The SBA Office of International Trade and the Step Program as Key Tools for Recovery and Expansion (House Small Business subcommittee hearing, July 19, 2022)

Summary

Printed record of a hearing of the House Committee on Small Business, Subcommittee on Economic Growth, Tax, and Capital Access, held July 19, 2022, titled The SBA Office of International Trade and the STEP Program as Key Tools for Recovery and Expansion, Small Business Committee Document Number 117–062. Hon. Sharice Davids presided and the subcommittee met at 10:00 a.m. in Room 2360 of the Rayburn House Office Building and via Zoom, with Hon. Dan Meuser giving the minority opening statement. Witnesses were Mary Waters of the Georgia Department of Economic Development; Luther L. Tooks of Pyramid Foods, LLC; William E. Spear of the New Jersey Business Action Center; and Devan Walding of RADIUS Corporation. Davids closed by looking ahead to reauthorizing the STEP program; the subcommittee adjourned at 11:06 a.m.

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“The SBA Office of International Trade and the Step Program as Key Tools for Recovery and Expansion (House Small Business subcommittee hearing, July 19, 2022).” Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/the-sba-office-of-international-trade-and-the-step-program-as-key-tool-72e7e8e9b3/, SHA-256 3f584f7f4aa62e335cc16d5f461cc7768532eb647278e1645182dd7fa37aff48.

Full text

THE SBA OFFICE OF INTERNATIONAL TRADE
AND THE STEP PROGRAM AS KEY TOOLS
FOR RECOVERY AND EXPANSION

HEARING
BEFORE THE

SUBCOMMITTEE ON ECONOMIC GROWTH,
TAX, AND CAPITAL ACCESS
OF THE

COMMITTEE ON SMALL BUSINESS
UNITED STATES
HOUSE OF REPRESENTATIVES
ONE HUNDRED SEVENTEENTH CONGRESS
SECOND SESSION

HEARING HELD
JULY 19, 2022

Small Business Committee Document Number 117–062
Available via the GPO Website: www.govinfo.gov

U.S. GOVERNMENT PUBLISHING OFFICE
48–012 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
SCOTT PETERS, California
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
MIKE FLOOD, Nebraska

MELISSA JUNG, Majority Staff Director
ELLEN HARRINGTON, Majority Deputy Staff Director
DAVID PLANNING, Staff Director

(II)
CONTENTS
OPENING STATEMENTS
Page
Hon. Sharice Davids ................................................................................................ 1
Hon. Dan Meuser ..................................................................................................... 2

WITNESSES
Ms. Mary Waters, Deputy Commissioner, International Trade, Georgia De-
partment of Economic Development, Atlanta, GA ............................................ 5
Mr. Luther L. Tooks, Chief Executive Officer, Pyramid Foods, LLC, Shawnee,
KS .......................................................................................................................... 7
Mr. William E. Spear, Manager, Office of Export Promotion, The State of
New Jersey Business Action Center of the New Jersey Department of
State, Trenton, NJ ............................................................................................... 8
Mr. Devan Walding, Vice President of Sales, RADIUS Corporation, Kutztown,
PA .......................................................................................................................... 10

APPENDIX
Prepared Statements:
Ms. Mary Waters, Deputy Commissioner, International Trade, Georgia
Department of Economic Development, Atlanta, GA ................................. 22
Mr. William E. Spear, Manager, Office of Export Promotion, The State
of New Jersey Business Action Center of the New Jersey Department
of State, Trenton, NJ .................................................................................... 25
Mr. Luther L. Tooks, Chief Executive Officer, Pyramid Foods, LLC,
Shawnee, KS ................................................................................................. 28
Mr. Devan Walding, Vice President of Sales, RADIUS Corporation,
Kutztown, PA ................................................................................................ 29
Questions for the Record:
None.
Answers for the Record:
None.
Additional Material for the Record:
None.

(III)
THE SBA OFFICE OF INTERNATIONAL TRADE
AND THE STEP PROGRAM AS KEY TOOLS
FOR RECOVERY AND EXPANSION

TUESDAY, JULY 19, 2022

HOUSE OF REPRESENTATIVES,
COMMITTEE ON SMALL BUSINESS,
SUBCOMMITTEE ON ECONOMIC GROWTH,
TAX, AND CAPITAL ACCESS,
Washington, DC.
The Subcommittee met, pursuant to call, at 10:00 a.m., in Room
2360, Rayburn House Office Building and via Zoom, Hon. Sharice
Davids [chairwoman of the Subcommittee] presiding.
Present: Representatives Davids, Newman, Bourdeaux, Andy
Kim, Meuser, Garbarino, Young Kim, Van Duyne, and Donalds.
Chairwoman DAVIDS. 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, please remember to remain muted until you are recog-
nized 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 that they have
returned to the proceeding.
American entrepreneurs are nearly always looking to expand
their businesses. Whether it is hiring new workers, offering new
products, or opening new locations, small business owners always
have an eye on growth. In recent years, increased globalization and
digital adoption have led many small businesses to expand their of-
ferings to international markets.
Approximately 166,384 small businesses in the United States
currently export, accounting for about 26 percent of all U.S. ex-
ports, and $341 billion in export sales.
However, small business exporters represent only 3 percent of
the total U.S. small employer firms. With 96 percent of all con-
sumers, and two-thirds of the world’s purchasing power residing
(1)
2

beyond U.S. borders, increased exporting has the potential to boost
the small business economy.
Recognizing this, the Small Business Administration created the
Office of International Trade in 2010. OIT works in cooperation
with other federal agencies and public and private sector groups to
encourage small business exports and provide small business ex-
port assistance.
Small firms are often discouraged from selling their products
overseas due to the complex exporting process, the capital required
to fill foreign orders, and expertise necessary to follow international
rules and regulations.
These unique challenges spurred Congress to create a 3-year
state trade and export promotion pilot grant initiative in 2010. In
2015, Congress authorized the program through 2020 and renamed
it the State Trade Expansion Program, otherwise known as STEP.
STEP provides small firms with the knowledge and support they
need to expand into new markets and export their products abroad.
The program awards matching funds to states and territories for
participation in trade missions, international marketing efforts,
workshops, export tradeshow exhibits, and other promotional ac-
tivities. Over the years, these initiatives have helped thousands of
small businesses overcome the barriers that stop many firms from
participating in the international marketplace. In fiscal year 2021,
SBA supported $832 million in export sales from STEP and as-
sisted over 3,400 small businesses.
Last Congress, the House passed H.R. 6133, the STEP Improve-
ment Act of 2020, which would have reauthorized STEP for 4 fiscal
years, increased grand spending flexibility, and made a range of
additional improvements. The Committee plans to introduce simi-
lar legislation this Congress.
As we prepare for STEP reauthorization, we must look closely at
what is working well in the program and identify areas for im-
provement. Improving operations and efficiency within STEP will
help American entrepreneurs break into exporting and boost the
overall economy.
I look forward to hearing from our witnesses about their experi-
ence with STEP and the actions Congress and SBA can take to en-
sure the program helps as many small businesses as possible.
I would now like to yield to the Ranking Member, Mr. Meuser,
for his opening statement.
Mr. MEUSER. Thank you, Chairwoman Davids, very much. And
thank you certainly to all of our witnesses for attending with us,
both live and on video.
Small businesses are job creators, innovators, and drivers of the
United States’ economy. They also export high quality products
which showcase American manufacturing, agriculture, and energy
across the globe. According to the SBA, small businesses comprise
96 percent of all exporters in the U.S. In my home state of Pennsyl-
vania, the U.S. Census Bureau found that over 88 percent of the
state’s exporters are small firms which resulted in $12.5 billion in
exported products in 2019.
The SBA’s Office of International Trade assists small businesses
in export promotion activities through management and training
programs and the State Trade Expansion Program grants the
3

STEP grants. The STEP program partners with states and terri-
tories to increase the number of small businesses that export, in-
crease the value of exports by small businesses, and it creates a
number of small businesses exploring significant new trade oppor-
tunities.
Many states use STEP awards to facilitate foreign trade missions
and tradeshow exhibits, or provide consulting, marketing, and
website services. Pennsylvania has received several STEP awards
since the program’s inception and has effectively used the STEP
funds for its financial assistance plan, the Global Access program
(GAP), which GAP is designed to be flexible and allow companies
to use STEP funds to their best advantage.
It has resulted in quite a numerous number of success stories.
Gilson-Snow, for example, a premium snowboard and ski design
and manufacturing company located just outside of my district in
Winfield, Pennsylvania, was started by a middle school science
teacher and his class. The company was awarded GAP funds for
digital marketing on Facebook and Instagram, which resulted in
sales totaling nearly $20,000 during the campaign and increased
brand awareness in Australia and New Zealand markets.
Another example is Pepro, LLC, out of Oil City, Pennsylvania.
Pepro, LLC, is a veteran-owned small businesses that specializes in
mobile and remote communication shelters which ensures commu-
nications are not interrupted during emergencies or natural disas-
ters. They used GAP funding to cover costs associated with attend-
ing the International Wireless Communications Expo in Las Vegas.
Their president, Kelly Lander, stated GAP funding has been a
great benefit to us. Our biggest sales effort for international busi-
ness is the IWCE Trade Show. GAP funding pays for our booth
space, which is our largest expense. This funding was especially
helpful during 2021 in dealing with challenges related to COVID.
So clearly, a great return on investment in this program.
Small businesses face many barriers to exporting, including lim-
ited capacity, resources, access to capital. Unfortunately, the pan-
demic created additional challenges and resulted in many canceled
trade shows, missions, and travel, which hindered the ability of
STEP awardees to conduct activities.
Further, economic headwinds very much caused, many would
argue, by the Biden administration policies, have hindered small
business operations, including exporting. A recent survey from
Goldman Sachs, 10,000 small businesses found that 80 percent of
small businesses say broader economic trends, such as inflation,
supply chain issues, and workforce challenges, are having a nega-
tive impact on their business.
Last week, inflation soared to nearly a 41-year-record high as
prices skyrocket month after month, it is not surprising that the
Job Creators Network polling found that 72 percent of small busi-
nesses did not believe that the Biden administration policies were
doing enough to combat inflation.
This is a top problem for small business owners. Small busi-
nesses in my district tell me every day that inflation is forcing
them to raise prices, modify operations, and is hindering their abil-
ity to plan for the future, and certainly to invest in inventory and
other capital investments.
4

I appreciate very much the Chairwoman for calling this impor-
tant hearing on the STEP program today, and I look forward to
working together to increase small business exports and empow-
ering innovators with the tools they need to reach new markets.
However, if we truly want to help small business, we must reduce
regulations that slow domestic production. We must make our
small businesses and large businesses in the U.S. the most com-
petitive in the world. We need to adamantly oppose any tax in-
creases and make the 2017 tax cuts permanent which will have
great positive effect and predictability for small businesses. And we
also need to end much of the excessive spending that has attrib-
uted to soaring inflation.
So, I will end by just being clear. Continued reckless inflationary
spending in Washington, increase in taxes and regulations will not
support small businesses in their efforts to expand and export.
I yield back, Madam Chairwoman.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
I would like to take a moment to explain how this hearing will
proceed. Each witness is going to have 5 minutes to provide a
statement, and each Committee Member will have 5 minutes for
questions.
Please ensure that your microphone is on when you begin speak-
ing so that everyone can hear you, and make sure that you return
to mute when you are finished.
With that, I would like to introduce our witness.
Our first witness is Ms. Mary Waters. Since 2015, Ms. Waters
has served as Deputy Commissioner for International Trade for the
Georgia Department of Economic Development. Under her leader-
ship, Georgia rejoined STEP after a multiyear absence and her
work has helped Georgia become a top 10 exporting state for the
first time in 2020. Ms. Waters is also currently serving as presi-
dent of the State International Development Organization, Inc.
(SITO), the premier U.S. organization dedicated to supporting state
international trade agencies and state development programs. Wel-
come, Ms. Waters.
Our second witness is Mr. William Spear. Mr. Spear is the man-
ager of the New Jersey Office of Export Promotion and director of
New Jersey STEP, both of which are part of the New Jersey De-
partment of State. He has worked for the state for more than 23
years and graduated with an Associate of Applied Science degree
from Union County College and a Bachelor of Science in Business
Administration from St. Elizabeth University. Welcome, Mr. Spear.
I got tongue tied because I have an associate degree, too. Got ex-
cited about it.
Our third witness is Mr. Luther Tooks. Mr. Tooks is the CEO of
Pyramid Foods, LLC. Mr. Tooks’ company produces Pitmaster LT’s
barbeque sauces and rubs which he has perfected over the course
of 3 decades. Mr. Tooks is a proud U.S. Army veteran and Kansas
City barbeque pitmaster. Mr. Tooks utilized STEP to export his
products which since 2020 have been available in the U.S., Canada,
Europe, and the Middle East. Welcome, Mr. Tooks.
I will now yield to the Ranking Member, Mr. Meuser, to intro-
duce our final witness.
Mr. MEUSER. Thank you, Madam Chairwoman.
5

Our next witness is Mr. Devan Walding. Mr. Walding is the vice
president of Sales at RADIUS Corporation, which is located in my
district in Kutztown, Pennsylvania. He is responsible for the com-
pany’s international growth strategy, including opening new mar-
kets and increasing brand awareness and revenue. RADIUS Cor-
poration was founded in 1983 and is a second generation, family-
owned and woman-led company. RADIUS Corporation manufactur-
ers sustainable oral healthcare products here in the United States,
including toothbrushes, toothpaste, floss, and even pet care prod-
ucts. Through Pennsylvania’s export program, the company re-
ceived three STEP-funded global access program awards in recent
years to help offset the costs of their initiatives in Italy, Russia,
and Germany. RADIUS has received countless awards for their in-
novation and contributions to export promotion. In 2015, they re-
ceived the Governor’s Export Impact Award, and in 2016, they re-
ceived the President’s ‘‘E’’ Award which is the highest recognition
an American company can receive for making a significant con-
tribution to the expansion of United States exports. Most recently,
the SBA announced RADIUS Corporation as the Eastern Pennsyl-
vania Export of the Year for 2020. They have also received awards
from Martha Stewart, AskaDentist.com, Baby Maternity Magazine,
Family Choice, and many others for their design, sustainability,
and high quality products. It is a great honor to represent small
businesses like RADIUS Corporation who are driving innovation,
manufacturing high-quality American made products, and making
the world a better place.
Mr. Walding, I would like to welcome you to the Subcommittee
today. We all look forward to hearing more about ways we can sup-
port small businesses in their export ventures. And thank you to
all the witnesses for joining us. And I yield back.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
Again, thank you all for being here. And I will start off by recog-
nizing Ms. Waters for 5 minutes.
STATEMENTS OF MARY WATERS, DEPUTY COMMISSIONER,
INTERNATIONAL TRADE, GEORGIA DEPARTMENT OF ECO-
NOMIC DEVELOPMENT; WILLIAM E. SPEAR, MANAGER, OF-
FICE OF EXPORT PROMOTION, THE STATE OF NEW JERSEY
BUSINESS ACTION CENTER OF THE NEW JERSEY DEPART-
MENT OF STATE; LUTHER L. TOOKS, CHIEF EXECUTIVE OF-
FICER, PYRAMID FOODS, LLC; DEVAN WALDING, VICE PRESI-
DENT OF SALES, RADIUS CORPORATION

STATEMENT OF MARY WATERS
Ms. WATERS. Thank you very much, Chairwoman Davids,
Ranking Member Meuser, and Members of the Subcommittee,
thank you for the opportunity to testify this morning. Representa-
tive Bourdeaux, it is a pleasure to see you online this morning as
well. Good to be here from Georgia.
In my role as the deputy commissioner for International Trade
with the Georgia Department of Economic Development, I oversee
the state’s international trade program and lead a global team fo-
cused on helping Georgia companies grow through exporting. More
than 80 percent of the exporters that we serve are businesses with
6

fewer than 100 employees. I am also the current president of the
State International Development Organizations, or SIDO, a non-
partisan organization comprised of state international trade offices.
I want to thank the Committee for your commitment to small
business exporters and to the State Trade Expansion Program.
STEP is a valuable resource for our businesses in Georgia, and a
key program in our agency’s ongoing efforts to help companies in-
crease their exports.
Exporting is an important avenue of growth for small businesses
and for the U.S. economy as a whole. Diversification of sales helps
businesses mitigate risk, become more resilient, and globally com-
petitive.
In Georgia, total trade with the world exceeded $166 billion last
year, and that includes more than $42 billion in exports. However,
of the more than one million small businesses in Georgia, the U.S.
Department of Commerce estimates that fewer than 11,000 Geor-
gia companies exported in 2019.
The mission of SIDO’s member states is to help small businesses
begin exporting and expand to new markets. STEP is a vital com-
ponent of our shared mission and provides companies with the con-
fidence and support to start the export process.
I would like to provide a brief overview of STEP in Georgia.
Georgia was an early participant in the STEP program in 2011 and
2012, but we stepped away in 2013 after our application was de-
nied. Due to the financial impact of the pandemic on our small
businesses, we wanted to expand our trade services to include fi-
nancial assistance awards, and we applied for a STEP grant in
2020. Georgia was fortunate to receive $162,488 in STEP 9 base
year funding and the response from our small businesses has really
been tremendous. To date, STEP funds have assisted 124 small
businesses, including 23 new-to-export firms and exporters have al-
ready reported more than $1.69 million in sales for a return on in-
vestment of 10.4-to-1 during the initial grant performance period.
We use STEP funds to help companies participate in trade
shows, travel to meet new customers in foreign markets, partici-
pate in U.S. commercial service programs, and other approved ac-
tivities. And I would like to highlight a couple of great success sto-
ries. Take for example a minority-owned agribusiness company
using $1,725 in STEP funds to travel to a trade show in the Middle
East. As a result of participation, this company reported more than
half a million in export sales to three new markets.
A woman-owned business in Georgia’s booming fintech industry
used $6,000 in STEP funds to participate in two trade shows dur-
ing 2021. As a result, the company has expanded sales of more
than $100,000 to five European markets. Or take for example, a
minority-owned, new-to-export firm using STEP funds to travel to
a trade event in South Africa that is now negotiating potential con-
tracts with two new customers.
These are just a few examples of how STEP helps our local busi-
nesses compete in the global economy. And it is important to note
that small business export success is a shared mission with our
federal partners. STEP serves as a nexus program that connects
state and federal trade agencies to develop a more coordinated as-
sistance plan for exporters.
7

At SIDO, we are committed to working closely with the SBA and
Congress to continue to strengthen the STEP program. Reauthor-
ization is critical to supporting greater U.S. exports in the years to
come.
And before I conclude, I want to provide a few recommendations
on how we can continue to strengthen the program. More details
are included in my written testimony.
First, measure ROI by long-term outcomes and by taking all
components of the trade process into account. Achieving an export
sale, especially for new-to-export firms, involves several steps and
can take years depending on the industry. In determining ROI, it
is very difficult to separate one component from the other because
all are part of the reason for a company’s success.
Second, reducing the administrative burden. This includes the
application process, the quarterly reporting requirements, as well
as the A-STEP system.
And third, increasing funding to $30 million or more. Increased
funding will allow grantees to support more trade activities and in-
crease the value of financial awards direct to small businesses,
which achieves the primary objectives of STEP.
I want to thank the Committee again for your support and lead-
ership, as well as SBA’s Office of International Trade, for their
partnership. We strongly support the reauthorization and full fund-
ing of the STEP grant program and look forward to working to-
gether on that process.
Thank you again. I look forward to your questions
Chairwoman DAVIDS. Thank you.
Mr. Spear, you are now recognized for 5 minutes.
Mr. Spear, I believe you might be muted.
No, we still cannot hear you.
Okay, Mr. Spear, we will come back to you after. The technical
team will help you.
Mr. Tooks, you are recognized for 5 minutes.

STATEMENT OF LUTHER L. TOOKS
Mr. TOOKS. Can you hear me?
Chairwoman DAVIDS. We can.
Mr. TOOKS. Oh, okay. Thank you. Thanks for allowing me the
opportunity to serve as a witness and it is my pleasure to visit with
you virtually, Congresswoman.
My name is Luther Tooks, and I am the owner and CEO of Pyr-
amid Foods, a small company based in Shawnee, Kansas. And we
have been in operation since 2016.
As you said earlier, our core business is in the co-packing and
distribution of Pitmaster LT’s BBQ sauces and rubs and
seasonings.
We began communicating with Lu Chang and the Kansas De-
partment of Commerce in 2018, shortly after becoming interested
in exploring the exportation of our products. I reached out to Lu
and he scheduled an introductory meeting with me in his office.
And during that meeting, he gave me a comprehensive overview of
the STEP grant program and how it could be used as a resource
to help us succeed in exporting our products.
8

We decided in 2018 to embark on a mission to export of products
to Canada, and through the STEP program, more specifically, the
KITMAP grant program, we were able to get assistance to a grant
to get our labels redesigned, reformatted, and get our labels trans-
lated in Canadian French, as well as English. And have our mar-
keting brochures also interpreted into Canadian French. And that
allowed us to begin exporting to Canada in 2019.
We decided in 2021 to embark on another mission to export of
BBQ products to Mexico. And again, working with Lu, it was deter-
mined that the STEP KITMAP program once again would offer the
grant assistance we needed to successfully get our products ex-
ported to Mexico.
We consequently did apply and received a grant to help get our
marketing brochure and labels again translated into Spanish this
time. And in addition, we were able to get our labels properly for-
matted to meet the requirements for sale in Mexico. And that as
a big challenge.
But as a result of that assistance, in both instances, we were
able to distribute our products into Mexico and Canada our sales
are increasing from year to year.
We would not have been successful without the education and
the financial support we received through the Kansas Department
of Commerce and the STEP program. And we are grateful for those
two opportunities.
Chairwoman DAVIDS. Thank you, Mr. Tooks. And we will come
back to you, well, I know I will because we have to talk about BBQ.
Mr. Spear?
STATEMENT OF WILLIAM E. SPEAR
Mr. SPEAR. Yes, thank you so much.
Chairwoman DAVIDS. Oh, there we go.
Mr. SPEAR. How is that?
Chairwoman DAVIDS. All right. You are recognized for 5 min-
utes.
Mr. SPEAR. Thank you, Chairwoman Davids, Ranking Member
Meuser, and to all the Members of the Subcommittee, for having
the opportunity to testify before you today. And Chairman, com-
pliments on your associate degree. It works a big deal here in New
Jersey.
Further, allow me to specifically acknowledge Congressman Andy
Kim of the Third Congressional District of New Jersey and his
work on the Subcommittee. And also, thank you, Subcommittee for
your continued support of small exporters and of the STEP pro-
gram. It is a pleasure to share the importance of both of those here
in New Jersey.
My name is William Spear. I am the manager of the Office of Ex-
port Promotion and the director of the State Trade Expansion Pro-
gram. Our office and the program are in the New Jersey Business
Action Center under the leadership of Executive Director Melanie
Willoughby. We are housed in the New Jersey Department of
State, led by Secretary of State Tahesha Way. And on behalf of
Governor Phil Murphy, whose administration encourages New Jer-
sey-based businesses to export globally, we are pleased to highlight
how your efforts strengthen our commitment.
9

I would like to start with three numbers which I will come back
to. Those numbers are 4.6 million, 185 million, and 527.
But now about the state:
We are the fourth smallest state in the country. However, we
have the ninth largest gross domestic product. In 2021, New Jersey
exports were $49.4 billion, up 30 percent. As a result of that, we
are the 10th largest exporting state.
Small companies and small businesses in New Jersey make up
the majority of exporters.
We are sixth in the number of small and medium sized export-
ers.
We are seventh in the amount of exports from those companies,
and we are fifth in the percentage of small and medium sized ex-
porters.
And please note, those data are from the U.S. Census Bureau
and the U.S. Bureau of Economic Analysis.
Given the significant presence of small businesses in New Jersey,
which SBA reports makes up 99.6 percent of all business in our
state, any resource program or assets that support those businesses
are important.
SBA’s STEP program established its importance with our office
a long time ago. We see the value of the STEP program every day.
We watch it assist small exporting companies to increase and di-
versify their revenues, pay higher wages, and create and retain
jobs.
However, New Jersey has not always had the type of success
that we are being asked to talk about today. In the first years of
our participation, we had a very, very steep learning curve as a
granting entity. We were a great exporter but we were learning
what it meant to be a granting entity.
We built our program on two core principles: Be stewards of the
federal money, and to treat the money as if it was your state’s.
Both of those were instilled by the early SBA STEP leadership.
From the beginning, we looked to support the best small companies
we could find. As a result, the program now begins to reflect those
activities.
And now I would like to come back to those numbers I first
shared.
From 2017 to 2022, the State of New Jersey has received $4.6
million of SBA awards.
$185 million of actual export sales of U.S.-made goods and serv-
ices have directly resulted from companies receiving those awards.
Five hundred twenty-seven New Jersey jobs have directly come
from either being created or retained by those STEP awards.
And given that we still have two grant programs open, those
numbers are subject to increase, of which we are very, very
pleased.
However, the numbers are really only a bit of a secondary point
with regards to the measurement. The real measurement is in the
companies themselves and these three quotes:
‘‘NJ STEP is an excellent program that has allowed us to meet
with foreign food buyers.’’ And that is from a socially and economi-
cally disadvantaged, new-to-export firm.
10

‘‘The NJ STEP provided strong support for our firm’s export ac-
tivity and helped to increase international sales.’’ That from a
woman-owned exporting firm.
And, ‘‘Without NJ STEP, our firm would not be in business
today. Support from the program helped to create international
marketing material, paid for booths, and helped market our
brands. We create jobs from STEP.’’ And that is from a socially and
economically disadvantaged, woman-owned, new-to-export firm.
We have many other things that we could talk about, but allow
me to close with a confirmation of our partnership with SBA to
continue to grow the program for the benefit of all of its stake-
holders.
Thank you so much, Madam Chairman.
Chairwoman DAVIDS. Thank you, Mr. Spear.
Mr. Walding, you are now recognized for 5 minutes.
STATEMENT OF DEVAN WALDING
Mr. WALDING. Good morning. And thank you to the Sub-
committee for allowing me to testify today.
So first of all, I will put a little bit more detailed introduction on
RADIUS, the organization.
So RADIUS is a second generation, family-run oral care manu-
facturer based in Kutztown, Pennsylvania. For over 39, almost 40
years, we have been trusted to make ecofriendly, natural, and inno-
vative oral care products for the whole family, including tooth-
brushes, toothpaste, floss, and travel accessories. And actually, if
you have never seen our products, they are pretty unique insomuch
as there was a part back in the early ‘80s was an ergonomically
right-handed toothbrush. Specifically now, with our landfill bio-
degradable samples, vegetable brush bristles, replaceable tooth-
brush head technology, and certified organic toothpaste, we con-
tinue to redefine what should be the conventional oral care offering
even now for your pets.
We are proud to be supporting sustainable U.S. jobs in addition
to being a certified WBENC, (Women’s Business Enterprise Na-
tional Council) Member and WOSB (Women-Owned Small Busi-
ness).
As earlier mentioned, we are proud to be the recipient of the
President’s ‘‘E’’ Award for exports in 2016, recognizing our signifi-
cant contribution to the expansion of U.S. exports. We currently
have 30 staff Members and have exported to as many as 40 dif-
ferent countries. As much as 25 percent of our business at any
given time can be directly attributed to international sales, and we
were also the two-time recipients of the PPP loans, the first in
2020 and the second in 2021.
Just a little bit about myself. So, my name is Devan Walding,
and I am the VP of Sales here at RADIUS. I have three citizen-
ships, including being American, Canadian, and Australian. I have
lived, worked, and studied in all three countries. The majority of
my career has been working in international sales, including time
spent as a contributor in Australia for an American firm.
In 2021, I took over global sales responsibilities at RADIUS, and
I am currently, albeit at a different college during pandemic for my
MBA at the University of Wisconsin, and I am proud to work for
11

a family-run, Made in America business located in Kutztown,
Pennsylvania.
Specific about the STEP program. So, to be clear, RADIUS is a
small company with limited resources. And we also have a very
unique value proposition in terms of what we offer in our oral care
portfolio products. Selling our product requires effort and time be
it domestically or internationally. We are not simply a ‘‘me too’’
product where somebody can just pick it up and resell it. We are
constantly pursuing international expansion opportunities to be
able to fit via both digital and physical formats, online and in per-
son. We engage with both state and federal resources, including the
Pennsylvania Department of Community and Economic Develop-
ment in addition to the U.S. Commercial Service. These assets con-
tinue to prove invaluable as we seek expertise and expert opinion
where we cannot always afford it ourselves. This access and sup-
port allow us to compete in an increasingly competitive global mar-
ketplace while also promoting Made in the USA product and pro-
viding quality local jobs.
The STEP program has enabled us, RADIUS, to participate and
compete in channels that we would otherwise struggle, or simply
not be able to afford. The sheer availability of these grants allows
us to start a dialogue around what opportunities would provide the
best return on investment for our brand, and ultimately Made in
in American products. Finding the funds to participate in many of
these initiatives is often a roadblock that limits our ability to par-
ticipate, thus keeping us off the global stage and constricting po-
tential new sales.
While tracking the material impact of these investments can
sometimes take years to confirm, our ability to invest in sales pro-
grams, through the flexibility of the STEP program, keeps us agile
enough to remain competitive. Most recently, the Cosmoprof Trade
Show in Bologna, Italy, had over 220,000 attendees with 144 coun-
tries of origin. We received inquiries from 13 separate countries.
The impact of show attendance cannot be understated. We sell a
physical product and the ability to showcase RADIUS, in person,
could be the material difference between security new business and
not.
Trade shows, among many other STEP approved programs accel-
erates our go-to-market strategies, increases our product visibility,
and adds credibility to our brand. We have been called the best
oral care company you have never heard of and we are committed
to changing that with the assistance of the STEP program. Thank
you.
Chairwoman DAVIDS. Thank you, Mr. Walding. And thank you
to all of our witnesses. We appreciate you taking the time and
sharing your experiences with us.
So I am going to begin by recognizing myself for 5 minutes. I al-
ways think it is funny when I recognize myself. I do not know why.
So I often say that entrepreneurship is baked into the DNA of
the Kansas Third Congressional District, and I say that because it
is true. But BBQ is definitely the lifeblood of Kansas City and our
community is extremely proud of the small businesses that produce
our world famous cuisine from sauces to dry rub and everything in
between resulting in slow smoked perfection as we call it. Which
12

is why I am so thrilled to have Mr. Tooks of Pyramid Foods here
today with us to speak about his experience in entering the STEP
program from Shawnee, Kansas. And through exporting, Mr. Tooks
and Pyramid foods are able to spread the love of a good dry rub
and sweet Kansas City BBQ sauce far and wide. Exporting pre-
sents certain an incredible opportunity for small businesses to ex-
pand their customer base and increase sales, but the processes that
these businesses have to go through to become an exporter are cer-
tainly complex and can be intimidating, which we heard a bit about
already.
But Mr. Tooks, I am curious, if you could share with us what in-
terested you in exporting your products? And what were some of
the immediate challenges that you faced? And also curious how you
got connected with the STEP program there in Kansas to help you
navigate that process.
Mr. TOOKS. Okay. I am sorry. It took me a second to unmute
myself.
Chairwoman DAVIDS. No problem. Go ahead.
Mr. TOOKS. I got interested in exporting our products through
having met with some representatives from the World Trade Cen-
ter Food Export Association in a couple of meetings and got invited
to participate in some foreign trade missions. And during that proc-
ess, I had the opportunity to present our products to buyers from
all over the world, really. And it was out of those meetings I
learned exporting was a tough business. I mean, it is tough enough
trying to sell your products in the U.S. but trying to sell to foreign
markets is a lot more challenging in that you have got pricing to
deal with and you have got regulations to get your products out of
the U.S. and into these countries. Just a lot of regulations to deal
with. But fortunately, there are organizations around to help you
get through—the World Trade Center, Kansas Department of Com-
merce, and Food Export Association. And so what I just had to do
was meet with Lu Chang representing the Kansas Department of
Commerce to help me navigate through getting our products prop-
erly packaged, labeled, to meet the requirements of a couple of
countries to start out with. Canada, what we learned in the early
stages of exportation, was it was just that we start out—because
they imported a lot more American made products than anybody
else. And that is where we started out. And so what we learned in
the process was that you needed someone to help navigate through
all of the regulations. And so, we found someone to help with that.
And then helped get our labels translated into both English, well,
they were already in English, but to be dual labeled, to be trans-
lated into Canadian French, which we learned was different than
French in France. We went through all the design work and then
we had to make sure that the ingredients were properly formatted.
Then we had to make sure that our marketing materials that we
had to share with our business distributors were able to use those
materials for their customers. Well, the STEP program was great
for help with that because we were able to apply for grants to help
with the translation, label redesigns, and the printing of the labels.
Without that, we would have never got——
13

Chairwoman DAVIDS. Thank you, Mr. Tooks. Thanks, so much.
My time has actually expired. But I look forward to talking to you
more. I will come visit you when we are all back in the district.
With that, I will turn to the Ranking Member. I will yield to the
Ranking Member for 5 minutes.
Mr. MEUSER. Thank you, Madam Chairwoman. And thank you,
Mr. Tooks, for your testimony. And Madam Chairwoman, I cer-
tainly hope that we can get some of that great BBQ perhaps ex-
ported here. I will not misstate exactly how you folks express your-
self when it comes to your very special BBQ, but I will help you
eat it. So hopefully, Mr. Tooks can oblige.
Thank you all for your testimony. I am going to Mr. Walding
since he is from the great Commonwealth of Pennsylvania and in
my district. Mr. Walding, excellent to hear about your company,
your growth, being based there as a rural manufacturer is really
special, so congratulations.
Now, could you elaborate a little bit more on how the awards of
our STEP program, and in Pennsylvania known as the GAP
awards have specifically helped you reach new foreign and inter-
national markets?
Mr. WALDING. Yeah. Thanks for the opportunity to speak
again. And I apologize if I was not coming in clear earlier.
So, our products are consumable, all right, and certainly, oral
care over the past decade especially has become increasingly com-
petitive. And so as we establish ourselves, you know, we have got
a lot of equity here in the U.S., but sometimes our ability to trans-
late those in America, that sustainable premium characteristics
that certainly set us apart and really make us, you know, what
should be the conventional oral care offering in some international
marketplace can be tough. And so specifically, in going to trade
shows or trade missions and participating in these types of events,
it does allow us not only to in one single, let’s call it 2 or 3 days,
what would take probably months and months of these types of
interactions, right, on Zoom or on Microsoft Teams or digitally or
email, you can achieve in a matter of 5 or 10 minutes. You know,
there is just such a material impact. I mean, I am not selling, I
am not a SAS. I do not sell a service. I sell a product. And so we
need to export that to these destinations. We often go through dis-
tribution. There is a lot, similar to Mr. Tooks, there is a lot that
goes on between when we make that toothbrush in Pennsylvania
to when it arrives in country and then goes to distribution and
then hits that retail shelf. So these types of foreign trade missions
are absolutely critical to not only the participation and awareness
of our brand security new potential business but also to getting
material feedback on whether or not those market are, in fact,
where we should be spending our time, be it the RADIUS time or
the assets that we have allocated towards that. So making sure
that we can confidently use what materials and resources we have
is equally as important as the context that use just to make sure
that we are as effective using the tools, the limited tools that we
have.
Mr. MEUSER. Great. Thanks. Yeah. I do have some experience
in international sales and entering new markets so I can under-
stand the challenges, and I am glad that this STEP program pro-
14

vides at least the catalyst and some resources to help you be suc-
cessful.
Let’s just talk about competitiveness as a whole quickly. The
price index inflation is at a 41-year high. How has this impacted
your export strategy and operations? And as well, small business
optimism has declined for a number of months now. Expectations
for better business conditions are really at an all-time low since the
early 1980s. Given the current inflation levels and small business
climate, how will tax increases, so I am going to ask you about that
as well, tax increases affect your operations, affect your margins,
affect your ability to be very competitive and the number of people
that you continue to hire?
Mr. WALDING. Great questions. And I think somebody, I apolo-
gize, who mentioned it earlier, but predictability is a big one for us
as a small manufacturer and trying to keep steady, consistent jobs
in rural Pennsylvania. And we delivered a price increase earlier
this year, the most significant in decades throughout this organiza-
tion as we have tried to keep our products competitive and our
pricing relatively static. And we no longer could afford to remain
in business if we did not do that. And when there are premium
product or more of a commoditized product, I think we all feel the
same pressure on our margins and our ability to sustain ourselves
in the long term. And so specifically things like, and given the in-
flationary environment, we are making adjustments ourselves, cer-
tainly, but with the best interest for keeping us and our longevity
front and center. Certainly any tax reform or increase to us would
certainly be of material impact to sustaining ourselves and our
profitability.
Mr. MEUSER. Thank you.
I will yield back, Madam Chair, and I look forward to the invita-
tion to lunch.
Chairwoman DAVIDS. Noted.
The gentleman yields back.
The Chair will now recognize Congresswoman Bourdeaux from
Georgia for 5 minutes.
Ms. BOURDEAUX. Thank you so much, Chairwoman Davids, for
holding today’s hearing and thank you, Ranking Member Meuser.
I want to also thank our witnesses, and especially Ms. Waters, my
fellow Georgian, for joining us today. Sorry I cannot be there in
person but I had a scheduling conflict.
But did want to talk with you for a few minutes about inter-
national trade in Georgia and how you use the STEP program. In
your testimony, you talk about how Georgia participated in STEP
2011 to 2012, then had an application that was denied in 2013, so
it was out of the program for a while, and then very pleased to see
we are back in it in 2020 and 2021.
So as a state that has seen significant economic growth and ben-
efits from trade, both with and without participate in STEP, can
you speak to the benefits of STEP and how it has helped enhance
Georgia’s small businesses’ ability to do business overseas over the
past 2 years?
Ms. WATERS. Great, Representative Bourdeaux. Thank you very
much for that question. It is a great question. And I will say that
Georgia has a very well-established trade program. Our team has
15

been doing this for the better part of 30 years and for pretty much
the entirety of that time we have been focused on small businesses.
And so we always viewed the STEP program both in its pilot years
and now getting back into it in 2020, we have really seen the abil-
ity to lean on STEP as one tool in our overall tool kit of how we
on an ongoing basis support our small business exporters through
counseling and referral to resources and market entry, market in-
telligence, introductions to customers. We really look at our serv-
ices, if you will, in terms of a spectrum of assistance from a band
new new-to-export company that is just starting to get that little
flicker really through to the process of connecting with partners in
markets and actually achieving those export sales. And so what the
STEP program does allow us to do, we really think of it as an addi-
tional service that we can provide to companies because that finan-
cial piece is so critically important.
I was a trade manager in this team before I went to the private
sector, and now I am back sort of running the international trade
team for the department. And the common thread is so many small
businesses, they do have really cool, really innovative products and
that passion is there for their businesses and for their products and
technologies, and they just need assistance and they do not nec-
essarily know where to start. And a program like STEP I think for
our businesses, small businesses in Georgia, it is one thing to know
that you have got a really well structured trade program and re-
sources that are there to assist you as the small business, but
knowing that there is that financial backing that you can, if you
do your homework and you apply and you say I have been wanting
to get to this international trade show for 4 years and I have never
had the budget to do it but I know if I make the commitment now
I am going to get some percentage of that money back and that
frees me up to globalize my website, get my labels translated, do
more in the international sphere that really can tip the scales for
small businesses and take exporting from a priority in a company’s
focus to being a top priority and really being able to truly get into
the international market. That is the value of STEP for our Geor-
gia companies.
I will say that the pandemic really was the tipping point for us
as a state to get back into the program and I want to recognize
SBA and the improvements they have made to the program over
time. It really is a significantly different program now than it was
in 2011 when we started out. But being able as a very adept export
development state, to be able to offer direct financial assistance
awards to these companies really does make the difference and
every dollar that we can get into the hands of those companies does
matter because it frees up a dollar that they can then continue to
expand their export sales.
Ms. BOURDEAUX. Thank you so much. That was actually really
helpful to hear that contrast back and forth.
Unfortunately, I am short on time, but would love to talk with
you more just because we have such an international and diverse
community in the 7th District. And I know a lot of my immigrant
communities have, you know, one foot in this country but one foot
in the country that they immigrated from and I think there might
16

be some interesting opportunities for partnerships with you all for
them and to help boost their business.
With that, again, welcome to D.C. Good to have you here, and
I yield back the balance of my time.
Chairwoman DAVIDS. Thank you. The gentlewoman yields back.
The Chair will now recognize Congresswoman Young Kim, the
Ranking Member on the Subcommittee for Innovation, Entrepre-
neurship, and Workforce Development for 5 minutes.
Ms. YOUNG KIM. Thank you, Chairwoman Davids. And I would
also like to thank my Ranking Member Meuser for holding this
hearing. And I want to thank our witnesses, especially Ms. Waters,
for joining us in person and other witnesses joining us virtually.
We are here to analyze the work of SBA’s Office of International
Trade and STEP program. I want to let you know that I am very
proud to represent California’s 39th Congressional District. I rep-
resent the parts of California, Orange and San Bernardino counties
and it is home to San Pedro Bay Port Complex. Nearly 25 percent
of the nation’s total exports pass through the San Pedro Port Com-
plex. So I have seen the supply chain crisis very, very closely at
home.
Unfortunately, supply chain crisis and this issue have been exac-
erbated by workforce and truck driver shortages, burdensome regu-
lations, which California is known for, and warehouse capacity
problems. In my home state of California, we have this onerous leg-
islation AB5. That will change the definition of an independent
contractor and force truck drivers to comply with onerous licensing
requirements and AB5 could only lead to more trucking shortages
and to the estimated shortage of 80,000 truck drivers nationally.
To further compound our supply chain and workforce issues, one
of the owners of a logistics company in my district told me for every
five people they hire, one does not show up. They do not show up
for work. Workforce shortages are only adding fuel to the fire of in-
flation. So to paint a picture of that magnitude of the problem, at
the end of May, the federal government’s Job Openings and Labor
Turnover Survey found that there was a near record of 11.3 million
job vacancies across the nation.
I want to ask a question to both you, Ms. Waters, and Mr. Spear.
We have heard that STEP reporting requirements are more de-
tailed and burdensome than grants from the Department of Com-
merce and other agencies. So can you give us an overview of how
your office manages STEP programs and the reporting require-
ments?
Ms. WATERS. I will take a first shot at this. I will say from
Georgia’s perspective, there is an administrative burden in STEP
with respect to the application process as well as quarterly report-
ing. I think it is worth it because the value is there for the compa-
nies and certainly as a state grantee that is again new to the pro-
gram, we are absolutely willing to make that tradeoff because we
know the value is there for small businesses. But I think the most
effective way to address administrative burden within the STEP
grant is to continue to work together in partnership with SBA Of-
fice of International Trade with this Committee, with Congress, to
focus in on the core priorities of the program, the core objective of
STEP, to get new small businesses into exporting and to help those
17

exporters get to new markets and to collaboratively focus on con-
cise performance metrics that get to that outcome driven perspec-
tive instead of calculating ROI on a quarterly basis and going real-
ly into very specific data that to my understanding is not required
by Congress on a quarterly basis because that does take time away
from when we could be assisting small businesses in the export
process.
And with that I yield my time.
Ms. YOUNG KIM. Mr. Spear, as you respond to my same ques-
tion that I posed to Ms. Waters, can you suggest how we can en-
sure that program is meeting its performance metrics while also re-
ducing administrative burden?
Mr. SPEAR. Well, yes. Let me give you the short answer. Yes.
Many of the points that have been raised today are absolutely sig-
nificant. However, in New Jersey, we have taken some steps to
kind of reduce that burden already. When we query our companies,
we simply ask for actual sales and projected sales and actual jobs
and projected jobs. So that is the minimum that we can get to get
back. I mean, there are other things that we could include that
would be indicators, but we have minimized it by minimizing what
we ask the companies. We have done that with regard to that. And
we have actually found, although we have not had as many experi-
ences with other agencies, we actually did back away from applying
for another agency’s grant earlier in the year because the burden
was actually heavier than what we found at SBA.
Ms. YOUNG KIM. Thank you.
Chairwoman DAVIDS. Sorry, I was like totally thinking about
your question. The gentlewoman’s time has expired.
The Chair will now recognize Congressman Garbarino for 5 min-
utes.
Mr. GARBARINO. Thank you, Chairwoman, and thank you to
the Ranking Member for having this hearing.
I know, Ms. Waters, you spoke briefly about what you had to
deal with and your small businesses with the height of the COVID-
19 pandemic. I do not know if you got to say everything you want-
ed to say regarding how that affected the businesses in your state
and the effect on exports.
Ms. WATERS. Thank you for that question. I will say the con-
versations that we were having with our small businesses as the
pandemic was starting, you know, many of our same small busi-
nesses were looking at EIDL loans, were looking at PPP financing,
and really our grant program started in October of 2020. And when
we were able to go back to our exporters and say, you know, we
now have this money that we want you to be able to continue to
stay focused to the extent possible on export development and
international markets. What we absolutely did not want to happen
in Georgia was for some of our really great small businesses to lose
focus from the importance of international growth. You know, we
were asking a lot of our small businesses at a very challenging
time and a lot were understandably focused on making payroll and
continuing to sustain themselves during the pandemic. But those
companies that were really in a position to maintain themselves
and sustain, we did not want them to have to step away from inter-
national development in any way. And so being able to follow up
18

with those companies and say, look, for any upgrades that you
need to make to your website right now, any kind of new strategy
development that you are looking at for international markets,
using the pandemic as an opportunity to kind of restrategize about
what exporting will look like in the future, you now have resources
through STEP to make some of those changes. We had a lot of com-
panies that were still very eager to be involved in international
trade events and a lot of global events went virtual. And so we had
companies that were needing to buy really high quality audio and
video equipment to be able to participate virtually with global buy-
ers at these new hybrid or virtual trade events.
Mr. GARBARINO. I do not mean to interrupt. I am running out
of time. So you would say that the money, the businesses took ad-
vantage of this program and they have been successful in using it?
Ms. WATERS. Yes. I think that is true, taking into consideration
that there continues to be some postponement and cancelation of
events through COVID but by and large companies did take advan-
tage of the opportunities. Yes.
Mr. GARBARINO. Good. Good. All right.
Mr. Spear, would you agree with that? Did you see the same
things with your companies in your state?
Mr. SPEAR. That is correct. We actually saw, it was interesting,
the newer-to-export companies were much more creative in asking
about STEP and how it might embrace their international efforts
by internationalizing their websites. So yes, overall, but as a nu-
ance, it was the newer-to-export companies that moved that mark
a lot more so than our more experienced exporters.
Mr. GARBARINO. Okay. So, it sounds like in both states one of
the activities that was most popular was internationalizing the
websites. What else was popular amongst the small businesses?
What else did they use their money on?
Mr. SPEAR. For New Jersey, anything that did not require get-
ting into a plane and travel was looked at. So taking your website
and using that as the lead entity of your export process, 100 per-
cent. We had a lot of people do that. But also things as mundane
as translating a product catalogue into a foreign buyer’s language
or translating a website. Things like that. There were several U.S.
Commercial Service, and U.S. Commercial Service is kind of like
the unsung hero in the background. They took many of their long-
standing services and virtualized those so that you did not have to
have a company travel into country to take advantage of what is
easily the best service provider in international business bar none.
But their assistance and their entrepreneurialism helped compa-
nies take advantage of STEP funds as well.
Mr. GARBARINO. Ms. Waters, anything you want to add about
anything else that your businesses were able to use the money on?
Ms. WATERS. No. I would simply echo what Mr. Spear just
shared.
Mr. GARBARINO. Okay. I appreciate that. And I have got 8 sec-
onds left, so I yield back. Thank you, Chairwoman.
Chairwoman DAVIDS. Thank you. The gentleman yields back.
The Chair will now recognize Congresswoman Van Duyne, Rank-
ing Member of the Subcommittee for Oversight, Investigations, and
Regulations, for 5 minutes.
19

Ms. VAN DUYNE. Thank you very much, Madam Chair, and to
the Ranking Member for holding this hearing today.
Mr. Walding, when you think about all that is going on in the
economy right now—labor market issues, 9.1 percent inflation, sup-
ply chain slowdowns—would you say that dealing with these has
slowed your ability to grow your export business?
Mr. WALDING. I switched audio. Is that okay?
Ms. VAN DUYNE. I can hear you just great. Thank you.
Mr. WALDING. Okay, great. Yeah. So I would say absolutely.
We are seeing softening across both domestic and international
markets and we are doing our best right now to pivot in terms of
what are realistic expectations both in terms of current markets
that we currently participate in, but also in terms of where we see
growth and where we want to be participating. Right? So metering
I think, and we were talking about predictability, just trying to di-
gest what the impact is going to be in 3, 6, 9, 12 months is really
kind of where we are as an organization, you know, piecing out
what is happening domestically versus what is happening inter-
nationally. And I think specifically for us, you know, things like
foreign exchange is causing a significant burden as a function of in-
flation and some other regulatory environments. So, yeah, we are
taking major steps to kind of course correct or to get some realistic
expectations heading over into the next 6 to 12 months.
Ms. VAN DUYNE. Thank you. And Mr. Walding, one of the
things that the congressional Democrats are discussing right now
is a massive reconciliation bill that many would think would in-
clude a tax hike on small businesses. How do you think that would
affect you in the current climate?
Mr. WALDING. I think that any additional cost pressures that
small businesses like ours, again, we do not want to lay off. Right?
We want to expand. But also, we have got to be cognizant of what
we can digest as an organization in terms of sustaining our busi-
ness over the long term. You know, it is no small feat for any small
business to overcome those first couple of years, let alone be kind
of innovators and curators going against global giants for almost 40
years. We anticipate and we expect ourselves to be doing the same
for the next 40. An increase in taxes is simply just going to burden
our ability to remain competitive and where do we pass that cost
on. Right? So, I mean, we are either going to feel it on our bottom
line having to make some tough calls internally or we pass that on
to the consumer. Like I said earlier, we had to do that just by vir-
tue of inflationary environments, making us increasingly less com-
petitive going against, like I said, some major contract manufactur-
ers or international players where we, like I said, we butt up
against this every day.
Ms. VAN DUYNE. I appreciate that answer.
I am going to ask this of the whole panel starting with Mr.
Walding.
If you had to identify your top three challenges right now, what
would they be?
Mr. WALDING. At the moment——
Ms. VAN DUYNE. We have got four witnesses so I am hoping
you can just kind of, without having to——
20

Mr. WALDING. Yeah, sure. The first one for us is going to be
I would say foreign exchange is a big one for us at the moment.
I would say supply chain would be the second. And to a lesser ex-
tent, I would say retaining talent.
Ms. VAN DUYNE. Okay.
And then Ms. Waters?
Ms. WATERS. Thank you. I would say for the companies that we
work with, strength of the dollar is a barrier right now. Workforce
considerations are very real for our small businesses. And ongoing
supply chain disruption and uncertainty about where the next dis-
ruption might come from are at the top of our list.
Ms. VAN DUYNE. Thank you.
Mr. Spear?
Mr. SPEAR. Thank you so much. Echoing both of the first two
witnesses, what I would add to that is the companies we are look-
ing at right now are really, really, really young and new to export-
ing. And so at the moment, when we have a conversation about
supporting their export activities, they have not fully fleshed out
what their own export activities are.
And so if we could have a way to get them further educated and
then layer possible financing on top of it, that would move that
conversation along really, really quickly.
Ms. VAN DUYNE. So the top three issues that you have got is
education of your workforce and financing?
Mr. SPEAR. Actually, more education just on the aspects that
there is a market beyond the 21 counties of New Jersey and the
United States of America.
Ms. VAN DUYNE. All right. Mr. Tooks? Mr. Tooks?
Mr. TOOKS. I was on mute right quick.
Ms. VAN DUYNE. There you go.
Mr. TOOKS. Number one, the ingredients cost. We have to
source our own ingredients. Our products are made from a manu-
facturer and they are experiencing costs and ingredients, and I
think a lot of it has to do with transportation. But the second thing
would be our cost for moving our products here in the U.S. but just
as much across the borders of Mexico and Canada.
So increased transportation costs have a direct impact on our
ability to grow and it also has a negative effect on making our mar-
gin because we cannot pass on all of those costs.
Ms. VAN DUYNE. All right. Thank you very much. I yield back.
Chairwoman DAVIDS. Thank you. The gentlewoman yields back.
Again, thank you all for joining us today. Thank you to our wit-
nesses for taking the time and thank you to our Committee Mem-
bers.
Expanding into international markets can definitely boost small
businesses across the country and grow the American economy.
And given these benefits, we have to make sure that it is as easy
and manageable as possible for small businesses to be able to sell
their products abroad.
We have heard extensively from our witnesses today about the
unique challenges that exporting presents for small firms, and by
advancing policies that address these concerns we can certainly al-
leviate some of these obstacles and ensure that American small
businesses have a place in the global economy.
21

I am looking forward to collaborating with my colleagues on the
Committee as we reauthorize the STEP program so that we can
better serve entrepreneurs.
Without objection, Members have 5 legislative days to submit
statements and supporting materials for the record.
And if there is no further business to come before the Committee,
without objection, we are adjourned.
[Whereupon, at 11:06 a.m., the subcommittee was adjourned.]
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APPENDIX
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