Hector V. Barreto may not be the first Small Business Administration chief from California, but he’s probably the one best known in the San Fernando Valley. Up from the trenches himself as the owner and president of Glendale-based Barreto Insurance and Financial Services, Barreto has rubbed shoulders with many of the area’s local entrepreneurs and business leaders in his roles with various chambers and political groups and as founder of the Latin Business Association. He also happened to be co-chairman of now-President Bush’s election campaign in California. After being confirmed by the U.S. Senate late last month, Barreto says he will be doing many of the same things he did as a small business activist locally, albeit on a larger scale. But Barreto also concedes he is not merely trading in the freeway for the Beltway. The SBA is charged with advocacy, policy and programs for 25 million small businesses nationwide, focusing on everything from taxation to health care. He will likely be working with a smaller budget than the SBA has had in the past President Bush has proposed a cut in the agency’s budget, down from $857.6 million in fiscal 2001 to an as-yet-undetermined figure likely to fall around $773.5 million when it is approved in coming weeks. And Barreto will likely have to address criticism that the agency has not served all the nation’s small businesses equally. Barreto, who has sold his $3-million business and begun house-hunting in Washington, D.C, spoke to Business Journal senior reporter Shelly Garcia about the challenges that lie ahead. Question: Does the tremendous growth in minority businesses in recent years mean that, as head of the SBA, you’ll need to approach the job differently than your predecessors? Answer: I don’t know that it makes me approach business in a different way. Small business issues cut across all communities. Small business owners are interested in increasing revenues, creating jobs; those goals are pretty universal. The fact that I’ve been a small business owner, I know what it’s like to struggle to meet payroll, to not have markets available and work very hard to penetrate and develop new networks, to continually improve your skill set, and I know about the struggles to identify talent. Those are the issues small business people deal with every single day. Q: How do you think you can use your personal experience in your new role? A: The SBA is not a place that small business is going to come to to solve all its challenges. But it is a place where business can find an advocate, where we can advocate on issues that are important to small business owners. The questions that I’m getting are in regard to taxation and regulation and health care. Those are areas where the SBA can work on solutions and advocate for their interests. Q: Do you think what you’ve seen here in California reflects the nation at large, or is there something about the business community in this area that is distinctive? A: A lot of the trends we see in California in terms of growth and size and businesses being created, I think those are forerunners. A lot of the innovation and trends we see do have their genesis in California. When I first moved to California, the figure was 80,000 Hispanic businesses. Fourteen years later, it’s 450,000 Hispanic-owned businesses. There’s a lot of intertwining elements to that, not only the growth but the industries. We have high tech, computer companies, construction, services. You name it, we have it. I think you may see more of a diversity in terms of the business segment and growth rates. I think we’ll see those things replicated throughout the country. Q: Are there certain sectors where you see particular opportunities for small business? A: One of the areas I think is of interest to small business is this whole area of international trade. Ninety-seven percent of all international trade is done by small businesses, yet they only represent 31 percent of the value of that trade. So I think there’s an opportunity, especially in California. We have an international trade office. The president is now seeking trade promotional authority to negotiate trade agreements south of Mexico, so there’s opportunities there, and we want to be helpful to small businesses interested in pursuing those opportunities. Q: How much of a challenge do the proposed budget cuts present? A: We understand that the whole budget process is a very important process. Our constituency groups and small businesses should have a voice. I’m very confident we’re going to have the resources we need to do the job we’re charged to do. Q: The SBA has been criticized for addressing only a small percentage of the small businesses out there. Do you see that as an issue of inclusiveness or a matter of relevance? Has the agency kept up with the changes in the business community? A: I think it’s important for the SBA to continually be changing to reflect the business community. Not every business is going to access a program of the SBA. They may not be ready to get a loan or compete for a large government contract, but the SBA can still be a powerful advocate for them on issues that are important. I think we also need to be creative and think outside the box and use technology to affect small business. Q: How can technology be better utilized to assist the effort? A: One of the areas is the great amount of information we’re communicating through the Internet. A lot of businesses may not have the opportunity to go into a local SBA office, but they can log onto the Web site. This is just one example of a way people can retrieve information, download forms and a whole host of information. We also can use technology internally to make sure we’re getting more output from our programs. We want to make sure we’re modernizing the agency and keeping pace with the changes occurring in the business community. Q: To what extent do you think you’ll be able to maintain the hands-on approach you’ve had with the L.A. business community in your new capacity? A: I think one of the things I need to do is make sure I stay very connected to our business community. We’re planning on doing a lot of traveling, getting out and seeing the businesses, meeting with business groups. We don’t plan on being removed and detached from the business community. We have a lot of seasoned veterans. We’ll be bringing in some new folks as well. Q: Is there anyone we might be familiar with here in California who you plan to bring to Washington? A: You’re going to have to stay tuned.
