up and running but would last longer. And so
maybe I would say is that something that you are seeing? Just be-
cause of that skillset that people in the military would bring, how
do we get that type of long-term investment in making things
again which would be great, you know, as part of the Made in
America, reshoring our jobs back here is something our military
would be so excellent at, how would we handle, how can we make
better laws to give you access to capital to make that happen?
Mr. SHAMESS. Thank you for the question.
Mr. PEACOCK. Can I take this one?
Ms. TENNEY. You can all chime in whatever order you want to
do.
Mr. PEACOCK. Sure. One thing that has been not mentioned is
the USDA. They are very strong supporters of rural businesses and
any type of farm business. They have got guaranteed loan pro-
grams as well at the SBA. And I am in a rural area as well and
they will do most any type of rural business, provide funding for
that. So I wanted to mention the USDA, as well as the SBA as an-
other funding possibility to capitalize small rural based businesses.
Thank you.
Mr. SHAMESS. So I love the idea of creating jobs and businesses
where you are. And I think that is very important, especially in
rural communities in Small Town America. And so when you think
about the landscape of small business, it is incredibly diverse. You
have entrepreneurs that are sole proprietors that buying that truck
can be the business. That can be it; right? There are other busi-
nesses that can be started with $10,000. And so when I think about
the Post-9/11 GI benefit for example being used as a capital tool
for business ownership, you can do a lot with that amount of
money for most of these businesses. And so you are talking about,
depending on the state you are in, that can be $80,000 over the
course of 3 years. That is a tremendous amount of money to start,
whether it is something that is going to be an employer or some-
thing that you are going to be a sole proprietor and that can stay
local to where you are. And so I think that would be one of the best
tools is that H.R. 4991 being brought back in a bipartisan way.
Ms. TENNEY. And I think investing from not just one source but
you are saying investing whether it is a car loan. We have taken
a lot of reindustrialization in our region and it is interesting that
a lot of these people tend to be former military or dairy farmers.
I find that those are the most resourceful people I know. They get
the job done. They know how to fix things. They do not complain.
They work long hours and that is why I just think this is just a
goal mine to be able to access the skill set that you have all
learned by being in the military to be able to use that to industry
and growing our regions again, especially in Upstate New York. We
have this beautiful area of the country but we are not getting the
capital we need. And we have people who have proven records and
I would just love to be able to highlight that. And I do not know
36
if Mr. Haynie or Ms. Sayles want to weigh in on that as well,
quickly. I have 20 seconds.
Mr. HAYNIE. If I could just add one more thing to that point.
You can buy a commercial laser for $20,000 with installation, ready
to run. So you could be a laser manufacturer in the United States
for $20,000 getting started. That is incredible.
Ms. TENNEY. See, I do not even know that.
Mr. HAYNIE. But that is incredible; right? You can do that any-
where.
Ms. TENNEY. I am low tech.
Mr. HAYNIE. Anywhere in the country you can do that.
Ms. TENNEY. That is fantastic.
Anything else quickly before I run out of time? Again, I cannot
thank you enough for what you do and your service, and helping
our veterans is really important. Thank you.
Chairwoman VELÁZQUEZ. Thank you.
Thank you to our witnesses for testifying today and for your
service on behalf of our country. Those that have served in our
Armed Forces are often natural entrepreneurs as has been dis-
cussed here. The skills they develop in the military like leadership,
perseverance, resourcefulness, and discipline make them ideal busi-
ness owners. These veteran-owned businesses play a key role in
supporting the American economy and communities across the
country. Our country stands to benefit immensely by making it as
easy as possible for veterans to start and run their businesses.
Today, we heard invaluable testimony about what is and is not
working when it comes to SBA veteran programs. I hope that we
can apply these lessons moving forward as we work to advance
policies that empower veteran business owners.
Without objection, Members have 5 legislative days to submit
statements and supporting materials for the record.
If there is no further business to come before the Committee,
without objection, we are adjourned. Thank you.
[Ms. Sayles did not subimt her responses to questions in a timely
manner.]
[Whereupon, at 11:51 a.m., the committee was adjourned.]
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