On the shelf outside U.S. Small Business Administrator (SBA) Linda McMahon’s Washington, D.C. office, there’s a book prominently on display: People Before Profit: The Inspiring Story of the Founder of Bob’s Red Mill. It caught my eye when I just interviewed McMahon. And it made me smile.
Bob is Bob Moore, 87, who started Bob’s Red Mill Natural Foods with his wife Charlee, 40 years ago, and is known for running it with an ethical attitude. The conspicuous nod to his mission made me encouraged for McMahon’s SBA tenure.
A few things McMahon told me about her plans and priorities for the SBA made me more encouraged, especially for women entrepreneurs — although I wish she’d done more with the SBA’s Office of Women’s Business Ownership in the past year (a reality she conceded, as you’ll see in the interview).
You may know McMahon as the former World Wrestling Entertainment (WWE) CEO and wife of WWE promoter, Vincent McMahon. She stepped down as CEO in 2009 and became a Republican Senate candidate in Connecticut in 2010 and 2012. She was unsuccessful. In 2016, McMahon co-founded Women’s Leadership LIVE, to “empower a new wave of women entrepreneurs and leaders.”
Since being appointed by President Trump a year ago, she’s been on the road nonstop visiting SBA district offices and meeting with small business owners to find out how her agency and the federal government can help them. McMahon knows what it takes to build a successful business. She’s done it.
But will she be successful for America’s entrepreneurs at the SBA? To use her expression: “the proof will be in the pudding.”
Here are highlights from our conversation:
Next Avenue: What are your top priorities at the SBA?
Small Business Administration Administrator Linda McMahon: I want to make sure we can reach as many small businesses as we can through mentoring, access to capital to help them grow, to servicing the needs of the market. Mostly, I am there to listen.
I’ve been to 31 states and talked to over 600 business owners. I have visited their companies and had roundtable discussions. I want to be an advocate for those 30 million small businesses we have around the country and listen to the things that are their concerns.
What is your sense of the small business climate right now and why?
Incredible optimism and enthusiasm. It’s a great time to start a business or expand a business in the country. Regulatory reform — they have started to see that and respond to that. They are saying: ‘Thank God, we don’t have to do all this paperwork for so many things.’
Entrepreneurs are often the CEOs, the receptionist, the accountant, the janitor, the rack jobber, every other thing that goes into having a business. So anything that takes them away from that focus on their business is time lost and opportunity lost. In real cost, often they have to hire someone to come in to comply with regulations.
How will the new tax law help small businesses?
Without fail, every business I talked to said they would take tax cuts and put money back into their business. They would hire more. They would increase benefits. They would provide benefits. They might produce more goods and services. They might opt to have another location.
Now the proof will be in the pudding. That is what they told me they are going to do. I think we are starting to see that already. Some have increased wages.
You’ve been on listening tours talking to small business owners. What did you hear?
I love their stories. We are all about our stories. They are about the American dream.
One thing that SBA really strives to do is to offer mentorship and counseling, and there are so many folks that don’t realize the broad scope of the services of SBA. They don’t understand that we have our resource offices, our Score partners, which is manned by volunteers, our Small Business Development Centers, affiliated with universities.
There is so much that can be offered to an entrepreneur such as our Emerging Leaders Initiative. Small business owners say the seven-month course is tantamount to getting an MBA.
You’ve said you were going to look for duplicative SBA programs and consolidating them. Can you give me some examples of ones you’ve merged and what the effect has been?
There was a duplication of efforts in our loan-servicing centers. We have had a director for our 504 loan program and a director for our 7(a) loan program. [504 loans are typically structured with SBA providing 40 percent of project costs, a lender covering up to 50 percent and the borrower contributing 10 percent. With 7(a) loans, small businesses can borrow up to $5 million for working capital to buy equipment and other supplies.] We are looking to combine them and streamline to make it more efficient.
We have also been able to reduce the time it takes to process loans by being more efficient and making it paperless. The applications are now online for our 7(a) program. For loans over $350,000, we have reduced that from 15 days to eight days. And for small business loans under that, from six days to three days.
You just appointed a new head of the Office of Women’s Business Ownership, Kathleen McShane, but I haven’t heard about anything from that office since you began. What are new initiatives it’s doing or planning to help women who want to start small businesses or already have?
The reason you haven’t heard about it is we haven’t done much with it.
In the beginning, we were looking at a lot of different areas. We knew we needed someone to come in and work with our women-owned businesses centers around the country. We have 107, and we want to expand those. We want to set up probably 13 more. Last year, we were able to counsel about 124,000 women.
We want to increase that not only with opening new offices, but we want to reach them now more digitally.
I think all of us understand that given our busy days, if we want to access information and do some research it is at a time when we can do it. It’s not necessarily when it is at a seminar that is offered somewhere. If we have virtual webinars, courses and counseling, more of those things are going to be available to especially our women entrepreneurs, who are moms and caregivers.
We want to make it more available to them whether it is on their phone or an iPad. They can download and look at it when they have time to do it. We think that will be really beneficial.
What do you think are the biggest challenges facing women entrepreneurs?
Access to mentors and advisers and networking. These are things they need most. Taxes are also one of the greatest impediments to their profitability. And everybody needs capital. You can’t run a business without it. Women still don’t have the ease of capital.
Sometimes, it is the mentoring aspect that helps them know how to go about it [getting capital]. And how to process those applications. We are introducing — not just for women — SBA Lender Match, (a free online referral tool that connects small businesses with SBA-approved lenders). You go online, plug in your criteria, where you live and what kind of loan you are looking for and it will match you to SBA lenders who may be able to serve your needs.
You said at the WCBS Small Business Breakfast last year that women business owners are often not as confident in presenting themselves as their male counterparts.” Can you talk a little about that?
I have found this a little bit about myself. When I was kind of first going into business and first looking at ways to grow, sometimes I failed to look at how really good I was at some things.
I think that women are a little more self-deprecating. When we look at really putting forth our accomplishments, we are a little bit more hesitant because we think it is braggadocio.
It is not necessarily that we don’t have confidence, it’s that we just aren’t as willing as our male counterparts to just jump out there and say ‘Hey, I can do that, I have done that and I have the ability to go forward and do that.’
We want to make sure before that we are not going to make any mistakes; that we can do the best we can for that person or that company or that organization, so we hold ourselves a little bit back sometimes by just not jumping out there — knowing we’ve got it inside, but not wanting to appear that we’re bragging.
And what’s your advice to women entrepreneurs about this?
Go for it! Don’t be hesitant to really tout your own accomplishments, certainly in a way that is appropriate to the audience. But don’t be afraid of it. Don’t be afraid to recognize it in yourself.
And what’s your advice specifically for women who want to start businesses after 50?
The first thing I would do is say to yourself: Why do you want to start a business? Is it because you have an expertise or an idea of something that you now want to do on your own that you think you can do very well? Are you going into business because it is the only thing you know to do? You make great cupcakes. Should you go into the cupcake business? You’re a technology whiz and now you want to start a consulting service or know how to develop your own product.
You have to know what your driver is. Are you going to be willing to commit that time and effort that it is going to take to launch a business and really focus on it?
I think there is an incredible wealth of women who have so much to offer. When you look at what women are doing — women are starting more businesses today. When you look at the totality of women’s businesses today, they are contributing about $1.7 trillion in sales. It is an amazing group of women doing these things.
What has a smaller budget at SBA meant for small business owners?
Our budget was reduced probably 6 percent — which is not as big a cut as some other agencies took. Through our own efficiency, we were able to pretty much absorb those cuts without having to pull back on our primary programs that we had.
With the elimination of duplication, we are going to be able to increase the services that we are offering.
Part of the AMERICA’S ENTREPRENEURS SPECIAL REPORT
By Kerry Hannon Entrepreneurship Expert