Author Archives: Ann Sullivan

Women Entrepreneurs

Posted on by Ann Sullivan

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When I first began advocating for women entrepreneurs over 15 years ago, I was excited to take on the challenge. At that point the majority of meetings I went to on Capitol Hill consisted mostly of men, and no one was focusing on women business owners. For the first five years, I spent most of my time convincing the Congress that women business owners cared about economic issues that affected the growth of their business instead of the social issues “women” cared about. Not only was there a lack of understanding about women entrepreneurs, there was also a disparity between male-owned and women-owned businesses. The women’s business community’s favorite phrase was “we want a seat at the table.”

Looking back on the progress that women business owners have made over the last decade and a half, I am reminded that there was never one simple solution – no silver bullet to solve the inequities between male- and female-owned businesses and the disparities between large and small firms. Rather, we chipped away at access to markets and access to capital and urged elected officials and federal policymakers to consider women business owners in their deliberations. I am happy to report that today we have a seat at the table. 

Despite the odds, women-owned businesses have made huge strides and the wins for women entrepreneurs are accumulating. In particular, we received great news last year when the Census Bureau’s Survey of Business Owners (SBO) reported that there are now nearly 10 million women-owned businesses in the U.S. From 2007-2012, the gap between SBO releases, the number of women-owned businesses increased by over 27 percent. Since 2002, the number of women-owned firms has increased by over 50 percent from 6.5 million.

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What is even more impressive is the economic force that women-owned businesses have become. They contribute to the nation’s economy by generating $1.4 trillion in revenue and employ nearly 9 million Americans. These statistics reinforce the now-accepted conclusion that the women’s business community is a pillar of the American economy.

Looking toward future advocacy efforts, the key issues of women business owners generally fall into three buckets: access to federal contracts, access to entrepreneurial resources and access to capital.

Procurement Parity Takes Two Giant Leaps

The Women-Owned Small Business (WOSB) Federal Contract Program has continued to grow and women-owned firms are reaping the benefits. First, the SBA announced that in FY2015—the first time since 1994—the federal government has achieved its 5 percent goal of contracting to WOSBs. Why 1994?  Because it is when the government established a 5 percent goal for contracting awards to women.  And what an effort it took; members of Congress, national women’s business organizations including NAWRB, a supportive White House and SBA and thousands of women across the country who cared enough to keep up the pressure.

In the same week that they confirmed the government had finally reached its 5 percent contracting goal, the SBA also announced a significant expansion of the WOSB program. When the last disparity study was completed in 2007, women-owned firms were considered underrepresented in 83 industries, thus making those industries eligible for participation in the WOSB Program. WIPP advocated for a new study to update eligible NAICS codes for the program. The study, completed by the Department of Commerce earlier this year, found that women-owned businesses are underrepresented in 113 industries and now these industries are immediately eligible for the program—opening the doors for more than a third of all industries.

The disparity study, The Utilization of Women-Owned Businesses in Federal Prime Contracting, highlighted two very alarming facts. First, women are 21 percent less likely to get a government contract when controlling for factors such as age and size of the business. Second, the industries in which WOSBs are less likely to win contracts account for about 85 percent of both total contracts and dollars awarded. When taken together these facts show that the need for the WOSB Program still exists. We have made tremendous progress but our work is not done.

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I have written previously about sole source authority—the ability for the agencies to award contracts directly to women-owned businesses. That authority was finalized in the Federal Acquisition Regulation (FAR)—the contractor’s rulebook—in January 2016. Now WOSBs can compete on a level playing field with all other small business set-aside programs and evidence shows that women are aggressively using this new tool.

Part of improving access to federal markets for women entrepreneurs, is improving access for the small business community as a whole. Moving in unison allows all small businesses to benefit. As the saying goes, a rising tide lifts all boats. That’s why I was particularly excited to see the House Small Business Committee’s first major piece of legislation for 2016 address many contracting issues.  The Defending America’s Small Contractors Act of 2016 (H.R. 4341) will prove to be significant to small contractors. Moreover, the bill was approved unanimously by the Committee and with over two-thirds of the Committee contributing content to the bill. 

Training and Counseling for Women Entrepreneurs

Women’s Business Centers, a network of over 100 non-profit organizations nationwide, are dedicated to assisting women entrepreneurs (or those that are interested in starting a business) and fill a much-needed role with respect to business generation and growth. Yet, for too many years, this program limped along with no increase in funding or change in program guidelines. Our question to Congress has been, “How can 100 women’s business centers serve 10 million women?” 

In response to that question, the Senate acted and we are hopeful that the House will as well.  For the first time in nearly a decade, Congress is on its way to reauthorizing the Women’s Business Center (WBC) Program. In the Senate, the Committee on Small Business and Entrepreneurship unanimously approved the Women’s Small Business Ownership Act of 2015, which would do just that. Senator Maria Cantwell (D-WA), Chair David Vitter (R-LA) and Ranking Member Jeanne Shaheen (D-NH) sponsored this landmark legislation and the bill was referred out of Committee on a bipartisan, unanimous vote—a rare occurrence in Congress. Representative Susan Delbene (D-WA) has introduced a companion bill in the House.

Under the bill, the WBC Program would be authorized at $21.75 million per year through FY2020, allowing more Centers and providing additional support to existing, successful Centers. SBA’s funding for WBCs are matched by private donations, doubling the impact of this increase. WBCs will be able to receive grants up to $250,000, a major increase from the previous maximum of $150,000.

Given that WBCs provide an invaluable resource for women entrepreneurs it is only reasonable that support is given to encourage job creation and job growth.  Last year, they served over 140,000 women entrepreneurs, which led to the creation of over 760 new businesses. 

Access to Capital

For as many strides as we made in access to federal markets and resources, access to capital lags far behind. A recent report by the Senate Committee on Small Business and Entrepreneurship highlighted many areas where women-owned businesses were underserved by private capital markets. The report pointed out that women-owned businesses receive only 4 percent of the total dollar value of small business loans and only 7 percent of all venture capital funds.

The report was illuminating and led to a renewed focus on reducing the gap between male and female led companies with respect to available capital. It was through this next new challenge for WIPP that we created WIPP’s Access to Capital platform titled “Breaking the Bank” and I am happy to report that we are already checking items off of our list. The Securities and Exchange Commission (SEC) finalized rules for equity crowdfunding, which allows small businesses to obtain capital from investors without going through the expensive and complex securities registration process. Additionally, the House passed legislation to give small businesses a voice at the SEC. The SEC Small Business Advocate Act of 2015 (H.R. 3784) passed the House in February and requires the SEC to establish an Office of the Advocate for Small Business Capital Formation to assist small businesses in accessing capital. Simplifying the patent and trademark process is another priority that the Senate Committee on Small Business and Entrepreneurship highlighted in a recent hearing. Making patents and trademarks more accessible will increase investment and allow women entrepreneurs to capitalize on their intellectual property.

While none of these policy changes will solve the access to capital struggle that women entrepreneurs currently encounter, WIPP and others are taking the same approach that we did to access to federal markets—chipping away at the issues.

Our Voice During the 2016 Elections

WIPP has launched WE Decide 2016, a collaboration with Personal BlackBox (PBB). WE Decide 2016 is an interactive, online platform for women entrepreneurs to have their voices heard during the 2016 elections. With the support and collaborative efforts of several associations with quick polls and issue surveys, we will be able to ascertain women business owners’ views. WE Decide 2016 engages women business owners and women entrepreneurs to focus our message on results, sensible regulations and an investment in small businesses. The opinions shared through WE Decide 2016 will culminate in a policy platform, which will be shared with Presidential and Congressional candidates at both national conventions.

When reflecting on these recent legislative and regulatory achievements, I am grateful for the progress that women entrepreneurs have made in so many different areas. None of this would have happened without advocacy. Advocacy is not a once-in-a-while exercise. Change does not happen with an annual visit to an elected official or a retweet by one person or one organization . It needs a constant drumbeat and direct focus by many. As we unite to tackle tough issues, I am absolutely convinced that 10 million women-owned businesses will make a difference.

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Ann Sullivan is the President of Madison Services Group, Inc. (MSGI), a woman-owned company that provides government relations and business development services to corporate and non-profit clients.

The Price of Doing Business: Paying Attention to the Rules

Posted on by Ann Sullivan

climbingwebsiteLooking at the past fifteen years of progress women business owners have made, I am reminded that there is no one-step solution to solve inequalities between male and female-owned and large-and-small businesses. Rather, women-owned firms have chipped away at the inconsistencies in the federal marketplace and urged elected officials and policymakers to consider women businesses owners in their decision making.

Women-owned businesses have gained ground and we can see the progress on a number of fronts. Last year, the Census Bureau’s Survey of Business Owners (SBO) reported that there are nearly 10 million women-owned businesses in the U.S, and since 2002, the number of women-owned firms has increased by over 50 percent. Similarly, the Women-Owned Small Business (WOSB) Federal Contract Program continues to grow, and women-owned firms are reaping the benefits of $17.9 billion to WOSBs in fiscal year 2015. For the first time ever, the federal government met its 5 percent contracting goal with women-owned businesses. 

While we have made tremendous progress, there is still work to be done. Part of improving access to federal markets for women entrepreneurs is improving the federal marketplace for all small businesses. While Congress passes the laws, agencies implement them through promulgating rules.

Women Impacting Public Policy (WIPP) works hard to remain informed on federal contracting changes, especially rules that govern contracting. NAWRB supports WIPP as a Collation Partner to submit comments on behalf of our collective members. By advocating together on behalf of WOSB’s with members of Congress, we can create change to give more women greater access to federal markets.

Below are some of the new developments you should know about when it comes to federal contracting. Most are good news – some are not.

Continue reading →

OMWI: Take Advantage of Your Ally

Posted on by Ann Sullivan
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25 May

Did you have any idea that there are 20 offices throughout federal agencies that focus on the promotion of women and women-owned businesses? They are the Offices of Minority and Women Inclusion (OMWIs) in agencies such as the Consumer Financial Protection Bureau (CFPB), the Federal Housing Finance Agency (FHFA), and the Federal Deposit Insurance Corporation (FDIC).

Established in the Dodd-Frank legislation in 2010 by Congresswoman Maxine Waters of California, these offices are charged with helping women-owned businesses become vendors and ensuring that women are hired in the agencies and financial institutions they regulate.

Advancing women is a practice that, until recently, the federal government has hardly ever focused on. In the federal government (nearly three million civilian employees), women are growing in number, though not necessarily influence. While 44 percent of the federal workforce is female, women hold only one-third of Senior Executive positions at federal agencies, according to Government Executive. One study by the Center for American Progress found that, on our current pace, it will take until 2085 for women to attain parity with men in leadership roles in our country.

But that can change. While recently moderating a panel of two OMWIs – one from the FHFA and CFPB – it became clear that OMWI could be named the Office of Women Advancement because of their mandate to advance women internally and externally with their agencies. Raising the number and authority of women within government is at the core of the 20 OMWIs. While the history of these offices has been well-documented, women business owners should know the ways they can take advantage of these offices.

Important to remember, these tips of using OMWIs to your benefit will largely only apply to the federal agencies dealing with financial matters or the Federal Reserve Banks. Nonetheless, using OMWI standards with other agencies or in the private sector can prove to be a valuable approach.

Diversifying the Supply Chain
Along with encouraging diversity within the workplace, OMWIs exist to enable more contract awards to women-owned businesses. Section 342 of Dodd-Frank goes to say that efforts to assist women extend to contracting, where OMWIs must support “inclusion in all levels of business activities.”  That’s a large mandate to help women win more contracts. Moreover, these are the only offices that serve all women-owned businesses, not just women-owned small businesses. For the growing number of “mid-tier” women-owned contractors, this is a new avenue for support and access.  

Women are underrepresented in federal procurement opportunities, and OMWIs are trying to address this gap by awarding more contracts to women-owned businesses. OMWIs are only at the financial oversight agencies, though their sister Offices of Small and Disadvantaged Business Utilization (OSDBUs) exist in most other agencies. With that in mind, if federal contracting is in your business plan, then you should use OMWIs to get in the door.

Inclusive Hiring and Leadership
The most obvious place for inclusion is within an agency itself. Section 342 of Dodd-Frank states, “Each agency shall take affirmative steps to seek diversity in the workforce of the agency at all levels of the agency….” Importantly, diversity in the workforce explicitly includes senior management—the most important and often most bereft of women across the federal government. For example, according to the FHFA’s 2014 OMWI report, only one-third of the FHFA’s executive leadership is female. Only slightly better is the FDIC where women make up 35 percent of leadership—despite nearly half of the agency’s overall workforce. OMWIs are tasked with creating a more fair and diverse workplace within an agency’s hiring and leadership teams, meaning they have the ability to offset this imbalance and underrepresentation of women.

This can benefit you twofold. First, and most obvious,  if you have dreamed of holding a position in the civil service, then go for it. Let the OMWI be your ally. For those less inclined to join the federal workforce, this policy benefits women: simply put, more women inside will help women outside.

Setting the Tone
The arm of OMWIs, however, extends beyond the government. Referring back to Section 342, these offices are responsible for developing “diversity policies and practices of entities regulated by the agency.” It is no secret that women at the table in leading financial positions are the exception, not the rule. Fortunately, with the advent of standards to ensure inclusion, this may be changing, and women may have a growing leadership role in the financial sector.

The abilities for this to be useful to women business owners are again, twofold. First, as these standards are developed, women should be at the table prioritizing and developing the standards. In conversations with OMWIs, they welcome feedback about how to achieve their mission. More importantly, however, may be the impact these new standards have on commercial entities regulated by these agencies. In the real estate world, for example, this includes banks that issue, buy, and sell loans. Providing women a stronger role in such a space would better represent the demographics affected by the decisions that lenders make.

Bonus Benefit: Reporting Data
Mandated by law, OMWIs must submit annual reports available on agency websites. As a federally sanctioned document, the statistics and findings of these reports carry weight throughout government. In advocacy, especially at the federal level, numbers are everything. Culling these reports for data can get numbers that make the case. These reports, which are all available online, also provide data on regional differences and issues affecting women.

Taking advantage of available online resources is crucial in understanding the gaps, needs, and much-needed progress of women in the financial community. More importantly, this information can help your business determine its priorities in working with OMWIs.

On the surface, Offices of Minority and Women Inclusion are advancing women in four ways: through diversifying the supplychain; inclusive hiring and leadership; setting the tone for the commercial world; and providing much needed data. OMWIs are dedicated to women. Take advantage of your ally—get to know an OMWI.

Ann Sullivan is the President of Madison Services Group, Inc. (MSGI), a woman-owned company that provides government relations and business development services to corporate and non-profit clients.

To view the original article please see our magazine titled “Advancements for Women” Vol 4, Issue 3 by Clicking Here 

The Mystery Behind Lending to Women

Posted on by Ann Sullivan
In her first appearance before the U.S. House of Representatives, the Administrator of the Small Business Administration (SBA), Maria Contreras-Sweet, recently said, “There is no silver bullet when it comes to access to capital.” This comes from a woman who left the California-based bank she founded to become Administrator. Her sentiments were brought into clear focus by another Californian, Congresswoman Janice Hahn, who cited bleak statistics when it comes to the status of women and access to capital: before the recession, women-owned small businesses received 40 percent of SBA loans; today, it is only 16 percent.
The publication of the Senate Small Business Committee’s report on challenges facing women business owners, 21st Century Barriers to Women’s Entrepreneurship, has spurred the women’s business community into doing some soul-searching to try to get to the bottom of the mystery. Namely, why do women lag behind their male counterparts when it comes to obtaining capital for their businesses? The speculation comes in various forms: women don’t have the confidence to go ask for money/investment, men lend to men not women, lending requirements stack the deck against lending to women-owned businesses since they tend to be smaller and newer than male-owned businesses; the list goes on.
The National Women’s Business Council, another voice for women nationwide, recently published a study about this topic.
Among its findings: 
  • Men tend to start businesses with twice as much capital as women, $135,000 vs. $75,000.
  • The biggest difference in amount of capital between men and women was with regard to outside equity, in which women receive only 2% of total outside funding compared to men, who receive 18%.
  • Women were more likely to be discouraged from applying for loans due to fear of denial – and justifiably so: in 2008, women-owned businesses were much more likely to have their loan applications denied than their male counterparts.
  • Women entrepreneurs tend to raise smaller amounts of capital to finance their firms and are more reliant on personal, rather than external, sources of financing as compared to male entrepreneurs.
The study made the following recommendations:
  • Entrepreneurs should consider founding businesses with other people.  According to the study, many investors are reluctant to fund a single business owner because of the difficulty for one person to scale a business. Additionally, they should also complete a cost-benefit analysis of what equity financing can do, carefully weighing the upside (financial, social, and human capital) of external equity with the downside (less control of the company’s future).

For Funders, the study recommends increasing outreach to find women entrepreneurs with investment-ready firms. Similarly, they should increase the number of women on the financing and investment side, such as angel investors, members of a venture capital pitch committee, and in other roles.

  • For the Entrepreneurship Ecosystem, the study recommends encouraging women to participate in STEM fields prior to entrepreneurship. Although women are on par with men regarding educational attainment, previous research indicates that women are less likely to have degrees in STEM fields – and these fields are more likely to offer opportunities for growth-oriented entrepreneurship. Additionally, business programs focused on women and women-led and –owned businesses should be established and strengthened, including accelerator and incubator programs, equity financing programs, and business mentorship and training programs that target women-owned firms with high-growth potential.
  • A recently published SBA Advocacy study, Understanding the Gender Gap in STEM Fields Entrepreneurship, backs up the last set of recommendations, finding that women who attended universities with industry-funded research and development are more likely to start an entrepreneurial venture.  It also found that women are just as likely as men to be entrepreneurs when their first postdoctoral job is in a STEM industry.
Policy advocates are all seeking a way to bring more capital to women-owned businesses so that they can become successful and create wealth for themselves and their families.
“Why do women lag behind their male counterparts when it comes to obtaining capital for their businesses?”
An ally is Senator Maria Cantwell, who chairs the Senate Small Business Committee. She recently held a roundtable discussion in Seattle, Washington that focused on changes Congress could make to resolve this inequity.  After a hearing packed with women business owners and advocates on Capitol Hill earlier in the summer in Washington, D.C., Senator Cantwell introduced a bill that would make it easier to access loans of less than $150,000 (including microloans) because women use these loans by a greater percentage than men. It also boosts the services of Women’s Business Centers (WBCs), which provide entrepreneurs with business training, counseling, as well as connections to lenders.
Similarly, to counter the lending trends identified at the Congressional hearing, Administrator Contreras-Sweet touted recent actions taken by the SBA on a number of fronts to increase SBA loans to women. For example, the SBA waived fees on loans below $150,000. The Administrator recently announced the upcoming launch of SBA One, an online platform that will automate the credit scoring process and the sharing of electronic documents between the lender, the bank, and the SBA. Also, under her leadership, the SBA has expanded the Impact Investment Fund, a feature of the Small Business Investment Company (SBIC) Program, which promises to increase the amount of investment funds that flow to women-owned businesses.
Solving the problem of access to capital for women requires actions on all fronts both public and private. No one has a cure-all – a silver bullet – to solve the problem.
“Last, but certainly not least, women should think bigger and bolder by foregoing the notion that business debt is bad.”
On the private front, business organizations that serve women need to step up educational offerings and seminars, including training on which lending programs are available and the best way to obtain the right amount of capital required to start and grow their businesses. They must facilitate connections with lenders and investors who want to connect with their membership. Lenders need to be much more aggressive about reaching out to women business owners and advertising their loan products to them. Non-traditional lending institutions, such as Community Development Financial Institutions (CDFIs), must do a better job of promoting their ability to provide small loans. Equity and angel investors should be seeking out and forming alliances with women business organizations to create a pipeline of women who are ready and eligible for their capital offerings.
On the public side, the Small Business Administration (SBA) should push its network of lenders to pay closer attention to lending to women. The SBA should also look for ways to strengthen outreach efforts to women to encourage them to participate in their lending programs. Similarly, the SBA could make it easier for women-owned small business to apply for loans by streamlining the requirements for participating.  Like Senator Cantwell’s proposed bill, Congress should allocate the necessary funding to Women’s Business Centers who are in a position to help: there are just slightly more than 100 WBCs nationwide, which is not nearly enough to serve the fastest growing segment of businesses.

Last, but certainly not least, women should think bigger and bolder by foregoing the notion that business debt is bad.

Insisting on a cash business will almost certainly keep the business small and result in slow growth. That is unless you come to the business armed with lots of cash or you take over a business that is well-established. The last time I looked, not many of us fit into either category.
Although the answers to why women lag behind men in accessing capital for their operations and growth remain elusive, there is no mystery that to be successful, women entrepreneurs need it. An integrated solution depends on all stakeholders, both private and public, must work together to increase capital for women entrepreneurs.
So what are we waiting for?  Let’s get to it.
Article by Ann Sullivan WIPP Government Relations
To view the original article please see our magazine titled “Break it Down” Vol 3, Issue 6 by Clicking Here

Women Business Owners Take Capitol Hill

Posted on by Ann Sullivan

Advocating for change, more than 300 women business owners and their leaders descended on Washington, D.C. packing one of the largest Congressional hearing rooms on Capitol Hill to standing room only. Congressional hearings rarely draw this kind of attendance or celebrity, but both were on display for a July 23, 2014 hearing, “Empowering Women Entrepreneurs: Understanding Successes, Addressing Persistent Challenges, and Identifying New Opportunities,” chaired by newly appointed Committee Chair Maria Cantwell (D-WA).

The hearing, which coincided with the annual conferences of Women Impacting Public Policy (WIPP) and the Association of Women’s Business Centers (AWBC), featured witness testimony from Maria Contreras-Sweet, Administrator of the Small Business Administration, Barbara Corcoran, host of the hit ABC TV series “Shark Tank,” Nely Galán and women entrepreneurs who spoke of their experiences – both the successes and the struggles – of starting and growing businesses. The hearing was broken into three separate sessions: access to capital, access to federal contracts, and access to counseling and training.

The takeaway was simple: there are federal policies that can help women business owners in each of the three areas and the Congress should act on them immediately. The reaction from the Senate was swift; one week after the hearing, Committee Chair Cantwell and six of her Senate colleagues introduced legislation, appropriately titled the Women’s Small Business Ownership Act of 2014, S.2693.

“Women make up half of the population, and we have a lot of ideas that could become great products and spur our economy,” said Chair Cantwell at the bill’s introduction, adding, “This legislation will help ensure women entrepreneurs get the right tools they need to turn those ideas into new businesses and create jobs.”

The Senate bill was largely founded on a report released by the Committee in July, 21st Century Barriers to Women’s Entrepreneurship. The findings are summarized neatly – yet alarmingly – into two short sentences: “In the 21st Century, women entrepreneurs still face a glass ceiling; while women-owned firmsare the fastestgrowing segment of businesses, and many succeed, women must overcome barriers their male counterparts do not face.” The report highlights the fact that women businesses generate $3 trillion in economic activity and support more than 23 million jobs, but continue to face significant obstacles when it comes to business ownership.

More specifically, the Senate report identified critical challenges women confront in three issue areas: access to capital, access to business training and counseling, and access to the federal marketplace. According to the report, women entrepreneurs account for just $1 out of every $23 in small business lending in the United States, despite representing 30 percent of all small companies. Women’s Business Centers (WBCs) provide entrepreneurial and business training to women entrepreneurs (which they do efficiently and effectively at a cost of approximately $137 per entrepreneur) but are stretched extremely thin with most states having just one center with a small staff.Despite a 500 billion dollar a year federal marketplace, women-owned small businesses got only 4.3 percent of federal contracts in FY2013, despite a Congressionally mandated goal of five percent.

In order to lift the glass ceiling for women business owners, the legislation proposes specific actions, which are described in greater depth below:

Access to Capital
The bill enhances the SBA’s Microloan program by allowing lenders in the program to increase overall lending capacity to $7 million and by offering more flexible loan terms, and improved business counseling and technical assistance. This legislation also makes the SBA Intermediary Lending Program permanent and would extend for one more year the fee waiver on 7(a) business loans below $150,000. Together, these changes would allow for greater access to capital for women-owned businesses. If you do not know about these lending programs, go to the Small Business Administration’s website.

Access to Counseling and Training
To boost support and modernize the national network of Women’s Business Centers, the bill increases funding of the program from $14.5 million per year to $26.75 million and increases the maximum grant award from $150,000 to $250,000. The bill also requires that a formal set of program guidelines be issued and reinstates the SBA’s authority to waive the federal matching requirement.

Access to Federal Contracting
Finally, the legislation would provide sole source authority in the Women-Owned Small Business (WOSB) Procurement Program. Currently, government agencies must find multiple women-owned small businesses capable of competing for a contract before the WOSB program can be used. Sole source authority removes this burden, making it easier for agencies to award contracts to women through the program. It is also a matter of fairness, as the WOSB is the only government small business contracting program that does not have sole-source authority.

These policies are important and advocates such as WIPP, the AWBC, and the Association for Enterprise Opportunity (AEO), are working hard to see them signed into law.

The sheer number and awe-inspiring presence of so many women – who traveled from all over the country – to unite in support of a common cause was powerful. The hearing room, more typically accustomed to hushed tones and wonky exchanges, was packed to the brim with successful women business owners ready to act.

While organizations dedicated to assisting women business owners will press for enactment, it is the push from each woman business owner in the country that will make the difference.

Together, we can break through the glass ceiling that now limits women businesses from reaching their full potential.

—

 

Ann Sullivan
WIPP Government
Relations

Policy Prescriptions to Assist Women Entrepreneurs

Posted on by Ann Sullivan

Does the name Alice Paul ring a bell? Alice Paul led the effort to give women the right to vote. She raised money for the cause, led a group of White House protesters known as the Silent Sentinels, was imprisoned three times, force-fed raw eggs when she staged a hunger strike, and kept the pressure on President Wilson to support ratification of the 19th Amendment. She was all of these things, but above all else, she was a fierce advocate on behalf of women.

Today, hunger strikes or stage protests to stop traffic are less common, but we do raise money and we do advocate for the advancement of women-owned businesses. Having just celebrated Women’s History Month, the following are policy changes that will enhance the growth of women owned businesses.

Strengthen Counseling for Women Business Owners.

There are 106 Women Business Centers (WBCs) across the country that counsel and train more than 137,000 entrepreneurs and aspiring entrepreneurs annually, creating 700 new businesses a year at a cost of $122 per person. Last year, WBCs outperformed their goals by 18% and enjoy high customer satisfaction ratings. With the success of these women business centers, Congress should invest in more funding to establish additional centers and to boost the ones currently in existence. The centers are required to match these federal grants by raising matching funds from other sources, but with $14 million in federal money for the whole program they are boot strapped. Women deserve better.

In addition, other entrepreneurial training and counseling programs operated by the U.S. Small Business Administration (SBA) should be given priority when it comes to funding. Programs such as the Program for Investment in Microentrepreneurs (PRIME) are critical pieces of the puzzle when it comes to supporting women entrepreneurs with the skills needed to successfully run a business. Studies show that these investments pay off. According to the Association for Enterprise Opportunity’s (AEO) most recent report, Bigger than you Think: The Power or
Microbusiness in the United States, businesses that receive training have higher success rates (88% are still in business after five years, compared to a 50% success rate for businesses that do not) and have average annual revenues 38% higher.

Similarly, the Department of Labor (DOL) should encourage entrepreneurship as a viable job strategy. The DOL oversees a national network of job training centers, which are allowed to provide entrepreneurial training to unemployed individuals interested in starting a business – thus creating a job for themselves. However, a barrier exists that prohibits these centers from counting people starting a business as a “successful employment outcome,” and discourages these centers from providing entrepreneurial training. The DOL should change their performance metrics to accept a business startup as a successful employment outcome.

Increase Capital Access for Women-owned Businesses.

Women entrepreneurs continue to struggle to access capital to start or grow a business. According to Women Impacting Public Policy’s (WIPP) most recent annual member survey, women make an average of two attempts to access capital, securing a loan only 60% of the time.

The SBA operates a number of loan programs essential to women-owned small businesses: the 7(a) loan program, the Microloan Program, and the 504 commercial real estate loan program. These programs are supported by federal funding, meaning any decrease in funding reduces their ability to make loans. Congress should ensure adequate funding in order to meet the demands of women-owned businesses.

The advent of online crowdfunding is another recent development and step in the right direction, allowing businesses to raise up to $1 million. However, the Securities and Exchange Commission (SEC) threatens to derail it from taking off with burdensome compliance and reporting requirements. The SEC should ensure these costs stay at a minimum to allow this innovative model to take off.

Bring Women to the International Marketplace.

March 8th was International Women’s Day — a good reminder that expanding U.S. women’s business presence abroad through exporting should be a top priority. Many women business owners limit themselves to selling domestically because the international market is too daunting. A simpler, streamlined exporting process, one focused on getting our products abroad, would help. The dividends are significant: women-owned businesses that exported have on average more than 100 times the total annual receipts, five times as many employees, and more than triple the receipts per employee than those only selling domestically. WIPP operates an export education platform, ExportNOW focused on encouraging more women entrepreneurs to engage within the global marketplace to increase their success.

Bring Parity to the Women’s Federal Contracting Program.

The U.S. federal government is the world’s largest consumer —spending more than half a trillion dollars annually. You may be surprised to know that the goal — not mandate — for federal agencies to buy from women-owned companies is 5%;and the government has never met it. The Women-Owned Small Business (WOSB) procurement program, designed to ensure the mandate is met, does not have parity with other contracting programs. There are some bills to combat this in Congress — though none have been a priority for the leadership. That seems to be what the suffragettes fought for — parity. So why are we fighting for this 100 years later?

The histories of women like Alice Paul, and the countless other Suffragettes, serve as reminders of how hard we have fought to achieve the present. But more work needs to be done. To quote Alice Paul, “When you put your hand to the plow, you can’t put it down until you get to the end of the row.” We won’t.

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Ann Sullivan
WIPP Government Relations
1156 15th Street, NW, Suite 1100
Washington, DC 20005
202-626-8528

 

Congressional Retirement: Is It a Good Thing?

Posted on by Ann Sullivan

Election Day is November 4, a whopping 6 months – 30 weeks – from now. For most of us, that is an eternity away. For Members of Congress, however, November elections are knocking on the door. It seems absurd, but the evolving dynamics of Congressional races have changed both the way Washington works and the political calculus of elected officials.

Members of Congress retiring this year fall into two general camps: those who are genuinely tired and those who are tired of partisan gridlock. A growing number of “retirements” are the results of frustration, discontent, and political reality – forced decisions rather than ready to quit working. Many are pragmatists –Republican and Democrat – who are tired of Washington gridlock and polarization.

As of April 15, 2014, 27 Representatives and seven Senators have announced that they will not seek reelection this fall. Another 13 Representatives have announced intentions to seek open Senate seats in their states, opening up their seats. Taken as a whole, about 6 percent of the House and 7 percent of the Senate will not walk the marble halls of Congress next year.

Another interesting aspect of the group of pending retirees is the fact that only two are women – Reps. Michele Bachman (R-MN) and Carolyn McCarthy (D-NY). The 113th Congress is the most diverse Congress in history, with 101 female legislators – 20 Senators and 81 Representatives. With at least 48 vacancies opening up, not including sitting Members of Congress who may lose their reelections, women stand a good chance of increasing those numbers in the coming year.

Retirements of 6 or 7 percent do not seem particularly high or out of the norm, especially when compared to previous Congresses. According to Roll Call, an average of 22 Representatives retire each year, a number not too far off from this year’s 27 announcements. So why is there this impression that everyone is quitting? It is not the numbers, but rather, who has announced they will not run for reelection – some of Congress’ biggest names are calling it quits this year, including:

Let’s take a look at one particularly illustrative example of how one Senator leaving Congress can have far-reaching consequences. Earlier this year, Senator Max Baucus (D-MT) – already said to be mulling retirement – was confirmed to serve as President Obama’s Ambassador to China. On the one hand, after serving nearly 40 years in Congress, most recently as Chair of the Senate’s Finance Committee, one might assume that this was a fitting cap to a long legislative career. However, the implications of his retirement from the Senate were in fact far-reaching.

One: It precipitated a round of musical chairs, as Senator Ron Wyden (D-OR) assumed the Chairmanship of the Finance Committee, allowing Senator Mary L. Landrieu (D-LA) to leave her post as head of the Committee on Small Business and Entrepreneurship and take Senator Wyden’s old job as Chair of the Senate Energy and Natural Resources Committee. That in turn allowed Senator Maria Cantwell (D-WA) to relinquish her Chairmanship of the Indian Affairs Committee in favor of the Senate Committee on Small Business and Entrepreneurship. Replacing Senator Cantwell at Indian Affairs is Senator Jon Tester (D-MT).

Two: After spending two years working with his counterpart—Chairman of the Committee on Ways and Means Dave Camp (R-MI)—to develop a set of principles to guide comprehensive tax reform, Senator Baucus’ departure from Congress effectively doomed any chance for tax reform in the Senate. Not long thereafter, Chair Camp announced that he too would retire from Congress at the end of this year. So, not only do both of their retirements put tax reform on hold for the foreseeable future, but the institutional knowledge and intimate understanding of the intricacies of the U.S. tax code will no longer be around. Some would argue that’s a good thing.

Not only do retirements affect who chairs Committees, but the Republicans in Congress instituted “term limits” in 1994. Looking for a way to rotate Committee leadership, then-Speaker Newt Gingrich (R-GA) adopted a rule that Committee Chairs could only serve in that capacity for a total of three terms in Congress, even if it was spent in the minority. Senate Republicans adopted similar rules allowing for six years as Chair. Democrats in Congress did not. Even if the Chair of a powerful Committee does not retire from Congress, once his or her time is up, there is not much of an incentive to hang around if your status in Congress goes back to just being a rank-and-file member of the Committee. This may have heavily influenced Chair Camp’s decision to leave Congress.

Three: His retirement has the potential to upend Democratic control of the Senate. Senator Baucus was well-liked by his constituents and consistently received strong support back home in Montana, winning his last re-election battle in a landslide victory. He received 73% of the vote and carried every county in the state. With no incumbent on the ticket in Montana, most political observers are listing Montana as either “toss up” or “lean republican.” With one-third of Senate seats up for election each year, retirements this cycle could determine which party controls the Senate starting in January 2015.

Two other races that could decide the balance of power in the Senate next year feature two strong women. In Georgia, a number of Republican hopefuls, including three sitting Congressmen, are gearing up for a primary battle to replace retiring Senator Saxby Chambliss (R-GA). On the Democratic side, Michelle Nunn, daughter of longtime Georgia Senator Sam Nunn Jr. (D-GA), is likely to capture the nomination and could emerge victorious, according to Christina Bellantoni, a former political editor for PBS NewsHour.

Similarly, the Senate race unfolding in Kentucky is drawing a lot of attention. Senate Minority Leader Mitch McConnell (R-KY) will likely face Democrat Allison Lundergan Grimes. Although he is not retiring, he is the senior Republican leader in the Senate. One of the key themes of Ms. Lundergan Grimes’ candidacy is breaking political gridlock in Washington, where a win for her could serve as a referendum on the status quo. Could a win for her serve as a warning shot to sitting Members of Congress?

When the Founding Fathers wrote the Constitution, they were very particular in the design and function of the House and Senate. For one, they certainly believed that turnover in ranks of elected politicians was a good thing. This is why every Member of the House of Representatives must be elected every two years. On the other hand, they purposely designed the Senate so that it would not be subject to the whims of the majority. In fact, James Madison originally proposed Senate terms of seven or nine years to insulate the Senate from what some called the “amazing violence and turbulence of the democratic spirit.”

They compromised on six-year terms on a rotating schedule so that only one-third of Senators stand for election every two years. The system was designed specifically to reduce “Congressional brain drain” and ensures that the Senate operates continuously (it has been since 1789), protecting institutional knowledge.

Committee Chairs usually spend years getting to know the inner workings of the issues under their Committee’s jurisdiction, building a knowledge base accumulated over years of hearings on particular issues. We know how this impacted the prospects of comprehensive tax reform. One of the staunchest proponents for comprehensive climate change legislation (Rep. Waxman) will depart this year. Two of the most respected Armed Services Committee Chairs (Sen. Levin and Rep. McKeon) will depart. Chairs of Committees that oversee healthcare, workforce and labor policies, regulation of natural resources, among many other will all leave at the end of this year. Incoming Committee Chairs, whoever they may be, will have a lot of learning to do come January 2015.

I recently spoke with a respected candidate running in a competitive primary race in my home state of Virginia about the decision to run for Congress. The response was simple: “If we want to have bipartisan discussions, if we want to get back to the work of governing, we need to chip away at the system, one District at a time, one state at a time.”

Regardless of the outcome of particular races this November, there will be many new faces in Washington. Change is not a bad thing. There is nothing wrong with a change in leadership. Given the portrayal of Washington in the media over the last couple of years, maybe new faces and fresh blood will rejuvenate a House and Senate, both ailing and unable to govern effectively. Women in Congress will get a better chance at being Committee Chairs and retirements will enable more women to run. They will have big shoes to fill and a lot of work to do, but if you look at it that way, maybe the slew of retirements is a good thing, one Congressional seat at a time.

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Ann Sullivan
WIPP Government Relations
1156 15th Street, NW, Suite 1100
Washington, DC 20005
202-626-8528

 

Women legislators seek to increase access to federal contracts

Posted on by Ann Sullivan
Screen shot 2015-08-19 at 3_07_27 PM
25 Mar

Advocates for the women’s contracting community are alive and well in Washington. An issue that has limited the success of a program designed to help women access the federal market has taken center stage in both the House and the Senate. Moving forward will require the united voice of the women’s business community and the understanding of where this program came from and where it needs to go. 

Women business owners have thrived since the government began tracking business ownership in 1972. The growth and success of women-owned small businesses (WOSBs) has often relied on approaching and jumping into new markets where they often faced barriers. But, as successful business owners will tell you, you have to go where the business is.  

One such area is the federal procurement market, where opportunities now total more than $500 billion annually. As businesses look to increase revenue, selling goods and services to the federal government – the world’s largest consumer of goods and services – can be lucrative.

But historically, women business owners had only peripheral access to these opportunities, and even then, often only through subcontracting. In an attempt to change this, Congress established a government-wide goal of awarding 5% of federal contracts to WOSBs in 1994. They hoped this effort would galvanize agencies into working with women-owned companies. 

But that effort simmered and government contracting with women-owned businesses grew only marginally. For this reason, Congress established a program to help the contracting community and assist the women’s business community with finding opportunities. Unfortunately, it took more than a decade to implement the program. 

In 2011, 11 years after Congress acted, the Women-Owned Small Business Federal Contract Program (“WOSB Procurement Program”) was established to increase access to federal contracts by limiting competition to women-owned firms only. Yet the program came with significant restrictions—restrictions other small business contracting programs did not face. Most notably, awards through the program were capped at $4 million for goods and services contracts, and $6.5 million for manufacturing contracts—making the process of awarding contracts to women-owned business cumbersome  for contracting officers. 

Due to advocacy on behalf of women business owners and the support of two strong women in Congress, Senators Mary Landrieu (D-LA) and Olympia Snowe (R-ME), Congress passed legislation removing those arbitrary award caps in 2013. 

While that was an important step, the limitations did not end there. The program is not open to all categories of industries represented by women; about one-third are included in the WOSB program. This limitation is due to a study from 2007 that looked at under-representation of women-owned businesses in federal contracting by individual industries. 

The SBA looked too narrowly at the study, identifying only a few industries where the government was deficient in buying from women-owned companies, giving us the restriction we face today. 

While it is widely accepted that programs such as the WOSB procurement program need underpinnings that show disparity, the 2007 data is old and outdated. In 2013, Congress called upon the SBA to complete a new study by 2018. 

In the three years since the implementation of the program, the goal of contracting 5% of federal dollars to women-owned businesses still has not been met. Failure to meet this congressional-set goal translates into roughly $4 billion in missed opportunities for WOSBs annually.  Despite SBA’s efforts to educate women business owners and federal acquisition officers in federal agencies on the WOSB program, a mere 1/100th of one percent of federal award dollars has gone to women-owned businesses through the program. Clearly, barriers still exist. 

Heralded as a tool to level the “procurement playing field,” the Program was hardly designed with equity in mind. The WOSB Program remains the only major small business contracting program that does not have sole source authority, an important tool contracting officers use to make contract awards to small businesses.  Every other small business federal contracting program has sole source authority. All we are asking is that we be treated equally, that’s all.

In fact, more than 15% of all contracts designated for small businesses were awarded through sole source contracts.  The inability of the WOSB procurement program to utilize this contracting tool represents a substantial loss to women-owned companies.  Just for a point of reference, that 15% equals roughly $7.8 billion in annual contract awards. Failure to have access to this tool puts the program and the women it seeks to assist at a disadvantage. 

Rather than wallow in the inadequacy of 1/100th of a percent, advocates such as Women Impacting Public Policy (WIPP) have been busy trying to change it.  Earlier this year, the first step came in the form of an amendment sponsored by Representative Jackie Speier (D-CA).  A Member of the House Armed Services Committee, Rep. Speier shepherded the amendment to the National Defense Authorization Act – a bill that is known in Washington as “a must pass” piece of legislation.  The amendment gives the WOSB procurement program sole source authority.  

It also accelerates the disparity study on which the WOSB program is based by directing the SBA to conduct a new study within two years.  Why wait until 2018 to renew the list of industries underrepresented by women in federal contracting when they were already out of date in 2011? 

Now it is up to the Senate to act. Senator Jeanne Shaheen (D-NH) has already taken a leadership role, alongside Senators Cantwell and Gillibrand, by introducing the Women’s Small Business Procurement Parity Act (S. 2481). The bill mirrors the amendment that was successful in the House. Women business advocates are busy urging other Senators to join the effort. 

This is the power of advocacy in action—and a good example of how government can help the women’s business community. Making this change will bring better opportunities to women entrepreneurs seeking to compete for federal dollars. Increasing access to such opportunities is critical to continue the vibrant contribution of women business owners to the economy. 


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