Engage Your Community to Finance Your Business Venture. by John Hendrie

Larger scale visions seek that venture capital or significant bank leverage.  Opening a restaurant or even considering a store has the small operator looking at fairly traditional sources of investment – our flinty uncle Sherm, our parents, our dwindling IRA, credit cards maxing out, our friends and acquaintances.  There is money out there, and investors very interested in your ideas, concepts and business plans, but the mood can be pretty structured, wary and sour.  There are alternatives.

During the week of November 7, the New York Times had two complimentary articles about two different types of ventures that tapped unusual sources for start-up funds – a restaurant in Brooklyn, NY and a store in Saranac Lake, NY.   Each reached out to their community, and that community responded.

I have been to Brooklyn once to enlist in the Navy at the vast Brooklyn Navy Yard, so the local businesses I visited then were not what I would call neighborhood-friendly.  Certainly, things have changed in some forty years, most notably how one might raise capital for a new restaurant, called Littleneck.  The Times article covered the steps the restaurant wannabes took, beyond the usual outreach.  They enlisted a web site, kickstarter.com, which solicits donations (‘crowd funding’) to finance art, technology and business projects.  According to an owner, a Mr. Lefkove, “Promising little more than good karma, some discounts and a T-shirt, he raised $13,000 from 162 donors. “  Beyond this funding benefit, “…it connected us to the community, got our name out – and engendered good will”.   It also provides a ready clientele, which wants the business to succeed.  There are many variations on this type of financing scheme, but the goal is to meet small business needs, as well as those of the community.

After I stop shivering from memories of Saranac Lake in the winter (we were an ice hockey family up in that Northern Tier, playing from Messina, NY through southern Quebec Province and the Northeast Kingdom of Vermont), Saranac Lake  in the heart of the Adirondacks was pristine, but remote , and shopping journeys were a trek, even for basic clothing and household goods.  Local selection was very limited, and existing merchants were closing their doors, battered by the recession.  The town saw the need, and they took action, creating their own store, The Lake Saranac Community Store, featuring underwear to thread to insulated dungarees.  To reach their goal of $500,000, they sold Shares, priced at $100 each, and marketed to local residents and friends (those fair weather visitors during the summer).  They now have a Community store, owned by community shareholders, certainly an alternative to driving 50 miles to Big Box stores or shopping on-line.  The residents have invested in their future.

We are told that the way out of our current recessionary times is through Main Street, home to small businesses, entrepreneurs, merchants and dreamers.  Those neighbors create the sense of community – our spirit, values and heart.  Traditional means to start a business are now a barrier.  However, there are alternatives for those who drive change, growth and risk.  They are right in our own back yard.


Logos, product and company names mentioned are the property of their respective owners.

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