Living well eliminates the need for revenge.
Kanye West
This pandemic is shining a bright light on the country’s systemic impact on class, race, and age.
Communities around the world are now dealing with issues including bail reform as they relate to releasing prisoners, displacement and homelessness, and food insecurity and access. Business the way it was will not and cannot move forward in the way it functioned before the corona virus pandemic.
Ultimately, this is a time for adaptation and transformation. This is especially true regarding the fate of small business. Is this crisis a means to reshape how businesses are built, developed, and run? We have heard about the struggle of communities and small businesses. Government must consider being intentional about equity when it comes to recovery resources and allocation. In my mind, government might consider setting up the economic and education infrastructure to lift up and build historically marginalized communities into business powerhouses. It will require a re-examination of the formation and ownership of small businesses to enable them to be more resilient and sustainable for the future.
Instead of allowing small and micro businesses to shutter their doors, what if there was a mechanism that allowed employees who work in communities and who have a natural stake in the success of their businesses to invest, building equity and saving small businesses? What if we provided communities with the foundational and educational tools needed to develop the skill set required to run a business and maintain all the elements of a business? What if we taught them to not only think like entrepreneurs but to function like successful entrepreneurs with the support of the community in which the business exists?
The Cleveland Model
For many years, I had heard about community owned enterprises, but I never grasped how they worked until I went to visit University Circle with the Aggie Square team from UC Davis. The truth is equity doesn’t happen by accident. So, as we think about what small business and business, in general, looks like post pandemic, governments at every level must consider the disproportionate impact this crisis is having on communities of color. Later, upon visiting the Evergreen Cooperatives, I began thinking about how its business model can flip the generational and community wealth conversation. Cities, especially, must assume a vital role in setting the foundation for small business to grow and thrive within their communities.
Then, all of a sudden, the COVID-19 pandemic hit, forcing communities around the globe into a severe time compression in which they are forced to act and make decisions at the same time.
And, the Cleveland Model offers a prime example of this forward-thinking philosophy. In this Cleveland community, the city, its businesses, hospitals, and universities have implemented a new model of worker-owned/community-benefiting businesses which approach economic development in a unique and successful way that includes the creation of jobs (including green jobs) and the stabilization of neighborhoods.
The principal on which the Cleveland Model is based is clear and simple. Hospitals, universities and other “anchors” provide a consistent demand for the products and services of the area’s employee-owned co-op businesses. As a result, and with a focus on environmental sustainability, jobs are created, neighborhoods are revitalized, tax revenues are augmented, and investments in additional co-op businesses are increased. The effort in Cleveland brought together by a number of local institutions and organizations built momentum quickly as area residents gain a stake in business ownership while creating a flourishing business and a thriving community. The beauty of the Cleveland Model is in the successful demonstration of how everyone in a community can benefit from cooperative standpoint with appropriate funding.
Could Community Owned Enterprises Save Small Business?
Honestly, I have no idea, but in the midst of this pandemic, small businesses are suffering. Local farms, salons, restaurants, and more, who already face the challenge of succeeding against big corporate giants, now have an even bigger obstacle to overcome – mandatory closings by local and state authorities. But, through community owned enterprises, small businesses can be saved and thrive to the benefit of their neighborhoods.
Corporate giants, with seemingly endless resources, have often spelled the end for small businesses, but communities are beginning to band together to raising capital and learn what it takes to save the life blood of many communities. With the goal to help their communities, neighborhoods and local enterprises, like the hospitals and universities of The Cleveland Model, are joining the movement and taking control. These community-owned enterprises are backed with community-owned stock sales to local residents and businesses to provide the goods and services the community needs and wants at reasonable prices.
The community owned enterprise model is quite popular in Western Europe and has a growing following here in the United States. Community ownership business models run the gamut from small local bakeries and restaurants to general stores, co-ops to corporations. Around the world, though not in the U.S., even community owned banks are common.
In the U.S. communities across the country are embracing the community owned business model as a stabilizing force in neighborhood revitalization. The premise means resident control of businesses and other community assets to control community displacement, neighborhood inequality, and to save small businesses.
While thinking about the recovery, governments should think about investing in the community owned enterprise model. This type of investment is needed as it would allow historically disenfranchised communities to compete successfully against vast corporate entities. This type of investment could serve to train community members to read P & L statements, uncover ways to make business procurement efficient, and learn to reduce costs effectively, all items which help grow a business’s bottom line. Community owned enterprise also permits community businesses to be unique, true to the members of the community, while earning profits and promoting sustainability. They create opportunities for community members along with the potential for increased economic prosperity.
