SIDING WITH SMALL BUSINESS.

Associations can, and do, inform the Small Business Administration's work. ASAE's Mike Olson asks Jere Glover how.

In March I had the pleasure of meeting Jere Glover, chief counsel for advocacy for the Office of Advocacy in the U.S. Small Business Administration (SBA), Washington, D.C. I learned a lot about Glover's role as an ombudsman for small business in the areas of telecommunications and environmental and taxation issues. Glover and the Office of Advocacy are making sure that small businesses have their say in the dialogue surrounding regulatory changes.

An advocate for you

I'm convinced that trade association executives have a powerful partner in the Office of Advocacy, but I'm concerned that this may be a well-kept secret. Consequently, I'd like to share with you my recent interview with Glover. I'd like to help you inform your memberships and the general public that there is a place to go to receive help within the federal government.

Michael S. Olson, CAE 

ASAE President and Chief Executive Officer

Olson: Why was the Office of Advocacy created?

Glover: Congress established the office in 1976. Our mission is to represent and advance small-business interests before Congress and federal agencies. In addition, we find that our work in public policy research has led to greater involvement at the state and local government level.

The statute establishes a number of broad mandates for the Office of Advocacy. We are required to examine the role of small business in the American economy, including the contributions of small businesses to improving competition and stimulating innovation. We also measure the direct costs and other effects of government regulation on small business and study the ability of financial markets and institutions to meet small businesses' credit needs.

Suggesting solutions

When we identify policies that aren't working for small business, we are obligated to make recommendations to Congress or federal agencies. While some solutions involve creating new laws, many developments are simply new approaches to old problems.

Another key mandate for the Office of Advocacy is enlisting the cooperation and assistance of public and private agencies, businesses, and other organizations--such as trade associations--in our efforts on behalf of small business. We use trade association executives to help us study the issues, and many times we work with association members to examine the real-life application of new regulations or legislation. This help is invaluable.

No one event inspired the creation of the Office of Advocacy, but, like so many legislative efforts, it was partly due to the growing strength of a coalition--in this case, a coalition of small-business trade associations.

Olson: How many staff members does the office have?

Glover: The Office of Advocacy has about 40 employees in the Washington, D.C., office. An additional 10 staff serve as regional advocates and one employee resides in Texas as the national small business rural advocate. Each of these individuals, dedicated to small business, covers and travels throughout the states in their region. Advocates' offices are located in existing SBA regional offices.

Olson: What is your role?

Glover: The chief counsel for advocacy has a unique position in the federal government, charged by Congress to represent the views and interests of the nation's 20 million small-business owners before federal policy makers. While I have a staff to help with that charge, I am ultimately responsible for taking an independent position in the best interest of small business. I just celebrated my fifth anniversary in May. I was appointed by President Clinton and confirmed by the Senate in May 1994.

Olson: What are some of the key achievements of the Office of Advocacy during your tenure? What roadblocks to success have you encountered?

Glover: The 1995 White House Conference on Small Business was one of the most outstanding accomplishments for the Office of Advocacy and SBA during my tenure. The conference--attended by 2,000 small-business owners and activists--developed a broad and representative public policy agenda for small businesses. Both the White House and Congress have made huge strides to meet the goals established by conference delegates, including passage of the 1996 Small Business Regulatory Enforcement Fairness Act.

Changing the federal climate

SBREFA has been a building block in our efforts to change the climate in federal agencies. We have worked very hard to change their perception of small business and their approach to regulating small entities. SBREFA strengthened the Regulatory Flexibility Act of 1980 (RFA), a law requiring federal agencies to determine the impact of regulations on small entities and develop regulatory alternatives. The Office of Advocacy has been a key player in educating small businesses on their rights under SBREFA--including appealing federal agency rule makings in federal court--and supporting small businesses' attempts to challenge agencies that have not fulfilled their obligation under RFA. In January 1998, we filed an amicus curiae (friend of the court) brief on the Bureau of Land Management's failure to comply with the law. I am very proud of our initiative and fortitude.

The hallmark of Advocacy's efforts is addressing problems shared by small businesses of all types. Our research shows that small businesses

* incur up to 50 percent more costs per employee for federal regulations;

* face credit hurdles in traditional bank lending;

* encounter tax policies that do not fit small-firm operations; and

* enjoy little access to venture capital.

While no problem has a single answer, Advocacy has taken on each of these overriding problems with public-and sometimes private-sector solutions.

Highlighting roadblocks to growth

For example, as entrepreneurs encounter opportunities, they often cannot find capital to fund their growth. In fact, the Office of Advocacy found that traditional bank lenders and venture capital sources hesitated to support small business. Two public attacks on the problem have been to disclose bank-lending patterns and break down state regulatory barriers to venture capital deals.

In addition, Advocacy has launched the Access to Capital Electronic Network (ACE-Net) which links investors with small businesses seeking equity capital. Using the Internet, Advocacy has developed a beta site for this activity that will eventually be turned over to private enterprise.

Olson: What has been the relation of federal agencies to small business? What has been their attitude about small business?

Glover: Large companies usually have Washington staff or other experts available to brief agency staff and follow proposed regulations. As a result, agencies often perceive problems and "one-size" solutions that fit large companies. While these relationships may be appropriate, small firms have a difficult time allocating resources to educate federal agencies on their industry and business.

Correcting "one-size" solutions

In many ways, trade associations serve as representatives of small firms but they often have a diverse membership to represent in Washington. The Office of Advocacy works extremely hard to correct the one-size solutions by giving small business easier access to rule makers and by voicing the position of small business. Maybe most importantly, we've invested in the long term by teaching regulation writers about the value and circumstances of small firms.

Olson: What is the Office of Advocacy doing today on behalf of the small-business community?

Glover: Specifically, the office is continuing to do research on small businesses' contributions to the economy and on the policies that help or hurt entrepreneurship, business growth, and innovation. This research translates into effective advocacy efforts.

Research strengthens proposals

Because we have sound statistics and research, we can make valuable and respected recommendations to Congress and the administration regarding business policy. In addition, we use our vast network of small-business leaders to share our research with policy makers throughout the United States. This effort results in advancing small-business policy at the state and local level.

Olson: Does the Office of Advocacy recognize trade associations as a voice or advocate for the small-business community?

Glover: Trade associations and other nonprofit small-business assistance organizations are usually the most aggressive advocates. We couldn't do our job without their network of small-business members. We meet regularly with about 200 trade association executives to brief them on Advocacy efforts, small-business economic research, and the regulatory agenda. Trade associations

* identify business owners to work with us;

* provide vital information on their industries; and

* join us at the table in Washington to bolster small businesses' representation before the federal government.

Olson: You've been involved with the association community for many years. Can you highlight some of your roles?

Glover: While I am an attorney by trade, I've been in the Washington, D.C., area for many years representing small-business interests through trade associations. I was on the board of directors of the Small Business Legislative Council and National Small Business United. I was fortunate to represent the National Association for the Self-Employed, Service Station Dealers of America, the Alliance for Affordable Health Care (as president), and the National Council for Industrial Innovation (as the executive director).

Olson: In what ways has your association experience helped in your current position?

Glover: Because of my previous experience, I have been able to tap into the tremendous resource we have in the trade association community. No matter what unique issue we are working on, there is a trade association available to help. My staff really benefit because associations can quickly find businesses willing to give company tours, explain complex processes, describe the economics of an industry, and provide input into rule makings.

Olson: The Office of Advocacy is composed of three primary offices in Washington, D.C. Can you elaborate on their responsibilities and, specifically, on what a trade association CEO should know about them?

Glover: While the Office of Advocacy has some internal divisions, the welcome center is the Office of Public Liaison. This office publishes the monthly newsletter, coordinates a communication roundtable for association publication staff and media, and issues news releases. Communication efforts cover all the latest economic research and public policy initiatives in the Office of Advocacy.

The Office of Economic Research is the brains behind our research and statistics on small business. It spends many hours poring over government and private data to mine the facts about entrepreneurs and helping to develop policy recommendations.

The Office of Interagency Affairs provides the advocates on the front lines. The attorneys and policy staff represent small businesses before other federal agencies and analyze new legislation for its impact on small firms. ASAE members can rely on anyone in the Office of Advocacy to identify issues and statistics directly related to their members' industry.

Olson: How can the association community work with your regional advocates to identify topics of concern to their members? In what other ways do you envision associations and the Office of Advocacy becoming partners on behalf of small business?

Glover: Throughout the United States, local associations and small-business owners can work with our 11 regional advocates. These individuals meet with various groups to update them on Advocacy's research and policy work.

Identifying concerns

These relationships are invaluable to solidifying small businesses' voice at the federal and local levels. Trade association executives can benefit by contacting our regional advocates to meet with their association members, work on local or federal small-business initiatives, and cooperate on small-business events. A complete list of regional advocates can be found on our home page: www.sba.gov/region.html.

Olson: Can you tell me more about the Office of Advocacy's Vision 2000 Conference and why trade association CEOs should pay attention to it?

Glover: The SBA Office of Advocacy is hosting "Vision 2000: The States and Small Business Conference" December 1-2 in Washington, D.C. "Vision 2000"--a program in its second year--is an awards conference designed to spotlight initiatives that help small business, promote their replication throughout the country, and create an inventory of programs and policies that can be used to advance a level playing field for small firms.

Showcasing the best

The conference is open to anyone interested in improving programs and policies that affect small business: chambers of commerce, trade associations, state legislators, government regulators, small-business owners and advocates, state and local economic development agencies, and advisory councils and task forces. Association executives and members will be able to meet small-business leaders from the states that offer programs and policies for small-business development. Participants leave the conference with a network of state contacts and blueprints of programs and policies that will help their association memberships.

If ASAE members would like to know more about Vision 2000 or nominate notable programs, they can visit the home page: www.sba.gov/vision.html.

Olson: Your office publishes a newsletter called The Small Business Advocate. Why should trade association executives read it?

Glover: This monthly publication is one of the best ways to receive timely information on the policy efforts and research of the Office of Advocacy. Our work often has a direct impact on specific industries, and trade associations can reprint articles in their own publications or contact our staff about various issues affecting trade associations' memberships. The featured economic research and statistics often have breakdowns on specific industries' growth or contributions. In addition, the Office of Advocacy publishes requests for proposals in small-business research each year. Many associations have sister foundations that could submit proposals.

Olson: How does your group interact with the Small Business Legislative Council?

Glover: The Small Business Legislative Council is one of many associations with which we work to advance small-business policies. However, the SBLC is unique in that it is made up of other associations (and not business members), and it focuses solely on small-business issues. The Office of Advocacy briefs this and other associations on small-business issues pending either in the federal rule-making process or within Congress. As a SBLC board member for many years, I fully appreciate what a wonderful organization it is.

Olson: What is the future of the Office of Advocacy?

Glover: I expect us to continue to play a critical role within the small-business community as an independent voice before Congress and other branches of government. Advocacy's vital goals will continue to be acting as an effective guardian of small businesses and providing valuable information on small-business contributions to the economy.

Most importantly, the Office of Advocacy must get ahead of the curve with early identification of small-business policy needs. And Advocacy must identify new ways for small businesses to participate in policy making and holding their government accountable.

Small business drives economy

The facts are indisputable. Small firms are a driving force in the economy and should be a focus in 21st century policy developments. The number of small businesses in the United States has increased about 50 percent since 1982.

Women and minority-owned businesses represent the majority of startups. Policy research--conducted in part each year with contract research--must address issues affecting all small businesses as well as those issues creating special difficulties for new entrepreneurs and growing businesses.

Small-Business Facts

Small businesses...

* represent more than 99 percent of all employers throughout the United States;

* employ 52 percent of private-sector workers;

* employ 61 percent of private-sector workers on public assistance;

* employ 38 percent of private-sector workers in high-tech occupations;

* provide virtually all of the net new jobs;

* are home-based 53 percent of the time and are franchises 3 percent of the time;

* provide 51 percent of private-sector output;

* represent 96 percent of all exporters of goods; and

* receive 35 percent of federal contract dollars.

In 1997, an estimated 8.5 million women-owned businesses generated $3.1 trillion in revenues. The same year, an estimated 3.25 million minority-owned businesses generated $495 billion in revenues.

Source: small Business Administration Office of Advocacy (www.sba.gov)