McMahon promotes SBA successes in trip to Alaska

  • SBA Administrator Linda McMahon reminisced on making homemade ice cream with her dad after buying some spruce tip and birch syrup from Wild Scoop Ice Cream owner Elissa Brown on Thursday, July 20, during her visit to Anchorage. McMahon visited Alaska for two days with stops in Bethel and Kwethluk on Friday to listen to business owners and promote the SBA programs that can help small businesses. (Photo/Naomi Klouda/AJOC)
  • SBA Administrator Linda McMahon chats with 49th State Brewing Co. owners David McCarthy, right, and Jason Motyka on the roof of their Downtown Anchorage restaurant on July 20. McCarthy and Motyka are the 2017 SBA Small Businesspersons of the Year for Alaska. (Photo/Naomi Klouda/AJOC)
  • May Arruiza, a production assistant at the Ulu Factory in Downtown Anchorage, assembles the handles on an ulu as Small Business Administration Administrator Linda McMahon observes on a tour with owner Danni Lynch on July 20. McMahon spent an hour learning how the small business operates as one stop on her SBA Ignite Tour in Alaska. (Photo/Naomi Klouda/AJOC)
  • SBA Administrator Linda McMahon talks with Alaska Journal of Commerce Reporter Naomi Klouda at the Ulu Factory in Anchorage on Thursday, July 20, about the challenges she’s hearing from small business owners during her nationwide SBA Ignite Tour. (Photo/Andrew Jensen/AJOC)
  • SBA Administrator Linda McMahon visited Kaladi Bros. Coffee to chat with Tim Gravel and Chief Operating Officer Michele Parkhurst on her first stop of the day in Anchorage July 20. (Photo/Courtesy/Kaladi Bros. Coffee)

Linda McMahon saw her first ulu this past week.

The head of the Small Business Administration visited the Ulu Factory in Anchorage on July 20 during her two-day trip to the state to view firsthand an American business that benefited from the SBA loan program.

“So that’s how you get the handle on it,” watching May Arruiza assemble wood to blade by hand. “And the stamp, how is that done?”

Owner Danni Lynch gave McMahon a nuts-and-bolts tour of machinery that laser burns wooden handles with town names and Alaskan scenes. She introduced her to Kory Roy, whose job is to package each bowl and ulu set.

“Kory’s been with us since college,” Lynch said, introducing McMahon to each employee at the building on Ship Creek Avenue made possible through a 2003 SBA loan. Before they had a building, Lynch’s dad and uncle assembled ulus in a one-car garage, going back to 1973.

“This is fascinating,” McMahon said, as she perused display shelves of ulus and selected several she intended to send home for her grandchildren. Tourists filtering into the business on the banks of Ship Creek and suited security guards in charge of protecting the cabinet official didn’t seem to faze one another.

McMahon’s two-day Alaska portion of her national SBA Ignite Tour focuses on “learning and listening to small businesses” as she stopped at five Anchorage businesses, then hopped a plane the next day for Bethel and Kwethluk.

She’s in the 49th state to mentor companies and startups about programs the SBA offers for government contractors, vets, women entrepreneurs and established companies that want to grow.

At the 49th State Brewing Co., McMahon had a 45-minute listening session with companies that handle federal contracts and 49th State owners David McCarthy and Jason Motyka.

The meeting with contractors was the only portion of her Anchorage visit off limits to the media to allow for businesses to feel open with their private information, said Melanie Norton, the SBA regional communications director based in Seattle.

Other shop visits were conducted while customers came and went. Groggy folks showed up for their caffeine fix at Kaladi Brothers Coffee. At the Ulu Factory, tourists arrived in clusters from the trolley.

At 49th State, the lunch crowd watched from their plates as a television reporter filmed McMahon talking with McCarthy and Moytka on the sunny rooftop of the restaurant.

McMahon ended her business tour at Heather’s Choice Meals for Adventuring and sampling spruce tip and birch syrup Wild Scoop Ice Cream.

Knowing the territory

McMahon has insights into small business because of her own trials, she sometimes tells small business owners on her Ignite Tour. At 17, in August 1966, she married Vince McMahon and soon after enrolled in East Carolina University where Vince had been studying a year. There she finished in three years with a bachelor’s degree in French and a teaching certificate.

She recalls the challenges when at one point filed she and Vince filed for bankruptcy, even briefly receiving food stamps. Though her husband had attended college aiming to become a pediatrician, at one point he took a 90-hour a week job at a quarry.

In 1979, the couple co-founded what became World Wrestling Entertainment, which has made them billionaires. Now a publicly traded company, WWE has a market capitalization of $1.5 billion.

Of all President Donald Trump’s cabinet officials, McMahon has known him the longest and enjoys reminding people he’s in the WWE Hall of Fame.

They purchased the Cape Cod Coliseum in Massachusetts where they began to hold hockey and other sport events. Linda, as co-CEO, cooked meatball sandwiches to feed the crowds and came up with plans for expanding their business.

“I tell the story often,” McMahon said on her Alaska visit. “It’s all about cash flow and cash management. There were times early on that I made a decision about $12 a month that I am spending to lease this electric typewriter. Do I continue to lease this or can I now afford to buy it?”

It would take more than a decade but the company growth was explosive, enough so that some observers considered Vince and Linda McMahon business geniuses, according to a New York Times story.

One of her hooks for success was to establish a line of action figures, “Wrestling Superstars,” which drew children to the sport. Product merchandising and event management grew the bottom line into a multimillion-dollar industry.

In giving encouragement to others, McMahon said getting a successful business is always about opportunity and taking advantage of it.

“And I think it’s also a little bit about having Lady Luck,” she said in Lynch’s office at the Ulu Factory.

By the time Trump appointed her to head the SBA, she had run for the U.S. Senate twice from Connecticut. In 2010 she won the Republican Primary but lost to Democrat Richard Blumenthal. In 2012 she lost again, to Democrat Chris Murphy who filled Sen. Joe Lieberman’s former seat.

McMahon also is co-founder and former CEO of Women’s Leadership LIVE, LLC, a company that trains women in businesses. And she’s highlighted the advances of women in education, business and entrepreneurship in a series called “Women in America” that she co-hosted with Burt Wolf, which airs on PBS stations nationwide.

Learning about Alaska

While the locations change, she hears similar stories around country. The usual small business complaints come from their challenges in tax brackets that put them up to 35 percent, which McMahon said needs to come down to 15 percent, as Trump has advocated.

Health insurance is the other one she can reliably hear a lot about. Currently under the American Affordable Care Act, employers complain insurance premiums and deductibles have gotten so costly that that policies are essentially catastrophic coverage compared to what was available before the ACA.

“Small businesses are paying more and their employees are receiving less,” she said.

But in Alaska, she comes with a different set of expectations as well due to the transportation challenges in a vast geography.

“Sens. (Lisa) Murkowski and (Dan) Sullivan educated me about Alaska prior to my confirmation hearing. After listening a while, I sat back and said ‘wow,’” McMahon said. “That is just amazing that it is so incredibly different than anything you would encounter elsewhere. It gives a whole new meaning to rural America.”

One company told her that in order to accept a bid, they needed $30,000 to purchase fuel to get from Anchorage to the Aleutians for a cleanup contract. McMahon was able to suggest an SBA loan may be available to provide the money, so the company wouldn’t have to miss out on the contract.

On her Ignite Tour, which included Portland, Anchorage, Detroit and Milwaukee this time, the one phrase McMahon will have said perhaps most often: “The SBA is one of America’s best kept secrets.”

In the experience of 49th State owners McCarthy and Motyka, McMahon isn’t wrong.

Her trip highlighted businesses that benefited from SBA loans or other programs, among them McCarthy’s and Moytka’s, who have twice been named Small Business Administration Business Persons of the Year for Alaska in 2008 and 2017.

“Just the fact that she took the time to visit and hear the stories is encouraging,” said Motyka.

“Politics aside, there are only benefits to gain from having this visit,” McCarthy said, referring to the often-polarized view of Trump’s presidency. “The SBA is trying to stimulate small business growth in America and she is finding ways and avenues to increase lending to allow them to grow. Marketing the SBA and letting people know how it can help is an incredible challenge. It is America’s best kept secret.”

Unlike banks, the SBA guides businesses through loan programs, offering longer-term loans and lower interest rates.

“The SBA loan program is self-sufficient. One of the greatest advantages of the loan is that it extends over a longer period of time than a traditional bank would allow,” McCarthy said. “The SBA has a lot of programs to educate them to be more successful.

She’s getting the SBA name and resources out to more people. That’s the greatest benefit of what her office is going to do.”

The specific issues they discussed with McMahon — their second visit with her after meeting in D.C. for the SBA award in April — is the challenge of Alaska’s continued boom and bust cycles. Tourism is currently in a boom cycle with record amounts of visitors over the past few years, but the business suffered greatly when the Great Recession plagued the Lower 48.

Innovation that lasts year-round would be the answer, the partners told McMahon.

The 49th State Brewing Co., a property under the larger Denali Visions 3000 Corp., requires hundreds of summer hires with multiple properties at Healy and Denali National Park along with their latest acquisition in Anchorage.

For more than an hour, the owners spoke to McMahon about their challenges. They treated her to a lunch of fresh salmon on a bed of greens.

“I found her quick and sincere,” Motyka said. “We had a warm welcome from her and it was very personalized. She is a leader of people, right? And it shows.”

They respect McMahon for the way she rose in business to become a billionaire in the World Wrestling Entertainment empire she helped build from the ground up.

“Her business, (the WWE), we can relate to because we saw that business grow. I saw it while I was growing up,” McCarthy said. “It’s an iconic business from my youth.”

He recalled the action figures, and the television entertainment.

For new business Heather’s Choice Meals for Adventuring, it was an honor to see the cabinet official in her 1,000 square-foot retail/office location on Vanguard Drive.

“There were 10 people crowded into the space,” said Heather Kelly, the founder and member of the just-graduated cohort of the Launch Alaska Program.

Kelly is no stranger to SBA programs. She worked with the Alaska Small Business Development Center’s Lance Ahern and others as she worked her way from startup to launch.

“It was awesome to see she had done her homework on our business, that she had read about our products,” Kelly said.

One take-away from McMahon’s visit is a reminder that SBA programs can help her in the next steps as a small business that has grown exponentially in the past year. Some days she receives a flood of orders through E-commerce “and it catches us off-guard.” To obtain more capital, she has sold shares of her business.

“She reminded me that instead of giving up a percentage of my business to get our own kitchen built, I can show the SBA my plan and see if they could fund it,” she said.

Jon Bittner, the statewide director of the Small Business Development Center, said he wanted to show Administrator McMahon the “next generation” of Alaska entrepreneurs in Heather Kelly and Wild Scoop owners Elissa Brown and Christopher Pike.

“Both of the companies are relatively young and have succeeded in the face of a tough statewide economy, and are growing and thriving,” Bittner said. “I believe businesses like this represent the best aspects of the Alaskan entrepreneurial spirit and are examples of what is possible when people believe in the economic opportunities that Alaska has to offer.”

Naomi Klouda can be reached at naomi.klouda@alaskajournal.com.

Updated: 
07/26/2017 - 12:18pm

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