Mike Zakany was making his traditional salsas – developed from his
grandfather Jose Madrid's recipe – in the kitchen of a restaurant when
he lost use of that space. Rather than shut down, he shifted his
business to the local Community Kitchen Incubator, which was developed
by the Appalachian Center for Economic Networks (ACEnet). Zakany comes
to the Incubator several times a week, often bringing other family
members to assist him, and he usually makes 1,000 jars of salsa in a
day of production.
The idea behind the Community Kitchen Incubator is to set up a licensed processing facility where start-up entrepreneurs can rent the use of ovens, stoves, or canning equipment to produce their products. They run their businesses out of the incubator until they make sure they like being an entrepreneur and have products that will sell. The Incubator is a key component of the ACEnet Food Ventures Project, which aims to build on the assets of the community and, in the process, open many opportunities for quality jobs and ownership so that all residents can flourish.
As a result of the Food Ventures Project, over 100 small specialty food businesses thrive in an area that had less than a dozen five years ago. These businesses produce everything from tofu pasta to homemade chicken noodle soup and Thai meals. Two new retail stores specialize in carrying local products, and a community-wide “buy local” campaign has dramatically increased local sales. Increasing numbers of these expanding businesses sell their products through national food stores, thus bringing new capital into the community. ACEnet's Community Kitchen Incubator has equipment that the start-up firms rent to produce their products, so lack of capital for equipment is no longer a barrier to starting a business.
The Incubator also serves as a networking hub, where entrepreneurs interact and discover new ways to work together. For example, Chef Butcher is a well-known African-American chef in the community who came to the Incubator to learn how to bottle his Jamaican marinade and apple butter barbecue sauce. Mike Zakany has been his peer mentor, and now the two are buying jars together to save money.
Joyce came to the Incubator as part of her Work Experience Program, which requires her to work 30 hours a week as part of her public assistance benefit. Joyce makes superb homemade chicken noodle soup and other soups traditional to her Appalachian background. Staff encouraged her to expand her line with vegetarian and gourmet soups, many of which were inspired by recipes she found on the Internet. For several months, she made soups in the kitchen and sold them to the Marketplace, ACEnet's retail store, getting feedback to perfect her line. She now sells her soups to caterers and to several restaurants in town.
ACEnet has embedded the Incubator in a comprehensive economic development strategy designed to transform the way the community operates so that it is opportunity-seeking, creative, and inclusive of all residents. ACEnet brings together local organizations with firms to talk about specific needs or opportunities that have been identified by entrepreneurs. All then work together to design a new service, program, or institution. Through this process, the community has developed a wide array of financial resources for the businesses. One organization operates a number of loan funds, some of them targeted at start-up microentrepreneurs. That organization runs a credit union that is implementing an Individual Development Account, which provides matched savings to low-income people so they can start businesses. ACEnet has also set up a product development fund, which provides funds – repaid through royalties on the sales of the product – to hire experts to assist with product labels, packaging, and formulation.
In addition, ACEnet has teamed up with another nonprofit, Rural Action, which has organized farmers into a CSA (community supported agriculture) where people prepay for food from eight different farmers who supply fresh, locally grown meat, eggs, vegetables, and fruit. The CSA uses the Incubator as a drop off site; the Incubator's walk-in cooler keeps the food fresh.
Because of the lack of reasonably priced computer consultants in the area, ACEnet has partnered with a local high school to set up the Computer Opportunities Program, in which students get year-long training to start their own computer consulting businesses. This way, students can stay in the community and earn substantial incomes. While they learn, they train teachers and students in their schools, as well as family and friends.
These efforts have helped bring about a dramatic culture shift. People have learned how to work together, and as a result, are increasingly creative and effective in growing a healthy, sustainable community.
-- June Holley
June Holley is president of ACEnet.
When Reid McIntyre went to a bank in Astoria, Oregon, to borrow money for his three-year-old seafood business, everything was stacked in his favor – a sound business plan, a track record, and expertise in the field. But with the local seafood industry faltering, the bank found it too risky and turned him down.
The loan officer referred him to Shorebank Enterprise Pacific, a nonprofit lender just across the Columbia River in Ilwaco, Washington, which supports ventures with positive ecological, social, and economic balance sheets.
Shorebank Enterprise extended McIntyre and his partners a line of credit so they could pay fishermen for the catch before the company's wholesale clients paid up. Then Shorebank Enterprise helped McIntyre – whose business focuses on two of the area's healthier fisheries – to market environmentally superior salmon to upscale grocers and restaurants in Portland, in cooperation with local fishers. Not only did the fish come from a selective fishery – separate from endangered wild runs – but they were at peak quality because the fishers bled and iced them as soon as they were brought on board.
Few lenders roll up their sleeves and become fishmongers. But then, Shorebank Enterprise isn't your average lender. Besides providing credit, it offers services such as product development and advice in saving money through environmentally sound practices. It doesn't look just for creditworthiness or environmental virtue – it seeks both. Director of finance John Berdes ticks off the factors he seeks in a borrower: a business whose revenue can pay back the loan, and entrepreneurs with character, credentials, and a desire to invest in nature, diversify the local economy, and create stable community.
“Many solid entrepreneurs aren't used to looking at their business as a vehicle for environmental quality,” says Berdes. “It's our job to demonstrate to people that it's in their rational economic self-interest to care about it, if they don't already – and many of them do.”
So far, the strategy seems to be working. In its five years, Shorebank Enterprise has written off less than one-half percent of its $6 million in credit. Its portfolio of 60 loans, almost all in northwestern Oregon and southwestern Washington, includes oyster farms, a brownfield clean-up, a single mom's in-home childcare facility, and sustainable wood enterprises. It works for the clients, too.
“They look at the big picture and come to us with a lot of leads,” says McIntyre. “Often you end up doing business with their other clients. It's more like a partnership.”
– Seth Zuckerman
Seth Zuckerman travels the Northwest writing about the emerging conservation economy. His dispatches can be found at www.tidepool.org/dispatch.html
– CAROLE TASHEL
Carole Tashel is a free-lance writer from Santa Fe, New Mexico.