Making Sense: Strengthening Local Communities and Economies

At the Virginia 2012 Farm to Table Conference, ideas on how to create sustainable and profitable local businesses were discussed and imagined. The following summarizes some of that information and provides an overview of how to encourage local investment, plus information on resources that are available in Virginia for small businesses.

i. What is possible right now?

  1. According to Michael Shuman (2012), locally owned businesses are essential in creating: jobs, tourism, long-term vitality, social equality, and more active citizens.

    A book written by Michael Shuman.

  2. There are many pathways towards investing locally, with the aim of creating those important jobs, vitality, etc. In Virginia, the pathways that would work well include (Shuman, 2012):
    1. Self-Investment – By investing in ourselves and securing our own financial stability, we can invest strongly in our communities. Shuman advises putting your money somewhere else and investing it, rather than putting it into an IRA. Ways of doing this include:
      1. Avoiding credit cards – Cards have a 25-30% interest rate. Placing money in your own personal savings account to avoid needing a credit card will help you avoid spending that extra money on interest.
      2. Buying a home – Your mortgage is not taxed; it is a better investment to put money into your own house rather than renting.
      3. Paying mortgage faster – Again, before putting money into your IRA, invest in your house: it becomes a long-term “ piggy-bank” (Shuman, 2012).
      4. Being energy efficient – Investing in energy efficient technology for your house and appliances may cost more upfront, but in the long run will aid you in saving on electricity and water bills.
      5. Greenhouse   Investing in your own food could cut your grocery bill by $160 per year.
      6. Biking  – Gas prices are very high – investing in a bike you can use to commute places locally can help save money spent on that gas.
      7. Making your own cup of coffee – Spend your money on bulk coffee rather than a single cup a day from a café – lessening your amount spent by $3.08 per week will save you $160 a year. This idea applies to any make-at-home item versus a store bought one.
      8. Education – Investing in your education can improve your earning power; Warren Buffet said: “The more you learn, the more you’ll earn” which is true in regards to local investing and many other aspects of life.
    2. Moving money into local banks – Local banks spend and put more money back into the community than larger banks.
      1. Some local credit unions of Virginia include: Common Wealth One (Alexandria), Assurance (Richmond), FedStar (Roanoke), Constellation (Reston), Park View Federal Credit Union (Harrisonburg), Farm Credit Country Mortgages (Bedford)
    3. Investing in cooperatives (Such as the Friendly City Food Coop in Harrisonburg, VA and the Health Foods Coop in Lexington, VA).
    4. Investing in community supported models of business – This idea is founded upon Community Supported Agriculture (CSAs) like Season’s Bounty in Harrisonburg, VA which offers produce or JMD Farm in Staunton, VA which offers meat products. There can also be Community Supported Kitchens, Restaurants, Publishing, Energy, etc.
      1. In Harrisonburg and Staunton, there is even a Community Supported Baking (CSB) business called Sunberry Baking Company

A sign displaying some of Sunberry Baking Company’s delicious cookies. Retrieved from http://sunberrybaking.com/pictures/

ii. What resources are available from participating organizations?

  1. Eastern Mennonite University’s School of Business
  2. Farm Credit of the Virginias: Farm Credit of the Virginias offers real estate, equipment, operating, personal and auto loans in order to meet the needs of the diverse agricultural operations in the Virginia area. Going through Farm Credit is beneficial for local investing because interest expenses can be lowered through patronage refunds and the Farm Credit’s local offices understand the local agriculture and community of where they are located.
  3. JMU Center for Entrepreneurship: A collective of students, faculty, and alumni who are interested in creative business ideas and practices and willing to offer support to businesses in the area.
  4. Small Business Development Centers of Shenandoah Valley and of Virginia: Offers counseling, education, and resources for starting up a small business. There are location-specific centers, one of which is centered around the Shenandoah Valley. This location also has support from JMU’s Business School.
  5. Staunton Creative Community Fund: Staunton creative communities offer support and funding to local entrepreneurs in the central Shenandoah Valley in an effort to promote and support community.
  6. USDA Agricultural Marketing Service:
    1. Market Promotion Program: Targets non-profits, farmers’ markets, roadside stands, CSAs, etc. in order to expand the reach of local food and producer-to-consumer contact.
  7. USDA Farm Service Agency – Virginia: FSA has many loan programs for farms and ranches.
  8. USDA Natural Resources Conservation Service: Offers financial assistance to eligible landowners and agricultural producers, technical assistance to private landowners, conservation districts, tribes, and other organizations, as well as easement programs and landscape planning.
  9. USDA Rural Development: Rural Development offers various grants for local food producers and businesses. These include:
    1. Community Facilities Grant Program: This grant program targets local governments and nonprofits in order to support rural communities. The grants will support a variety of facilities or equipment in order to promote, distribute, and produce local foods. Those who can receive funding are: farmers’ markets, food processing centers, food banks, cooking schools/school gardens, and community kitchens.
    2. Business and Industry Guarantee Loan Program: Targets businesses, agricultural producers, and nonprofits. These grants help new and old businesses in more rural areas have access to affordable capital. 
  10. Virginia Cooperative Extension: The extension offers educational resources for current or future small business owners/farmers.
  11. Virginia Farm Bureau Federation: The Farm Bureau supports a variety of programs, educational tools and events—in the Virginia community—that help agriculture prosper.  Becoming a member of the Farm Bureau supports those efforts.
  12. Virginia Foundation for Agricultural Innovation and Rural Sustainability:
    1. FAIRS’ goals are to “offer assistance in rural areas to promote cooperative business development.”
    2. They invest in local communities by offering technical assistance, education and training, as well as cooperative assistance.
      1. FAIRS has helped develop cooperatives, an important aspect of local investing. “VA FAIRS has focused considerable resources on identifying emerging market trends that create opportunities for small-scale producer cooperatives. These trends often translate into opportunities for producers to transition into new types of agricultural production, processing and marketing ventures that reward attributes such as “family-farm” produced, and “locally grown” products.”
  13. Virginia Grown: Offers media and marketing services and information. Offers the incentive of having the “Virginia’s Finest” stamp on products – this increases consumer awareness of what they are eating and increases Virginia branding.
  14. Virginia Employment Commission

iii. Crowdfunding, sourcing sites, and crowdsourcing

  1. Crowdfunding is a collective effort by a network of people who combine their money, often through the Internet, in order to invest in and support efforts initiated by other people or organizations (Ordanini, Miceli, Pizzetti & Parasuraman, 2011). Crowdfunding is also known as crowd financing or hyperfunding.
  2. Examples of Crowdfunding sites include:
    1. Three Revolutions: The mission of Three Revolutions is to fund food by connecting food innovators with those who want to support them – and overall, fund food through community. This Crowdfunding project is continuing to develop and hopefully grow and expand.
    2. Credibles: Credibles’ slogan is “If you eat, you’re an investor.” This Crowdfunding project is aimed at small local food businesses. It is sponsored through Slow Money. This site is different from other Crowdfunding pages because your support of a small business earns you “credibles” or “edible credits” which a supporter can use later once the business is up and running.
    3. Kickstarter: With Kickstarter, you create a small reward with a certain price point, and if the backer pledges the price and claims the reward, he will get the reward but only if the funding is successful. Kickstarter charges 5% for a successful project plus the cost of credit card processing fees.
    4. Indiegogo: Indiegogo works on the same idea as Kickstarter, where backers who pledge a certain price receive rewards, or “perks”. Indiegogo charges 4% for a successful project plus the cost of credit card processing fees.
    5. GoFundMe: Similar to Kickstarter and Indiegogo, GoFundMe charges 5% for a project, but has more social media widgets for greater advertising.
  3. Examples of Crowdfunding in Virginia:
    1. Forge Brew Works on Kickstarter
    2. Virginia Sustainable Agriculture Documentary Project on Kickstarter
    3. McDonough Community Garden, Richmond, Va on Indiegogo
  4. Sourcing sites are websites which help a local business promote and spread information regarding their products or services. It is important for local business because it reaches beyond physical word of mouth and can help gain attention between states or even nationally to internationally. Some vital sourcing sites include:
    1. Facebook
    2. Twitter
    3. LinkedIn
    4. Pinterest
  5. Crowdsourcing is a way for local producers to get consumers more involved with their business. Crowdsourcing is essentially asking the crowd for help or feedback (Howe, 2006). Examples include a business creating a “design our logo” contest or asking for comments from customers.
  6. Examples of crowdsourcing in Virginia:
    1. Capital Bike Share, Arlingtonwants feedback from bike renters where new bike renting stations should be. They offered an interactive map where you to place new locations and where you could like or dislike already suggested stations.
    2. Virginia Living – The Virginia Living magazine hosted a recipe contest for the best holiday recipes reader’s had. The ones with the most votes would be published on their website.
    3. Design Downtown, Harrisonburg – Artists in the local community were encouraged to create an illustration that encompassed the spirit of Downtown Harrisonburg and the recent renaissance that has been taking place there.

iv. Examples, testimonials, and case studies

  1. A Bowl of Good: In order to raise enough funds for a second storefront that maintained its dedication to local and sustainable products (such as locally crafted tables), A Bowl of Good pre-sold 100 gift cards worth $200 to fund their endeavor.
  2. Friendly City Food Cooperative: Friendly City collected $150,000 dollars before opening its doors by recruiting “member owners” who became part of the coop.
  3. Lucas Roasting Company: Started a “Pay Love Forward” fundraising campaign. Supporters could purchase a $50 gift card and receive 10% back on their investment.
  4. Autumn Olive Farm: Utilized Shenandoah Valley Small Business Development Center to begin the process of creating their business.
  5. Kybecca Wine Bar: Another example of a small business that used the Small Business Development Center to support their business.

Goats from Autumn Olive Farm, located in Waynesboro, VA. Retrieved from http://www.autumnolivefarms.com/about-us/

 

 

References

Howe, J. (2006). Crowdsourcing: a definition. Wired Blog Network:Crowdsourcing. Retrieved April 8, 2013, from http://crowdsourcing.typepad.com/cs/2006/06/crowdsourcing_a.html

Ordanini, A.; Miceli, L.; Pizzetti, M.; Parasuraman, A. (2011). “Crowd-funding: Transforming customers into investors through innovative service platforms”. Journal of Service Management 22(4): 443. doi: 10.1108/09564231111155079

Shuman, M. (2012, December). Building communities with local money. Virginia farm to table conference, Weyers Cave, VA.

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