Rural Matters

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From SHEILAH ROGERS
Redwood Valley

From the Association for Enterprise Opportunity (the trade association for domestic microenterprise development): On Wednesday, November 18, 2009 Connie Evans, president and CEO of the Association for Enterprise Opportunity (AEO) participated in President Obama’s Small Business Financing Forum, hosted by Treasury Secretary Timothy Geithner and Small Business Administrator Karen Mills held at the Treasury Department. The invitation-only Forum included Senator Mary Landrieu (D-LA), Representative Nydia Velazquez (D-NY), Secretary of Agriculture Tom Vilsack, Grady Hedgespeth, SBA Director of Financial Assistance, Gene Sperling, Counselor to the Treasury Secretary, small business owners from around the country including a borrower from a micro lending institution, CDFI leaders, and bankers.

The purpose of the forum was to provide ideas to President Obama on what additional steps the Administration can take to improve access to capital to the small business community. Evans acknowledged the good relationship AEO has with both the SBA and the CDFI, and thanked both Administrator Mills and Secretary Geithner for their inclusion and attention to the smallest of businesses served by the microenterprise development community which includes both CDFIs and SBA Microloan intermediaries. Evans continued with these specific remarks when recognized from the floor:

“Our members are receiving ten times the number of bank referrals for loans per week as compared to before the economic crisis. They are spending more time providing technical assistance in making these loan applications viable. We ask that you allow technical assistance funds

Debt, equity, and a third thing that might work better – Seth Godin

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From SETH GODIN

If your business needs money, it seems as though you have two choices:

• Get a loan from a bank
• Raise equity from an investor, giving up part of your company in exchange

Banks are everywhere, so the idea that they can loan us money seems obvious. And venture capitalists and the companies they fund are in the news all the time… and making a billion dollars sounds like fun.

Here’s the thing: for most businesses, most of the time, neither is a realistic option.

Banks aren’t in the business of taking risk. Which means that they make boring loans to boring companies for boring purposes. They do everything they can to be riskless. Which means you need to guarantee the loan with your house or with assets worth far more than the loan. Which means that a good idea is not a sufficiently good reason for a loan.

And equity? Well there are two problems. The first is that the number of investments that professional VCs can make is microscopically small compared to the number of businesses that want them. Go to Seth’s Blog for article→
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Love a local business? Buy a share

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From CNN Money

Sometimes it takes a village to fund a company.

John Halko was halfway through renovating an expanded space for Comfort, his mostly organic eatery in Hastings-on-Hudson, N.Y., when the credit crisis hit. His source of funding — a home-equity line — ran out, so he applied for a loan at a local bank. He was turned down.

Halko wasn’t ready to throw in the dish towel. His solution? The modern equivalent of an old-fashioned barn raising. Instead of soliciting neighbors to lift timbers, he asked them to open their wallets. For every $500 they purchased in “Comfort Dollars,” his patrons received a $600 credit toward meals at the restaurant. As the community rallied around Comfort, Halko says, “it gave us hope.” He raised $25,000 in six months, and the new, larger space – now called Comfort Lounge — opened for business in May.

Plenty of entrepreneurs are turning to their communities for support in these tricky times. As the recession wreaks havoc on America’s economy, finding the money to launch, expand or even just sustain a small business is often a struggle. In the second quarter of 2009, venture capital funds raised the smallest amount since the third quarter of 2003, according to the National Venture Capital Association in Arlington, Va. Banks continue to pull credit lines and credit cards from many small businesses. Even proprietors who are willing to extract capital from their homes — often their biggest personal asset – can’t always do so, because the declining housing market has left so many homeowners underwater.

But entrepreneurs are resourceful, and as the economic crisis forces them to seek new sources of capital, a growing number appear to be finding money in their own backyards. After all, local customers have a personal incentive to invest in their favorite businesses. And while no one is officially tracking the trend, anecdotal evidence suggests that the practice is growing.

Keep reading at here→

Creating a Resilient, Natural Economy

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From DAVE POLLARD
How To Save The World Blog

August 11, 2009 Ukiah Valley, Mendocino, North California

My friend Dale and I have been conversing about my recent post concerning why so many entrepreneurs want to be sole proprietors, when, historically, committed partnerships (of people with a shared purpose and complementary skills) tend to be far more resilient, sustainable, and joyful. I’d been writing about our modern aversion to accepting responsibility for other people, and Dale suggested it was this fear of responsibility, more than any of the ten fears of entrepreneurship* I write about in my book, Finding the Sweet Spot, that keeps so many of us in the thrall of wage slavery. Dale wrote:

What keeps people from starting startups is the fear of having so much responsibility. And this is not an irrational fear: it really is hard to bear…This really fits with my own experience.  I had plenty of opportunity to expand my business creating software products and sharing software development expertise. The thing that always held me back was knowing the responsibility that I had for everyone else.  I was also nagged by the thought that this great burden that I was taking on would not be respected, or worse, would be taken advantage of.

I was chatting about this this afternoon with Tree (a very successful sole proprietor, doing work as an independent professional facilitator), who has challenged me before on whether “the work we’re meant to do” really should preferably be in partnership with others. I had lamented that most of the people who had written to me to tell me that thanks to my book they had found their sweet spot (the work they’re mean to do), also told me that this work involves writing or personal coaching or some other individual enterprise.

Keep reading here→
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Ukiah! Invest Locally: Put Your Money Where Your Life Is

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by Michael Shuman
Yes Magazine

July 4, 2009 Ukiah, Mendocino County, North California

Americans want to invest locally: here’s how.

The Obama Administration believes that the best way to repair our financial system after the Great Crash of 2008 is to improve the performance and oversight of global banks and investment firms. A growing number of Americans, however, would prefer to pull their retirement savings out of these high financial fliers altogether. They would rather invest in their communities.

The problem is, they can’t. Outdated federal securities laws have left Main Street dangerously dependent on Wall Street, and overhauling these regulations turns out to be a hidden key to economic revitalization. There are two reasons Americans increasingly wish to invest in locally owned businesses. First, they understand that these businesses are the real pillars of a prosperous, sustainable economy. A growing body of evidence suggests that every dollar spent at a locally owned business generates two to four times more economic benefit—measured in income, wealth, jobs, and tax revenue—than a dollar spent at a globally owned business. That’s because locally owned businesses spend more of their money locally and thereby pump up the so-called economic multiplier. Other studies suggest that local businesses are critical for tourism, walkable communities, entrepreneurship, social equality, civil society, charitable giving, revitalized downtowns, and even political participation.

Second, many Americans no longer believe Wall Street’s assertions that a global, publicly traded corporation is the safest place to invest their savings. According to data in Statistical Abstract, sole proprietorships (the legal structures chosen by most first-stage small businesses) are nearly three times more profitable than C-corporations (the structures of choice for global businesses). Moreover, a bunch of global trends, like rising energy prices and the falling dollar, are making local businesses increasingly competitive. Meanwhile, Americans are shifting their spending from goods to services, a trend that promises to expand the local business sector, since most services depend on direct, personal, and, ultimately, local relationships.

Locally owned businesses currently generate half of the private economy, in terms of output and jobs. Add in other place-based institutions—nonprofits, co-ops, and the public secto—and we’re talking about 58 percent of all economic activity. So in a well-functioning financial system, we’d invest roughly 58 percent of our retirement funds in place-based enterprises. Yet local businesses receive none of our pension savings. Nor do they receive any investment capital from mutual, venture, or hedge funds. The result is that all of us, even stalwart advocates of community development, overinvest in the Fortune 500 companies we distrust and underinvest in the local businesses we know are essential for local vitality. This situation represents a colossal market failure.

The good news is that much of the problem could be solved by modernizing securities laws. Today these laws place huge restrictions on the investment choices of small, “unaccredited”investors—a category in Securities and Exchange Commission vernacular that includes all but the richest 2 percent of Americans. The regulations prohibit the average American from investing in any small business, unless the business is willing to spend $50,000 to $100,000 on lawyers to prepare private placement memoranda or public offerings—thick documents

Revisiting The Cluetrain Manifesto – 10 Years Later

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From cluetrain.com

[A 10th Anniversary edition with added chapters is about to hit the bookshops. Here is the manifesto. You can't get much better at business market forecasting and the impact of the internet than this. -DS]

If you only have time for one clue this year, this is the one to get… We are not seats or eyeballs or end users or consumers. We are human beings. And our reach exceeds your grasp. Deal with it!

Online Markets…

Networked markets are beginning to self-organize faster than the companies that have traditionally served them. Thanks to the web, markets are becoming better informed, smarter, and more demanding of qualities missing from most business organizations.

…People of Earth

The sky is open to the stars. Clouds roll over us night and day. Oceans rise and fall. Whatever you may have heard, this is our world, our place to be. Whatever you’ve been told, our flags fly free. Our heart goes on forever. People of Earth, remember.

95 Thesis

1. Markets are conversations.
2. Markets consist of human beings, not demographic sectors.
3. Conversations among human beings sound human. They are conducted in a human voice.
4. Whether delivering information, opinions, perspectives, dissenting arguments or humorous asides, the human voice is typically open, natural, uncontrived.
5. People recognize each other as such from the sound of this voice.
6. The Internet is enabling conversations among human beings that were simply not possible in the era of mass media.

Rural Matters

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From SHEILAH ROGERS
Redwood Valley

May 26, 2009 Ukiah, Mendocino County, North California

May is a busy month for networks, not-for-profits and alliances that are dedicated to the pursuit of entrepreneurship as the economic development strategy in rural communities throughout the United States.  Small and microbusinesses have, after all, created 2/3 of new jobs during the past 20 years and they are historically the first responder during economic downturns.

The National Summit on Entrepreneurship hosted by the Association for Enterprise Opportunity gathered in Washington, DC and announced two new partnerships: one with BALLE, the Business Alliance for Local Living Economies and one with Green for All, the national organization committed to the growth of living wage blue collar jobs in all ‘Green’ sectors.

A compelling interactive session at the National Summit on Entrepreneurship celebrated the unique flavors of particular rural regions and the emergence of deliberate entrepreneurial efforts that build upon those flavors.  Regional Flavor Strategies bring together stakeholders – microenterprise development programs (we have one – it’s called West Company), chambers of commerce, cultural and historic preservations programs, not for profits, educational institutions, Main Street programs, and many others to promote the assets and flavor of their region.

Entrepreneurs are supported to identify and respond to their region’s flavor and encouraged to think and act innovatively as they utilize the flavor of their region to grow and expand their enterprises.  Entrepreneurs from outside the area are attracted to these new vital centers for a place to locate their businesses.

Mendocino County and the North Coast region have identified Six Targets of Opportunity where there is demonstrated job growth, wage increases, competitiveness and career potential.  Three of the six are particularly flavorful in Mendocino County and may provide opportunity to develop a Regional Flavor for the region.

Community-Based Entrepreneurs – Dave Pollard

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From Dave Pollard
How To Save The World

Six steps to sustainable, community-based Natural Enterprise, from my book Finding the Sweet Spot

I’m in Denver for the weekend at the annual conference of BALLE, the international network of community-based sustainable businesses. The reason I’m here is more about looking for ideas than personal networking. One of the mandates I’ve taken on in my current work is to make our association (the Chartered Accountants of Canada, equivalent to CPAs in the US) champions of entrepreneurship and of new, sustainable enterprise formation.

The reason we’re championing entrepreneurs is that no one else will. It’s an interesting paradox that the North American economy is driven by entrepreneurs (virtually all new net employment in the last decade has been in the entrepreneurial sector), not by big corporations, but all the money and attention flows to the big corporations. Entrepreneurs don’t get bailouts, massive incentives to locate in your community, or big unpublicized government subsidies. Universities say they teach entrepreneurship but what they do is the minimum (‘intrapreneurship’) lip service to get big corporations to fund ‘chairs in entrepreneurship’ that let them hire and retain professors. Economic Development Offices of governments at various levels are designed to attract businesses (i.e. property and business tax revenues) so their work for entrepreneurs is mostly low-budget, low-value work like providing names of lawyers and accountants and telling you how to get business licenses, incorporate and file taxes.

Accountants and lawyers (especially the smaller ones) will take on entrepreneurs as clients, but generally are unenthusiastic and not terribly helpful for businesses at the critical start-up stage. Bankers (with the notable exception of credit unions) generally avoid entrepreneurial businesses, and lenders of last resort are usually vultures who create more problems for entrepreneurs than they solve. BALLE founder Michael Shuman has written about these challenges in his book The Small-Mart Revolution.

What’s worse, in some progressive circles, the very word ‘entrepreneur’ is suspect — it’s almost as if profit and enterprise are considered necessarily exploitative.

Keep reading here→.
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An Open Letter to Wage Slaves

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By Dave Pollard

I’m asking you to do more than just freeing yourself from a life of grinding, miserable, meaningless work by creating your own “Natural Enterprise.”

The following is an open letter from Dave Pollard to the readers of his book, Finding the Sweet Spot: The Natural Entrepreneur’s Guide to Responsible, Sustainable, Joyful Work. It has been adapted for the web.

In our modern society, we rely on the education system to teach us what we need to know to live and make a living.

That system has let us down badly. It is in the interest of those who control the current economic system, those with the established wealth and power, that we not know that there is a better way to make a living than working for them, doing meaningless work as wage slaves, just to buy ourselves some leisure time to do what has meaning for us.

We each need, personally, to rediscover the joy and meaning of natural work, of Natural Entrepreneurship. Finding the Sweet Spot is an attempt to get you started on that journey.

We need a blossoming of millions of Natural Enterprises, connected and collaborating and supporting each other as part of a dynamic Natural Economy.

But what we also need, collectively, as a society, is a blossoming of thousands, millions of Natural Enterprises, connected and collaborating and supporting each other generously as part of a dynamic new Natural Economy. Is such a thing possible?

Keep reading Creating a Natural Economy at Alternet→

See also my Foreword in Dave Pollard’s book [DS]→
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Where are our young, local, small business entrepreneurs now that we need them?

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From Dave Smith
My Foreword to Finding The Sweet Spot by Dave Pollard

[To counter the efforts of those who would foist The Masonite Monster Mall on our community, we need young entrepreneurs to galvanize new local businesses at the potential Masonite Transition Park. The intended gathering of Big Box Dinosaurs and other chain and franchise stores to force their way in, feed at our community trough, and leak their ill-gained revenues and profits to parts unknown, rather than allow small locally-owned businesses to thrive and re-circulate our money locally, will leave our community with lasting scars. If they overrule local citizens and government through their big bucks purchase of the initiative process, and the zoning of the Masonite site is changed adding $30 million to its value, then you can kiss local small business opportunities here goodbye for a generation at least. It's highly doubtful, for many reasons, that a mall will ever be built. But by keeping the zoning industrial, we will keep the property price within reach of local appropriate technology startups, with good paying jobs, rather than having some retail monstrosity imposed on us from outsiders. Recessions, with great changes upon us, are opportune times to help create the next world of business. Because credit and investment capital is tight or non-existent, businesses will have to be started on shoestrings. This is good. It focuses attention and requires great tenacity. The choice is ours. This book is a key business how-to manual from Dave Pollard for budding entrepreneurs. And here is my Foreword. -DS]

3/27/09 Ukiah, North California

A couple of stories, one a “business failure”, the other a “business success.”

During the seventies, with high unemployment and energy shortages a fact of daily life, some friends and I started and ran a very successful natural food cooperative in Menlo Park, California called Briarpatch Natural Foods. It was created to fill a real community need, following the age-old business adage of “find a need and fill it.” People had time on their hands, and natural foods were expensive, so by working 8 hours every three months, members were able to purchase healthy foods for at least 30% less. Three of us co-managed the store, and the work of unloading trucks, stocking shelves, buying fresh produce at the produce terminal, running the cash registers, and everything else needed to operate a small grocery store was done by members. At one point, there were over 350 families on the waiting list.

Because labor is, by far, the largest expense of doing business, taking most of that cost out of the expense statement created not only cheaper food but an enormous forgiveness for the obvious inefficiencies of volunteer, untrained labor and the lack of basic business skills by its enthusiastic and smart, but woefully unskilled management. What fun we had playing store!

It eventually proved to be unsustainable long-term for the simple fact that business is cyclical and when Silicon Valley exploded into runaway growth and success, no-one had time to play store, and the store didn’t adapt quickly enough to the rapidly changing times that did it in. All vendors were fully paid, all member investments were fully returned, and the graceful ending of a beautiful success left us only fond memories. By our current business standards, it was a failure because it didn’t grow and make its “investors” a ton of money. By those of us most intimately involved in the daily business of running a community cooperative, it was one of our most beautiful, successful business experiences.

On the other hand, Smith & Hawken, the $100 million garden company I co-founded is considered an enduring entrepreneurial success. I disagree, and here’s why.

Buddhist Economics – E F Schumacher

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By E.F. Schumacher
Small Is Beautiful (1973)

“Right Livelihood” is one of the requirements of the Buddha’s Noble Eightfold Path. It is clear, therefore, that there must be such a thing as Buddhist economics…

Economists themselves, like most specialists, normally suffer from a kind of metaphysical blindness, assuming that theirs is a science of absolute and invariable truths, without any presuppositions. Some go as far as to claim that economic laws are as free from “metaphysics” or “values” as the law of gravitation. We need not, however, get involved in arguments of methodology. Instead, let us take some fundamentals and see what they look like when viewed by a modern economist and a Buddhist economist.

There is universal agreement that a fundamental source of wealth is human labour. Now, the modern economist has been brought up to consider “labour” or work as little more than a necessary evil. From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it can not be eliminated altogether, say, by automation. From the point of view of the workman, it is a “disutility”; to work is to make a sacrifice of one’s leisure and comfort, and wages are a kind of compensation for the sacrifice. Hence the ideal from the point of view of the employer is to have output without employees, and the ideal from the point of view of the employee is to have income without employment.

Self-Actualizing Work – Abraham Maslow

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Maslow on Management (Book Excerpts)
Abraham H. Maslow

A musician must make music, an artist must paint, a poet must write, if he is to be ultimately at peace with himself. What a man can be, he must be. This need we may call self-actualization… It refers to man’s desire for self-fulfillment, namely to the tendency for him to become actually what he is potentially: to become everything that one is capable of becoming…
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To do some idiotic job very well is certainly not real achievement. What is not worth doing is not worth doing well.
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The test for any person is—that is you want to find out whether he’s an apple tree or not—Does He Bear Apples? Does He Bear Fruit? That’s the way you tell the difference between fruitfulness and sterility, between talkers and doers, between the people who change the world and the people who are helpless in it.
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…seeking for personal salvation is anyway the wrong road to personal salvation. The only real path [is] salvation via hard work and total commitment to doing well the job that fate or personal destiny calls you to do, or any important job that “calls for” doing… This business of self-actualization via a commitment to an important job and to worthwhile work could also be said, then, to be the path to human happiness (by contrast with the direct attack or the direct search for happiness) — happiness is… a by-product, something not to be sought directly but an indirect reward for virtue… The only happy people I know are the ones who are working well at something they consider important… Or I can put this very bluntly: Salvation Is a By-Product of Self-Actualizing Work and Self-Actualizing Duty.
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…most people prefer no work at all to meaningless work, or wasted work, or made work… In self-actualizing people, the work they do might better be called “mission,” “calling,” “duty”, “vocation,” in the priest’s sense… For the truly fortunate worker, the ideally enlightened worker, to take away work (mission in life) would be almost equivalent to killing him.
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All human beings prefer meaningful work to meaningless work. This is much like stressing the high human need for a system of values, a system of understanding the world and of making sense out of it. This comes very close to the religious quest in the humanistic sense. If work is meaningless, then life comes close to being meaningless. Perhaps here is also the place to point out that no matter how menial the chores—the dishwashing and the test-tube cleaning, all become meaningful or meaningless by virtue of their participation or lack of participation in a meaningful or important or loved goal.
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Enlightened management is one way of taking religion seriously, profoundly, deeply, and earnestly. Of course, for those who define religion just as going to a particular building on Sunday and hearing a particular kind of formula repeated, this is all irrelevant. But for those who define religion not necessarily in terms of the supernatural, or ceremonies, or rituals, but in terms of deep concern with the problems of human beings, with the problems of ethics, of the future of man, then this kind of philosophy, translated into the work life, turns out to be very much like the new style of management and of organization.

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