Proprietor’s Daughter With Political Savvy Takes Over at the SBA
Susan Engeleiter, the new chief of the U.S. Small Business Administration, has been a lawyer, a teacher and, most recently, a politician.
She said she understands small business because her father owned a small flooring company in Milwaukee.
“I was raised in a small-business household,” said Engeleiter, whom President Bush swore in for the appointed position at the White House on May 1.
Engeleiter faced several immediate challenges when she took responsibility for the SBA and its staff of 4,500. The most significant is an expected shortfall of $400 million to $600 million in SBA loan guarantees applied for by thousands of business owners across the country.
“We hope to take money from other areas to make up the shortfall,” said Engeleiter, who expects requests for loan guarantees to top $2 billion in the next fiscal year.
The SBA guarantees provide the extra security needed to encourage lenders to make long-term, fixed-rate loans to small companies, she said.
“The SBA is the lender of last resort for small businesses,” said Engeleiter.
Another top priority for the 36-year-old SBA chief will be to activate regulations Congress recently passed aimed at thwarting abuses of the Economically Disadvantaged Business Owners Act.
She said screening procedures will be tightened to prevent companies not truly owned by minorities from obtaining lucrative government contracts. Federal audits and investigations have revealed that, in some cases, companies were set up as fronts for that purpose.
Another area of interest to Engeleiter is what she described as the “dismal” proportion of federal government contracts that go to businesses owned by women.
“I feel strongly that people should succeed whether they are men or women, but less than 1% of all federal contracts went to small businesses owned by women,” she said. “Yet 27% of all small businesses are owned by women.”
Engeleiter, who will earn about $125,000 a year as SBA administrator if a pending pay raise is approved, said she supports the President’s proposal to raise the federal minimum wage to $4.25 an hour from $3.35. (On May 17, the Senate approved a $4.55 rate and sent it to the White House, setting the stage for an expected veto.)
On another issue of interest to small-business owners--mandatory parental and family-emergency leaves for employees--Engeleiter said she favors allowing states to set such regulations rather than having the federal government set them. Several measures that would require employers to grant such leave time have been defeated in Congress, but supporters vow to continue the battle.
“In my view, it should be left at the state level,” said Engeleiter. “Wherever possible, I would like to see mandates dispensed with.”
Engeleiter, who has a 5-year-old daughter and a 2-year-old son, said she supported six weeks’ maternity leave for Wisconsin workers.
Although she is new to Washington, Engeleiter is no stranger to politics. At 22, she was the youngest person ever elected to the Wisconsin Legislature. She was the first Republican woman elected to the state Senate and the first woman Republican floor leader.
She said she met with Bush during her campaign last November, when she ran for the U.S. Senate seat vacated by Democrat William Proxmire but lost to millionaire businessman Herbert Kohl, another Democrat. Meanwhile, Engeleiter appears to have the support of many small-business organizations.
“We supported her nomination to the hilt,” said Betty Jo Toccoli, a Los Angeles business owner and president of National Small Business United, a grass-roots trade association.
“We think she is excellent,” Toccoli said. “She obviously has the support of the President to deliver the programs we need, and she has the smarts to do it.”
A spokesman for the National Federation of Independent Business said the group supported Engeleiter in her run for U.S. Senate. Shortly after her appointment, federation president John Sloan called her “a good friend.”
Family Owners’ Poll
Family-owned businesses are more likely to care about customer service, community service and employee relations than public firms, according to University of California researcher Amy Lyman.
However, Lyman, a lecturer at UC Davis, said she found family businesses are more vulnerable to feuding, nepotism and a reluctance to seek help than public companies.
“If you own the company or own control of the shares, then you can make some decisions about how you want to run things,” Lyman said. “You don’t have to look at the quarterly earnings statement as the only indicator of success. In some ways, family firms can redefine what profit means.”
She based her findings on a survey of about 80 businesses whose owners were asked their attitudes toward service, how their employees are trained to deal with customers and family values.
Lyman is a founding member of the Family Firm Institute, a national group formed to enhance the knowledge and practice of professionals serving family businesses.
Breakfast Sessions
The Torrance Area Chamber of Commerce’s Small Business Council is offering a series of breakfast meetings in June. “How Voice Mail Can Help Your Business Grow” is the topic of the June 8 meeting. On June 15 the subject will be “How to Analyze Your Financial Statement.” On June 22, a banker will speak on “Doing Business Beyond Our Shores: The Basics of Import/Export.”
Meetings will begin at 7 a.m. at Mimi’s Cafe, 25343 Crenshaw Blvd., Torrance. Breakfast will cost between $5 and $7. For information, call (213) 517-7970.
