SBN: People, Planet, Profits

Krueger-Braneky Promotes Local Business

True success cannot always be measured, even in business. For over a decade the Buy Local movement has been gaining ground, promoting a view that supports economically, environmentally, and socially sustainable business practices that strengthen communities. The sustainable business model advocates profitability through such unorthodox practices as collaboration, even with competitors, profit sharing with employees, and implementing earth-friendly processes. Socially responsible business owners recognize that their impact on the communities they serve goes beyond the jobs they provide the local economy, and that their commitment must run deeper than to shareholder profits alone. They pursue a “triple bottom line”, a return on investment of not only profits, but also community growth and planet stewardship.

Communities are beginning to consider the real costs of big box businesses, and in many cases, rejecting them in their neighborhoods. Worried not only by the fraying of community ties, citizens are realizing that the up-front promises of jobs exacts a back-end price of taxpayer subsidies and the loss of many more local jobs over time, as the companies retail behemoths replace go out of business. Studies consistently show that for each job a big box store creates, it destroys more than one existing job. Beyond that, the social foundations of an entire community are undermined. For local, independently owned companies, ties to the community are built into the way they do business. It goes beyond employees. Local businesses use local accountants, local advertising agencies, and promote locally produced goods. Local business owners live in the communities they serve. Big box stores extol their economies of scale, but centralize design and management decisions and replicate their concept ad infinitum. They add nothing to promote the unique character of the areas they locate in. In fact they often leave empty hulking shells behind them when they relocate or go out of business: Wal-Mart has left almost 400 empty stores in its wake. Some communities are devising retail store space limits. Others are trying to concentrate growth back into zoned commercial districts. All across the country, small business networks are sprouting up to defend the values they bring to their communities.

The Sustainable Business Network of Philadelphia began as a project of the White Dog Cafe Foundation, local social entrepreneur Judy Wicks’ pioneering effort that grew from her desire to develop an ethical business model for her White Dog Cafe restaurant. She has acted as example and guide for the region, promoting a business philosophy that goes beyond profitability to social and environmental responsibility and integrity. She has inspired a new generation of entrepreneurs not willing to consider doing business in any other way. The Sustainable Business Network is putting local living economies first and celebrating the virtues of the “triple bottom line”- people, planet and profits.

I interviewed Sustainable Business Network (SBN) executive director Leanne Krueger-Braneky about the network’s goals, programs and initiatives.

Can you give me some background on the SBN? How did it come about?
The organization was conceived of just over five years ago. It started with a group of progressive entrepreneurs who were also members of an organization called the Social Venture Network, a national association of highly successful social entrepreneurs. So folks whose businesses do a minimum of 1-3 million dollars in sales a year. There were groups of entrepreneurs all over the country. At the time, Judy Wicks was involved in the national leadership of the organization. So she and the other members of Social Venture Network who lived in Philadelphia got together and started saying, it’s great that we’ve got this network, but wouldn’t it be amazing if we could do some of this work locally, and if we, as successful entrepreneurs, could come alongside people who are just trying to start businesses to give them the mentoring and support that we wish we had had? And to further the new business model? So that’s how our organization was born.

 

SBN is a founding member of the Business Alliance for Local Living Economies (BALLE). Can you describe BALLE’s work? What is the sustainable business model, and what do you mean by a “triple bottom line”?
BALLE is a network of other organizations like us, working in other places around the US and Canada, there are currently 37 groups with more than 12,000 members. So BALLE is sort of the connector. It’s how our group in Philadelphia can connect with a business group out in Washington state who’s got a similar mission and principles as we do and say, OK what are you doing, how is it working out there, and sort of share best practices. We were one of the original members of BALLE and now it’s grown to 37 networks, which is very exciting. There’s a conference every year. Last year it was in Burlington, Vermont, and there were 500-600 people there. At that point there were 30 networks. And there were 60 people there representing new cities or towns that were interested in starting a new BALLE network. So the movement has taken off. At this point, there’s one network joining every month.

 

So what is our business model, what is a sustainable business? We use the phrase “triple bottom line” a lot. And the idea is that in a conventional business context your business success is measured by your bottom line at the end of the year. How profitable are you? Well, Ben & Jerry’s conceived of the “double bottom line”, back in the ’90s. They asked what would it look like if we measured success not just on our profitability, but also on our impact on people? So we talk about people as an internal and an external practice. How do you treat your employees? What do you have in place internally? And also, how does your business affect the community at large? We’ve got members who, as part of their business mission, is to employ people who may be difficult to employ. We’ve got businesses who’ve chosen to locate in inner-city neighborhoods to create jobs where they’re needed most. We’ve got businesses who strive to provide health care benefits, even if other businesses in their industry don’t do so, because they believe it’s part of their responsibility to their employees. We’ve got members who assist their employees in purchasing a home. The list goes on and on.

We also talk about planet, too. So, at the end of the year, your business success, is measured by your profitability, certainly, because if you aren’t profitable, you can’t sustain your work. But also, what’s your impact on people? And what are your environmental impacts? Are you recycling? If you’re dealing with food, are you trying to source your food locally, instead of transporting it 1200 miles from the farm to the table? There’s a lot of really innovative environmental practices that some of our folks have put in place. From rehabbing old buildings for their business, to using innovative ways to deal with waste, to going to a closed-stream practice, where any kind of output that comes from the production process is somehow used again in the process.

Give me an example of SBN’s diversity.
Well, every November we do the Triple Bottom Line awards. It’s open to SBN members, Buy Local Philly members, and people who’ve participated in our Social Venture Institute. This year, we gave awards in two categories, one in retail and one in service. In the service category, was Premier Cleaning Services, Inc., owned by Terry Long, with headquarters in Darby, Delaware County. They’ve got a lot of great practices. They are a minority owned business. They use only environmentally friendly cleaning products. And the reason they went in that direction is the owner started to have health problems. He did some research and realized that the chemicals he was using were negatively affecting not only him, but also his employees and his clients, so he went to a complete green cleaning system. He also creates new jobs. He employs people from Southwest Philadelphia, North Philadelphia, Delaware County, so he’s sort of strategically hiring from communities where these kinds of entry-level jobs are really needed. So that’s one example.

The other business that won, in the retail category, is Cosmic Catering. They’re a long time member of SBN. They’ve got a physical location at the Chestnut Hill Farmer’s Market, and they also have a catering business. They source local food as much as possible, and buy directly from farmers whenever they can. They provide healthcare to their employees. They have a really unique way of dealing with food waste. Whenever possible, they use compostable plates and silverware, so when you’re done eating, whatever they’ve prepared, you can take the plate with your food scraps and silverware, and throw it into a box for the compost bin. And then they take all that food waste back to their kitchen garden and they compost it. Then, when we hire them again next year, the food we’re eating they’ve grown in their gardens, so part of the nutrients that we’re eating came from our food scraps the year before. And they’re doing something unique in that they also educate their customers about this. Some organizations that hire them are people like us, and that’s very important to us; we want local food, organic food, compostable plates or reusable plates. But other people who hire them don’t have that same level of awareness, so what they help do is communicate with their client and tell them, OK this is what we do and this is why it’s important. They always put the options out there on the table.

What are some of your programs and events?
We’ve got something on every month, and sometimes two in a month. We do two conferences a year, the Social Venture Institute, which we just held. And that’s practical business training for folks who are running or want to start a triple bottom line business but aren’t sure where to go for that training. If you go to business school or get business training, they’ll teach you good business practices, but they don’t factor in, well, what if it’s important to me to pay my employees a living wage? Conventional business advice might say, you need to keep the wages down as low as possible to maximize your profits. This is actually a different business philosophy. So we have a two-day training institute that teaches you how to implement this philosophy. We had a hundred and twenty people there this year; it grows every year. And we strategically market to minority entrepreneurs who often times come to us and want businesses to have a positive effect in their communities but they’ve never heard the term ‘triple bottom line’, so we try to make it tangible for them. We bring in experts and entrepreneurs to share their stories and it’s a tremendously inspiring event.

Then we run SBN’s Annual Conference in May that’s on local economy issues. So it’s broader. There’s useful sessions for business owners, but also for the general public as well. In the past we’ve done break-out sessions on everything from access to capital for small businesses, to fair trade products, to environmental justice issues. Then we have monthly meetings that are networking and educational events. They’re almost always open to members and non-members alike. In October we hosted Stacy Mitchell who did a reading from her book Big Box Swindle: The True Cost of Mega-Retailers and the Fight for America’s Independent Businesses. She’s done a lot of consulting to communities who are trying to keep big box retail out of their neighborhoods.

We also have support groups that meet monthly, the Circle of Entrepreneurs. There’s one that meets in Princeton, one in West Chester, and one in West Philadelphia. And they’re free. People can get on the agenda and present either a business challenge or question they’re having. It’s a way for people to present business ideas and get advice from their peers. People can come with a new business idea and talk it through with a community of people who know what they’re talking about.

As an organization, we’ve got a lot of support available for entrepreneurs and we’ve created this unique community of businesses where it’s all about cooperation and collaboration, instead of just pure competition.

How many members are there?
There are 350 members on our books. This time two years ago we’d just hit the 200 member mark. So it’s been growing very rapidly. In the early years, the businesses that came to us already considered themselves to be sustainable. So they were already doing something socially and environmentally responsible and they wanted to be part of a community of businesses where that was the norm. And that’s still the case, but we’ve also widened our net in the past year and a half to attract independently, locally owned businesses. And our only membership criteria are that a business must be locally owned, and independently owned. Local ownership is key. When businesses are locally owned, they’re more apt to be investing in their local communities. Research shows that when you spend a certain amount of money at a local and independently owned business, about three times as much of the money you spend recirculates in the local community. They are paying local taxes; they haven’t gotten the tax loopholes that may be available to major corporations. They’re incorporated locally, so that’s where their headquarters are. They are employing people locally, but they’re not just employing the people behind the cash register, they’re employing a local accountant, a local graphic designer, a local bookkeeper, you name it. Anybody who’s working for that business is going to be based locally for the most part. And research also shows that local businesses support nonprofits, over 300 times as much support. They’re much more invested in their local community.

I heard from business groups that after Katrina, the quickest, fastest businesses to open again were the local businesses, because those were the people who lived in the community and they were invested in that area no matter what. And while it was easier for large corporations to leave because they could open a new store in a place where they expected it to be more profitable, the businesses that were owned by people in the community opened quicker, hired their employees back more quickly, and are part of the economic renewal of that area.

So you’re convinced that if you look at the future of cities, that their economic viability into the future relies on building up a local economy?
Yes. I think that’s going to be truer as oil prices go up. Right now we’ve got a system where it’s cheap to ship things back and forth to China because our oil prices have been artificially low. And that’s allowed corporations to outsource and so on. But as it becomes more expensive to do business overseas, businesses are going to see that it’s important to revive local operations. And there are companies already doing this. Timberland is in the process of opening a factory in California. They’re starting to see that they need to produce some of their products locally instead of having everything shipped so far apart. And so we believe that’s actually the future of the economy, reviving, as much as possible, local production, local manufacturing.

See, this makes sense to me, but I wonder why is it so hard to convince our politicians of this- to back small businesses instead of the big-box stores, to back local economies, and to back a triple bottom line?
I believe that those of us who are doing this, and doing it successfully, have a responsibility to document what we’re doing. To create the body of research that convinces politicians and policy-makers that this really does have an economic impact. Three times as much money recirculates back into the local economy if it is spent in local businesses. That’s been documented in three studies now. We need more studies like that. We know that more new jobs are created by small businesses than large corporations. When a larger corporation comes into an area, like when a Wal-Mart moves in, they come in touting the new jobs they’re going to create, but research is showing that over time the competition dies out, and the number of jobs that are created aren’t as high as the number of jobs that are eventually lost.

What needs to happen in Philadelphia to create a more socially aware, sustainable climate for growth?
First, the consumer support is key. People need to start supporting their local independent businesses when they can, and that’s what our Buy Local Philly campaign is all about. The idea behind it is educating consumers about the economic impact of buying local and also letting them know about the businesses right in their own backyard.

You see it as just an education problem?
Well I see that as part of it. The consumers need to be making the decisions like if I want to buy a book, do I go to Borders or do I go downtown to Robin’s Bookstore, which has been around in Philadelphia for five generations. When I need a hammer, do I hop in the car and go to Home Depot or, in my neighborhood, there are five hardware stores that are closer than Home Depot.

Sometimes it’s harder to find out the information. That’s the reason behind our directory, and there’s an online searchable database on our website. So we’re trying to make it easier for people to find the local, independent businesses when they want to support them. If there’s a consumer commitment to buying local, it’s going to change the tide.

The local foods movement has largely been a consumer-driven movement. People have read that local food is fresher, tastes better, supports farmers, and now larger corporations are waking up to that.

So that’s one thing. Two, certainly there needs to be policy incentives. And there’s a white paper we put together during the last mayoral election in 2003. We put together a series of recommendations. It was specific recommendations for the city of Philadelphia, but a lot of the recommendations could apply to a broader, regional economy. Things like cutting down tax incentives for larger, non-Philadelphia headquartered businesses to move in and creating incentives for small businesses. Or creating financing options for small businesses. We work with a lot of people and often the first question is where do I go for capital? So, creating funding pools that are amenable to these kinds of businesses.

There are some members of your organization that do this, right?
We’ve got a couple of members who provide access to capital. I don’t believe there’s enough capital to meet the kind of demand in the Philadelphia region now. There’s organizations like the Reinvestment Fund, which has an initiative now where they’re providing capital for groceries in inner city neighborhoods. So now if you’ve got a grocery you’ve got access to capital, for some people for the first time. And they also have provided a lot of money to the renewable energy world, but there are a lot of other places where it’s needed too.

Was SBN involved in the Sustainability Forums?
Yes. We were one of the sponsoring organizations and I sat on the steering committee for the first round of them. You said earlier you thought part of the problem is people aren’t talking to each other. In my mind, the Urban Sustainability Forums is the first time that a lot of the leading organizations in Philadelphia really sat down at the same table. That’s the first time I was sitting down with these other organziations and hearing what other people were doing and collectively brainstorming to make this program possible. So I see that as a really positive step. And there will be a candidate’s forum that the Sustainability Forum is organizing for February. Part of our challenge is getting sustainable business issues on the agenda. Every candidate for mayor should have a piece of the platform that talks about small business.

I’ve been trying to cover all these sustainable issues as they relate to Philadelphia, and I never run out of people to talk to, I think it really is catching on.
There’s a growing community of businesses and non-profits and people working on these issues who really care about them and I feel the profile for sustainability has increased so much in the city even over just the past year or two. It’s an exciting time to be in Philadelphia.

Find out more about the Sustainable Business Network and the locally owned businesses that support its goals for building a local, living economy.

Features, Community, SBN: People, Planet, Profits, sustainability, PhiladelphiaGreen City Journal interview by Caryn Hunt with Sustainable Business Network Executive Director Leanne Krueger-Braneky detailing the organization’s goals in Philadelphia.

2006-11-26 10:36:06

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