Balle Beat

by Michelle Long

What is successful business development? Do successful businesses “grow” every year? Is there a point when enough is enough? Rather than defining the development of a business or a community as unlimited growth, can we instead define development as the enhancement of what already exists?

Owners of local, independent enterprises who are members of Business Alliance for Local Living Economies (BALLE) networks are exploring that question. One such company who has followed a local living economy growth strategy is Ann Arbor, Michigan’s Zingerman’s Deli. In January 2003, this strategy contributed to its selection as a cover feature as Inc. Magazine’s “Coolest Small Company in America.”

Rebounding From A Wall
Zingerman’s cofounders Paul Saginaw and Ari Wienzweig built their enterprise into an extremely popular and internationally known business, but 10 years have opening, they felt they hit a wall. They had grown to the point where complacency can creep in and entrepreneurs itch for a new challenge. Of course, the most common growth strategy in the retail food business is to franchise … opening Zingerman’s clones in other cities. Weinzweig, however, adamantly opposed that idea. “For me, it was important to be part of something great and unique. You lose the uniqueness when you try to replicate the original,” reported Inc. Magazine. “That other way, however, proved frustratingly elusive. Saginaw and Weinzweig had no interest in pursuing acquisitions or moving to another location, and they knew of no alternative growth strategies for small companies like theirs. They did a lot of reading, thinking and talking. By 1994 the outlines of a grand design emerged. The Zingerman’s Community of Businesses (ZcoB) was ready to be born …

ZcoB was Weinzweig and Saginaw’s vision for a company that by 2009 would be made up of 12-15 individual businesses. All the businesses, Zingerman’s Deli, Bakehouse, Creamery, Catering, training and more, would share the Zingerman’s name, but each would have their own identity and remain small and located in the Ann Arbor area. Funding for each of the start-ups would come from Weinzweig, Saginaw and a managing partner who would work in the business as the owner.

What were the results? “Much has changed at Zingerman’s. The company has been adding businesses at the rate of about one every 18 months, and the pace shows no signs of slackening. Altogether the businesses employ 334 people, up from about 125 in 1994, when the company consisted of just the deli and bakery. With the new businesses have come new partners, new language, and new opportunities for employees, as well as energy, passion, and excitement that was missing a decade ago …

“Yet for all the changes, what is most striking is how much Zingerman’s has remained the same. It’s still a local, independently owned business with extraordinarily close ties to Ann Arbor and its environs. Last year, the 20th anniversary of the company’s founding, 13 local nonprofits put up a giant plaque next to Zingerman’s Deli saying, ‘Thank you for feeding, sheltering, educating, uplifting, and inspiring an entire community.’ One organization, Food Gatherers, was started by Zingerman’s in 1988. “We don’t like to advertise our work with nonprofits,” says Saginaw, “but it’s fair to say this would be a different community if we didn’t do what we do.”

Creating More “Communities of Businesses”
Seattle’s Essential Baking Company shares a similar growth strategy. Entrepreneur and BALLE Seattle steering committee member, Jeff Fairhall, founded Essential Foods (natural sandwiches and wraps) on a shoestring and made the first products from his home in 1988. By 1994, he had become successful in his current location and saw further opportunity to offer new fare and launched the Essential Baking Company. Now a successful and well recognized name throughout the greater Seattle area, Jeff says he has a range of ideas for the Essential Baking Co. and local living economies.

Over the next year, this independent business owner plans to continue to invest in his core business while expanding his own “community of businesses” to ope a new line of premium quality gourmet chocolates. He plans to buy Fair Trade beans directly from suppliers and make chocolate locally. Like the bakery, he plans to offer tasty, educational tours of the new chocolate factory. Jeff doesn’t want the company to grow very large, but does want to grow his opportunities to be creative and to make a difference (see the company profile in the March/April 2003 issue of In Business).

On May 30 – June 1 in Portland, Oregon, BALLE is holding its National Conference, “Building Economies for the Common Good.” Participants will discuss such issues as: growing a business to the benefit of the business and the community; city and county policies that support independent enterprises; and redefining economic development.

Family farms, independent local businesses, community newspapers, local artists, entire ecosystems, and the unique character of our towns are disappearing. The only people who can ensure the vitality of your home, or even have the motivation to ensure that your place doesn’t become every place, are the people who live there. With this recognition, local business alliances across the country are working together to equitably increase prosperity, strengthen community and ensure healthy local environments.

We also encourage you to come early and attend the Portland, Oregon Sustainability Forum on May 29-30, presented collaboratively by 45 nonprofit organizations and government agencies.

www.livingeconomies.org
www.sustainablenorthwest.org

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