If it doesn’t make a lot of money, is it not worth doing?
That’s the general response to just about everything in the business world, from helping a company raise money, to offering legal services, to brokering business buy-outs when someone needs to retire. There are many important middlemen who grease the wheels of an economy, helping provide unique expertise. When a place is small, and business isn’t always brisk, this expertise is often missing. These services are as essential in rural towns as urban ones, so what (and who) picks up the slack when a service would make all the difference to success but simply doesn’t exist?
RedTire gets it.
YES! Magazine just put out its April 2017 issue, and it contains an interesting article about a service headquartered in Kansas, called RedTire. It helps ensure that businesses in need of a new owner don’t go out of business, by assisting with finding and settling in a new owner. Their tagline is great: “Retiring and aspiring business owners can apply today.”
In Concordia, Kansas, population 5,000, they made sure the local pharmacy stayed open, a huge boon to a tiny town that has relied on that business for the last 40 years.
“RedTire has nothing to do with tires; instead, the name is short for the phrase “Redefine Your Retirement.” The staff do everything from appraising the business to vetting the buyer, and even offer counsel after the deal is done.”
So, how do they do it when other for-profit businesses can’t or won’t? As always in rural towns, it takes a village, or, a creative partnership where people wear a variety of hats.
Turns out the University of Kansas hosts (and essentially underwrites) the RedTire program. The program’s success is built around the involvement of business students who staff the service. They get paid as they learn in a real world setting, while making a real difference in their community. Brilliant!
The kicker? The program does not charge for its services. This has caused folks interested in replication to turn away. I say, phooey on them. They don’t get it.
Our experience in rural Oregon.
I run a nonprofit program called Hatch Oregon that helps entrepreneurs raise money using a new “crowd-investing” law in Oregon. It’s a new model of raising capital from your community, and has the power to transform the inequitable financial system. Turns out that many of our clients are in rural communities, outside urban Portland. Frankly, most of Oregon is rural. And guess what, they haven’t got much money.
The USDA provided us with a grant a few years back, to offer our program in rural Joseph (pop. 5,000) and Baker City (pop. 10,000) in rural NE Oregon. We did train the regional economic development district staff (funded by state, federal, and foundation dollars), but no one else in town was beating down our doors to learn how to provide the same service as a business. When servicing small business and rural communities, there’s just not much money in it.
What are rural town leaders supposed to do?
For the most part, they do without. Right now (early April), I happen to be working in a small town in Scotland (pop. barely 3,000). Yesterday, I picked up the local paper in the cafe/craft/bakery shop. The leading cover article was about the Royal Bank of Scotland pulling the plug on over 20 banks in small towns all over Scotland. This coastal area of Fife alone will lose six of their branches on high streets up and down the coast. Town leaders and citizens are “angry and dismayed.” While the reason sounds plausible (400% increase in online and mobile banking) there’s an entire generation of folks who don’t trust the internet with their money, and local tourism depends on a local bank. What will these folks do? Who cares?
Decision-making based on how much money an entity can make is an increasingly dangerous one. Whether it’s fiduciary duty to shareholders (which has been called into question recently) or just a regional firm with their heads in the numbers and their hearts in the freezer, it’s a slippery slope to reduce every decision to a quantitative data point. It also implies the decision-makers won’t feel the effects. These days, it’s harder and harder to avoid the fallout. What we do to others we do to ourselves, in very important ways. Taken together, this profit-over-people mindset of making decisions, especially effecting people in small places, feels like a social and economic catastrophe waiting to happen.
Let’s reach across silos.
I believe we’ve got to do what Kansas did, and reach across silos to create mutually beneficial partnerships with all kinds of unusual suspects. Universities, community colleges, nonprofits, hospitals, libraries, corporations, tourist organizations, and government agencies should begin to look at themselves as community catalysts in new ways.
Perhaps every town needs a “Community Collaboration Coordinator” who is paid by a bit from each entity (now there’s an idea). This person is given the time and authority to identify, troubleshoot, and suggest solutions with the aim of creative collaborations and mutual benefit. Rather like a regional solution “ombudsman.”
The post Why Rural Towns Get Left Behind, and What We Can (Should) Do About It appeared first on Hatch Innovation.