Main Street Keene, NH circa 1950s

Why Doesn’t Every Main Street Have an Incubator? I often ask that to myself when I see that a new, hot company has been built against all odds from a basement, or college dorm room. I ask myself, what about the other ten, twenty, one hundred, or one thousand that failed because they didn’t have a place to work from and feed off other driven individuals and entrepreneurs. Municipalities and state government are so willing to divvy out tax credits and business development monies to attract global companies, that they often sacrifice far more than they gain just to keep people employed.

Why must we attract companies from elsewhere to our state, when we can support young companies that are built from the ground up right here at home? These companies would have loyalty to our towns and states far more than a global firm that moves operations to the lowest cost domicile as soon as its sweetheart package expires.

There are alternatives. We can build small business incubators on Main Street to support up and coming companies, while also providing executive suites for established entrepreneurs to work from. There are scores of self-employed people that work from their homes each day that could rent a small space from the incubator; these funds would help subsidize the operation. Along with corporate sponsorships from investment firms and companies interested in working with exciting young companies, these incubators could almost be completely self-sustainable. It probably makes a lot of sense to ask entrepreneurs to pay something to use the facilities, and in return they can be offered professional services (counseling, finance, legal, internet connectivity, etc.).

A single space with so much energy could reinvigorate Main Street in more ways than one. It would be a place that our future business leaders could aspire to work from. The space would be host to routine demonstrations of new products to excited investors and businesspeople. Most of all, it would create local jobs; jobs that have roots, with employers and employees sharing the same home and passion for a sustainable local economy.

This proposal would not be expensive to implement, but if costs were an issue even after the fees and corporate sponsorships, perhaps partnering with local colleges and universities would be a good way to maximize use of the space to lower costs. Business classes could be thought from part of the space and small businesses in the incubator could be asked to mentor students, or lead a workshop in a valuable skill.

If you have any ideas about this topic, please comment!

The “Support Local” movement has been largely focused on private individuals and businesses, rather than government purchasing. While a large amount of the services that a municipal government will require are ultimately sourced by employing public sector employees, a large amount of other expenses are incurred to do things like build or maintain infrastructure and feed students at school. While some municipalities make a concerted effort to promote “local purchasing”, there is still a long way to go.

It is rather silly that government is slow to fully embrace the “support local” movement, but what we are suggesting is agreeing on and passing best practices and protocols that would require all government purchasing agents to show evidence that they have sourced their materials or services from a local vendor or contractor. A new level of bureaucracy is not needed; the transfer of accounts from franchises and national companies to local suppliers could be done over an extended period of time and verified at the end of the fiscal year. This is an idea that most citizens could agree on.

The fact that we don’t lead by example by requiring the largest public expenditures in our towns to be fulfilled by our own neighbors is quite ridiculous. Maybe if we start at the top, local purchasing will have a larger penetration at the private citizen level, as more and more people see the benefits of keeping our tax money in our local economy. We are not advocating privatizing public sector jobs; we are suggesting that we realign policy to support local entrepreneurs and small business owners instead of non-Rhode Island companies.

The town may be required to publish how they procure goods and services, but all we are asking is that they publish the amount of funds that are spent at businesses in town, in county, in state, nationally, and from foreign companies. If we can quantify these amounts, we can track our improvement — along with job and local wealth creation. There are eight cities and 31 municipalities in Rhode Island, the affect of requiring local purchasing could change how government sources contracts and could potentially help us rebuild Main Street.

Please provide additional ideas for “local purchasing” legislation.

Zeb's General Store North Conway, NH

Spending a decent amount of time in North Conway, New Hampshire skiing has given me the opportunity to shop for locally-made goods at Zeb’s General Store on Main Street in the Village.  Zeb’s is an old fashioned general store organized in 1991 with a turn of the century schooner captain as their mascot; they carry only goods made and crafted in New England (zebs.com).  It’s location across from a park in the center of the Village, and the comforting old-fashioned ambiance ensures that it remains a high traffic destination in Mt. Washington Valley.

My full-time residence is in Wakefield, Rhode Island, which as many know is a village of South Kingstown.  As I frequently walk on Main Street, I see scores of local businesses working diligently to provide an alternative to the corporate stores and retailers that have drained personality and character from our daily transactions and interaction, and I see so much passion from people that want to spend their day doing what they love.  — But, I see a hole, a missing piece to the fabric of Main Street.  Wakefield lacks a general store.

Inside Zeb's

I am a transplant to the area from the northern part of the state, so perhaps someone has some history or information on the area and may be able to tell us why Main Street does not have a general store.  Our community needs a place where local artists, craftspeople, farmers, purveyors, vendors, and producers of all types of goods can sell their wares.  Maybe there was an establishment before, lost in time, or maybe its role in the community has changed and can now be re-defined.

General stores don’t have to be about penny candy and a farm stand, or old oil signs and suspect coffee.  We can offer consignment to local artists and craftspeople to sell their paintings, carvings, and other artwork.  Makers of specialty items like jams, pies, and sauces, soap makers, candle stick makers, woodworkers, even musicians could all converge in a central location to offer the products that they create out of passion, a respect for history, and an inquisitiveness of the future.

Local BBQ Sauces

Two things that make Main Street in Wakefield so special are the absence of franchises and the pedestrian nature of the area; both would make a general store successful.  Let’s give the people of town a farmer’s porch to drink their coffee on, or read a book.  Let’s provide a venue for children’s activities and a place that parents can take their kids after ice cream sundaes at Brickley’s (brickleys.com).  This community would wholeheartedly support an alternative to a convenience store, because they know that ‘Support Local’ movement is not always about convenience.

There is an opportunity here to explore the role of a general store on Main Street in Wakefield.  Local crowd funding could be used to raise funds to open such a place, or maybe a cooperative is a better way to go.  Either way, please reach out if you’d be interesting in discussing ideas for the future or fond memories of the past.

More than Food for Thought 

Fishing docks in Galilee, RI

The ‘Support Local’ movement has many obvious benefits, but it can be argued that the majority of the things that the movement really brings to the table are not quite as noticeable, at least at first glance.  The indirect advantages of a healthy and sustainable ‘Support Local’ movement in your community may outweigh the direct advantages in number.

Things like a tight-knit community – if citizens are aware of the benefits of building relationships with the business owners and community organizers in their town, an understanding of how everyone makes a living and the importance of supporting your neighbors begins to drive change in behavior.  This will undoubtedly create a sense of duty amongst townspeople and could promote better wellness and strengthen relationships.  Quality school systems are created when they are staffed with dedicated teaching professionals that live in the community and don’t have to commute long distances to work each day.  A healthy tax base driven by established, successful businesses and residents in good financial standing will provide the revenue needed to properly fund the schools and their programs.  Also helping to fund the school systems and town services are property taxes which will be buoyed due to property value appreciation since the community will be a more desirable place to live.

Ultimately, the goal of ‘Support Local’ is to create balanced lifestyles that allow for people to work closer to home doing something that they have a passion for, while educating people on how they can support these local businesses domiciled in their town, county, or state.  This change in behavior promotes a more sustainable existence and a healthier lifestyle, while creating local wealth in the process.  Clearly, it starts with food; purchasing your food from local farmers is a great start, but this concept can be expanded to a broader ‘knowing your supply chain’ principle that should create peace of mind.  This should also give craftspeople in the community the same support that farmers have enjoyed since the ‘Support Local’ movement has grown.  This movement should be about more than just food.

Changing your spending habits has the potential to benefit many, if not all, people in the community.  It just comes down to quantifying how much the effect is from small shifts in behavior, and promoting how people can make these changes.  Being aware of how and where you spend your money is a great first step, even changing the way you spend $100 per week can have a massive effect on an aggregate level.  As these altered behavioral patterns become the new normal, hopefully people will want to push the envelope and contribute capital into local ventures; perhaps these purposed investments can be in local community funds that will help small businesses grow and create jobs while paying a sustainable rate of return.  Now there’s some food for thought

By Jeff Perlman

The world has changed.

In today’s fractured political environment can we all agree on that?

Job creation, economic development, the fate of regions and the investment landscape has been forever altered by the economic collapse of 2008.

In this sea of despair, some have seen opportunity to create a new more sustainable economic paradigm.

Among the most promising is the idea of locally sourced capital or “locavesting.”

Ocean Road Capital is one of many transformational efforts taking place across the country. And they need to applauded and supported.

Locally sourced capital is a pro-active business model that if effectively executed will breathe new life into economies across the United States.

As a former Mayor of a mid-size city in Florida called Delray Beach, I have grown increasingly frustrated with the old model of economic development—namely throwing public dollars at companies willing to relocate to your city or state. First off, those dollars no longer exist.

Cities, counties and states are now hard pressed to pay for basic services and can ill afford an arms race to land new corporate headquarters.

But beyond budgetary constraints, it just makes more sense to employ a strategy that would enable communities to grow their own companies and jobs.

Such a model is more sustainable, far more exciting and spreads opportunities to more businesses than the traditional practice of economic development.

In Delray Beach, we are in the midst of launching a concept we call “Civic Equity.”
Basically, we are looking for promising businesses that already have customers, revenues and some traction but have a potential and desire to get to the next level in terms of growth and sales.

We have identified a local team of experts (finance, marketing, operations, legal, sales professionals etc.) who evaluate prospective companies and jointly work with prospects on an agreed upon plan to accelerate their businesses.

Once the plan is complete, we line up local funding and make consultants available to insure that the plan is being executed. In exchange for the investment in dollars and expertise, the companies agree to relocate to our community.

For investors, the benefits are many.

• They take great pride in bringing much needed jobs to our community
• They can visit their investments and watch them grow unlike other investments that they make
• They have insurance for their investment in the form of an agreed upon acceleration plan and experts who ensure that the money is spent wisely on implementation.
• They can expect healthy returns.

For the entrepreneur, the benefits are also obvious. They are no longer alone in their quest to succeed, they join a community that welcomes and nurtures them and they gain access to capital and expertise needed to grow.

While Civic Equity in its current form does not work with start-ups, we acknowledge that they are an important part of the ecosystem and we are working on models to grow that sector as well.

We are starting small, with three portfolio companies, but we believe passionately in the concept of local funding.

We also applaud efforts like Ocean Road Capital for their vision and dedication to local economies and talented entrepreneurs.

Everyone has their own moment when they can identify when passion for an idea was first ignited. For me, it was at my son’s graduation from an honors high school program. As the principal ran through the amazing accomplishments of the group, it occurred to me that if we didn’t do something to ignite our local economy most if not all of these talented students would go off to college and never return. Instead, they would transform other communities.

What a shame that would be for Delray Beach.

On a business level, who would ever invest millions in talent development only to see that talent leave for greener pastures? On a human level, don’t we owe it to our children to create opportunities should they want to come home?

That’s why I am committed to Civic Equity. Has it been difficult to sell the concept and find investors? Yes, at times. People are afraid to commit. But commit we must.

Our children and our communities need us to lead and a find a new path toward prosperity in a changed world.

Jeff Perlman is a founder of Civic Equity LLC, an investment fund in Delray Beach, Florida where he served in elected office from 2000 to 2007 and as mayor from 2003 to 2007. He is the author of the upcoming book “Adventures in Local Politics: The Education of a Small Town Mayor.”

Saturday was a typical one in Brooklyn: the sidewalk crowded with fashionably dressed people chatting in the spring sunshine, discovering friends in common and business connections.

But these people weren’t waiting for brunch at the latest hot local eatery. They had shown up to participate in a “cash mob,” an event to support local businesses that got started last year in Buffalo and Cleveland and has since spread across the country. The first National Cash Mob Day happened on March 24.

Here’s the idea, inspired by the flash mob phenomenon: Put out the word on Facebook, Twitter, and other social media telling people where to meet and when. Then take the assembled group to a local store, where attendees can show their support by buying stuff. The business owner gets a financial boost and some publicity, and the cash mob participants get to feel good about where their money is going.

The Brooklyn event targeted a year-old shop called By Brooklyn, which sells only merchandise made in the borough. It was organized by Amy Cortese, author of the book Locavesting: The Revolution in Local Investing and How to Profit from It, along with the folks from Smallknot, a startup “social lending platform” that aims to help people invest in their own communities. About 30 people showed up, crowding the small storefront and waiting in line to purchase beef jerky, handmade notebooks, and a variety of other merchandise.

Cortese says she became interested in the idea of keeping investment local after she saw her Manhattan neighborhood – the Upper West Side – undergo a sad transformation. “I watched, appalled, as all our local merchants closed up and it became this soulless mall,” she says. The cash mob, says Cortese, makes a statement about a neighborhood’s vision of itself. Despite gentrification and rising rents, the shops in this part of town remain mostly small and locally owned. “This is just a way to say, we want it to stay that way,” she says. “We have a lot of fun, but we also have a serious message.

“I’m usually really stingy,” says a young woman who gave her name only as Rachel. She was carrying a gift-wrapped bag of sea-salt caramels. “I’m hesitant to buy at stores like this because they’re expensive. But it seems like a nice thing to do.”

Which raises the question: Are cash mobs anything more than a well-meaning gesture that generates nice media coverage? (It seemed like half the people at By Brooklyn had notebooks and cameras.)

For By Brooklyn’s owner, Gaia DiLoreto, the answer is yes. “It was very uplifting,” says DiLoreto, a self-described “recovering finance robot” who left corporate life at the height of the economic crisis to start her own business. “It’s an incredible affirmation of what I’m doing, that so many people believe in what I believe in.”

DiLoreto estimated that the cash mob just about doubled the business she would have gotten on a typical Saturday. More importantly, “people walked into the store who have never been in my store before.”

For her, the cash mob is emblematic of a new type of business model that she sees taking root everywhere around her. Starting something new in this economy has been tough, but DiLoreto says the support from like-minded people has been “overwhelming.” Ideas like “locavesting” may not conform to traditional economic thinking, but that doesn’t bother her. “It’s happening,” she says. “Whether it works out on economists’ worksheets or not. I see it everywhere.” If she’s right, maybe you’ll see the effects on a neighborhood near you.

source: The Atlantic

http://www.theatlanticcities.com/jobs-and-economy/2012/04/supporting-local-business-muscle-cash-mob/1769/

1. Ditch the Cards

All electronic transactions siphon money out of your community to some extent, so try the human approach and bank in person. Pay in cash or, second best, write a check. If you have to use plastic, choose debit. Your local merchants lose some of their profit any time you use a card, but they pay up to seven times more in fees when it’s a credit card. And studies show people spend 12 to 18 percent more when they use cards instead of cash.

2. Move Your Debt

Already broke up with your mega-bank? From credit card balances to car loans to mortgages, mega-banks make far more money off your debt than your savings. Refinance your debt with a credit union or local bank and let your fees support your community. Be wary of “affinity credit cards,” which donate a certain amount per purchase to good-hearted organizations but often are connected with a mega-bank.

3. Spend Deliberately

Forget Internet deals; shop local and independent. Support second-hand markets by buying used, and barter and trade services when you can. Look for goods grown and made nearby.Research your purchases carefully: That organic Dagoba chocolate bar is owned by industry bad-boy Hershey. Want to give money to Coca-Cola? Buy Odwalla juice. Easy company screening at Green America’s Responsible Shopper website.

4. Shorten Loan Lengths

To get as much interest from you as possible, banks offer to stretch out terms. Avoid the 30-year mortgage or the seven-year car loan. If you’re stuck with one, change it yourself: Decide the length of term that’s best for you and pay down your principal. Calculators at sites like ­mtgprofessor.com can be used for any loans, not just mortgages.

5. Earn Feel-Good Interest

A community development bank will reinvest money from your CD back into your community and pay you interest. So will alternative savings tools offered by RSF Social Finance or the Community Investment Note from the nonprofit Calvert Foundation, which also lets you target by cause, such as public radio stations. Put money into kiva.org microloans and get no interest but big returns in social-economic justice. Closer to home, consider investing in family—a college loan for a nephew, for example.

6. Create a DIY Retirement Fund

Avoiding Wall Street’s ubiquitous 401k can be tricky. One way is via “Self-Directed” IRAs and Roth IRAs. These require the account owner—you—to make all investment decisions. You get to decide what projects to invest in—from local projects and businesses to real estate.

7. Invest In Home

Investing in your home strengthens your community and builds your wealth. Pay down your mortgage, then use that equity when it’s time to retire. Want more investment? Do it with a second property and be a local landlord, or invest in your children’s home. Beyond mortgages, invest in your home’s energy efficiency for a solid rate of return. Or become your own utility by tying your alternative energy system into the grid.

8. Don’t Forget Your Community

Buy shares of a local co-op­—utility, food, store—or jump on a Direct Public Offering. Seek out, or better yet start, a community investment group to connect local businesses with local investors. Look for community Revolving Loan Funds that allow participation by individual investors, such as Cascadia (Pacific Northwest), “Invest Local Ohio” Economic and Community Development Notes, the New Hampshire Community Loan Fund, and Mountain BizWorks (North Carolina).

(source: Yes! Powerful Ideas, Practical Actions)

http://www.yesmagazine.org/issues/9-strategies-to-end-corporate-rule/8-ways-to-de-corporatize-your-money

PROVIDENCE, R.I. — Early in his career, John Carter toured a Massachusetts plant where 100 workers soldered jewelry parts together. If you could build a machine to replace all those workers, the owner said, you’d make a lot of money.

Carter did. In the early 1960s, he made a welder in his basement. The new machine — purchased by jewelry companies and badge makers in the U.S. and overseas — helped launch Electron Fusion Devices, an East Providence company that eventually employed 280 people in the United States, Britain and France.

Carter started the business in 1963 with $1,000 and sold it in 2000 for $280 million. But unlike some CEOs, he didn’t retire to Florida. (He lives in Providence and has a summer home in Little Compton.)

Instead, the old-school manufacturer is helping a new generation of entrepreneurs navigate a troubled economy.

He has promised to give more than $1 million to entrepreneurs through a series of innovation fellowships managed by The Rhode Island Foundation.

(source: Providence Journal)

http://news.providencejournal.com/business/2012/04/creative-solutions-investing-in-ideas.html

Asset allocation is an interesting concept and everyone seems to have an opinion, but one thing is universal.  Diversification is a must.  A portfolio of only stocks will experience a significant amount of volatility as global markets gyrate.  Investment-grade and government bond only portfolios are normally much less risky, but don’t carry the potential upside potential that equities offer.  So financial advisors tell their clients to start with a heavy weighting of stocks when you are young and slowly move towards the yield investments of fixed-income as you mature into your later years.  In the past decades, other investments have reached asset class status, including commodities, real estate, and master limited partnerships or royalty trusts.  Even more alternative in nature, hedge funds, fund of funds, buy-write option funds, wine, art, and other collectibles have shown up in the marketplace as assets to consider in your portfolio.

Local investment funds have not been discussed.  Sure, the JOBS Act makes these types of investments possible now that securities laws have been relaxed for the first time since their creation in 1933, but the concept of investing your money locally has not been seriously discussed by retail or institutional investors.  Deploying 5-10% of your savings to local investments will lower the overall volatility in your portfolio while also offering a lower correlated rate of return.  The macroeconomic picture does not need to be rosy for local investments to be successful.  There is a growing ‘support local’ movement that is turning locally sourcing goods and services from a cult following to a way to live a more sustainable life.  The patronage of small businesses in your community helps to create jobs and build local wealth, which in turn raise property values and offer many other ancillary benefits.  Put simply, there is also a cultural and quality of life ‘return on investment’.

Ocean Road Capital will work diligently to identify creditworthy small businesses that need financing to grow or enhance current operations, thoroughly vet prospective investment opportunities, and structure deals to be included within the portfolio of its local investment funds.  Investors will finally have the opportunity to include local investments as an asset class in their portfolio, along side investments in the equity and credits of the world’s largest corporations.  The only difference being, the small percentage of the portfolio allocated to local investments is tangible, and its progress can be seen in the community.  Cheers to a new way of thinking, and a new way of investing!

Picture this.  10,000 people get together and each invest $2,000 into a fund that is purposed with investing in small businesses in the community.  The impact of $20,000,000 being deployed directly into the local economy would be amazing, as the money would be used to grow business and create new jobs.  The yield and capital appreciation on shares in the fund would be paid to investors that live in the community.  Capital could finally move freely from investor to entrepreneur and the success of these transactions would be felt two-fold in the community as profits would remain, or be re-invested locally.

It was reported that the US Stimulus Package passed in 2008 cost approximately $278,000 per job created or saved, not including interest costs to borrow the money.  Scott Shane, professor of entrepreneurial studies at Case Western University has quantified what it typically costs a small business to create a job, based on actual statistics from sources such as the Bureau of Labor Statistics and the Census Department.  He has found that it costs a small business between $25,603 and $31,169 to create a job in the United States.  This tells us that the efficiency of private sector, small businesses to create jobs is nearly 10 times greater than the federal government.

Using the $20,000,000 local investment fund example, that means that nearly 750 full-time jobs could be created in our local community while generating investment income and/or capital appreciation for local investors in the process.  This is an honest, and sustainable way to generate a “feel good” rate of return with ancillary benefits and lasting impact on the community such as a healthy job market, higher property values, lower poverty levels, and a bustling Main Street.