Mahmoud Khattab: Small Businesses are the Lifeblood of California

4 min readJun 22, 2022


Mahmoud Khattab, CEO of Precision M.D., is well versed in the intricacies of running a small business in the Golden State: Precision M.D. is a private practice and a small business. Khattab employs between 18 and 20 people at his state-of-the-art medical building.

The significant investment Khattab made in himself and the practice also benefits many others. The state’s economy — both directly and indirectly — grew as a result. ‘It’s a very big project,’ he says. ‘It was 13,000 square feet and $6 million dollars. It was very challenging for me, and it took a very long time to finish it. In the end, it was worth it. I ended up with a very nice, unique building, actually, for the practice.”

And for his employees. The Precision M.D. CEO exercises great care when it comes to staffing.

“I feel choosing the right employees is probably 50% of being successful in business because if you’re surrounded by [the] wrong people, they’re going to bring you down,’ says Khattab. ‘If you’re surrounded by good people, good employees, they are going to bring you up and push the business forward.”

California, with its $2.9 trillion economy, relies on the big role that small businesses like Khattab’s play. According to studies by the Kauffman Foundation and the U.S. Census Bureau, businesses with fewer than 20 employees exhibited the strongest net job growth.

In 2016, sole proprietorships were the largest single business component in the state. Out of an estimated 4.2 million companies in California, about 3.2 million were sole proprietorships. This represents more than $162 billion in revenue. More than 539,000 of these businesses fall in the professional, scientific, and technical services sectors.

When sole proprietorships are removed from the equation, 88% of all businesses are composed of fewer than 20 workers. This represents about 18.2% of employees.

Given the number and breadth of small businesses in California, it’s not surprising concerns like Precision M.D. bring significant benefits to the state’s economy, among them:

- Increasing the state’s competitiveness in the international arena

- Dispersing trade’s positive economic impacts throughout California’s entire economy

- Their ability to be more flexible during times of economic downturn

- Supporting important sectors within their respective niches

- Creating jobs

- Being suited to both domestic and foreign niche markets

- Generating taxes

- Revitalizing communities

Market Challenges Faced by Small Businesses

The fact that small businesses are vital to California’s economy is undisputed. However, because of their size, such businesses face certain challenges that simply aren’t an issue for medium and large companies. In addition to meeting the procedures the state’s complicated regulatory structure requires, the other significant challenge is securing credit and meeting the collateral requirements set forth by lenders in the mainstream market.

Khattab acknowledges the challenges of running your own small business differ from those faced when you’re working for a large company. “There is a big difference between working in a hospital versus having your own private practice because working in the hospital, you’re very much focused only on medical aspects of the career. When you do your private practice, you have to do everything, including billing management, hiring, firing, following the rules and regulations, marketing, all of that. There’s actually a big difference in doing that, and it’s very challenging, especially in the United States, to have your own private practice in medicine,” he stated in a recent interview.

Helping Small Businesses Access Capital

The current financial environment makes it very challenging for a small business to leverage capital that’s sufficient for it to meet its daily expenses. Additionally, these companies must be able to tap into the funding so they can make long-term investments in their success.

“Marketing is very essential in doing cosmetic surgery because, as you know, it’s competitive,’ says Khattab. ‘A lot of people have cosmetic surgery/plastic surgery practices. You have to know how to deliver the message to the right people in a very efficient and effective way. I spent a lot of time learning about marketing. Also, in this type of business, you have to have the right location, the right building, and you have to invest a lot of money in technology.”

The California Small Business Loan Guarantee Program is just one initiative the state has embraced in an effort to help small businesses like Khattab’s Precision M.D. thrive and grow.

During the 2016–2017 fiscal year alone, loan packages totaled more than $206 million dispersed among 252 guarantees with a $74.1 million loan guarantee amount. Companies that borrowed money through this program reported the creation or retention of 6,847 jobs during that same fiscal year.

The success of the program is evident in not only the growth of small businesses but also in the increase in lenders. Seventeen new lenders participated in the state’s Small Business Loan Program in 2016–2017. By May 2018, the number of participating lenders had increased to 84.

Small businesses need to know how to tap into the resources available in California. As Mahmoud Khattab states, “I think the hardest decision, for me, was to build the building, to buy the land and build the whole building, because I’m one owner. It was a very, very expensive project. There was a very significant risk in taking this process, of making this decision — making this decision and going through the process. I feel, throughout all the years, that was probably the hardest decision to make. Eventually, I made the decision, and I had a lot of challenges throughout the process, especially since I had never been involved in real estate or building a building or construction or any of that.’ It’s a very big project. It was 13,000 square feet and $6 million. It was very challenging for me, and it took a very long time to finish it. In the end, it was worth it. I ended up with a very nice, unique building, actually, for the practice.”

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