Karen Barbour is no stranger to awards and accolades with a decades-long career in the insurance business.
Founder and president of The Barbour Group in Westminster, Barbour owns a globally recognized surety bond and commercial insurance agency. And she recently became the newest member of the Small Business Development Centers National Advisory Board. Barbour is joining the board as an advocate for start-up, small and minority-owned businesses nationwide.
Barbour is a Minority Business and Small Business Administration Hall of Fame inductee, receiving numerous awards including Ernst & Young’s Entrepreneurial Winning Women in 2009 and SBA Small Business Person of the Year for Maryland in 2008. Additionally, she serves as Vice Chair of the Advisory Board for the Maryland SBDC Network.
The Times recently caught up with Barbour to discuss her new appointment and her career.
Q: What is the significance of your being named to the Small Business Development Centers National Advisory Board?
A: According to Paul Bardack, executive director of Maryland Small Business Development Center, “Selection to the US Small Business Administration’s Small Business Development Center National Advisory Board is one of the most prestigious honors a businessperson can receive.” I believe he captured the significance of my appointment. I am excited to be part of small group of business owners and elite politicos whose energy and passion for small business will certainly bring about positive change. I am not sure what this appointment will yield for me, and that should not be my focus. My focus will center on being able to voice some concerns I have for small business. After 35 years in surety and servicing the broad needs of many small businesses, experiencing their trials and tribulations first hand, I am grateful to now have a way to possibly make the small business roller coaster ride a bit more fun with a lot less dips.
Q: What are some of the things you’d like to see the board accomplish?
A: In 2011, I decided that small business should have their own political party and wrote a blog called, Small Business Answer to Whovilleism. Small business is reportedly the backbone of America yet we have no spine in Congress. In 2016 with help of a solid few individuals, we launched the National Small Business Party. As you know, launching a political party and getting it up and running are two separate agendas, the latter of which takes a ton of time and money. But at least some of the ideas of the platform can be brought to bear and hopefully help small business. For example, small business should be more engaged when the federal government determines the NAICS codes for small business entities relative to their industry. We, small business, should be able to shape our size standards. But, I think it’s best that I just listen and learn in the beginning of my appointment. Getting to know the individuals on the board and what they have been advocating for is an important first step.
Q: How have you seen small businesses affected over the last year by COVID-19?
A: Some have done well, especially those that captured a significant amount of PPP funds. But for the most part, we are seeing a decline in revenues and losses. Some losses have been quite severe, reaching levels beyond $1 million. If any CPA reports in the notes of the year end financial statements that due to their client’s losses the company is not a going concern, the bank could very well call their line of credit with their surety company declining further bonding support. I expect to see the CPA year-end financial reports starting in April. I would think that by the start of the second quarter of 2021, the impact of COVID-19 will be better known ― at least in terms of the construction industry.
Q: What are the top services The Barbour Group does for small businesses?
A: We primarily provide surety bonds, all types, just not bail bonds. Most of our service is tied to construction bonds for start up contractors to Fortune 1000 firms. We evaluate financial statements, help secure bank lines of credit, come up with creative ways to restructure balance sheets to garner more working capital and equity, find the best surety line of credit/capacity that syncs with the contractor’s growth goals, advocate for legislative procurement change to open access for our clients, help negotiate contract terms, network our client base to form teaming relationships, and above all, we listen well.
Q: What made you want to get into a career of surety bond and insurance?
A: I studied cold war politics at Loyola but when I graduated the Cold War ended that year. My thoughts of becoming a spy for the CIA, NSA, etc. were dashed. I was a dual major, political science and history, and wrote a ton of papers. My liberal arts background made me a critical thinker and a pretty good writer. I saw a job opening for a contract bond underwriter and the company was opening their doors to women. I got the job as a home office bond underwriter and had to learn a lot of math ― like percentage of completion accounting without the use of a computer. I liked it a lot. I stayed in underwriting for nine years. I wasn’t challenged at work so decided this was a good time to secure my MBA, which I did from U of B. I became pregnant during my last year and decided I needed a change. I left underwriting and became the first female surety bond producer in the Mid-Atlantic region in 1994 tasked with outside sales production. I made a lot of cold calls. Working with contractors and small businesses and helping them grow profitably continues to be a big deal for me. I got to know the owners well, their families and became friends with many. I realized early on that being a bond producer to a contractor is an honor for me. You are entrusted with a ton of information and, that alone, made me realize I am valuable. For a woman back than to feel that in business was a rarity. I have treasured my profession and after eight years of being a bond producer, I started my own agency with $20, 10 corporate surety markets and 69 clients. We are now licensed in every state including PR. Having my own business enabled me to be legislatively active, drafting, advocating and securing new procurement legislation that opened doors for small businesses. This year, some of my ideas made it into bills introduced by Governor Hogan and Senator Hester Fry. Hopefully, some small businesses will see a reduction in the Maryland corporate tax rate.
Q: How did you get involved with the Party for a Cure fundraiser?
A: When I started my business I wrote down on paper for a nearly a week that I wanted to help children in Maryland. That week, the Muscular Dystrophy of Maryland knocked on my door and asked if I would participate in their Lock-Up, where the local police escort you to a local restaurant to phone your network to raise “bail” money. I raised $3,000 the first time. By the fifth year, I was raising over $20,000. In 2008, the MDA asked if I could step it up. So, with the help of Gaines & Company, Inc. (one of my first bonding clients by the way), we co-founded Party For A Cure. The first year we only raised $34,000. Lee Gaines remained as an active board member until 2016. By then Joe Laney of MT Laney Co., Inc. (Sykesville) and John Vardavas, CPA of Vantage Point Valuations (Harford County) signed on as board members. We decided in 2017 to form our own non-profit as we wanted to make sure the proceeds of our gala went directly to individuals and families in need. None of the board members receive any income from the gala and contribute significantly to event each year. Since its beginning we have raised $1.2 million. Our next gala is slated for Sept. 24 at Turf Valley. We hope by then to have an in-person event and raise more money for our mission. In 2010, I won the Shining Star Award. It is an award chosen by the families of MDA. I showcase the award still today. Lee Gaines also won the award and continues to be a large and dedicated contributor to the event along with Myrt and David Gaines and their families. We have had support from Jennifer Gilbert for eight years, followed by Bruce Cunningham of Fox 45 and Denise Koch of WJZ. Our event is rather unique as we have the children and families attend. They tell their story and meet the attendees at the event. We learn a lot from them and the energy of our emcees, and music by the Ruxtones always brings a Hollywood touch to the event. We are raising funds now for the Eggers family in Cecil County. We are funding a 630-square-foot addition to create room for their two children afflicted with Duchenne’s disease. They have taken in a child with the same disease as their mother is quite ill. We have most of the materials and are looking for a contractor to begin work. For more information on our non-profit and the Eggers family, please visit our website at www.pfac-md.org