Season 3, Episode 7: Karen Kerrigan
Small Business, Big Impact: A Talk with Karen Kerrigan
In this episode of Jack Rants with Modern Bankers, host Jack Hubbard sits down with Karen Kerrigan, President and CEO of the Small Business & Entrepreneurship Council (SBE Council), one of the leading voices advocating for small business owners in Washington, D.C.
Karen shares her 30-year journey fighting for entrepreneurs and shaping policies that impact Main Street America. From AI adoption and global market challenges to tariffs, startup trends, and succession planning, she dives into the real issues affecting today’s small business landscape.
Discover how the SBE Council helps business owners stay informed, influence legislation, and thrive amid constant change. Karen also discusses the rise of agentic commerce, the power of AI for small business growth, and why the future has never been brighter for entrepreneurs who are ready to adapt.
View Transcript
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Jack Hubbard: So my friend Sandy Hansen called me after the Barlow conference. Sandy's a senior executive with Barlow Research, and she said, oh, I know you have a podcast, and you have to get Karen Kerrigan on. I said, well, I'm sorry, I've never heard of Karen. And she said, well, Karen…
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Jack Hubbard: is the, Executive Director, President of the Small Business Entrepreneurship Council. I said, oh, okay, that's… I'm not familiar. She said, well, you gotta be familiar, and now I am, and I'm absolutely thrilled to have you on the show, Karen. Thanks so much for taking your time today.
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Karen Kerrigan: Well, thank you, Jack. It just makes me… it gives me a little bit of our motivation to get out there and get more people to know about us and what we're doing. It's… I know there's… there's a lot going on in Washington a lot of small business owners really don't know about, or maybe don't want to know about.
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Karen Kerrigan: But I really do appreciate you having me on today. It's going to be a fabulous conversation.
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Jack Hubbard: I think so, too. Well, you start your… you started the business, it is a business, it's a not-for-profit, but it's a business. 1994, you got 100,000 members. Talk a little bit about what the Small Business Entrepreneurship Council does, who you are.
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Karen Kerrigan: Yeah, you bet. So, we are an advocacy organization dedicated to promoting entrepreneurship and protecting for small businesses, and as you mentioned, you know, we've been at this for 30 years.
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Karen Kerrigan: And so, we have focused and worked on a range of policy initiatives and public and private sector initiatives that really work to strengthen the ecosystem for startup activity and small business growth.
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Karen Kerrigan: So, you know, our work largely is at the federal level, in terms of federal policy. We certainly have worked at the state level, but also quite heavily at the global level, too, in terms of global policies and how that impacts small businesses, and
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Karen Kerrigan: I've had the opportunity to go on lots of missions with the State Department to do what I do here overseas, you know, working with local business organizations and building their advocacy and their capacity. So, we are a voice for small business, and so much has changed over 30 years, as you know, Jack.
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Karen Kerrigan: But, you know, it's really interesting, the more things,
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Karen Kerrigan: change, you know, the more they stay the same. So, but it's been a good ride.
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Jack Hubbard: It has, and, and…
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Jack Hubbard: One of the things… I want to talk a lot about what you do, and a lot about small business, but you must spend a lot of your time in Washington.
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Jack Hubbard: Those of us that are outside the Beltway, we see the news, and we hear YouTube, and we read stuff, and who knows what's true anymore. What's it like? What's it like in Washington? And when you do go to the Hill, which I believe is often, what are you talking about, and who are you talking to?
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Karen Kerrigan: Well…
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Karen Kerrigan: Yeah, it can seem pretty ugly to the outsider looking in, you know, in terms of what's going on.
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Karen Kerrigan: you know, in Washington, and I think you do have to be, you know, cut, you know, have a certain, like, DNA, or be cut from something, a different cloth to do the type of work we do. But I have to tell you, I love it. I love what we… I do.
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Karen Kerrigan: I love politics and policy, and I love representing small businesses. So, that has really kept me at this, and passionate for all these years. But you're right, I mean, I go to the Hill on a regular basis, meeting with members of Congress, meeting with the leadership.
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Karen Kerrigan: you know, testifying before, you know, Congress, congressional committees, you know, visit with the White House, visit with the various agencies.
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Karen Kerrigan: Really just working on the broad range of issues that impact small businesses. So, it could be tax, regulatory, healthcare, trade issues now. I mean, tariffs is in the news quite a bit.
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Karen Kerrigan: Ai and technology and regulation. That's another big, you know, thing, issue that's floating around in terms of, do we regulate this? Both at the federal level, it's moving in the states.
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Karen Kerrigan: And represent the views of small businesses. So, we may be commenting, or we may be, giving feedback on a certain legislative or regulatory proposal, saying, hey, this is great, this is going to be an incentivized.
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Karen Kerrigan: This is going to lower barriers, it's going to lower costs, it's going to create a more vibrant economy where there's opportunities for entrepreneurs.
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Karen Kerrigan: Or we may say, hey, this is not going to work. It's going to impose more costs, burdens, create new barriers, and have… or have unintended downstream impacts, on the entrepreneurship and small business ecosystem. So.
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Karen Kerrigan: Our engagements are one-on-one meetings, they could be roundtables with members of Congress and the leadership in the Capitol. You know, I've been involved with those. Meeting with, you know, congressional, leaders, committee, chairmen, excuse me.
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Karen Kerrigan: Meet with a lot of staff, lots and lots of staff.
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Karen Kerrigan: And, really just, you know, whatever the pressing, the burning issues are, that they're…
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Karen Kerrigan: doing up on Capitol Hill, working on, you know, we're there, you know, really giving, you know, the small business point of view, based on the feedback from our members, based on all of our surveying and our work over the years.
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Jack Hubbard: Well, you talk about feedback, and you discussed, you brought up tariffs, and I absolutely want to talk about this with you.
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Jack Hubbard: We hear in the news that it's horrible, and it's not horrible. It depends on what cable channel you turn on, I suppose. But what are you hearing from small businesses, Karen, about the tariffs and what effect it's having on them?
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Karen Kerrigan: Well, certainly from a… from a general and broad perspective, you know, when we've done… when we came back with our…
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Karen Kerrigan: survey in July, and we have another one in the field right now. You know, 73% of small business owners expressed concern about the direction of tariff policy, right? They just did not know where it was going to land. A lot of uncertainty about what that actually meant for their costs.
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Karen Kerrigan: Where's this gonna go?
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Karen Kerrigan: About 9% said it was actually having a significant impact on their firm, meaning that, yeah, this is… their costs were going up, they were actually having some problems in terms of competitive issues, cost issues.
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Karen Kerrigan: you know, like, I think 40% said slightly negative impact, and then you had 35% that said no impact. So it really varies, you know, Jack, depending on the type of industry you're in. Obviously, retail
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Karen Kerrigan: any of the inputs, you know, business inputs that are being tariffed, you know, there are exclusions on 2,000 tariffs, you know, so there's a lot of exclusions on things that are not being tariffed.
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Karen Kerrigan: But… but I do have to say, on the broader business community, and in terms of their outlook.
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Karen Kerrigan: and their certainty and their confidence, I mean, it does have a little bit of a depressive effect. It's like, where is this going to land? Because I think tariff policy, it's been chaotic. I mean, we just had, you know, on a regular basis, you know, there's a new, something that's being tariffed, you know, coming out of the White House.
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Karen Kerrigan: And so… so I think that's the uncertainty that it's causing for the broader business community.
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Karen Kerrigan: But… but… and… but you have to also weigh that against other policies, Jack, because, you know, the Congress just sealed, you know, a good tax package that made permanent a lot of the, you know, the tax…
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Karen Kerrigan: provisions to 20% small business deductions, taxes didn't go up, lower individual rates, a restored R&D expensing, 100% bonus depreciation.
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Karen Kerrigan: You see regulatory policy moving in a good direction. So, tariffs are just one piece of the broader policy.
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Karen Kerrigan: But it is causing some uncertainty, and that always undermines, you know, growth, bold investment, hiring decisions, and then particularly for some that are most affected in certain industries.
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Jack Hubbard: Well, you brought something up that I just wasn't aware of. I knew there were exclusions, but you said 2,000.
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Karen Kerrigan: Yes.
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Jack Hubbard: So, let me ask you this, let me ask it this way. So, I'm a small business, and we're a member of your council.
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Jack Hubbard: I… I have a certain business, and I'd love to know if there is an exclusion, or how that all works. How do you communicate that to your members so that they stay as ahead as they can on things like tariffs and legislation?
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Karen Kerrigan: I know what… well, when it pops, when the exclusion list came out, I mean, immediately we, you know, distributed that and said, here, go at it, use the search engine, find, you know, your inputs, and see. So, whenever, you know, that information immediately comes out from the federal government, from the White House, Commerce Department, whoever it might be.
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Karen Kerrigan: or the new rules around guidance for the R&D
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Karen Kerrigan: the new R&D tax credit that's been restored, that they've allowed small businesses to make retroactive deductions, which is really good.
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Karen Kerrigan: We immediately provide, you know, that information to our members. We have a weekly Small Business Insider newsletter that goes out that will include all that important information in there. So, so that's how we, you know, as soon as it comes out, we
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Karen Kerrigan: provide this, you know, to our membership, you know, through communications channels. If they're emailing us about stuff, we get back to them as soon as we can.
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Karen Kerrigan: But, again, when something does pop.
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Karen Kerrigan: We get it right to them, or…
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Karen Kerrigan: Jack, I think more importantly, if we sort of get intelligence or know things about an emerging issue, or potentially an emerging issue.
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Karen Kerrigan: you know, we will also inform them about that as well. So, it's a lot of communication on our end that's going out, and we get it right from the source. You know, whatever the, you know, the platform or the department might be on that particular issue, we'll get that out there.
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Jack Hubbard: Yeah, and here's another issue that everybody is facing, and…
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Jack Hubbard: Sure, it's going to be a continuing issue, but it's here now, and that's, you mentioned it, AI and technology. What are you seeing out there, Karen, as far as small businesses integrating AI and technology into their business to make them more effective and efficient?
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Karen Kerrigan: It's been really positive, Jack. I mean, an incredible story, a good news story.
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Karen Kerrigan: And I really do think, you know, so we've been at this for 30 years. You know, I'm pre-internet with this organization, right? So we heard all the doom and gloom when the internet came around, and how it was going to destroy small businesses, and we're like, oh, no, no, no, no, wait, let this develop, see what happens. We saw it as a big positive, and that was the case.
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Karen Kerrigan: Then, you know, there was the app economy, and then there's, you know, social commerce. but it's been really positive. And, you know, when the government,
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Karen Kerrigan: when there was that big move about 2 years ago to say, hey, we gotta stop this, some of the big technology guys out there were saying, oh, this is gonna be really bad. We're like, whoa, whoa, whoa, whoa, let's look at the facts, you know? So, that is where our surveys come in handy. We did the first big survey on small business and AI use.
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Karen Kerrigan: And, it was extraordinary, you know, how quickly the technology was being embraced by small businesses.
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Karen Kerrigan: And, we think because of a lot of reasons. One, inflationary pressures during the Biden years.
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Karen Kerrigan: You know, people couldn't… they don't… didn't have access to the skilled employees they need, and AI is an amazing solution on all those fronts, right? Cutting costs, doing things more efficiently, finding, you know, finding new markets.
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Karen Kerrigan: So, it's been a really great, story. We… and with that one survey that we did two years ago.
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Karen Kerrigan: We estimated that small businesses were saving, over $280 billion a year in time and money using AI tools. That was back then.
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Karen Kerrigan: Now we continue to see rapid adoption, using it more and more, and and… and really just encouraging our members who are not, you know, fully embraced that you have to get on board, you know what I mean? You have to use these tools.
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Karen Kerrigan: There are going to be hardships coming, and the technology is going to continue to change. There's going to be AI built upon AI. Let me give you a good example of this. So, ChatGPT just announced yesterday that
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Karen Kerrigan: Agentic commerce, right? We had regular commerce, e-commerce, social commerce, now we're going to move into Agentic commerce. And what they announced is that they're, they're small merchants on Etsy and next Shopify.
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Karen Kerrigan: will have this really great tool where when people are using, you know, the ChatGPT and looking for a product or service, they'll be able… it'll be seamless in terms of an instant checkout, if they want to do that through Etsy, Shopify, and then they're going to take applications from outside merchants. This is how quickly
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Karen Kerrigan: Right? You know, this is moving. Now there are those who are poo-pooing agentic Commerce, and I think… I think, I think it's… I think it's here. I really think it's gonna happen. You know, given my experience using ChatGPT and Claude, what I use it for.
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Karen Kerrigan: A great business I heard about the other day, this woman is called an AI-empowered mom, helping moms, you know, use, AI, you know, to make their, you know, their… what they do at home, you know, more easy and more efficient.
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Karen Kerrigan: In fact, I saw another interesting chat GP… or it was a… it was ChatGPT Claude. It was basically, you know, using that type of, AI tool.
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Karen Kerrigan: that within 6 months, it was, like, I think just over 10% of women were using, ChatGPT, you know, or Claude, but now it's over 50%.
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Karen Kerrigan: So, it just shows the rapid adoption as well. So, we always try to tell the good news story, and we say, lookit, if you want to regulate, are there existing rules on the book? You know, are there… are there things that we can do? We want to balance regulation
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Karen Kerrigan: do it in a balanced way, where if regulation is needed where it's currently not, or there's actual consumer harm, yes, then regulate. But, so we told that story, and I think it did help people back off quite a bit. And just one other thing on that, too.
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Karen Kerrigan: Jack, in our surveys of small businesses using AI, when we ask them, their employees love it, okay? I mean, 81% positive response, 2% negative, and 17%, you know, great, you know, I'm at work, give me a tool to use.
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Karen Kerrigan: But what they saw the greatest value for their employees, it allowed their employees to focus on higher value work, right? So their employees were happier, they're doing more interesting things, more fulfilling things, and they're not replacing
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Karen Kerrigan: employees, or just now are able to use them for higher value work, but also, as I said, businesses couldn't find an employee… a lot of people can't find employees, so they're using AI tools, you know, to fill that gap.
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Karen Kerrigan: Yeah.
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Jack Hubbard: I want to ask you about what you're seeing around banks and the commentary you're getting from your members around the
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Jack Hubbard: the banking relationships that these small businesses have in a second. But the…
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Jack Hubbard: You could look at any number. My friend Mary Beth Sullivan, who is in Washington, D.C, at a great consulting company.
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Jack Hubbard: I just got an email from her and says, 33 million small businesses from $100,000 in revenue, solopreneurs, which I saw on your website you do a lot of work with, which is great, all the way up to about $10 million in revenue. Now, you could look at any number, but here's my question.
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Jack Hubbard: There are more small businesses, many more today than there were certainly when I was in banking or when I got into consulting. It's growing. What are you seeing in terms of small business startups?
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Jack Hubbard: Are you seeing a continuing growth trend in people starting up their own business?
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Karen Kerrigan: Yes, thank goodness, because we went through a period of time where there was the Great Recession and its aftermath, right? More businesses were closing than starting. Then it started to come back, more businesses, you know, starting than closing.
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Karen Kerrigan: But still very, like, humdrum, you know what I mean? Not the type of growth that you want to see in a vibrant economy.
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Karen Kerrigan: But interestingly enough, and I think this shocked everyone, you know, during, in 2020, I mean, the big COVID year, and when there was this massive digitization, right? I mean, there was acceleration of digitization. All of a sudden, you saw this rapid rise in business applications.
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Karen Kerrigan: So, and that has not stopped, Jack. So, now there are more than… for the past 4 years, more than 5 million people
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Karen Kerrigan: filing business applications, that is, they're filing to get their EIN number, right? And now, not all of them are going to launch into full-fledged businesses, okay? Because, like, oh, I'm going to take the first step.
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Karen Kerrigan: You know, and that's why we said, hey, we need to really encourage this, right? We want people taking that next step.
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Karen Kerrigan: But that has translated, actually, into more businesses. So, there is, yeah, there's greater interest. I think people have more opportunities because of digital tools. The barriers to entry are much lower, the costs are much lower.
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Karen Kerrigan: you know, starting a business out of your home, doing a pop-up shop, there's different audiences that you can reach. I mean, really, it's a very exciting time because of all these new tools, and, you know, and all the different types of businesses, and
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Karen Kerrigan: because consumers do like buying from small businesses, and they do like niche products, and they're… you know, you have, you know, YouTube and TikTok and, you know, all these… and Facebook, and all these ways that you could find out about these businesses, and you could target consumers.
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Karen Kerrigan: at low cost, or no cost, if you really know how to do social media in a very smart way. So, it is growing, which is really great news, and that's why we're like, hey, we gotta encourage this. We gotta…
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Karen Kerrigan: You know, we gotta make sure policy makes it easier for these people to start, you know, grow.
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Karen Kerrigan: And they can't get frustrated, you know what I mean? By… when government gets in the way, which they often do, and that happens a lot at the local level, Jack, in terms of getting a business permit, or, you know what I mean? It could take forever to do things, so…
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Karen Kerrigan: But anyway, so it is good news in terms of the interest and actually people starting businesses.
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Jack Hubbard: And it's a very positive story, and you know, I've started up a couple of businesses, and it's… it's incredibly fun, and it's incredibly challenging.
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Karen Kerrigan: It's my understanding that a large percentage of these businesses, however, fail in the first year.
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Jack Hubbard: So, I'd love… I'm gonna… I'm a member of your council, and I come to you and I say, well, I'm thinking about starting a small business, or I've heard about your council, and I come to you.
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Jack Hubbard: What are some pieces of advice that you could give to somebody? Because you've seen thousands and thousands of businesses start and fail. What are some pieces of advice you could give to a business as to what they need to do when they start this thing?
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Karen Kerrigan: Well, I think, I mean, the biggest… you're right, I mean, businesses fail for a number of reasons. They spend too much, they don't really know, sort of, what their market is, and
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Karen Kerrigan: And I think, you know, that is the biggest thing, is that, yeah, you're passionate and you want to go, but you've got to do research. You've got to really understand if your idea, your concept, your product is actually going to sell in the marketplace, you know what I mean? It's something that…
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Karen Kerrigan: sounds great to you, but there's a lot of things that you could do in terms of doing market research, and talking to other people, and seeing what else is out there in the marketplace. You know, look at, you know, at the competition, whether this has been done before, how you can build on it.
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Karen Kerrigan: A lot of that thoughtful research and planning, I think, is really necessary before jumping right in. And I think a lot of people do jump right in.
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Karen Kerrigan: You know, without sort of walking through, you know, all that thoughtful research. And we have so many resources and, you know, people and websites and other people who do this really well in terms of, you know.
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Karen Kerrigan: in terms of what people need, you know, developing a business plan, doing the marketing, doing your pricing, knowing your market, who's your market niche, right? And then, you know, and then every step, how to market, you know, what's available to you now? How are you going to market? How are you going to market your brand?
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Karen Kerrigan: So, it is really, you know, taking the time to think through, you know, all those, those key issues before you just go, before you spend a lot of money, and then, you know, you fall flat on your face. So, so that is… so…
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Karen Kerrigan: That would be the big thing. And also that you don't need to have a… you don't need to spend a lot of money doing these types of things, right? I mean, there's so many tools, you know, bootstrapping as opposed to spending a lot of money. You don't need a storefront.
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Karen Kerrigan: You know, you can look at partners, collaborators, there's so many ways that you can reach, you know, the public, you know, outside of
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Karen Kerrigan: you know, overhead that's going to cost you a lot, that, you know, could be the demise of your business, you know, within a year or less. So, you know, those are the, you know, those are some of the things, you know, some of the key things that we tell people. And also, I think the other is.
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Karen Kerrigan: you know, find a mentor. Find other business people who have sort of been there, done that. There are a lot of local businesses
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Karen Kerrigan: people in your community, bankers, right? I mean, there's, you know, who'd be more than happy to sit down with you and talk through this and sort of, you know, be a mentor and give you their ideas.
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Karen Kerrigan: And… and just to be supportive along the way, in terms of when you start and grow this business.
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Jack Hubbard: Yeah, and you talked about money, and I think… I would believe one of the top reasons that businesses fail is lack of capital, and I think
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Jack Hubbard: small businesses go into this thinking, well, if I have a couple of months worth of money to fall back on, and it's just not that easy, it's gotta be longer than that. There are… there's a great bank out in Arizona. It's a fairly new bank, small community bank. It's called Integro Bank.
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Jack Hubbard: And Thomas and Sarah is the president, and they do so much for small business, because that's their niche. I've interviewed a woman named Ellaria Rollins, who is the CEO of a bank called Fortuna Bank, and their focus is women-owned businesses.
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Jack Hubbard: And this all sounds really good. It is, it is good. And their websites are fabulous, etc.
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Jack Hubbard: But what are you really seeing out there in terms of, I need a financial partner? How are banks stepping up with small businesses?
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Jack Hubbard: new small businesses, existing small businesses. What are you seeing in terms of banks helping small businesses go to that next level?
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Karen Kerrigan: Well, in terms of new small businesses, you know, Jack, with banks, I mean, you really gotta have traction. You've got to be an existing, you know, business. You're not going to get, for the most part, startup capital, you know, from, you know, from a bank. And… and so…
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Karen Kerrigan: you know, that's important to know that. And you see that 80%
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Karen Kerrigan: you know, the businesses do start, you know, with their… their own capital, you know, what do they call it, family, friends, and fools, right? They're sort of circle of… circle of friends, or circle of supporters, financial supporters that they turn to for that money. Credit cards.
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Karen Kerrigan: you know, you know, lines of equity on their home. I mean, there's just a lot of different ways that people
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Karen Kerrigan: you know, use money to start. So starting is a different story, and obviously, VC money, that's not even… you know, you've got to have sold 20… 10 businesses, and they all, you know, sold in the billions before you can go to…
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Karen Kerrigan: you know, someone in the venture capital community say, hey, give me a million, two million, 10 million bucks. So, so at the startup level, it's very different, and I think… I think, individuals who are starting businesses now understand that, that, you know, banks…
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Karen Kerrigan: that's not going to be their source, you know, of funding. That's sort of a different stage that you get to.
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Karen Kerrigan: But what I am finding is that, you know, businesses that get, you know, too…
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Karen Kerrigan: it's… it's mixed, okay? I would have to say it's mixed. It depends on the culture of the bank, it depends on whether it's, you know, a national
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Karen Kerrigan: you know, a national brand that has to have a local… I would say the banks that you're talking about, and the credit unions, and, the community banks, they've been very supportive, you know what I mean, of their local businesses.
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Karen Kerrigan: they're more in touch with them, and I think really trying to do things that sort of align
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Karen Kerrigan: With, you know, technology and seamless things, and providing them more services that will allow them to be,
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Karen Kerrigan: financial management partners, you know, in addition to just providing the cash. Because obviously, when a business succeeds, the bank succeeds, right? When the business makes great money and pays back, it's like, well, they need more money, right, to expand or, you know, open, you know, open up a new location or a new plant.
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Karen Kerrigan: So, I think,
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Karen Kerrigan: So I think at this point, I think banks that are doing that are really reaching out and being partners with business owners.
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Karen Kerrigan: are at a… in a good place right now, because there is so much technology, and there is… but that high-touch thing, I think, is really important right now. It's going to become even more important, I think, in the future, you know, given, you know, how we're just inundated with technology, and we don't have those connections.
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Karen Kerrigan: I think those type of connections, that type of mentoring support is going to become even more important for local businesses who are in local communities, you know, to benefit from local banks.
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Jack Hubbard: Yeah, no, that's really true. You said something earlier that I want to go back to, because I think here in the United States, there's, you know, we have this patriarchal
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Jack Hubbard: View of our country, but the world is just smaller than ever, and there's so many different countries and continents, and you do travel quite a lot, and you know a lot about small business and entrepreneurship and other continents.
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Jack Hubbard: What other countries are you seeing that are really flourishing around small business?
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Karen Kerrigan: Well, that's a good question. You know, there are… I would say,
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Karen Kerrigan: some of the former Eastern Bloc, you know, Soviet countries, you know, who haven't gone, you know, back to the mothership, you know, are doing quite well. You have,
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Karen Kerrigan: you know, when I think about some of my travels to
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Karen Kerrigan: You know, that's a good… it's an interesting question. I mean, I've been to the Mideast, North Africa, European Union, Kazakhstan, Nepal, you…
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Karen Kerrigan: there's no one that does it better than the U.S. I mean, I just… I just have to say that, because unfortunately, there are…
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Karen Kerrigan: So many barriers, regulatory and tax barriers, and…
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Karen Kerrigan: you know, just the red tape and the bureaucracy, is crazy in some countries, like, you know, across the European Union, you know, and in places like the UK, because I go there often, and I meet with my small business friends there.
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Karen Kerrigan: Or in other countries, there is, you know, sort of a culture of corruption that's really been hard to get rid of, and that makes it very, very difficult for people to start businesses with that corruption.
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Karen Kerrigan: But I would say, I mean, obviously, you know, Israel is amazing in, you know, in terms of its startup culture, in terms of what do… I know they're sort of…
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Karen Kerrigan: there's a lot of, you know, issues right now, you know, over in the Mideast, and, you know, geo… geopolitical issues and concerns.
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Karen Kerrigan: you know, Spain, I think is doing, you know, quite… quite well in this regard. I really have to think about other countries, you know, because it's…
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Karen Kerrigan: it's… it's like, when you talk to them, they're still like, yeah, they… we… our countries just don't get it, you know what I mean? And they still… many of them still face these regulatory barriers.
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Karen Kerrigan: Or they're becoming more free, but now they're reversing. You know, they're moving in reverse, right? And so… which is a big problem.
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Jack Hubbard: Yeah, barriers. Let me talk to you about barriers a little bit.
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Jack Hubbard: One of the things that we're seeing at our age is, okay, what do we do now?
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Jack Hubbard: What's the future look like? Some businesses that have grown have opted to merge or sell, and that's terrific. Others are generational, so the father slash mother will pass the business down to the kids.
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Jack Hubbard: What are you seeing, Karen, around succession planning? Because I gotta believe, in the next 5 years, maybe 10 years out most.
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Jack Hubbard: There's gonna be a ton of turnover in terms of ownership of businesses.
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Karen Kerrigan: you know, I still think this is a big problem. You've got two-thirds of business owners who have not either developed or communicated any type of succession plan, right?
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Karen Kerrigan: And, you know, I believe out of those who actually want to sell the business when they get there, that a very, very, very small percentage are actually able to sell that business.
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Karen Kerrigan: Right? So…
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Karen Kerrigan: So a lot more thought needs to go into this a lot earlier, you know, for many businesses. So, you know, it's interesting, what we're seeing is, you know, some creativity and some of the models developing around, well.
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Karen Kerrigan: if I… if no one wants to sell it, or if my kids don't want it, maybe the employees want to buy it. So there's those type of employee type of…
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Karen Kerrigan: you know, buyouts that are happening. But I would say we're still… this is still a big problem for businesses in terms of, you know, putting together a succession plan, or thinking what they built, wow, this is gonna go, and someone's gonna buy it, and it actually doesn't… it doesn't sell.
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Karen Kerrigan: So, but also we do see, you know, businesses, and I read an interesting article the other day, where there is more technology and AI integration, surprise, surprise, you know, around this issue, really helping them to sort of get into the business to understand what they need to do.
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Karen Kerrigan: And even, sort of, when they need to sell, as opposed to.
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Karen Kerrigan: you know, me at SBA Council, I'm not going to sell this, but it's a good example. Wait until the last minute until I retire. And then, oh, you know, there's no market for this, right?
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Karen Kerrigan: So, so I think it's still mixed. I think many businesses aren't prepared, and I think some are quite shocked, you know, when they get there, that they can't actually sell the business, which is unfortunate, right, for the business community, the employees.
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Karen Kerrigan: you know, that work there. And, and, so I think a lot… a lot has to do with the age of the business owner, whether they're modernizing the business.
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Karen Kerrigan: You know, those are things that they need to be thinking about, you know, along the way, is really just sort of making sure the business is embedded in a way with all these AI tools, technology, forward thinking, so that it is saleable, you know, when they want to sell it.
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Jack Hubbard: Yeah, and I'd like you to react to this, because it's not just financial that's really important. As I mentioned, I've started a couple of businesses.
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Jack Hubbard: I'll tell you the first thing that I look at is… and this may shock you, but maybe not because you've seen this, but it shocks bankers when I talk to them.
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Jack Hubbard: I think the number one thing, neutral of capital, that a small business owner needs is a great partner behind him or her.
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Jack Hubbard: I traveled so many weeks. I don't travel as much anymore, but I traveled so many weeks, and my wife was… has always been there to help me.
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Jack Hubbard: So I think you need somebody to understand that an entrepreneur, this is inextricably tied to their family. This is a 24-7 situation. So there's emotionality around it, there's hard work around it, there's always worry. I always say to bankers.
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Jack Hubbard: Your small business clients will likely wake up around 3.17 in the morning, and it doesn't have to do with the chili they ate last night. It has to do with worry. They worry about their clients, their colleagues.
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Jack Hubbard: Can I make payroll? What are some things that are uncontrollable? What do you tell small businesses to come to you and say, I'm worried, I'm worried about all these kinds of things. How can these businesses be successful, Karen, with all these things that are over their heads?
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Karen Kerrigan: I know. Well, you know, what is this saying that,
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Karen Kerrigan: only, like, a small percentage of things that you actually worry about… worry about come to fruition, right? And it really is just, you only can control the controllables, right? And, and… and, you know, yeah, be forward-thinking and control the controllables, but…
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Karen Kerrigan: you know, again, many things that you worry about, you know, will not come to fruition. So, that is where you're right. I mean, sort of a support group, a peer group.
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Karen Kerrigan: is really, really incredible to check your worries against, you know, reality, right? And so that is one of the things that we do recommend, you know, to business owners, is that
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Karen Kerrigan: And they've been valuable in terms of having peer groups locally, you know, of businesses, whether it's the same industry or a different industry.
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Karen Kerrigan: You know, that you can really talk to and meet with, where you all can share intelligence, share your worries, and really determine whether, you know, what you're worried about, you know, is it something really that you should be worrying about, right? Or maybe you're worrying about the wrong thing, and there is something around the corner where you should be focusing your time and attention.
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Karen Kerrigan: But I do agree with you, sort of the emotional support and having, you know, a family member there, whether it's a husband, a wife, a partner, or whoever, you know, that, you know, is there to share the ride, I think is so… and that understands, you know what I mean? And that understands this is what the business is all about.
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Karen Kerrigan: But if you don't have that, but also a plus, you can do a plus, is that I do think that peer group is so, so important that I think will get you through, you know, those periods where, you know, where you're having sleepless nights and really, really worried about the future.
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Jack Hubbard: Yeah, and I wanted to ask you about this exact topic around what you offer at the SBE Council.
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Jack Hubbard: Advocacy and policy issues, certainly. You do research, and you talked about that, you've got a newsletter. But let's say that I'm a small business owner, and I am looking to network.
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Jack Hubbard: or I am looking for resources, maybe around webinars or seminars. What does the SBE Council provide in that regard?
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Karen Kerrigan: Well, we don't try to duplicate or replicate what all the other great organizations and groups are doing, and that's why we have such great partnerships.
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Karen Kerrigan: You know, with a variety of different, educational platforms, with,
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Karen Kerrigan: you know, some of the more educational, you know, type of, either they're government entities or non-government entities, the small business experts that we have, access to, who, you know, do regular
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Karen Kerrigan: do regular output, you know, of content and trends and tips, and… so, you know.
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Karen Kerrigan: If we don't have an answer for something internally, we definitely will turn, you know, we have such a slate of resources and friends and inventory, you know, of information that we could provide business owners
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Karen Kerrigan: That will hopefully, you know, resolve their issue, or, help them with their planning, or, you know, whatever they might need, right, to navigate the next challenge. Or opportunity, I'm going to say, or opportunity, as well. And, you know, some of, you know, some of my favorite, and long-time
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Karen Kerrigan: friends and, and greats, in this space, are Barbara Weltman, she has, the, the,
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Karen Kerrigan: the Big Ideas for Small Business Platform. She does an idea of the day, she's a tax expert, personnel expert. Every day, she cranks out something, and I encourage people to get, you know, on her e-news list.
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Karen Kerrigan: My good friend Riva Lozonski runs Small Business Current. She was the former editor of Inc, and she, puts out great content on marketing and branding and trends and what's happening in the marketplace.
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Karen Kerrigan: And we do that too, but we don't, like I said, when others do great things, it goes right into our newsletter, and we push that out as well. So, yeah, we have a list of resources that we can, turn people to, you know, if they do have questions or need ideas or solutions.
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Jack Hubbard: Well, let me give everybody one example of that. Raymond Keating is your chief economist.
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Jack Hubbard: And in a recent article, he talked about the fact that, sure, in the second quarter, 3.8% GDP growth, great. First quarter, not so good.
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Jack Hubbard: But one of the things he pointed out, and it's fascinating, is there are 10 states where there was really positive GDP growth in the first and second quarters, and there are 10 states where there was actually negative.
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Karen Kerrigan: That's right.
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Jack Hubbard: So you look at, okay, I'm a small business, and truthfully, as you know, you can go anywhere today, so I'm gonna move to Vermont. Well, that sounds really good, but Vermont had a negative GDP growth.
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Jack Hubbard: Do I want to move to a state that does that? This is exactly what you all, what you all do. It's, it's absolutely fabulous stuff.
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Karen Kerrigan: Yeah, the… those regular, reports that come out from, like, BLS or Commerce Department, and we… we basically dig into them. There's always reports… the Fed, you know, their interest rates, I mean, their, you know, their, you know, their regular reports that they do, we'll… we'll dig into those.
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Karen Kerrigan: jobs numbers, there's numbers every week, right? So, yeah, what my chief economist will do is dig into those, analyze those, and say, well, say, well, why is this important to small business, and why is this important to policymakers, too, that they understand this, and put together those pieces? So.
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Karen Kerrigan: Yeah, so that's information that is very, very useful, you know, to folks who want to expand, or look for new markets, or…
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Karen Kerrigan: remove, you know, to another state, I guess? You know, that's more friendly and growing. And, it's what we love doing, right, is providing this type of information, but there's a reason why we provide it. It's not just to… it's not like TMI, too much information.
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Karen Kerrigan: There is a purpose behind it.
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Jack Hubbard: Well, you're into this every day, and you know, you don't have a crystal ball, and you're not Nostradamus, but people are often asking.
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Jack Hubbard: All right, I'm thinking about starting a business in 2026. What do you see in the future? What's 26… 2026 gonna bring, Karen, as far as small businesses go?
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Karen Kerrigan: You know, I think it's gonna be… I think it's gonna… there are a lot of opportunities. There are so many opportunities.
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Karen Kerrigan: you know, Jack, with what's…
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Karen Kerrigan: First of all, I think the policy environment is pretty decent, right? At the federal level. And also, you see a lot of states that are zeroing out, you know, all their income… I mean, it's amazing what's happening, you know, at the state level, too, in terms of to be competitive, to attract the businesses and investments, you know, to move to those states.
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Karen Kerrigan: So I think from a policy perspective, you know, the environment is going to be pretty good. I think this tariff issue will eventually land.
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Karen Kerrigan: But the other side of that is there's this big onshoring that's going on, Jack, right? You've got pharmaceutical onshoring, you've got everyone that's building new businesses here, you've got new plants, you've got… there's… so there's a lot going on.
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Karen Kerrigan: in the United States of America in order to bring that business and to bring these businesses and, you know, all the elements of its production back here to the United States. I think that is going to be a really big opportunity. I think there are a lot of opportunities for disruption as well, Jack.
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Karen Kerrigan: I mean, the whole educational area, the healthcare area. There continues to be stodgy ways of doing things where there is, room for a lot of disruption, for a lot of creativity, you know, and for people to bring their ideas, you know, to these sectors.
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Karen Kerrigan: Ai and quantum computing, I mean, all this is going to create new industries, you know, and new markets, and so that's really exciting for small businesses. So, I guess, you know, I think the opportunities there. The costs to start a business are extremely low, right? The barriers to entry.
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Karen Kerrigan: And you have all these great new tools now, and they just continue to get better and more innovative. So, you know.
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Karen Kerrigan: from what I can see that I can control, I can't control geopolitical events, you know, and all this other stuff, I still think it's going to be, you know, a great time to start a business, to grow a business, and…
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Karen Kerrigan: if businesses can pivot through COVID-19 and inflation like they did the last four years, and Locke came out very successfully on the other side, I'm sure they can sort of navigate, you know, any of the challenges that may pop up that we don't know about yet, Jack.
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Jack Hubbard: Yeah, well, we'll replay this in 2020… at the end of 2026, and we'll see what happens, but I agree with you, Karen. So much excitement, so much opportunity.
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Jack Hubbard: I've looked through your website at the SBE Council. It's absolutely outstanding. I've looked at the fees that you charge when people join. It's minimal, and it's a great investment. How can people get ahold of you and learn more about the SBE Council?
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Karen Kerrigan: What… the first step that I would encourage people to do is to sign up for our Small Business Insider Newsletter. It's right on our front page, there's a big image there, and they can sign up for that for free.
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Karen Kerrigan: Alright, because we want, you know, we want, everyone to have access to all the great work and research, tips and trends, and
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Karen Kerrigan: you know, all of our activity up on Capitol Hill or around the world, we report on that to stay accountable to our members and to small businesses about, you know, what we are doing, you know, to support their efforts. It's also very important to know what policy
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Karen Kerrigan: does to your business. A lot of people still don't understand sometimes about some of the tax and the regulatory stuff. You know, there's been a patent tax, you know, that has been…
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Karen Kerrigan: you know, sort of floated, and we're beating that back, and why? Because…
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Karen Kerrigan: you know, small businesses produce 16 times more patents, you know, than… than all the businesses. So, understanding policy is important, I think, to your business as well. Small Business Insider ENews, sbecouncil.org.
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Karen Kerrigan: start there, and then, you know, from there, once you see the value, you know, it'd be great if you could join us, and be a voice, and come to Washington, and testify on the Hill, and talk to your member of Congress. That's where we get our power and influences, is through getting our members directly involved in our work.
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Jack Hubbard: That's terrific. Well, when Barlow Research says I should have someone on as a guest, I listen, and they were exactly right. Karen Kerrigan, thanks so much for all you do for small business, and thanks for joining us today.
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Karen Kerrigan: Thank you, Jack.
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Jack Hubbard: Thank you, Karen. That was wonderful.
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Karen Kerrigan: We didn't even talk about any of the issues, which… we didn't really dig deep into any of that stuff.
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Jack Hubbard: Do it again. We gotta get… we gotta have you back again, but this was absolutely fantastic. I mean, the time went by like nothing.
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Karen Kerrigan: I know. Yeah, what do you say?
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Jack Hubbard: to your time. I know you've got other things to do.
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Karen Kerrigan: Oh, yeah, that is…
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Jack Hubbard: the time, so…
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Karen Kerrigan: I got an interview on TikTok, and what that…
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Jack Hubbard: I was gonna ask, and that's another… I was gonna ask about that, because there is a subterranean economy that's worth billions of dollars! It's amazing!
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Karen Kerrigan: Well, you know, when we…
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Karen Kerrigan: 26% of small businesses use TikTok, believe it or not. So, we serve… we got this, you know, result to the White House.
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Karen Kerrigan: And, the… and just the ROI on TikTok is extraordinary. So…
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Karen Kerrigan: But, you know, there might be something that replaces it right next year, but… so it was all about the U.S. ownership, and like, yeah, we gotta… I said, yeah, we… if we can keep it and control the algorithms, it'll be great, but if we don't come to some type of deal, it's really gonna hurt a lot of small businesses, because it's a very cool tool, and
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Karen Kerrigan: And it's just… I'm telling you, there are in terms of sales, you know, people selling out of things once they go on TikTok. I mean, you really find your niche audience on there, and a lot of the younger users, they love small businesses. They love these
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Karen Kerrigan: the brand, sort of what they stand for, you know, there really is sort of that connection there, you know, with that younger audience on TikTok.
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Karen Kerrigan: So…
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Jack Hubbard: I don't know that I'd watch somebody with makeup, you know, on TikTok and go buy it, but people are doing it.
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Karen Kerrigan: Well, we'll see what agentic commerce brings next, right? I mean, can you.
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Jack Hubbard: I'm glad you brought that up. That is fascinating, isn't it?
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Karen Kerrigan: It is, it's moving so, so quickly. So quickly, and that's good news, because then all the bad guys in Washington won't be able to keep up with this and squash it. Yeah, that's good.
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Jack Hubbard: That's true. Well, thank you again, Karen. I really appreciate it.
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Karen Kerrigan: Thank you.
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Jack Hubbard: The show is gonna be on, the 29th of October. We'll get you plenty of time marketing, and you can use this in any way you want, but thanks again for joining me today.
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Karen Kerrigan: Yeah, yeah, send it along, we'll help distribute it, get out the word, too. A lot of people will watch it once we send it out in our e-news.
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Jack Hubbard: I agree. Thanks, Karen.
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Karen Kerrigan: Alright, we'll talk soon.
