New SBA director plans to rebuild in RichmondJuly 30, 2012 6:00 AM
by Paula C. Squires
Jayne Armstrong likes a challenge — on and off the job. When not working as the new leader of the U.S. Small Business Administration’s Richmond district office, you might find her moshing a dog sled in Quebec, skydiving in Rhode Island or floating over Sedona, Ariz., in a hot air balloon.
Those are some of the adventures Armstrong embraced during the past year. A personal trainer in Delaware even had her walking over a bed of hot coals during a workshop on overcoming fear. “You kind of get in this zone, and you walk on them. I didn’t burn my feet or anything. It was great,” says Armstrong.
Lots of small businesses probably felt as if they were walking on hot coals during the recent economic downturn. “Small business took a very hard hit with the recession,” says Armstrong. Many companies struggled with cash flow and access to capital, forcing some of them to close. Three years later, she says, things are better. “Now we’re starting to see more startups … Access to capital continues to be an issue.”
Armstrong, who came to the Richmond district office in March, manages SBA programs in Central Virginia and Southern Virginia, including Hampton Roads. The district does not include much of Northern Virginia, which is served by the SBA’s Washington office.
Altogether, there are 635,977 small businesses in Virginia, representing 47.7 percent of the private-sector work force, according to the most recent data from the SBA. Under the agency’s definition, a small business is an independent enterprise with fewer than 500 employees. In Virginia, small businesses are just that — small. More than three quarters of them, or 76.5 percent, did not have employees other than the owner in 2009, and most companies had fewer than 20 workers.
Armstrong came to Richmond from the SBA’s Delaware office. She started that district office in 1999 and stayed on as the director for nearly 13 years. In Delaware, much of the business is focused on the corporate sector; whereas in Virginia she sees more variety. There’s everything from government and defense contractors in Hampton Roads to wineries in Central Virginia and artisans in other parts of the district. “In Virginia, I’m like a little kid in a candy store,” says Armstrong. “There are so many resources to work with.’’
During the past fiscal year, which ended Sept. 30, 2011, the SBA’s Richmond district office made 708 loans to small businesses, totaling $216 million. Its venture capital program put up $16.5 million for 10 companies, and its counselors saw 628 clients who participated in programs at the Women’s Business Center.
During her first year in Richmond, Armstrong says the primary focus will be on rebuilding. About 50 percent of the staff retired in the last six months, “so it’s a great opportunity for us to rebuild.” She also plans to focus on four industry sectors: retail, tourism and agritourism, manufacturing and defense/NASA. To promote SBA services, she says the staff will get out to more events.
To that end, it’s not unusual to find Armstrong waving a sign that says, “Honk if you love small business.” Virginia Business talked with Armstrong in her office in the Federal Building in downtown Richmond. The following is an edited transcript.
Virginia Business: Tell us about the state of small business in Virginia? What are you hearing?
Armstrong: It’s still a little bit of a mixed bag … Small businesses took a very hard hit with the recession — probably one of the hardest hits. One of the biggest issues has been access to capital. A lot of the businesses couldn’t get financing at the critical time when they really needed it … Now we’re starting to see lending pick up a little bit. But you know, it has been like a rollercoaster. It has been up and down.
VB: Do you have any statistics on how many small businesses closed during the recession?
Armstrong: We don’t track that at the SBA … But the reality was we were seeing a lot of very established businesses really struggle through the recession. Now we are starting to see more startups. The difficulty is, as people are starting up businesses, the access to capital continues to be an issue … Back in the ‘90s when we had the [another] recession, you saw a lot of people taking their severance pay and starting up businesses. This is a different economic cycle. The businesses didn’t have that, or the employees didn’t have that as they were leaving their corporate jobs. So it has been a struggle for a lot of people getting started in business because they’re undercapitalized as they’re getting started.
VB: Do you still see that as a major challenge today?
Armstrong: It is still a major challenge …. The good news out of the recession is that I think America finally woke up and realized how important small business is … We are starting to see some things stabilize, and the banks are starting to lend again.
VB: You are new to Virginia. Are you seeing anything unique to the state?
Armstrong: I went to Delaware to become the SBA director to launch the office there because I wanted the challenge of starting a new office from scratch. Because so much was focused on corporate because of the nature of Delaware, we had to work that much harder to get something done or to create opportunities for small businesses … One of the reasons I’m very excited to be here in Virginia … is there are so many resources to work with … I’m all about government working smarter and being very careful not to duplicate. I want to make sure we go in and we leverage our resources and develop strong partnerships so that we can utilize our resources as efficiently as possible to help small businesses and to have a greater impact on small business, too.
VB: Let’s turn to health care and small business. How are they tackling that issue?
Armstrong: Obviously it’s a huge expense for small business … The Affordable Care Act [recently upheld by the Supreme Court] is already making health-care coverage more affordable and more accessible for families and small businesses, with more to come in the near future. The law includes a number of benefits for small businesses to help them access better health-care options for their employees and reduce overall costs — including tax credits and the opportunity to leverage their buying power with other small businesses in new health plan exchanges in 2014.
VB. What is your big focus this first year on the job?
Armstrong: I’m focused right now on kind of relaunching SBA, if you will, because we’ve had 50 percent of our staff retire in the past six months … It’s a great opportunity for us to rebuild the SBA and identify people that will be the best fit to help us meet the needs of the small business community … Initially we’re going to target four industries — retail, tourism and agritourism, manufacturing, and then defense/NASA.
VB: How many small businesses does the SBA work with in a year?
Armstrong: I don’t know off the top of my head. We have the Small Business Development Centers for the Women’s Business Center, the Veterans Business Outreach Center, the U.S. Export Assistance Center. We’re touching a large number of them.
VB: Can you mention a couple of things that small businesses in Virginia should know about in case they need help from the SBA?
Armstrong: Sure. We’ve been directed by the Obama administration to double small business exports in five years. So the SBA has a program called the State Trade Export Program, STEP, in which we’re funding grants to states. We do it here in Virginia through the Virginia Economic Development Partnership (VDEP) … It helps small businesses to participate in exporting, to go on trade missions and everything … I think a lot of times — because of how the economy has been — a lot of small businesses think it’s too complicated to get into exporting. There are so many resources out there to help. The SBA, the Department of Commerce through Commercial Services, there’s everything to help you with identifying those markets.
I think, too, that one of the things that has become very important with this whole access to capital issue is to know your banker. A lot of small businesses, if you talk to them and you say, ‘Who is your bank, who’s your banker?’ Some will say, ‘Well I’m at such and such bank, or I’m at such and such credit union.’ But they can’t name who they’re working with there. And it’s because they’ve never really established a relationship with one lender or one banker … That is the most important lesson for small businesses. They need to get out there and establish those relationships just like the corporations do. They need to have a banker who comes out to visit their business, who understands their business so that they will fight for them. Otherwise, they’re just a number.
VB: What are your chief goals?
Armstrong: We need to broaden our reach with the organizations that we work with. You look at women’s and minority and veteran’s groups to associations. As we do this targeted approach, there are a lot of organizations that maybe we’ve done presentations to in the past, but we haven’t been attending monthly meetings and really building those relationships. We’re going to be doing a lot of more of that … It’s all about relationship building. With relationships come more referrals and a greater awareness of what resources are available. And the more relationships we have with the banks and the credits union and the micro lenders, then we can get more money on the street for small business.
VB: How did you get into this line of work?
Armstrong: I got into economic development through a partnership that was a consortium of political, higher education, industry and small business in West Virginia. It was a technology-oriented consortium that was working on a lot of space shuttle and space station contracts at the time with the software industry. But I got into it initially from the journalism side … I was writing press releases and developing marketing materials. And then I really got into economic development and really and truly became an advocate for small business. … And I got into the SBA. I came in through the public policy arm, through the Office of Advocacy, and organized a White House Conference on Small Business.
VB: What year was that?
Armstrong: 1994 to ’96. Everything I learned about small business I learned in that crunch of two years … It was fascinating because we worked across the spectrum. We worked with every association, every organization to make sure that every business interest was at the table … I learned by listening to all the different issues they were facing whether it was taxes, procurement, unfunded mandates, access to capital. The whole gamut of small business issues.
VB: Did your parents run a small business?
Armstrong: My dad had a small management consulting firm, but, I got into it working through economic development and seeing these small businesses. Watching them struggle, watching them grow, watching how they treated their employees. I had a real admiration for it, and the work ethic especially, the passion.
VB: What else have you done in the field?
Armstrong: I worked for the Office of Advocacy and then became an SBA district director. I was the director of the West Virginia office from ’96 to 2000. And then I went to Delaware to launch that office.
VB: What do you do when you’re not helping small businesses? How do you relax?
Armstrong: I follow so many different bucket lists, you would laugh. I have an adventure bucket list. In the past year I have walked on hot coals. I have zorbed. Do you know what zorbing is?
Armstrong: That’s a big plastic ball, a sphere thing that they strap you in, and they roll you down a hill. I travel a lot. I’ve been all over. I love to travel … My next step is I am hot air ballooning over Cappadocia, Turkey, in November. I also like to give back to the community … I’m very new to Virginia, so I don’t have the track record here yet, but I’m real involved with student recruiting, mentoring, the Rotary, a lot of charities.
VB: How would you assess the mood of small business?
Armstrong: I am starting to get feedback from across the board with a lot of partners that they are starting to see some consistency with the recovery, and that it is much more positive. Most small businesses you talk to … they’re cautiously optimistic. They’ve been through a lot in the last five years … Their employees are their families and when they have to lay people off … That was the hardest thing for them to do: to lay off people that they considered family … I think that’s what’s so special about the small business community. They’re our neighbors; they’re our family, our friends
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