Small, local, medium and regional businesses are the lifeblood of a healthy, sustainable economy, creating roughly two-thirds of net new jobs each year. Growing evidence suggests every dollar spent at a locally owned business generates two to four times more economic benefit – measured in income, wealth, jobs, and tax revenue – than a dollar spent at a globally owned business. Other studies suggest local businesses are key to tourism, entrepreneurship, social equality, civil society, charitable giving and revitalized downtowns. Smaller businesses are also more efficient at catalyzing innovation, producing more innovations for dollar of R&D investment than do larger firms.
In launching Sustainable Industries, I was all in. I went for a couple of years without pay, taking out a second mortgage to pay my bills and maintain a steady supply of food, caffeine, and hoppy beer. I worked long hours and I was hard-core about quality control. Hard work was probably the biggest advantage I had over the fact that in some respects I didn’t really know what I was doing.
We grew organically in a challenging and rapidly changing industry, with no outside investment, averaging 30% revenue growth, year after year for our first 7 years. It took 6 of those 7 years for Sustainable Industries to finally break even on top of that growth – and we did it with a mostly clean balance sheet. This was an extraordinary accomplishment from a group of people who were learning by doing.
Our biggest year was 2009, but it was toward the end of that year that the recession finally gave us a good smack. By this time, marketing budgets had been reeled in and a few of our larger clients had disappeared overnight. Like many small businesses, we were confronted with cashflow problems and there were no viable opportunities to access capital. There was no help to be found from mission-driven angel investors or from some of the social investment organizations that Sustainable Industries had supported for years (there is another good story in there, but I’m not petty enough to tell it now). Bottom line: We were served a nice big slice of humble pie.
In those next few very difficult years in the heart of the recession, many entrepreneurs much smarter than me would have closed up shop and said “sorry” to their stakeholders. I toughed it out. And I’m not sharing this to paint myself as a saint. Frankly, there were no easy choices. I made the amateur entrepreneurial mistake several years ago of putting everything I had into Sustainable Industries, and that left me personally holding the bag for a lot its obligations. That’s not how you’re supposed to do it. Sustainable Industries is a story of true “corporate personhood.” Although in the Great Recession, this corporation would not be getting a taxpayer bailout, and its founder had no golden parachute.