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Witness Testimony of Mr. Rhett Jeppson, Associate Administrator for Veterans Business Development, U.S. Small Business Administration

Testimony of

RHETT JEPPSON

ASSOCIATE ADMINISTRATOR FOR VETERANS BUSINESS DEVELOPMENT,

U.S. SMALL BUSINESS ADMINISTRATION

BEFORE THE
SUBCOMMITTE ON ECONOMIC OPPORTUNITY
HOUSE COMMITTEE ON VETERANS’ AFFAIRS

SEPTEMBER 20, 2012

Chairman Marlin A. Stutzman (IN), Ranking Member Bruce L. Braley (IA) and members of the subcommittee – thank you for inviting me to testify.

My name is Rhett Jeppson.  I currently serve as the Associate Administrator for Veterans Small Business Development at the U.S. Small Business Administration and am also a veteran.  I am a Lieutenant Colonel in the United States Marines Corps Reserve, with recent service in U.S. European Command, U.S. Forces Afghanistan, and U.S. Special Operations.  After my first tour in the Marine Corps, I left the service to operate a small family business while my father underwent a bone marrow transplant.  Additionally, in the late nineties I served as the Director of State Purchasing in Florida. 

Two of America’s greatest assets are the service of our returning veterans and the economic dynamism of our small businesses.   Our nation’s 28 million small businesses employ half of the private sector workforce and are responsible for creating 2 out of 3 net new private sector jobs across the country.[1]  

As small business owners, veterans continue to serve our country and create jobs in our communities.  According to the most recent U.S. Census data, nearly 1 in 10 small businesses are veteran-owned. These businesses generate about $1.2 trillion in receipts and employ nearly 5.8 million Americans.[2]

Research also demonstrates that veterans over index in entrepreneurship.  In the private sector workforce, veterans are at least 45 percent more likely than those with no active-duty military experience to be self-employed.[3]

Today, there are over 200,000 service members each year transitioning from active service.  Boots to Business, the entrepreneurial track of the new Transition Assistance Program (TAP), is focused on providing these service members with the training, tools and resources they need to make the transition from military service members to successful business leaders.


 

SBA’s Role Supporting Veteran-Owned Businesses

At SBA we are focused on making sure our nation’s veterans have the capital, the counseling and the access to contracting opportunities they need to start, build and grow successful business.  This is what we refer to as our 3 Cs: capital, counseling, and contracting.

The first ‘C’ is capital.  In FY 2011, SBA supported more than 4,300 loans to veteran business owners, totaling more than $1.5 billion.

In addition, our Patriot Express Loan program has supported more than $460 million in lending to veteran entrepreneurs and small business owners over the last three years. The program, which has been extended through 2013, offers low-interest loans to members of the veteran and military community.

Our second ‘C’ is counseling.  Our data show that small business owners who have a long-term counselor are more likely to hire, grow, and increase revenues.

Not many people know just how extensive SBA’s counseling network is. We call it the SBA bone structure. The backbone is our SBA employees on the ground in 68 field offices around the country. If the field office is our bone structure, our muscle is our Resource Partner network comprised of over 900 Small Business Development Centers, most at local colleges and universities, more than 100 Women’s Business Centers, our Veteran Business Outreach Centers, and more than 370 chapters of a mentoring program called SCORE.

In sum, there are about 14,000 SBA-affiliated counselors who serve about 1 million people each year, and the best part is it’s free for participants. We estimate that there is an SBA counselor within about an hour of every small business in America.

Last year our Small Business Development Centers, Women’s Development Centers and SCORE network trained more than 68,000 veteran entrepreneurs. And, an additional 86,000 veterans received training and business counseling through our Veteran Business Outreach Centers last year.

The third ‘C’ is contracting.  At SBA, we work across Federal agencies to ensure that the statutory goal of 23 percent of Federal contracts are awarded to small businesses. This is a win-win. Contracts are the oxygen that small businesses need to build their top line. At the same time, the government gets to work with some of the most innovative, nimble and responsive companies – often with a direct line to the CEO.

The Service-Disabled Veteran-Owned Small Business Concern Procurement Program allows Federal agencies to set acquisitions aside for exclusive competition among service disabled veteran-owned small business concerns. SBA works with service disabled veteran-owned small businesses to build awareness of Federal contracting opportunities and to ensure they have the resources they need to bid for Federal contracts.

Last year we helped service disabled veteran-owned small businesses access more than $11.2 billion in Federal prime contracting dollars. This is the fifth consecutive year that we have increased the amount of Federal contracting going to these businesses.

Operation Boots to Business: From Service to Startup

In the fall of 2010 and 2011, President Obama called for the creation of two joint task forces: the Department of Defense-Department of Veterans Affairs (DoD-VA) Veterans Employment Initiative Task Force and the Interagency Task Force on Veterans Small Business Development led by SBA.  The goals of the task forces are to:

1)                  develop proposals to maximize the career readiness of all service members; and

2)                  create proposals to better support veteran-owned small business owners.

Both task forces identified the need to create a nationwide entrepreneurship training program for transitioning service members.  As an outcome of these task forces, SBA is working with DoD and VA to include entrepreneurship training as a part of the overall, service-wide changes to the Transition Assistance Program (TAP).

The overall goal of the “new TAP” is to strengthen the transition of all of our service members from military to civilian life and to prepare them for success in the next phase of their life.  In the “new TAP,” each service member will receive “core” education in post-service veterans’ benefits.  In addition, the goal is for each veteran to choose from three “optional” tracks for further, targeted training:  1) Higher Education; 2) Technical Training; and 3) Entrepreneurship.  When fully implemented, the SBA and its partner network would deliver the entrepreneurship track to those transitioning service members who opt-in to receive entrepreneurship training.  

The Operation Boots to Business program will build on SBA’s role as a national leader in entrepreneurship training.  SBA will leverage its ongoing collaboration with Syracuse University’s Institute for Veterans and Military Families (IVMF) to provide comprehensive training materials specifically geared toward transitioning service members. 

Through the Boots to Business initiative, SBA Resource Partners will build on these efforts by deploying this expertise at military bases around the country to collaboratively deliver face-to-face introductory entrepreneurship training as a network. Our Resource Partners, not a group of contractors, will also introduce transitioning service members to the essentials of entrepreneurship and lifetime business support available to them in our Resource Partner network.

A transitioning service member upon completion of the introductory course may enroll in an intensive, 8-week online business planning training course delivered by Syracuse and other affiliated University partners.  As always, counselors and mentors from SBA’s Resource Partner network will be there to work with service members throughout the eight-week online course, and thereafter as these service members start their businesses.  


 

There is great work that is already going on around the country by our Resource Partners to provide transitioning service members and veterans with entrepreneurship training. At the same time, SBA, DoD and the Services realize the need to have a standardized curriculum to ensure that every service member has the opportunity to receive entrepreneurship training. The national curriculum, enhanced by the tailored approach and expertise of our Resource Partner network, helps us ensure that every transitioning service member has this opportunity. This national, Resource Partner-delivered model is dependent on FY2013 funding and statutory authority to help support the training that will occur on bases across the country.

The national initiative consists of three progressive phases that will deliver exposure/ introduction, feasibility assessment, and in-depth training for service members interested in business ownership:

 

 

Phase 1: Video

Short Introduction: Call to action for returning veterans to consider entrepreneurship, with a description of the career path

 

Phase 2: Feasibility Analysis Instruction

In-Person Course: Creates basis for future business plan by identifying strengths, challenges

 

Phase 3: Online Instruction

In-depth Course: Provides an 8-week online/distance learning course that leads to the creation of a business plan

 

 

 

 

 

 

Phase 1: Short Introduction on Entrepreneurship (< 10 minute video)

Phase 1 of the program will introduce all 200,000 plus transitioning service members to entrepreneurship as a career path. The introductory video is packaged and delivered for online streaming or DVD distribution.  Participation is mandatory as part of the TAP curriculum. 

Phase 2: Feasibility Analysis Instruction (2 days)

Phase 2 guides participants through a 2-day classroom instruction focused on creating a feasibility analysis for a business plan.  This training will be delivered face-to-face by our Resource Partners on-base. The Feasibility Analysis Deliverable will represent the outcome of the 2-day intensive seminar. The document will serve as the basis for future business planning efforts, and is designed to assist the service member in developing an ‘actionable’ plan for subsequent effort focused on launching a new venture. A pre-formatted template will be used to facilitate the completion of the analysis during the 2-day training and participants will ‘walk away’ from the training with a completed feasibility study of their own business concept.


 

Phase 3: In-depth Online Entrepreneurship Course (8-week ONLINE course)

Phase 3 offers participants an in-depth, 8-week online training program to further explore the fundamentals of small business ownership. This online course will be offered by Syracuse and its affiliated University instructors/partners. Curriculum topics include understanding customers, marketing, accounting and finance, and operations. This online course will be offered on a rolling basis, to be completed within 60 days from the start date. Participation is optional, but participants must sign up in advance.   

Getting Started: Pilot with the USMC

To test the initiative prior to national rollout, in June 2012 SBA partnered with the U.S. Marine Corps to deliver a streamlined version of the Boots to Business entrepreneurship training to approximately 20,000 transitioning Marines in four pilot locations: Quantico (VA), Cherry Point (NC), Camp Pendleton (CA), and Twenty-Nine Palms (CA).    

The pilot with the Marines consists of three progressive phases to deliver exposure, introduction, and in-depth training for service members interested in business ownership. The pilot does not include the 2-day feasibility assessment but uses a 90 minute course at the pilot locations due to time and cost constraints.

 

Phase 1: Video

Short Introduction: Call to action for returning veterans to consider entrepreneurship, with a description of the career path

 

Phase 2:  Classroom

Instruction

In-Person Course: Provides a 90-minute training course on entrepreneurship

 

Phase 3: Online Instruction

In-depth Course: Provides an 8-week online/distance learning course that leads to the creation of a business plan

 

 

 

 

 

 

Phase 1: Short Introduction on Entrepreneurship (10 minute video)

·        Estimated Number of Participants: ALL 20,000 transitioning Marines at the four bases participating in the pilot. 

Phase 2 (Initial USMC pilot only): In-Person Classroom Training Course on Entrepreneurship (90-minute training)

  • Estimated Number of Participants: 4,000 Marines, representing 20% of population at the four bases in the pilot.
  • Delivery: Face-to-face, by SBA Resource Partners on-base.

Phase 3: In-depth Online Entrepreneurship Course (8-week course)

·        Estimated Number of Participants:  1,600 Marines, representing 8% of population at 4 pilot sites; 40% of initial participation due to attrition.

·        Registration Information:  Registration information for the 8-week course is provided in the 90-minute curriculum slide deck so that participants can learn about their opportunity to sign up for the 8-week online course.  Additional information is also provided in the 90-minute course’s teaching notes. Interested Marines can register for the 8-week online course by going to http://boots2business.org and hitting the ‘register’ tab, filling out the registration form, and entering the following code: USMC2012. The original version of the 8-week online course will be managed by professors in Syracuse University’s network. The SBA is also exploring self-paced curriculums for future uses.

·        Delivery: By Syracuse and its affiliated University instructors/partners  

Supplemental Demonstration of 2-Day Curriculum at VA Conference on June 24-25, 2012

·        Overview: SBA partnered with Department of Defense (DoD), Veterans Affairs (VA), Syracuse, and SBA Resource Partners to present a 2-day feasibility analysis curriculum at the National Veterans Procurement Conference June 24-25th.  The purpose was to demonstrate the additional phase of the Program which will be integrated into the nationwide rollout but which is not part of the streamlined Marine Pilot. 

Estimated Number of Participants: 50 service members, representing all branches of the military.

In August 2012 three Navy locations were added to the pilot: Anacostia-Bolling, Washington, DC, Bethesda, MD and King’s Bay, GA.  In October 2012, the U.S. Army plans to host a pilot in Ft. Sill, OK.

Following our assessment of the pilot we plan to roll the program out nationally to all branches of the military in FY 2013 subject to funding.

We know that our nation’s veterans helped reshape the American economy following World War II. They helped to build one of the longest periods of economic growth in our country’s history.

And, we know they can do it again if they are encouraged and supported with the right tools and the right opportunities.  That’s what Boots to Business is all about.

And, it’s why we are committed to ensuring that these amazing men and women have the access and opportunity they need to fully realize their potential as entrepreneurs and small business owners.

Thank you for your time today and for allowing me to appear before this committee.



[1] Headd, Brian. “An Analysis of Small Business and Jobs,” U.S. Small Business Administration, March 2010.

[2] “Survey of Business Owners - Veteran-Owned Firms, 2007,” U.S. Census Bureau, Department of Commerce, May 2011.

[3] “Factors Affecting Entrepreneurship among Veterans,” Office of Advocacy, U.S. Small Business Administration, March 2011.