Administrator Guzman, the fifth Latina to serve in a U.S. presidential cabinet, shares how she learned to be “as entrepreneurial as the small businesses” she serves, the growing pains of pivoting from behind-the-scenes player to principal, and her best advice for other Latinas who want to do the same.
Alicia Menendez: Isabel Guzman is obsessed with giving small business owners the access to resources they need to grow and thrive. She currently serves as the Small Business Administrator for the Biden-Harris administration, managing billions in funding for America's small business owners. We talk about how the SBA can support your small business, but we also talk about how Administrator Guzman made the pivot from being a behind-the-scenes player in her role as Deputy Chief of Staff in the Obama-Biden SBA to her current role in the presidential cabinet, the time she took off to be with each of her sons when they were young, and her best advice for all the workhorses in a world of show ponies. Administrator Guzman, thank you so much for making the time to do this.
Isabel Guzman: Oh, Alicia, it's great to be here with you. Thank you.
Alicia Menendez: Every profile of you begins with a story of you working at your father's veterinary chain, so I'm going to actually skip past that and move directly to your first business, a Framing studio. What was the inspiration and vision for that?
Isabel Guzman: Well, I mean, frankly, I've always loved art, so I wasn't surprised that I ended up in a business with serving artists, serving art galleries, really integrated in the art scene in Los Angeles. This was a picture framing company that I opened up with the partner that served a lot of Latino artists in particular, and it was just a fun business, frankly, as we of course had a product that we were producing as well as credible shows that we would support across the region. So it was so much fun, a lot of energy was put into it, and clearly it was a passion of mine. It was actually named after me. My middle name is Inez, and that was just an incredible experience.
Alicia Menendez: What did you learn actually running a business, or what were the mistakes you were able to make as a small business owner that were fundamentally different than having a front seat to your father's business?
Isabel Guzman: Being with my dad prepared me for this, but the decisions that you have to make every single day to really ensure that your business keeps afloat is such an incredible challenge really for every business owner. You have to have the skills and the tools and the knowledge and the networks to be able to mobilize quickly. That was really formative for me to be able to maximize my ability, to tap into resources quickly, to make quick decisions, be that leader. You are the focus of your employees and making sure that they're following a vision, that they're able to come into work inspired every single day and ensuring that your customers are happy every day.
Alicia Menendez: What happens that you're on this path where you're pursuing business as an entrepreneur, something happens that you decide you want your impact to be bigger, you want your role to be different, that you make what seems like a really sharp turn into advocating for other business owners. What is that thing that happens?
Isabel Guzman: Well, I do have to take you back because it seems sudden in my later life, but when I was in high school, I joined all of the more politically-oriented clubs. I founded my own Junior Statesmen of America Club at my high school. I was in debates. I loved speech and debate. I also did the student council, you know, ran to be president of my school, so all of those things were really attractive to me. I volunteered on campaigns. Lucille Roybal-Allard was my first campaign I ever volunteered on as a young girl, and that was really formative, and so it was really more of a decision point in school when I got into UC Berkeley and UPenn Wharton, that was almost a turning point for me, like what do I want to do? On an immediate basis, I was interested in public policy and political science, but here I was going to make this choice to go in as an undergrad in business in Wharton.
And at that point in my life at 18, I chose business, but I was always interested in it. In fact, I thought one last stint right before going to Penn, I was a Congressional Hispanic Caucus Institute intern, and I served in my senator's office during the summer before I went to college. So it was always in me. I wanted to be able to serve publicly as well and have that reach and impact in public policy. And so I think it was just almost like a full circle many years later to have that opportunity in an issue that I cared about so much, small business.
Alicia Menendez: I always say to the people I work with that one of the hardest leaps in television is to go from being a producer to being an on-air talent. I think in your line of work, you have made one of the hardest pivots, which is to go from being a chief of staff or a behind-the-scenes operative to being the principal. The way I understand it from my PhD now in Isabel Guzman is it almost seems to me that when the opportunity opens up to move from the federal level to the state level and do this work in California, that that becomes the opportunity to step out. So I want you to both tell me if my interpretation is correct, but also tell me then what that required of you, to go from being the lady behind the lady to being the woman in charge.
Isabel Guzman: Oh my God. Doctora Menendez totally nailed it because that is exactly what I was thinking when I took that position in California. I actually thought about it like, no, I love to get into the weeds of policy. I like to dig in. I'm an operator, I'm an entrepreneur. I like to just be able to do the action. And so what would it be like to be the principal of the face that has to go out and promote these programs and speak on behalf of the administration? And so it was very intentional decision to say, "You know what? I should put myself outside of my comfort zone and do this more external-facing job and leading small businesses for the state of California." So I've never talked about that with anybody, but it's so funny that you did nail it, you got your PhD.
Alicia Menendez: I think it's a very challenging thing to do, not only to get other people to see you that way, but then to fully step into it. So I was a staffer for a good part of my life, and I still, if I am in a public place with someone who is more publicly recognized than I, I will offer to take their bag and their coat and hold it for them because I understand what goes into staffing a principal, and sometimes I have to be reminded that in certain scenarios now, I am the principal.
Isabel Guzman: Well, it is a transition, and I do love that. I think that one of the things that I learned about being an entrepreneur from my dad and being a small business owner is that change is inevitable. You've got to be flexible. You got to be agile. You got to be able to adapt to the moment, and so I definitely have always been that. I consider myself a little bit of a chameleon, being able to adapt really quickly into different environments. But it was a challenge to force myself to be public, to be open and transparent about my own life. I'm very private, and to be willing to put myself more on the external-facing a little bit less than the operational and deploy a massive team instead to lead my vision and ensure that they could implement against my vision. It's a different skillset to be able to deploy, but I'm thrilled that I made the leap in the transition.
It was an honor to work in that position, especially once COVID hit. And I do feel that it's an advantage having that operational skillset because people know they got to come in prepared if they're going to meet with me because I probably have already done all the reading, I know the programs in and out and across the state and the federal level, and so that's what I still love to do. So I almost overworked myself doing both, but I enjoy now the external part. I love meeting with groups of incredible entrepreneurs and speaking to them and trying to give tips at a real broad scale.
Alicia Menendez: You put me to shame because I am currently doing a bi-weekly D.C.-New Jersey commute. You are doing a bi-coastal commute for a long period of time, and somehow in there, you managed to build a life, which I think for a lot of women is the concern that that sacrifice will mean, if they want to get married, that they'll never be able to get married, if they want to have kids, that they'll never be able to have kids. You were sort of a proof positive point that you can do it. I wonder how you did it or what your counsel is to someone who is trying to do the same.
Isabel Guzman: Yeah. Well, fortunately, my family was willing to move with me from the very beginning because I think the strength and the foundation that my family plays is so important to me, but they were with me for at least almost two years in the very beginning. And then of course, family changes happen. My son is now in college, but at the time, being a senior in high school, we were wanting to make sure that he had an opportunity to be in California. And so now, yes, I try to go back as much as I can on weekends only to California in addition to the travel that I do, because I am the principal out there on the road. I am the chief marketing officer for the SBA. I am the one who tries to mobilize and get insights from entrepreneurs around the country, and so I travel extensively around the country and do weekends with my children.
And I know it's challenging, and luckily for me though, they are teenagers. This wasn't the very beginning of their life. I know that that would be a very different situation. So I know I'm fortunate in that respect. I took two years off for each of my kids, chose to. At the time, I still have my businesses, but set aside my priorities, hire people, and that was an opportunity to really get close. So my kids and I have a really strong connection. And my team will laugh at me, but if I get multiple calls and I'll prioritize my kids as well and be able to take that moment with them, give them that moment throughout the day when they really need me. So there's sacrifices we make in these jobs, and they know that I'm busy and traveling all the time, but we stay connected as much as we can.
Alicia Menendez: I love that. I don't think we talk about that enough, how you can take a pause in your career and still come back and have opportunities that maybe even wouldn't have been available to you without that type of pause. Let's talk a little bit about the Small Business Administration. SBA manages a $500 billion portfolio, deploys $50 billion in funding every year to America's small business owners. If someone is listening and they are a small business owner, what is the way in which they most likely interface with SBA?
Isabel Guzman: Well, I think that SBA finally became a little bit more known after the COVID happened, right? Businesses became familiar with the PPP, that Forgivable Loan Program and all the other resources that were layered. There's 34 million small businesses in this country, constant births and deaths, and so there's always a challenge to reach our small businesses. But I think above all, SBA is known to fill gaps in the capital markets. We are a lender ultimately, and that portfolio says it all. We put out that $50 billion every year that we support in capital. It's loans, investments, innovation grants that really helps spur small businesses forward.
And we have iconic brands that have come through the SBA. Everything on our loan side, Jeni's Ice Cream, Chobani Yogurt, sweetgreen, which is one of our recent favorite to lift up because they got a microloan, a very small dollar loan that they were able to grow their business with. And so that's oftentimes the touch point, is a business realizes they need capital. The other is that they realize that they can't do it alone because every entrepreneur knows that it's overwhelming. Multiple hats you have to wear and the decisions you have to make constantly every day. So having this network of free advisors and supporters and advocates who can be there for your business, whether that's starting with your business plan, all the way to helping you go to markets abroad, SBA is here to be part of that team of advisors that you can count on.
Alicia Menendez: I think one of the other things that the pandemic laid bare and the PPP Program also was there are still structural foundational issues, especially for our community when it comes to our access to capital, our relationships with big financial institutions. I just wonder if you ever feel hamstrung about sort of the things that are within SBA's power to control and the things that require regulatory efforts, require Congress, require a re-imagining that is outside of SBA's purview?
Isabel Guzman: Well, I mean, we definitely learned during the pandemic that those who had those bankers or lawyers or accountants on speed dial were able to get to the critical resources to keep their businesses afloat. And that was something that we thought about and prioritized in the Biden-Harris administration, was making sure that we could really, truly fill those gaps because this is the agency that helps deliver that American dream of business ownership. And it's about making sure that those that we underinvest in, those underserved communities can really access the resources that we know will help them start better and grow faster and larger.
Everything's on the table. It's an all of the above strategy. We've implemented extreme activism around supporting our small businesses. I tell my team, I have to be as entrepreneurial as the small businesses I serve. They had to pivot and adapt during COVID. Let's do the same. We're scaling just like some of those businesses are. And so that means regulatory reform, organizational restructuring, because simplification is the goal, customer experience is the goal and equity, because we know that the face of entrepreneurship is changing and we need to fill those gaps that were laid bare during the pandemic.
Alicia Menendez: When you talk about your time at the SBA, sort of the first quorum, most people don't get that opportunity, right, to be inside of a government agency, do their best, take the time away. We're like, "Oh, I wish I would've done this differently." If I would've been in charge, I would've done this." How did being able to come into the agency with that 2020 hindsight change the way that you approached the work?
Isabel Guzman: Oh, it really did. It really did. Because when I served during Obama-Biden, I was deputy chief of staff, I was senior advisor to administrator, I got to look at all policies and program initiatives. So I learned about programs I'd never heard of before around innovation and investment, and I got deep into our program. So I did know that there were still challenges. It was still too complicated. We didn't have enough lenders or competition in the lending space, and we weren't really leveraging technology fully. And so I wanted to make sure that we immediately hit the ground running to make those changes.
And I do think that's a huge advantage. Having served before, you know people, and we have incredible mission-driven folks here, and that I'd worked with the previous time. So I knew people, I knew systems, I knew processes, I knew our programs, and I know small businesses. I grew up around small businesses. I know their challenges. And we have this incredible entrepreneurial community, the Latino community, women, African-Americans are starting businesses at the highest rates. How are we going to ensure that underinvestment doesn't limit our growth into the future? They are the future. And so I have a sense of urgency, all these things keep me up at night, and I wanted to make sure that I could make these changes that I knew needed to happen.
Alicia Menendez: When you were talking to small business owners specifically when you were talking to Latinas, what is the concern that comes up most frequently?
Isabel Guzman: When everyone talks about small businesses, I think we always have to keep in mind that they are by nature, hopeful and optimistic because no one else would have the bravery to jump in and start their business if they didn't really truly believe in all the possibilities and their vision. But every day are challenges. And for Latinas and Latinos as well, underserved communities in general, it's the capital barriers. If you think about it, as a Latina, I'm more likely to be using my credit cards. I may not have the historic generational wealth building to position me well for my launch, and so I'm probably paying way more for my cost of capital. I'm having to work harder to deliver a bottom line to make my business successful. And so capital really is critical towards making sure that businesses can survive. It's foundational.
But it's also the networks, the know-how, knowing the right people to go after contracts or get in a private supply chain, or do trade abroad. I mean, all those things are not necessarily readily available to communities. And so it is the access to markets, which means growing your revenues. And we know by studies that revenue growth is limited as well, and that's because they need to know how to know, but get the learnings, the knowledge, the networks to really connect, and that's what the SBA does. And so really powering up those programs to be more effective has been our priority in the Biden-Harris administration.
Alicia Menendez: I want to end with a question about you because I emailed Maria Contreras-Sweet to say like, what about Administrator Guzman do I have to know or understand? And she wrote back, "Isabel can be shy, but in meetings, her intellect shines through." And I also just think it gets to a certain thing for a lot of women, certainly a lot of Latinas, which is this tension between being the workhorse and being the showhorse. We're always told, put your head down, be humble, do the work. That'll get you to the middle, but it won't get you to the top, and it certainly won't put you in the president's cabinet. And so I wonder what your best counsel is to a Latina who is listening and in you sees so much of herself?
Isabel Guzman: I think that's so right. I just know that if I do the work, if I deliver, that's what's going to matter, right? And honestly, I still live by that because I do this work for passion. The accolades are less important to me than actually getting it right, because I just love these entrepreneurs so much. So it is passion first.
But the second thing I would say is that I think the bravery that it takes to start a business, the bravery it takes to just launch in a meeting even really means being able to put yourself out there, believing in what you have to say, believing in that vision and being committed to it. And so I do feel that I've been able to deploy that. I know that I know these things, and I think as women, we over-study, we over-prepare. We know these things in and out, and it's just being brave to jump in and share what you have to say and know that what matters is that you're doing the right thing by the people that you're representing or the goals that you have. I do think that that makes a difference. Leadership of course, matters and your ability to be bold, but the authenticity, I think is what I'm most known for and what I think is most real to me and what I care about the most.
Alicia Menendez: Administrator Guzman, thank you so much for doing this.
Isabel Guzman: Thank you for having me. This has been incredible.
Alicia Menendez: Thank you for listening. Latina to Latina is executive produced and owned by Juleyka Lantigua and me, Alicia Menendez. Kojin Tashiro is our lead producer. Tren Lightburn mixed this episode.
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CITATION:
Menendez, Alicia, host. “Why Small Business Administrator Isabel Guzman is Obsessed with Delivering the American Dream of Business Ownership.” Latina to Latina, LWC Studios, October 28, 2024. LatinaToLatina.com.
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