Small businesses create favorable context for rosy health

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Kathryn Foster, overseer of the city’s business incubator, visits Ann Dickerson and her husband, Bill Zack, of Chattanooga Cookie.

Despotism, which is of a very timorous nature, is never more secure of continuance than when it can keep men asunder. *** [A] despot easily forgives his subjects for not loving him, provided they do not love each other.

— Alexis de Tocqueville

Americans are a people given to organizing themselves in all sorts of ways for good purposes. When Alexis de Tocqueville visited the United States in the 1830s, he made note of the American penchant for forming groups. “Americans of all ages, all conditions, and all dispositions, constantly form associations. They have not only commercial and manufacturing companies, in which all take part, but associations of a thousand other kinds, — religious, moral, serious, futile, extensive or restricted, enormous or diminutive.”

In their group making, Chattanoogans seek economies of scale and administrative efficiency even when the idea of a large administration seems antithetical to the cause for which the organization is formed. Take, for instance, the industry of business incubators. These seeming charitable groups let big government and trade groups help tiny startups to their feet. Thousands of incubators exist around the world to provide training, aid, practical services and cheap quarters to one- and two-person entrepreneurial outfits.

The Business Development Center on the North Shore of Chattanooga is home to commerce newcomers such as Chris Bursch and his wife, Rebecca, who are launching a franchise operation of Office Pride, a commercial cleaning service. Nearby works another married couple, Ann Dickerson and Bill Zack of Chattanooga Cookie Co. These businesses have three years to prove their mettle before being forced out.

Kathryn Foster runs the incubator in the development center with the goal of “business development,” which is to say the creation of prospering small service and production outfits.

The center opened in 1988 and is the largest in Tennessee and the third largest in the U.S., she said. Whereas the graduation rate nationwide is 87 percent, the local one has a 92 percent success rate even during the paper money meltdown commonly called the Great Recession. All told, 475 companies have been hatched at the Manufacturers Road incubator.

These have created tens of thousands of jobs, Mrs. Foster said. “Synergy is absolutely vital.” Her clients arrive happy about a list of helps. When leaving, the primary benefit in young capital creators’ minds is “synergy, and the friendship and the networking,” Mrs. Foster said. “And then they would talk about the resources, having access to the counseling, and the attorneys, insurance, *** business planners. Synergy would definitely take a front seat to the benefits,” Mrs. Foster said.

COULD THIS SYNERGY help the public health of Chattanoogans overall? An odd question;  Mrs. Foster looked quizzically at us. The synergy her group helps develop “enhances the ecosystem of the entire community. We’re doing this; we’ve got CoLab across town, doing a very similar project; you’ve got Lamp Post [small business capital]. You have about 20 organizations in our community all helping entrepreneurship.

“Everybody is working together to try to get companies from a conceptual stage to ready to market to the revenue stage, and to maturity. *** All over the country incubators have proved successful.”

She sees benefit in the fact that all incubator customers are segregated from the wider local economy. Entrepreneurs share the “same challenges. *** We may be in completely different industries *** but we still have to deal with HR issues, taxation, and cash flow. Everybody [at the BDC] has the same exact same things that keep them up at night.”

If a startup owner can “network, socialize and commiserate” with people in the same building, the Chamber executive said, they are receiving a genuine benefit. When they go they’ll stay in town, the trade group hopes.

The mood among small business operators is full of life, Mrs. Foster said, going as far as she dared to answer our question.

“The failure is not an option attitude is directly related why we have so much success that comes out of here because people — any time you start a new business, you get down. It’s very difficult. *** It is hard work. You do have to work long hours. But if you see other people doing it and other people are successful at it, you see a light at the end of the tunnel.”

BUT THERE’S MORE. Is it possible that physical health of a town or city might be rosier, more blessed, stronger if that town is marked by the small business “synergy” that Mrs. Foster talks about?

At the end of a long day in the sweets business, Ann Dickerson of Chattanooga Cookie Co. is wiping down her stainless steel racks. She is checking her next day’s Chamber council meeting and marketing schedule. She’s placing an order for more special ingredients. Today she pressed herself into the notice of 10 potential customers and chatted with five existing ones; she gabbed with half a dozen fellow entrepreneurs at the incubator; she’s weary. She’s satisfied. She and husband Bill have made progress.

The contentment of the small-business person at the end of a long day is not just a private rosiness telling of a sense of personal satisfaction before going to bed. Her happiness is a public phenomenon as well.

A local economy filled with small businesses makes people healthier than if they lived in a locale overshadowed by corporate titans, an important study says.

We’ll tell you about it tomorrow. Please drop by.

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Sources: Alexis de Tocqueville, Democracy in America, trans. Henry Reeve, Schocken Books, New York, Vol. 2, Chapter 2, “Of the use which the Americans make of public associations in civil life,” Page 128