A franchising world Q&A with U.S. Small Business Administrator Steven C. Preston: Steven C. Preston was confirmed by the U.S. Senate by unanimous consent on June 29 as the 22nd administrator of the U.S. Small Business Administration. Preston will oversee the delivery of financial and business development tools to America's entrepreneurs.

In his business experience as an executive and as an investment banker, Steven C. Preston has been deeply involved in small businesses and recognizes the vital role they play in society. He has worked with investors and their portfolio companies on strategic and operational issues, helped franchisees become more effective through training, funding and business-process support, and worked directly with small companies seeking to tap into public and private capital markets.

During the first half of his private sector career, Preston worked in investment banking and treasury management as a senior vice president and treasurer of First Data Corp., and an investment banker at Lehman Brothers. During this period, he advised companies on strategic issues, worked with them to gain access to capital, designed complex financial risk management strategies, evaluated investments and dealt with credit issues.

Preston most recently was executive vice president of the ServiceMaster Company, where he also served as chief financial officer during a period of expansion, restructuring and significant change in the regulatory environment.

He currently is vice chairman of the Board of Visitors for the Weinberg College of Arts and Sciences at Northwestern University and has served on numerous boards of philanthropic and other organizations.

FW: The International Franchise Association congratulates you on your recent Senate confirmation as administrator of the U.S. Small Business Administration. IFA is pleased that President Bush selected you as chief advocate for small business with your strong background with the franchise business model- How does your past professional experience assist you in your new position?

Preston: Thank you for your support--it has meant a lot to me. I am very grateful to President Bush for the opportunity to serve in a way that affects the lives of so many Americans. The SBA provides a very valuable service to our country. I am also humbled by the bipartisan support I received in Congress and am committed to fostering a strong relationship with the many stakeholders of the SBA.

With respect to my prior business experience, I have been fortunate to have had the opportunity to work and lead in a variety of areas involving finance, operational transformation and technology. The most important lessons I have learned are pretty simple. We need to make decisions that start with the customer, and we need to foster an environment where people enjoy serving the customer and have the tools and support they need to do it effectively.

FW: According to a recent study compiled by PricewaterhouseCoopers for IFA's Educational Foundation, franchising comprises a significant sector of the American economy, contributing more than $1.53 trillion in economic activity annually. And as you know, small business comprises a very significant segment of franchising. In the past, franchised businesses have benefited from SBA's lending programs such as the 7(a) loan program. What is your position on the provision in the Small Business Administration Reauthorization bill, H.R. 5352, not to authorize any funding again this year for this critical lending program?

Preston: Don't be alarmed. The 7(a) program will continue to be strong. Actually, H.R. 5352 reauthorizes the flagship 7(a) loan program at a record $18.0 billion in lending authority through this program. It's important to note the 7(a) program operates at zero subsidy, meaning it does not require an appropriation because it breaks even before administrative costs are factored in. This is how the program has operated for almost two years, and it has done very well for small businesses.

FW: Some misinformed critics in Washington have contended that franchised businesses are not considered small businesses. What is the best approach to increase education and awareness about franchising to federal lawmakers and opinion writers?

Preston: I think starting with the facts is always the best start. Franchise owners invest their own capital, take personal risk and invest tremendous amounts of sweat equity into what they do each day. They need access to many of the same things that other small businesses do. I believe that legislators will listen if you work with them to understand your issues.

FW: How do you recommend that new small businesses or new IFA members who have no prior relationship with the SBA or any federal government agency, become familiar with the SBA's programs and take advantage of its services?

Preston: First and foremost, I invite small businesses and new IFA members to visit the SBA's Web site at www.sba.gov. There they can find the wide array of resources the SBA provides, from financing to technical assistance to how to access government contracts. The SBA can also be reached by calling the SBA Answer Desk at 1-800-U-ASK-SBA.

In addition, by visiting sba.gov or calling the 800-number, small businesses can learn where local resources are available. The SBA has 10 regional offices, 68 district offices and 16 branch offices to serve entrepreneurs. There are also resource partners such as 950 small-business development centers, 89 women's business centers and 10,500 SCORE counselors all over the country ready to help clients start and grow their businesses.

FW: Now that you are the agency's administrator, what are your priorities, both long-term plans and short term goals for your time at the SBA?

Preston: The SBA has a number of wonderful programs that help open the door of opportunity to millions of small businesses. There are any number of ways we can reach more people, make those programs simpler to use, and improve the outcomes we target. Much of this will require improvements in our operational processes and possibly legislative changes. I will be emphasizing a tenacious focus on the customer, sophisticated financial management and internal collaboration to achieve those goals.

In the very near term, I am focusing heavily on our preparedness in the disaster-lending operation, spending lots of time with SBA stakeholders to hear what they have to say about the SBA and focusing on employee morale. I want to make sure we have a workforce that looks forward to coming to work every day wanting to help small businesses.

All of that deals with the agency and its programs. I also look forward to working with the president and his team in continuing to promote his small-business agenda and advocating for small businesses on any number of issues.