Sometime by week's end, the state expects to post an application at coloradosbdc.org aimed at giving 20 small businesses a boost — in the form of data on markets, customers and competitors.
It's likely to be the first time the public gets to see what "economic gardening" looks like at the state level, and the unveiling of the pilot program signals the start of a small progressive wave in the realm of small business, catalyzed by two pieces of legislation shepherded through the Legislature by Colorado Springs Democrat Pete Lee.
Besides House Bill 1003 — whose "economic gardening" concept emphasizes nurturing and cultivating local small businesses by giving them tools that help them thrive — Lee sponsored HB 1138, "Concerning Benefit Corporations." That one allows businesses to set aside some of their profits for the public good without shareholder backlash.
The theory behind economic gardening is that instead of spending millions of dollars on incentives and tax breaks to attract a big manufacturer, helping small businesses to grow and prosper and add jobs might be the better path.
"Rather than hunting and gathering to bring in an Intel from California with incentives and tax breaks," says Lee, who sponsored House Bill 1003, "economic gardening focuses efforts to bring the tools and expertise to local businesses" to help them prosper.
Economic gardening can give rise to hundreds of small businesses that employ thousands of people; if a handful fail, layoffs are few. But if a community seeks to have only a couple of mega-employers, each employing thousands, then a downturn could bring disaster, as it did when Intel pulled out of Colorado Springs in 2007 and laid off at least 1,000 people.
The bill's fiscal note said it would cost $200,000 to implement, and it passed the House 36-27 and the Senate 20-15, along party lines. Signed by Gov. John Hickenlooper on May 24, the pilot will restrict help to "second-stage" companies, those that employ at least six people full-time and not more than 99, has had its principle place of business in Colorado for at least two years, has $500,000 to $50 million in annual gross revenues and has a product or service with potential to be sold outside its local area or the state.
"We do have a wait list already," says Kelly Manning with the Office of Economic Development and International Trade, alluding to "verbal referrals from the communities that know it is rolling out."
Without giving details, she adds, "With the feedback we've gotten, it will not be a challenge to get the 20 companies" for the pilot project. Two of those interested are from Colorado Springs, but Manning wouldn't name them.
David White, chief business development officer for the Colorado Springs Regional Business Alliance, says in a voicemail the group is aware of the new law and "engaged" in laying the groundwork to implement it next year. "We feel this is a good initiative and dovetails nicely," he says, with the Alliance's programs that support existing and start-up businesses.
The program will officially launch in January after 14 small business development center workers are certified through the Edward Lowe Foundation, a nationally recognized economic gardening certification program.
Also starting in January, after another party-line vote earlier this year, companies will be allowed to register for Public Benefit Corporation designation. With a two-thirds shareholder vote, they can amend their articles of incorporation to include "an additional purpose of providing a general or specific public benefit," instead of always putting profits first. And they'll be legally protected in doing so.
"In a typical corporation, corporate officers and directors owe a duty only to the corporation and its shareholders and must make decisions that best serve only the corporation and its shareholders' financial interests," Daniel Christopherson, with Christopherson Intellectual Property Law Firm in Washington, D.C., explains via email. "In a benefit corporation, officers and directors are also required to consider the public good, including protecting the environment and society as a whole."
Until now, the best Colorado companies could do was obtain "B Corporation" designation for branding purposes from B Lab, a Pennsylvania-based nonprofit. These companies may already donate a certain percentage to charity (Namasté Solar, Boulder); provide employees with paid time off for community service (New Belgium Brewing Co., Fort Collins); or give priority to local suppliers even if they charge more (Bhakti Chai, Boulder).
Last year when the Independent published "Friends with benefits" (cover story, March 8, 2012), there were 17 B Corps in the state; today, there are 30, says Heather VanDusen, senior associate at B Lab.
Two are in the Springs: the Paradigm Project, which works to set up sustainable businesses in poor communities around the world, and First Affirmative Financial Network, an investment firm for clients looking to invest in socially and environmentally responsible companies.
There might be another soon. David Amster-Olszewski, owner of SunShare, says his business model lends itself to public benefits, such as job training for the unemployed and building solar gardens that benefit low-income communities. "Think Habitat for Humanity," he says, "but for solar."