Fighting Big Government for Small Business

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Last week, the National Small Business Association picked Scott Hauge as its 2007 Small Business Advocate of the Year. Hauge took over as owner of San Francisco-based Cal Insurance & Associates from his dad and transformed it into a shop focusing on small- and medium-size businesses. That led him to get more heavily involved in lobbying for small business in 1984, founding Small Business California, an advocacy group. I talked to him about how small business fits into the big picture.

Q: Why focus on small business?

A: I saw that they were underrepresented and it provided a point of difference for Cal Insurance. We provide more than insurance; we provide advocacy.

Q: How did you get started on small-business issues?

A: In 1983, the Democratic convention came to San Francisco, and we wanted to have a presence for small business at the convention. We decided we wanted to have a cabinet-level small business association. We were not successful, but we created the small business commission of California in 1985. In 2002, it became a charter commission, which means it can't be dissolved without a vote of the people.

Q: Why was it important for small business to be a cabinet department?

A: The Department of Commerce was dominated by major corporations. We didn't disagree with their positions, but we wanted to be at the table when decisions were being made. The SBA (Small Business Administration) existed, but it was a second-class citizen.

Q: How do small-business interests differ from large company ones?

A: Let's take access to capital. The larger companies go through traditional sources such as banks or they floated stock. I don't remember venture capital being around then. Small business had to look for other programs. So that's not an issue that larger companies would be concerned with. Larger companies are as concerned about regulation as small business, but they have their own lobbyists and internal staff. Small business doesn't have those kinds of resources.

Q: What are some of the big issues now?

A: We have got to find a way to solve the healthcare crisis. Small business needs to be at the table giving their input; otherwise, we will see costs imposed on us that could be disastrous. Another big issue is workforce development. There is a concern down the road about where we are going to get employees who have basic and technical skills. Those skills are not being taught at schools.

Q: How far has small business come since you started?

A: We haven't come as far as I would like. Back in the mid-80s, you didn't hear small business being brought into economic decisions. Now they reference small business. That's a plus, but the actual impact of small business continues to be a challenge. There are three things we expect government officials to say: thattheir family is in a small business, that they grew up in a small business, and that small business is the backbone of the economy. They all say that, but in taking that into action we have got a long way to go.

Q: Why hasn't small business gotten more respect?

A: Some of it we can blame on ourselves. While we have massive numbers, trying to speak in a unified voice is a challenge. Small-business owners feel they can't do anything to impact government decisions, or they don't have time or money.

Q: What can small-business owners do?

A: I spend a lot of time talking to small businesses, saying we have numbers. Nationally, we are over 25 million. If we got even 10 percent to give $50, we would be a major force. Or when something comes up, send a letter, meet with a legislator or send an E-mail. I convince them that advocacy is part of business. You can be put out of business or have a lot of costs otherwise.

Q: What would you like to see happen?

A: We'd still like to see the SBA strengthened. The SBA has been cut in the last four to five years more than any other agency. The SBA does not seem to be as strong as a number of years ago. I want to be optimistic, but sometimes it gets difficult.

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