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Green Retailing: Small Is Beautiful

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Green Retailing: Small Is Beautiful
By Jay Tompt Wm. Verde & Associates

For many working in the sustainability movement, one book-Small Is Beautiful: Economics as If People Mattered-provided the spark that inspired their careers. Turns out, economics isn't a dismal science after all, and it's too important to be left to self-important politicians or obfuscating policy wonks. Instead, this book argues that economics can provide a potent framework for building healthy and sustainable communities. The book is still relevant 40 years after its first publication, and its author, E.F. Schumacher, is revered among academics and professionals working in a range of fields from development economics to green building. Why? It shows that decentralized, community-centric economic development policy improves sustainability and builds local resilience. Sustainability and local resilience are two issues of supreme importance to the home and shelter supply chain: the former, because that's what's driving growth, competitiveness, and innovation; the latter, because the long-term health of our industry is directly related to the health of our local and regional economies. But while our industry creeps toward sustainability, it's heavily reliant on centralized supply chains and international-scale corporations. Scale and centralization have benefited consumers with lower prices, due mostly to off-shore manufacturing. But too much of a good thing is, well, not a good thing. Many argue that high energy costs associated with a globalized supply chain make it inherently unsustainable. But the point I want to address is that it also leaves local economies vulnerable, evident today in high unemployment, diminished construction activity, and increasing closures of independent dealers. For independents to remain competitive they need, among other things, access to capital. Given the current credit crunch (and, by the way, a highly centralized banking system is also problematic), smaller dealers and distributors have little opportunity to invest in new innovations or take advantage of growth opportunities when they arise. I've often argued that creating strong links with one's surrounding community is the key success factor for independents. Now, there's one more reason why that's the case and it could prove to be a game changer: crowdfunding.

Crowdfunding is one of a growing number of alternative financial models enabled by the Internet and filling the gaps not addressed by the existing financial system. The idea behind crowdfunding is that many people can contribute small amounts of money to enable big things to happen. To date, crowdfunding has been limited to grants, product pre-purchases, and micro-loans. But that's about to change. The JOBS Act, which goes into effect next year, will allow crowdfunding sites to begin selling equity shares in companies, enabling capital to flow directly to smaller firms, bypassing Wall Street altogether. It may be too late for some firms, but this could prove to be a valuable path to survival, growth, and competitiveness for small independent companies whose fate is still undecided-especially for those who can draw on the good will of their communities. Independents interested in this path should start getting ready now. Simply listing your company's offer on a website isn't going to be nearly enough. Start building your business case and begin strengthening ties to your future investors: your community. Develop some innovative ideas that will make a difference-a green building training facility, perhaps? Ultimately, whether you want to raise equity investment or contribute to a creative idea, crowdfunding could prove that not only is small beautiful, but it's a sound financial strategy, too.

Summary Crowdfunding is one of a growing number of alternative financial models enabled by the Internet and filling the gaps not addressed by the existing financial system. The idea behind crowdfunding is that many people can contribute small amounts of money to enable big things to happen.

Description To date, crowdfunding has been limited to grants, product pre-purchases, and micro-loans. But that's about to change. The JOBS Act, which goes into effect next year, will allow crowdfunding sites to begin selling equity shares in companies, enabling capital to flow directly to smaller firms, bypassing Wall Street altogether. It may be too late for some firms, but this could prove to be a valuable path to survival, growth, and competitiveness for small independent companies whose fate is still undecided-especially for those who can draw on the good will of their communities.

Tags: Crowdfunding, Crowdsourcing, Economics, Jobs Act, local resilience, sustainability

Posted by Jason Robbins

Aug 11, 2012 12:48 pm GMT Viewed 759 times

Author: Jay Tompt Source

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