The Senate Banking Committee has scheduled a hearing on Tuesday to examine whether Steven Preston, the current head of the Small Business Administration, should take over the reins at the nation's beleaguered housing department.

Preston is the only witness before the morning panel.

Administration and Hill sources have told the Small Business Blog that SBA Deputy Administrator Jovita Carranza is expected to take over as head of the SBA if Preston is confirmed as head of the Housing and Urban Development Department.

Even if Preston gets the nod from the banking panel, he must be confirmed by the full Senate. Some Hill sources have said the confirmation process is likely to be "prickly" and "contentious." While Preston was well received on the Hill during his nomination process to take over the head of the SBA, he is expected to face tough questions next week from lawmakers who want to make sure that he's the right man for the big job of fixing the nation's housing crisis.

Preston was confirmed easily by the Senate when he was nominated by President Bush in 2006 to head the SBA.

HUD's previous director, Alphonso Jackson, resigned following allegations of favoritism in his dealings with a Philadelphia developer and criticism of his failure to implement an adequate response to the housing industry crisis.

Almost everyone is familiar with the owner of the corner store, a friend or neighbor dabbling away in the garage to create the next big thing, the technology whiz kid, a seasoned executive ready to make a new start or the savvy "mompreneur" who seeks a more flexible schedule.

They are all critical to U.S. competitiveness, especially during an economic downturn. There are nearly 27 million small businesses in the United States that account for about half of the American economy and employ about half of the country's workforce. During the last 15 years, small firms generated 93 percent of the nation's new jobs.

But the self-employed, as well as managers of small or micro businesses, face many hardships that make it difficult to grow their business. Granted, not every small business wants to become a big business, but they all struggle with issues like affordable health care, rising gas prices, access to capital, bureaucratic red tape, an onerous tax code and understanding export opportunities, to name a few.

To see what the experts advise, washingtonpost.com is launching Voices on Small Business, a new video series in partnership with Big Think, that will offer some suggestions, answer questions and spur dialogue on what makes a successful business.

Featured in the launch are: Tom Scott, founder of Nantucket Nectars, Thomas Cooley, the dean of NYU's Stern School of Business, and Fabrice Grinda, founder of OLX and Zingy. You'll be able to see and hear new voices each week.

Small Business Readers: Do you think these folks are providing good advice? Are there questions you would like to see future guests answer? Which leaders or interesting people in the small business community would you like to see participate?

Here is the Small Business blog's monthly roundup of legislation, regulation and other government activity affecting small businesses. Both Earth Day and National Small Business Week occurred in April, and much of the activity centered on those events.

Legislation

The House approved legislation reauthorizing programs that provide federal support for new technologies emerging from private-sector small businesses. H.R. 5819 reauthorizes through 2010 the Small Business Innovation Research and Small Business Technology Transfer Research programs.

The House Small Business Committee and its subcommittees in hearings last month examined a number of issues, including the effects of the ailing economy, rising gas prices, credit card lending, hiring a diverse workforce, entrepreneurs and their role in stimulating the economy and the inclusion of small firms in federal contracting programs.

It also heard from witnesses about how to maintain public lands for hunting, fishing, ranching and other small business uses. In 2006, more than 87 million Americans spent more than $122 billion on wildlife-related recreation.

Both the House and Senate small business panels held hearings on the impact of the credit crunch on small businesses, centering on the impact of the tightening credit markets.

Rep. Carolyn Maloney (D-N.Y.), who chairs a Financial Services subcommittee, announced that she has secured the 100th co-sponsor for her bill, H.R. 5244, introduced in February, that aims to reform major credit card industry abuses and improve consumer protections. She also held a hearing on the matter. Sen. Robert Menendez (D-N.J.) introduced in mid-March a similar bill, praising similar measures by Maloney and Sen. Carl Levin (D-Mich.).

The National Small Business Association expressed concern with the Menendez bill, saying that its language requiring credit card companies to verify an applicant's ability to pay -- based on current and expected income -- could hurt small firms and preclude them from using credit cards as a source of funding.

The Senate Small Business and Entrepreneurship Committee held a field hearing in Chelsea, Mass., listening to witnesses discuss the "underground economy" and what happens when some firms don't abide by lawful hiring practices.

Administration

President Bush nominated Steven Preston, the head of the Small Business Administration, to oversee the Housing and Urban Development Department. The nomination process is expected to be difficult because of the fragile state of the nation's housing market. Jovita Carranza, the No. 2 at the SBA, is expected to take over for Preston if he is confirmed as HUD chief.

The SBA hosted National Small Business Week in Washington and New York. A list of the winners and more is available here. Next year's celebration of small firms will be May 18 to 22.

The SBA's Office of Advocacy asked the Homeland Security Department to better word its rules on "no match" letters. Those are the letters the department sends to firms who have employees whose data don't match, i.e. their Social Security numbers appear to be incorrect. The SBA office said the department should give more time for small entities to correct discrepancies, among other things. Separately, the office applauded a new bill that would give it a separate line item in the federal budget. The measure is sponsored by Sens. Olympia Snowe (R-Maine) and Mark Pryor (D-Ark.)

Check out Tom Heath's latest post over on the WashBiz blog about the Canine Fitness Center, a small business that's all about man's best friend.

Entrepreneurs Maury and Lynn Chaput opened the Canine Fitness Center in Crownsville, Md., after their beloved dog Shadow tore a muscle in his leg and needed "swim therapy" as part of his rehabilitation. The couple couldn't find a pool built for dogs nearby, so they opened their own. Read more about how the Chaputs started their business and how they're doing now here. You might want to take your own pup for a swim.

While most small businesses choose to use e-mail or cell phones for quick communication, those who still use snail mail will soon be feeling the pain in their wallets. The U.S. Postal Service is increasing shipping rates beginning May 12.

The cost of sending a first-class letter will go up 1 cent to 42 cents, but the so-called "forever" stamps that currently sell for 41 cents will remain valid after the increase. If you buy any "forever" stamps after May 12, they will cost you 42 cents each.

The USPS said it had 5 billion forever stamps on hand in anticipation of high demand for them before the increase.

The postal service is increasing some rates for Express Mail by switching to a zone-based pricing system -- that means customers will pay less for nearby destinations, but more for longer distances. Customers can get a 3 percent price reduction by buying Express Mail online or through corporate accounts, according to the Post Office.

The parcel return service will move to a weight-based pricing system, which probably will work out well for you if you sell feather boas, but could be a problem if you're retailing, say, stained glass windows or stone bird baths.

The Post Office also announced that its "Parcel Select" service, which it defines as a "last mile" delivery service to every door will offer pricing and volume incentives for large- and medium-sized shippers. There's no mention of small firms receiving a similar kind of preferential treatment.

The Post Office is allowed to adjust its mailing rates each May, but by law its prices can't increase more than the rate of inflation as defined by the Consumer Price Index.

There are obviously other package shippers out there and the major firms have special packages for small businesses. The month of May might be a good time to take a look at your shipping accounts and reassess the firm you're using. They are all easy to find and compare online.

The Small Business Administration's Office of Advocacy released a study late last month that examined energy costs.

Characterization and Analysis of Small Business Energy Costs explores whether rising energy costs are harming small business growth.

The analysis found that small entities in the manufacturing and construction sectors pay higher prices for most, but not all, fuels. The price disparities are most pronounced for electricity and natural gas. Electricity costs for small businesses in the manufacturing sector accounted for the greatest price differential.

Companies with fewer than 50 employees pay 35 percent more for electricity than the sector average, while those with 1,000 or more employees pay 17 percent less than the sector average. The report concludes that small manufacturing sector entities that use substantial amounts of electricity are experiencing a significant competitive disadvantage.

The study was conducted by E.H. Pechan and Associates of Durham, N.C.

Women entrepreneurs are key contributors to economic growth in low- and middle-income countries, particularly Latin America and the Caribbean, according to a new report from the Center for Women's Leadership at Babson College.

Data gathered for the Global Entrepreneurship Monitor report on women and entrepreneurs show that women who are employed and have built a social network of entrepreneurs are more likely to become entrepreneurs themselves.

It's a surprise that developing countries in Eastern Europe have low rates of women's entrepreneurship, closely resembling their highly developed European neighbors, while countries in Latin America and the Caribbean have rates of women's entrepreneurship two and three times higher, said the study's principal researcher, Babson Professor Elaine Allen, in an interview.

Regardless of gender or country group, employment matters to entrepreneurial activity. The likelihood of being involved in entrepreneurial activity is three to four times higher for women who are employed in a wage job compared to women who are not working, are retired, or are students.

Globally, the rate of male opportunities in entrepreneurship exceeds that of women, but there's no gender gap with respect to necessity entrepreneurs, who start a trade for survival. Allen defines a "necessity entrepreneur" as someone who embarks on entrepreneurship because they are not able to find sufficient income elsewhere.

The rate of female necessity entrepreneurship exceeds that of males in Latin America and the Caribbean, she said, adding that people in those regions have a "more international view and are likely to see entrepreneurs as a way out of poverty." She speculated that they may have a more global view because "they're somewhat indoctrinated by the United States."

She also noted that in Latin America and the Caribbean there isn't a lot of "red tape" to starting a business. According to the study's "red tape index," countries such as Israel and Sweden require a lot of government involvement in starting a business and so rank high in the red tape department. Allen added that the United States has a very low red tape ranking because "it's quite easy to start a business here" when compared to some countries.

Japan and Peru were the only countries in 2007 where women were more active than men in starting businesses.

The global entrepreneurship survey involves data from 200,000 individuals from 42 countries, representing 70 percent of the world's population, according to Allen.

Small business advocates are mobilizing to quash a proposal being considered by a powerful Senate panel that would require credit- and debit-card issuers like MasterCard and Visa to report business owners' electronic payment transactions to the IRS.

The Senate Committee on Finance is considering the plan as part of a greater effort to increase tax compliance and narrow the "tax gap," which the IRS defines as the difference between the amount of tax that taxpayers should pay for a given year and the amount that is paid voluntarily and on time.

The National Association for the Self-Employed wrote to the panel last week, saying that it applauded lawmakers' efforts to encourage compliance, but that it was concerned "that the delicate balance between what is reasonable and what is detrimental has shifted to the latter." The group, which represents 250,000 self-employed individuals and firms that have 10 or fewer employees, said the committee's plan would "hinder tax compliance while also significantly impairing our nation's entrepreneurs."

The association believes the proposal will have unintended consequences, largely because it lacks clear details regarding its implementation.

One of the group's chief concerns is how the IRS would use the data, plus "there has been no clear indication of how this information would facilitate tax compliance," wrote NASE President Robert Hughes.

Treasury Department official Eric Solomon and former IRS Commissioner Mark Everson have both suggested that the data could be used to create industry profiles, by taking the total credit card receipts reported for a particular business field and calculating an industry average. The new industry profiles would then be used by the IRS to judge other items on a tax return.

For example, the IRS might see that florists make an average of 60 percent of their transactions through credit cards, so if the agency reviewed the tax return of a florist that significantly deviated from that average, it may question that return.

NASE posits that "use of these averages will only provide discrimination against those businesses that have higher than average credit card receipts," which could be a factor of a community's affluence, geographic region or even a business owner's efforts to manage cash flow or to accept a particular credit card.

NASE Executive Director Kristie Darien told the Small Business Blog that proponents of the plan say that, of the plans suggested, it would be the least burdensome to small businesses because credit card companies would have to generate the reports, not the small firms themselves. But Darien said it's unclear how a small business would be able to fix an error on the electronic transaction report, which she said would likely be something "like a 1099 form but listing all of a business's electronic transactions." The credit-card issuer would send the report to the business and the IRS.

The proposal requires that the merchant card processor verify the business's taxpayer identification number. If the processor fails to do that or has an incorrect TIN, the processor is required to withhold 28 percent of the money due to the business while the situation is resolved. "That withholding plan would put many micro entities out of business," said Darien.

Some members of the small business community have expressed concern that if the proposal becomes law, some small firms may stop taking credit cards or will have to charge higher prices because of the cost to comply.

The NASE is part of the Coalition of Fairness in Tax Compliance, which is made up of business lobbyists and trade groups. The coalition last week also sent comments to the Senate panel, slamming the plan for its potential cost, effectiveness, intrusiveness and for its 28 percent withholding plan.

MAY

1 Financial and legal issues workshop for an emerging high-tech firm. The event, held at Teqcorner in Tysons Corner, Va., from 6:15 p.m to 9 p.m. is free for MIT Enterprise Forum members and $25 for non-members. The speakers include lawyers, investment bankers and accountants.

2 Sustainable Business Incubator at Fairleigh Dickinson University is hosting, with other entrepreneurial groups, a day-long affair in Madison, N.J. focusing on growing the next generation of green ventures.

2 Conservative think tank The Heritage Foundation will host a 12:30 p.m. talk by editor Diana Furchtgott-Roth on the new book Overcoming Barriers to Entrepreneurship. She and her colleagues aim to illustrate how policy and economic environment can hinder business owners and suggest what can be done to help them. The event will be held at Heritage headquarters in Washington and more information can be found online.

4-7 National Business Incubation Association's 22nd annual conference in San Antonio, Texas.

6-7 Center for Women's Business Research national symposium. The group will release results of its three-year study "Accelerating the Growth of Businesses Owned by Women of Color" at the Omni Shoreham hotel in Washington.

7 Entrepreneur groups Yes Circle, TiE-DC and Success in the City are hosting a networking party at the office of Dickstein Shapiro in Washington from 6 p.m. to 9 p.m.

20 TiE-DC hosts an event in Bethesda, Md., for small business owners angling for a piece of the federal contracting market. From $5 to $50 million: How to Grow Your 8(a) will run from 6:30 p.m. to 9 p.m. Panelists are Hemant Virkar, CEO, Digital Infuzion and Tashu Trivedi, CEO of TFC Consulting.

20-23 The Association for Enterprise Opportunity hosts the National Summit on Entrepreneurship, including a rural track, in Anaheim, Calif.

JUNE

4 MIT Enterprise Forum hosts a session called the Analytics of Marketing at Johns Hopkins Applied Physics Lab in Laurel, Md. The event, from 6:15 p.m. to 9 p.m. is free for forum members and $25 for non-members. It's $15 for non-member students.

8-11 National Federation of Independent Business is hosting a small business summit in Washington. Speakers include former eBay executive Meg Whitman and Charlie Cook of the Cook Political Report, among others.

Three women who founded businesses focused on babies and children won Yahoo grants for growing their firms, the online media giant announced Tuesday.

The women entered the Seeds for Success competition and won $20,000 in cash, $5,000 worth of Web site consulting, and Web site hosting from Yahoo.

Pediatric speech pathologist Karla Duncan of Birmingham, Ala., will expand her firm Head2Toe Publications, a developer of toys and educational materials for special needs children. Abby Port of Woodstock, Ga., won for Red Koala, which makes custom home décor with an eye on children's rooms and nurseries. Dana Rubenstein of New York City co-founded Dapple, which will produce earth-friendly and baby-safe cleaning supplies for babies' hands, toys, and feeding tools like bottles and kids cups.

The contest received more than 5,500 applications in just three weeks.

"We were very impressed, not only by the quality of the ideas, but also the strong interest among women in creating businesses built on providing solutions for real life, everyday problems," said Susan Vobejda, vice president of marketing for Yahoo Small Business. "While many of the best business ideas centered around children's concerns, we also saw a variety of submissions focused on social responsibility. A reoccurring theme was that women see entrepreneurship as the best path for balancing the demands of home and family life with economic needs."

The grant recipients will spend the next six months using these resources to grow their businesses, ultimately competing for a $10,000 bonus grant to be awarded in October. The trio and their mentors will log their progress on the Web site seedsforsuccess.smallbusiness.yahoo.com.