See the previous section of The Local Economy Revolution, Interdependence.
Today, Della looks at how communities can best help new businesses -- while acknowledging that most small businesses are destined to fail.
* Some readers have called to ask us what "MOAR Gardens" refers to. 1
"When you grow a garden, you don't build the plants out of rocks and plastic. You create the environment where those tiny, threadlike little seedlings have the best chance you can give them of growing into strong and resilient plants. Some plants grow faster than others, some are inherently hardier. You can't do it for them. Your job is to give them the best chance you can give them to grow.
Just like gardeners work at giving their plants the best odds to thrive, we who care about communities can build an environment where our small businesses have the best chances to grow."
-- Me, a couple of sections ago.
What the hell are we supposed to do? ... Your biggest potential impact is probably your ability to help small businesses lash up to the whole range of resources your community has to offer.
Fine. Enough with the damn garden. You can't build seedlings out of rocks and plastic. Got it.
What the hell are we supposed to do?
There’s lots of experts on small business -- and thousands of variants of “How to Run Your Small Business” books geared to everyone from landscape contractors to nanotech inventors. You don't have to become the expert on Everything You Never Wanted to Know About A Small Business And Didn't Know You Should Ask. Your biggest potential impact is probably your ability to help small businesses lash up to the whole range of resources your community has to offer.
And since you're already in the gardening business, we might as well torture the metaphor a little further:
• Help potential entrepreneurs select the right seeds. Small business owners sometimes jump in with a stunning lack of market knowledge. Entrepreneurs tend to start businesses on a gut sense of an opportunity -- or on a “gee, it would be cool to do that” sort of model. A lot of times that works out just fine -- often they can find opportunities that will never show up on the site selectors’ reports.
But those entrepreneurs also face a huge risk of wrong moves or mistaken choices -- and the biggest risk of wrong choices is that they cut into a small business’s limited capacity. Missteps in the beginning can set a business up for failure, and anything that wastes capacity cuts away at a very thin layer of reserves.
Communities can help new businesses select the right seeds by sharing real-world information about their assets and their opportunities.
What’s our economic makeup?
Where are we over-supplied or undersupplied?
What are the hidden, maybe small-scale opportunities that result from population subsets or unusual regional destinations that out-of-towners might not know about?
This information isn't hard to come by, if you know where to look. But it can make all the difference between a hometown success story and a could-have-been-if-only tale.
• Preparing the soil. If you are starting a garden on a vacant lot, you don't just throw seeds down and hope for the best. You have to make sure that the dirt can nourish the plants you're planning to grow, and of course all dirt is certainly not created equal. What you need to add or do depends on what you are planning to grow. Peat moss? Mulch? Compost? Fertilizer? Lime? One seed needs one, one seed needs another.
Some business types benefit from opportunities to build strong local networks, while others need international connections. Sometimes they need help with inventory management, human relations issues, finding funding to grow into their potential.
None of these require a degree in rocket science, but again, remember capacity:
If I am an overwhelmed small business owner, chances are I will stumble along by the seat of my pants -- until the crisis that has been building up takes front and center. By then, it may be too late.
If we want to build a small business ecosystem, one of the easiest and simplest things we can do it to make this assistance easily available. Chances are someone somewhere is providing the information your local business need … your businesses just aren't aware of it or able to get it with what little energy they have to throw at it. Putting that within reach isn't hard … but it takes consistent effort and lots of repetition. Just like with fertilizing, once is never enough.
• Monitoring the ecosystem’s development. Biologists don't just look at an ecosystem once -- they identify key measurable indicators, and they check them regularly. What’s the water pH? How many songbirds did we count this year? Are we above or below the average for rainfall? How else are you going to understand where things are going -- or what we need to change in order to nudge trends in a better direction?
We do a particularly lousy job of monitoring our local small business ecosystems. We tend to assume that everything is fine based on a few overly-simplistic indicators, like the number of new businesses, without digging deeper into the data to understand whether those factors are actually signs of growth or decline.
An increase in the number of birds might look like a good sign to a biologist, but if most of the growth is invasive species who compete with the natives, that numerical increase might not be such a good thing.
Similarly, adding jobs that pay minimum wage or require only minimal skills could be less something to crow about than something to take as a warning signal.
None of these tasks are hard, and none of them require skills or information that we don't already have or can borrow from other professions. What we do need to bring to it is the diligence and the long-term perspective to cultivate our small business ecosystems. It won't happen overnight.
How Easy it is to Run a Small Business that Sucks
It's incredibly, stunningly easy to run a small business that sucks.
One of the side effects of the implosion of the real estate market globally is that the amount of really cheap space in many locations has skyrocketed. If you have a business idea, and a little cash on hand, chances are you can find some property owner with a paid-off mortgage who will rent you that storefront or warehouse for a song.
As we keep telling people that going into business for yourself ... more and more people will take us up on that offer. Including a lot of people who have no damn business running a business.
And as we increasingly idolize entrepreneurs, and as we keep telling people that going into business for yourself holds the promise of happy prosperity, more and more people will take us up on that offer.
Including a lot of people who have no damn business running a business.
Small business owners, over and over again, remind me of movie cowboys: tough, independent, self-sufficient, needing nothing from nobody. Behind that façade though, a lot of those entrepreneurs face each day overwhelmed, struggling to muster from within just themselves the full range of skills and resources that they need to run a successful business.
The good ones know that. But many small business owners have no idea what they don't know.
It's easy for us to just write off business success or failure as the machine of the market doing its impartial work. But like anything else, it's not that simple. Places -- whether storefronts or whole cities -- can get a reputation as a lousy business place pretty quickly, even when we can see great potential. It only takes a couple of wanna-be entrepreneurs getting a sweetheart deal from a desperate or disinterested property owner, and then crashing in flames when they botch their hiring or their inventory or their marketing, for that "bad spot" reputation to develop. And for independent businesses, more likely to rely on experience and gut check than the data that the franchises devour, reputation becomes a very solid reality.
Here's where you and your community’s revivified economic development come in. You can help them lash up -- to the information they need and the other businesses of their community.
If you're not linking your small business owners to detailed, hands-on training and coaching, you're shooting your community in the foot. If you're not inducing or requiring your incentive recipients to go through intensive business training, you're wasting too much of your limited funding. And if you're not helping your local businesses find, learn about and learn to buy and sell from each other, you're missing a powerful piece of firepower in your campaign to strengthen the resilience of your local economy.
Here's perhaps the most important point: you need to have some process, some system, that will help some of your potential small business owners learn the most valuable thing they may ever learn: that opening that business would be a bad idea.
Sometimes the best thing you can do to help manage your community's ecosystem is to keep the unhealthy ones from getting planted in the first place.
Coming Next: Pedestrian Scale Environments
- From Della Rucker: "MOAR" Gardens? It was just a joke .... There's a popular online cartoonist called The Oatmeal who uses MOAR instead of "more" for emphasis. Kind of a blend of "More" and "Roar." Usually the critter saying it is a bear or a tyrannosaurus or something. Probably not a joke I should have indulged myself in! ↩