Lina Mills remembers how she came to this country from Colombia at the age of 16, without ever working a day in her life.
As soon as he arrived, he found work in restaurants. “I had to support myself,” Mills recently told CalMatters. “I basically ran away from home.”
She knew a little English, learned more and became a catering manager. Now, 36 years later, she owns two businesses in San Francisco.
She employed a dozen workers at Creative Ideas Catering and Creative Ideas Cafe, but “had to send everyone home” during the COVID lockdowns and subsequent slowdown. Since then, she has managed to rehire some – now she is back to 10 workers and hopes to hire more. “I don’t just want to offer jobs to people who used to work for me – I’m trying to create more jobs.”
Mills relied on programs that help small business owners with financing, marketing, accounting and social media skills, which allowed him to participate in food delivery pop-ups during the height of the pandemic. Acknowledging the free help she received from a Small Business Development Center and the Renaissance Entrepreneurship Center, she said, “I have no idea what I would do without them.”
But that help for small businesses is now in jeopardy across California. The Renaissance center, which receives some state funds through the Small Business Technical Assistance Program, could see a drop in funding due to the state’s huge budget deficit. Since 2018, the program has supported hubs that help under-resourced small businesses in low-income, rural and disaster-affected communities, and those owned by women, people of color and veterans. Now, Governor Gavin Newsom proposes reducing the program’s budget by 56%, or $13 million.
Mills recently testified urging state lawmakers not to cut funding for the program. Small business leaders and advocates traveled to Capitol Hill last week and, among other things, lobbied against the cuts. Last weekend, state lawmakers released their budget proposal, which rejects the governor’s cuts to the program and restores its total annual funding of $23 million.
The Legislature approved a temporary budget on Thursday. The governor and lawmakers are expected to debate their budget priorities by the end of the month.
Alex Stack, a spokesperson for the governor, told CalMatters that budget negotiations are ongoing and noted, “Governor Newsom has invested billions of dollars in small business grants, tax benefits and other incentives over the past few years.”
When Newsom presented his revised budget proposal in early May, the governor said “these are programs that I have been advancing for a long time, many of them. None of this is work you enjoy doing, but you have to do it. We have to balance the budget.”
The staff of Rep. Jesse Gabriel, the Encino Democrat who chairs that chamber’s budget committee, did not respond to questions about this specific program. The California Office of the Small Business Advocate, which runs it, said it had no 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 base,” said Catalina Martinez, chief executive of the CAMEO Network, a small business advocacy group.
More than 90% of California businesses employ fewer than 10 employees, and 7% of the state’s businesses have 20 to 100 employees, according to the Public Policy Institute of California.
“Capital alone is not enough,” Martinez said, adding that small business owners need “clear business plans and a clear idea of their value proposition – things that will allow them to succeed and grow.” Small business development centers and other organizations can help owners with this, which Martinez said is important for first-generation entrepreneurs and immigrants “who may not have the networks and knowledge” they need.
Ernesto Delgado is among the business owners praising the state’s technical assistance program and other programs for small businesses.
“I was able to speak directly to accountants, legal and HR,” said Delgado. “I didn’t have to pay for them. I didn’t have the money to buy them.” These professionals helped him see the importance of creating an “evolving business plan,” he said.
He started with one restaurant and now owns six in the Sacramento area, which during peak times employ about 150 workers, he said. Delgado said taking a Small Business Administration class for emerging leaders set him on the path to management and entrepreneurship classes, and then culinary school.
“I wouldn’t be where I am today without some of those programs and connections through my relationship building,” said Delgado, whose restaurants include Mayahuel, his first, and Octopus Peru, one of his newest. “I don’t think I would have survived COVID.”
Further down the state is a different example of the impact of this technical assistance. San Diego restaurant owner Rodnia Attiq is counting on help from APEX Accelerators, a small business accelerator focused on government contracts, to land a big client: the U.S. Coast Guard, which is looking for a small business to serve food seven days a week at its San Diego station.
For El Borrego, which specializes in lamb tacos and a family business with nine people on the payroll, applying for a government contract was no joke, Attiq said.
“You have no idea how difficult it was,” she said, adding that even with help from APEX, which receives some funding from the state technical assistance program, completing the 140-page proposal took “10 days, non-stop, until at 11pm.” or midnight.”
But she felt all the hard work was necessary. “Everything is changing in the restaurant business,” she said. “It’s not easy. You have to look for all the ways to stay in business.”
Now, Attiq is waiting to find out if he won the contract. She is optimistic: “I already have my itinerary mapped out and what time I will wake up.”
This story was originally published by Levi Sumagaysay with CalMatters.
