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Small Business Reality — An Informal Study of Baton Rouge Businesses

The following is the April 23, 2013 Facebook post and conversation that followed initiated by Erin Rice, who teaches business classes at a college in Baton Rouge, Louisiana. The “informalness” of the study is evident, but so is the relevance and meaningfulness of this type of data and the conversation that follows relative to the Cooperative Movement.

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Erin Rice: I have reviewed approximately 500 student interviews of local small business owners in Baton Rouge. Here is what I have learned: about 95% of the small business owners that my students interviewed do not belong to trade associations or a Chamber of Commerce. About 95% have not used the SBA or SBDCs. only about 10% said they had gone to school to learn about business. About 85% used personal savings or loans from friends and family to start up. The other 15% inherited or had low cost start ups. About 5% are partnerships. Top three reasons for becoming business owners: own boss, set own hours, make more money (in that order). About 75% have reached the financial stability they sought. Food for thought…

Doubleu Cee Johnson: None of those numbers surprise me remotely. 500 different businesses? Pretty reasonable sample.

Erin Rice I was surprised by the Trade Association numbers and a little bit by the low SBA numbers. Yeah, Cal I have been collecting these for the last 5 years. I need to compile my results. The sample is strong, thank you!

Thomas Beckett Great stuff. Much to think about. Any info on succession planning in your data?

Matt Ludt Erin, this is pure gold — so much needs to be understood about true small business ownership the same way the reality v. the myth of the Middle Class needs appreciation.

Erin Rice Thanks for the enthusiasm Matt. @Thomas, no I didn’t think to put that in the assignment. I think of more good questions to add to it all the time. This year I added “number of employees.” Next year I will definitely add succession planning. I think this makes a case, at least in my area, that cooperative developers partnering with the SBA and SBDC is not efficient. I had thought it might be a good strategy before I started seeing these results a few years back. Succession planning is ripe for cooperation in my opinion. My understanding is that there is a crisis in succession planning that could prove opportunity for worker ownership.

Thomas Beckett That’s my working hypothesis. Looking for data.

Erin Rice Hey that’s my hypothesis too! Succession planning data is probably not too hard to find. OEOC has figures for Ohio I think. Talk to your local business broker, they know what is happening “on the street.” A business broker could possibly scout succession opportunities for worker ownership.

Thomas Beckett Excellent! I’ve been thinking about reaching economic developer types but business brokers did not occur to me.Bottom of Form

 
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Posted by on April 30, 2013 in People

 
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When the media isn’t there, you can count on Exxon.

I am utterly amazed that with as much attention is paid to the potential Keystone XL pipeline, that there was virtually no major media outlet reporting on this.  Instead, Exxon pretty much outed itself. 

Insanity.

 
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Posted by on April 1, 2013 in Uncategorized

 

Addressing the “it’s not really a co-op” problem

A question pops up all too often in the world of co-ops: when is a co-op not really a co-op?  This is a long-running, nagging question that reared its ugly ahead again the other night.

Friday I ventured to the local specialty foods store.  The cashier noticed my CO+OP Stronger Together branded jacket and asked if I worked for the local food co-op.  ”Nope, I am a researcher studying the co-op model’s impact on development.  Why do you ask?”  His response took me back: “co-ops aren’t really good for the community, y’know.  The food co-op caters to a small niche of white, upper-middle class consumers and drives out the competition.”  Before I could respond, a line formed behind me.  So now you, the reader, will be at the receiving end of my deconstruction of a local stranger’s takedown of the co-operative model.

Why would a cashier working at a specialty foods store make an effort to rail against the local food co-op when this community is littered with Wal-Marts, Kroger’s, Target, Starbucks, and McDonalds?  What the Hell is a co-op?  What’s its purpose?  Does a co-op have a responsibility to build the community it’s positioned in, and is it doing that?  If the food co-op is doing that, then where does this focused angst arise from?

More than any other type of co-op, food co-ops are on the frontline of the movement.  Food co-ops promise food with integrity, quality jobs, local economic investment, and participatory democratic ownership.  These features in action would to me seem to provide more community impact than any of the other box stores.  Yet why is it that I seem to find more critics of food co-ops than of Target?

My hunch?  Co-ops are held to a much higher standard.

The box stores promote a downward spiral, singing a “siren’s song” of low-priced consumerism.  Workers are treated poorly, sweatshop jobs are proliferated, and the environment is destroyed.  Just head out to any of your suburban strip malls on a Saturday afternoon and you can feel the misery ooze through your car’s windows as you look at the telltale CheeseCake Factory, Apple Store, and Chipotle.  

This is to be expected, though.  We all accept this nasty reality.  But I think those of us with a fondness for co-ops aspire for so much more.  We reject the notion that the economy is without social values, that store “associates” are to be treated as the property of the job creators.  We want a new, humanized economy, and we want it now!

But “now” ain’t gonna happen.  This isn’t an economy-question so much as a democracy-question.  We have to change things, and collective, democratic action has never been easy.  We live in a top-down world.  A purpose of the co-op movement is to pull the hierarchy downward so that it’s flatter, more horizontal, and accessible to the everyday person.  But that purpose in embedded in a world that teaches us that solutions can only come from the top of the pyramid.  Citizens are supposed to be voters or consumers, not do-ers or public entrepreneurs.   

Our capacity for democracy is sadly diminished.  Unfortunately citizens don’t really know how to “do” democratic governance or public entrepreneurship.  But when an institution like a food co-op takes center stage and implies they are creating new venues for participatory democracy, they are left wide open for criticism.  

Why?  Because people are hungry for change.  They want it now.  But they have also been taught that it is up to someone else to hurry it along and do it for them.  It follows that if a co-op exists, and the world is still full of centralized corporatism and bureaucracy teeming with alienation, then to many the co-op has failed.

We need time.  It takes tireless energy and the efforts of many who previously never “did” democracy.  Co-ops must drive this point home.

And yet I don’t think we can be dismissive of this criticism that our local co-op “isn’t acting like a co-op.”

Co-ops are great at extolling the value-added to their goods and services (electric co-ops provide competitively priced, reliable energy, and food co-ops give us amazing, fresh, local foods).  But they have yet to really hammer home what it means to be a co-op!  

Co-ops must promote themselves as co-ops involved in the great experiment of citizen democracy, not merely as a great provider of a competitively priced good or service.  They must drive home the proposition that they exist to democratize (or humanize) the economy through the infusion of values into their business model.  And the marketing isn’t enough; co-ops have to back up their claims of empowerment with substantive action.  Co-ops must provide venues for direct democracy by their member-owners.  Member-owners, the citizenry of the co-ops, must feel as if a hand is extended to them, inviting them to participate in meaningful democratic discourse, lest they feel they are being taken for fools (and as Elinor Ostrom was fond of saying, “no one likes to be a sucker!”).  In other words, citizens must feel as though they have a stake, they must be engaged, they must be listened too, and they have the opportunity to act upon their voice.

I take the criticism as a constructive challenge.  Should the participatory democratic features of our co-ops become more pronounced and obvious, I believe that the criticism of co-ops not acting like co-ops will diminish (and more importantly level a challenge of legitimacy at corporations and corrupt governments).  We are in a sense striving to make people feel as if they belong to something, that they need not feel alienated, and the co-op is the model best suited to do so.  We are attempting to move beyond a system that fosters passivity and artificial structural dependence, to one of individual empowerment through collective action.

Our mission is to prove the critics wrong!  But we don’t do so through a critical, pointed finger; we do so through an extended hand, an open mind, and a caring heart.  That is a social vision worth the wait.  That is a co-op.

 

 
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Posted by on December 24, 2012 in Uncategorized

 

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G-20 & B-20 Summits v. a Coop-20 Summit

Take an earnest look at the condition of our society and the world. The inequality of wealth & control, the social ills, and environment degradation are readily apparent. It’s not hard to recognize that our economic order doesn’t serve our needs.

One of the most difficult aspects about our predicament is that much of our economic order – the dominance of investor-owned corporate trade – is held in place and reinforced by our leaders. Whether it’s the heads of state, their finance ministers, or the cadre of staff, these leaders speak for us and spearhead issues that have in the past consistently favored the rights and freedom of these investor-owned companies. The group of these leaders I’m thinking of is the G-20.

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Posted by on November 2, 2012 in Uncategorized

 

Measure it!

By Adam Schwartz, The Cooperative Way

Welcome to another step in re-energizing the cooperative culture in your co-op.  I say, “Another” because while this is often listed as the fourth step after Understand, Believe and Create but before Manage, Market and Sustain in reality it can be any step in the process.

Clichés and maxims become so overtime because they contain at least kernels if not whole truth.  So is the case with the saying, “What gets measured gets done.”  But how does one measure culture?  In the words of the late Richard Dawson of Family Feud fame, “Survey Says!”

We need to ask what our co-workers think of the culture of the organization.  I ask my clients this often, and then I follow up with how do you know?  We can’t be afraid to ask and need to be even less fearful of the answer.  Hard shell crustaceans literally grow by shedding their hard shells for a brief time in order to grow a new bigger one, during that time they are very vulnerable.

Are we willing to hear the answers people are willing to share?  More importantly are we willing to act upon the information we receive?  If we are not ready don’t bother asking it will only frustrate those you ask.  I often try to get folks to synthesize their co-op’s culture in one word, knowing well this is a hard task but it forces people to think hard rather than hardly think.

Through the design of a proper survey tool we can measure the culture of our co-op and plan to address any issues uncovered or plan to ensure we keep a good thing going.  While the CEO or General Manager is the key person in setting the culture, employees, directors and members all play a role.

Culture is growing a recognizable organizational trait that must be managed.  Harvard Business Review published an article earlier this year entitled, “When Choosing a Job, Culture Matters.”  An increasing number of organizations have added the job title CCO-Chief Cultural Officer recognizing that culture matters.  I believe co-op employees are happier than workers for investor owned companies.  That is the next thing I seek to measure.

 

 
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Posted by on November 2, 2012 in Uncategorized

 

Innovation of Cooperative Innovation

Think of all the years that you relied upon having an ATM card. While we can now use our debit “atm” cards as credit cards and for many that supplants the need to withdraw cash from an automated machine, the ATM network was widely used by many many people for more than a decade and still serves a valuable role today.

The ATM network was invented by credit unions. Such a valuable tool was a cooperative innovation.

Its easy to hold up ATM’s as a great example of cooperative innovation, but the fact is that innovation is rife within cooperatives. With the purpose of fulfilling member needs and an intimate connection with those members, cooperatives are natural hotbeds for innovation. You may recall that I wrote about one such innovator last spring, La Citadelle maple syrup cooperative.

I also recently wrote about cross-sectoral regional cooperation. I think that there’s good reason for these two aspects to intersect.

Initially you may be thinking about how local cooperators from different sectors can put their heads together to innovate. As co-ops know the people of their community and their needs better than most, the opportunity is great to collaborate and invent services and products that serve these particular local needs tailored to the regional culture, geography, and demographics. However I’m not honing in on this opportunity, great as it is I have another intersection of innovation and cross-sectoral regional cooperation in mind.

To bring together the co-op memberships, customers, and public of a local region, these groups should sponsor a celebration of cooperative innovation. As a party with a greater joyful purpose, it is a great opportunity for people to learn about the cooperative alternative, recognize its genius in fundamental purpose and its inventions, and to identify another basis that they are a community — a community of cooperators. An exciting option would be a contest of innovations — an award for the greatest innovation in the last year by any cooperative (i.e. ACES electric power trading market) and another award for the greatest innovative cooperative to be formed in the last year (i.e. a neighborhood investment cooperative). We innovate well and thus this all makes sense as we should be recognizing our neighbors for their successes and achievements that make our lives better.

The advantages of such innovation celebrations is that it brings cooperatives front and center to these audiences without necessarily being preachy; in the present day, between political divisions and corporate desperation to attract attention, the public immediately senses direct pressures to have its mind changed. As such they turn away and shut out such demands. As such our cross-sectoral regional efforts may include speakers, other education opportunities, and new co-op formation activities. However none of these may get our memberships together & invite our other customers and the public without being at risk for being preachy. An innovation celebration party has the promise of doing what we need and fulfill our goals.

Take it to the ATM!

 
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Posted by on October 26, 2012 in Uncategorized

 

Cross-sector Co-op Meetings by Region

By Madeline Kastler and Peter Frank

Cooperatives are diverse enterprises: natural food grocery stores, farmers jointly marketing their products, electricity providers in rural communities, financial institutions, housing developments on college campuses and worker-owned bakeries. Cooperatives encompass a vast array of people, products, services, political ideas, and resources. Despite the many differences between these cooperative enterprises, they can share a uniting belief:  cooperatives build a better world.

A reflection of this unity is apparent in the sudden formation of new associations of co-ops that represent cooperatives of all kinds within a region. In Austin, Philadelphia, Minnesota, Seattle, Boston, Milwaukee, Western New England, Madison, Portland, and several other regions, co-ops are uniting to grow their local cooperative economy.  Motivated by community need, the desire to come together to grow the local cooperative economy and by the United Nations International Year of the Cooperative, this new generation of cross-sector collaborators has been growing steadily. Cooperators are breaking out of our sectors, coming together, and figuring out how to strengthen their shared economic model.

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Posted by on October 24, 2012 in Uncategorized

 
 
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