Lina Mills recalls how she came to this country from Colombia at the age of 16, having never worked in her life.
After arriving, she found work in a restaurant. “I had to fend for myself,” Mills told CalMatters recently. “I basically ran away from home.”
She knew some English and studied further, eventually rising to catering manager, and now, 36 years later, she runs two businesses in San Francisco.
She employed 12 people at Creative Ideas Catering and Creative Ideas Café, but “I had to send everyone home” during the COVID-19 lockdown and subsequent economic downturn. She has since been able to rehire some people and is now back to 10 employees and hoping to hire more. “I want to create more jobs, as well as provide jobs for the people who used to work for me.”
Mills has relied on programs that teach small business owners financial, marketing, accounting and social media skills, which allowed her to participate in takeaway pop-up stores during the peak of the pandemic. “I don't know what I would do without them,” she said, thanking the Small Business Development Center and the Renaissance Entrepreneurship Center for the free assistance she received.
But that support for small businesses is now in jeopardy across California. Renaissance centers, which receive some of their state funding through the Small Business Technical Assistance Program, could see funding cuts due to the state's massive budget deficit. Since 2018, the program has supported centers that help under-resourced small businesses in poor, rural and disaster-affected areas, as well as small businesses owned by women, people of color and veterans. Now, Gov. Gavin Newsom has proposed cutting the program's budget by 56%, or $13 million.
Mills recently testified to state lawmakers urging them not to cut the program's budget. Small business leaders and advocates visited the State Capitol last week to lobby against the cuts. Last weekend, state lawmakers released their budget proposal, rejecting the Governor's proposed cuts to the program and restoring its full $23 million annual funding.
The state Legislature passed a stopgap budget on Thursday, leaving the governor and lawmakers likely to battle over budget priorities until the end of the month.
Governor spokesman Alex Stack told CalMatters that budget negotiations are ongoing, adding that “Governor Newsom has invested billions of dollars in small business grants, tax breaks and other incentives over the past few years.”
“Many of these are programs I've championed for many years,” Newsom said when announcing his revised budget in early May. “None of these are fun jobs, but they have to be done. We have to balance the budget.”
Staff for Rep. Jesse Gabriel, an Encino Democrat who chairs the House Budget Committee, did not respond to questions about this specific program, and the California Small Business Advocate, which administers the program, said it could not comment.
If the program's funding is cut by more than half, “it could affect 75,000 small businesses a year that contribute to the state's tax revenue,” said Catalina Martinez, CEO of the CAMEO Network, a small business advocacy group.
According to the Public Policy Institute of California, more than 90 percent of California businesses employ fewer than 10 employees, and 7 percent of the state's businesses employ between 20 and 100 employees.
“Capital alone is not enough,” Martinez said, adding that small business owners need “a clear business plan and a clear idea of their value proposition — something that will enable them to succeed and grow.” Small Business Development Centers and other organizations can help owners, but Martinez said this is important for first-generation entrepreneurs and immigrants “who may not have the networks or expertise they need.”
Ernesto Delgado is among the entrepreneurs who praised the state's technical assistance program and other programs for small businesses.
“I had direct access to accountants, legal professionals, and human resources,” Delgado says. “I didn't have to pay them. I couldn't afford them.” These experts helped him realize the importance of creating an “evolving business plan,” Delgado says.
Delgado said he started with one restaurant and now owns six in the Sacramento area, employing about 150 people at peak times. Delgado said attending a Small Business Administration course for emerging leaders led him on the path to management and entrepreneurship classes and then culinary school.
“Without the connections I've made through these programs and the relationships I've built, I wouldn't be where I am today,” said Delgado, who runs his first restaurant, Mayawell, and his latest, Octopus Peru. “I don't think I would have made it through COVID.”
Further south in the state, there's another example of the impact of that technical assistance: San Diego restaurateur Rodnia Atiku is relying on help she received from APEX Accelerators, a small business accelerator that focuses on government contracting, to land a major client: the U.S. Coast Guard, which is looking for small businesses to provide meals seven days a week at its San Diego base.
For El Borrego, a family-run business that specializes in lamb tacos and employs nine people, applying for a government contract was no joke, Atiku said.
“I can't imagine how hard it was,” she said, adding that even with help from APEX, which receives funding from the state's technical assistance program, it took “10 days, nonstop, working until 11 p.m. or late at night” to complete the 140-page proposal.
But she felt all the efforts were necessary. “Every aspect of the restaurant industry is changing,” she said. “It's not easy. We have to find every way we can to stay in business.”
Now, Atiq is waiting to hear if she's been awarded the contract. She's optimistic: “I've already planned my route and what time I'm going to get up.”
This story was originally published by Levi Sumagaysay of CalMatters.
