Category Archives: Local business

Beware the coal powered electric car–or worse

electric_power_industry_net_generation_fuel-largeWas taking in an article titled Electric Cars are NOT Coal Powered Cars which features a huge pie chart showing that in 2009, 45% of US electricity was generated from coal. Not an auspicious start to an argument!

But it gets way better. He then goes on to “make a case” for why natural gas and nuclear are such “clean” forms of energy.

I had a chance to watch a documentary called Gasland which shows how people who live in communities being fracked are getting very sick, and the water is being poisoned.

Nuclear is even scarier. When I was in Japan I discovered that agriculture for *all of Northern Honshu* has been trashed, not just the areas that show elevated levels of radiation. Basically the buying public won’t trust the government that it’s safe (wonder why) and so they just won’t buy from that region. The farmers are devastated, leading to farmer suicides. Suddenly coal isn’t sounding so bad, is it?

Reality is that as a country, we’ve backed ourselves into a corner. Can’t imagine living without a car? The car and oil companies are at “mission accomplished” having killed commuter rail lines in the 1940’s (yes they were convicted, no nothing happened as a result) and given rise to suburbs and the need to have a car.

The only way around driving a “dirty fuel” car might be if you live somewhere very sunny, and have a lot of solar panels, then you might be able to come out net even with the grid, so you can feed the grid during the day, and then charge your car during the night. Of course then you have to factor in the power that went into making the solar panels (which is significant) but it’s probably the best thing around, besides not needing to drive.

More and more, I think the smart move is to “live local” where you can do your essential shopping by bike, your friends and entertainment are likewise nearby, and you can use public transit to get to work. Sure the public transit ends up using dirty fuel somewhere down the line, but it’s got to be much less per person than an individual car, be it electric or otherwise.

I’m looking hard at “going local.”

Want to support local businesses? Pay cash.

I have to admit that I’ve gotten very comfortable using my credit card. Too comfortable. Yes I pay it off every month so I’m not using it for “credit” per se–just for convenience. It’s nice to see a summary of my expenses, for understanding where my money goes. That convenience doesn’t cost me anything directly, but in thinking about it I’ve come to realize that it costs the retailers a lot.

Now if we’re talking a huge, publicly held company, then I look at it as a cost of them doing business with me. But when it’s the small business entrepreneur restaurant owner down the straight who makes the amazing Taiwanese double sauce noodles for me week in and week out, then it doesn’t quite feel right.

I got curious about how much it might actually cost them, and found a website, truecostofcredit.com which shows you the cost for a variety of cards, if you let them know which one you have. So looks like for a restaurant, factoring in the per transaction cost fee, and then the percentage fee, it’s about a 5% fee to the merchant to pay for my noodles on the credit card.

Having just spent about half a year working closely with a variety of small businesses, I know how much of a difference 5% can make–for a restaurant that’s taking in $400K a year, that’d be a $20K difference, which can mean a lot to a hard working local entrepreneur.

For me it’s become an easy choice: do I want that 5% going in the pocket of the owner, or the pockets of the huge bank’s executives and shareholders? When buying local pay cash! It’s fun, it’s easy, it makes a difference.

The store may be local, but is the service any good?

I recently wrote about my experience of discovering that there is a salon one block away from my house. I’m so used to driving everywhere that I didn’t even know it was there. So it’s great that I can walk to this business, but then of course I wonder if it’s any good. If nothing else, greater competition means that providers need to try harder, be better, to be successful. I wonder how the move to local business will impact service quality?

I grew up in Canada, and one of my fond memories is of family excursions across the border from Vancouver to Bellingham to go shopping in the United States. I remember how there was better selection, better pricing, and much friendlier service. It just seemed as if there was a lot more competition in the United States, and that the retailers tried harder. As customers we were in heaven, and it called to question why retail service back home in Vancouver was so lacking.

These questions about competition and service have been thoroughly studied. When I was at MIT studying for my MBA, I had the good fortune to take a class with Professor Duncan Simester, a very sensible professor of marketing at MIT who studies market competition. One of my takeaways from his class was the importance of location for many kinds of businesses, especially retail businesses. That given the choice between going to business A or business B, all other things being equal, you’ll go to the one that is closer to you. And along those lines, if A is closer they can probably charge a bit more, and still win your business because they are closer.

You may be thinking “I don’t mind driving 10 minutes if it’s going to save me some money.” And here’s the twist: when gas and cars are very cheap, then zipping around from here to there to save a dollar or two isn’t a big deal. But when gas gets closer to it’s fully loaded cost (which has been estimated at $12/gallon in addition to what you pay at the pump), then you’ll very likely think twice about driving to get that “deal.”

The end result will be that local businesses will regain a lot of power that’s been lost during the car age, and prices will go up. It may also mean that the large box stores lose power to small, more conveniently located, locally run businesses. I can only hope that levels of service will not suffer too greatly, and that the strategy of business success through good service will carry on. But the effective range of where we can shop is going to shrink, and this may not be a good thing for customers.

The return of the local business

Back in the old days, I imagine that everyone knew the businesses right around them. If you didn’t have a car, I’m guessing your options were foot, bike, and bus, with the latter not happening all of the time. For my grandparents who grew up in central Alberta, even going to a restaurant was a big deal, at least when they were young. So this notion of hopping in the car and driving 5 miles for…anything is relatively new.

After years of getting pounded on by the Internet and by chain stores, I anticipate the return of the small, local business. As gas gets more expensive, and as people to appreciate the value of “local” once again, we’ll start to seek out, discover, and support local businesses more.

I was recently looking for a hair salon for a friend, and so I did my usual thing: hopping onto Yelp to find out which businesses are around, which are affordable, which are good. And so I came up with a list of salons to call–all within about 5 miles of here, when I stumbled on something very unexpected:

There’s a salon across the street.

I’ve lived here over three years and I didn’t know that there was a salon one block away, on the other side of the street. Wow. I must have passed the storefront, because I patronize a dry cleaner that is very close by. But I just wasn’t paying attention–it didn’t register.

I’m glad I had this experience because it brings into my awareness how much I depend on the car for day to day living, and how I’d lost track of that. Why drive 5 miles when I can walk across the street? Going I will pay more attention to what businesses are nearby. I hope they have good service.

The rise of grease

Was at Parisoma’s  Clean Tech demo night last week and was delighted that the first table I came across was the folks from Skip to Renew. They are making high quality lubricants from plants and algae. As the Sales Director Josiah explained, when you have metal on metal, you need a lubricant.

At first I was a bit skeptical on the performance aspects, and so I grilled him on that. The product they have on the market is for bike chains, Re:cyclist, and not only will it outperform what everyone considers the best product out there, but it’s also cheaper, 100% non-toxic, and it comes from plants. Cool!

They have more products in the works, including a plant-based grease that can be used in places like farm machinery or factories. Josiah said that the product smells much like vegetables–so much better than your typical grease. Personally I’m looking forward to their spray on lubricant product, so that I have a non-peteroleum alternative to WD-40.

From a business point of view, Skip to Renew has opportunities in two very different arenas, consumer and industrial. One would almost want to take the company and split it into two, and have different teams to go after each opportunity, because the sales cycle and influencers will be so very different.

Apparently the competitor that REI carries is actually a mix of vegetable oil and synthetic oil, and so isn’t 100% natural. I want a choice! Technically as a long-term member of REI, which is a co-op, I’m also part owner. We’ll see how much sway I have. 🙂 Conveniently, I will be at a bike maintenance workshop (did I say core life skill?) on Saturday at REI San Carlos.