Isabella Guzman is the new administrator of the Small Business Administration (SBA). And she’s got a long-term problem.
No, it’s not about pandemic loans or the bottleneck in disbursing grants under other stimulus initiatives. It’s not even about catching fraudsters or approving applications. She has these problems of course. But that’s not the long-term problem.
Guzman’s long-term problem has to do with awareness.
“The SBA has always been the best kept secret in government, and we don’t want to be that,” she told me in a recent podcast interview. “We want to be known.”
Right now most small business owners I know are only aware of the SBA because of the media attention received – both positive and negative – by being the middleman for various stimulus programs. But those programs are going to end this year. So what happens after that? What’s next for the SBA?
For years, the department has struggled to get the word out about its services. And there’s no question that the SBA has many services to offer small businesses well and beyond dolling out loans and grants.
“We know that government can be hard to navigate, and we’re trying to simplify our processes,” Guzman says. “Our customers are small businesses owners who have to wear so many hats and have so many responsibilities and need a team behind them.”
What kind of team? There are the Small Business Development Centers, a network of free consulting agencies generally tied to colleges and universities which use professors and grad students as resources to help small businesses create business plans, do market research and evaluate technology. Or there’s Score, a long time, SBA-linked association of “retired” small business experts and owners who provide wisdom and advice at no charge. The SBA also has a myriad of educational programs and customer assistance resources that can help small businesses get government contracts or just better manage cash flow.
Then there are the many guaranteed loan programs the agency offers through its lender network that can provide millions of dollars of working capital and other financing opportunities to buy property and equipment for small businesses who otherwise would not be able to fulfill normal banking requirements.
And yet, when I ask my clients – who are mostly established firms – about the SBA I usually get blank stares. These clients aren’t aware of these options. They don’t realize they can get free consulting from university professors and retired CEOs or bank loans from lenders that wouldn’t ordinarily lend to them. Even the business owners I know operating in low- to moderate-income areas aren’t aware of the special services and funding available specifically for them. Or the more than a hundred women’s business centers throughout the country specifically devoted to the needs of female entrepreneurs.
Why not? It’s awareness. The SBA has an opportunity to leverage the enormous PR it received during the pandemic and use it to make more businesses aware of all that it does. So how does administrator Guzman plan to do this?
“We’re going to be looking at all of our programs completely and trying to apply a customer-first and technology forward approach as well as an equitable approach,” she says. “We intend to make sure that we’re meeting businesses where they’re at in their current situations and providing products and services that can best help them grow.”
Specifically, that means hiring better and brighter people for her organization (“like Nasa” she says), increasing their partnering outreach to government departments, local organizations and chambers of commerce, and focusing on issues that are top of mind for many business owners, such as exit strategies.
“Our small business development centers in particular are training up on ESOPs (Employee Stock Ownership Plans) and other types of alternatives for exit strategies,” Guzman says. “We know that it’s a big challenge to sell or hand down a business and we don’t want those businesses to disappear.”
Finally, Guzman plans a greater reach out to communities of color and other areas where discrimination and lack of education is holding back on their opportunities. Her goal is to prevent “barriers from limiting entrepreneurship” and “to make sure that every type of entrepreneur from all backgrounds have the opportunity to pursue their dream of small business ownership”.
Will the SBA be able to leverage its notoriety from the pandemic into a message that enables more small business owners to take advantage of all the resources it provides? Other administrators have tried this in the past, with mediocre outcomes. But Guzman has a chance right now to increase capitalize on what her agency has done in the past and make more business owners aware of the services it can provide in the future. Let’s hope she succeeds.