ASSETS explains how businesses should combine economic development and social change.
WRITTEN BY BY DAVID A. KOSTIVAL
(Photo by Bill Uhrich)
Sustainability in business is a commonly heard phrase to suggest a workplace should encourage environmentally friendly practices.
But the word in its broader definition means that businesses also need to be socially sustainable, said Jonathan Coleman, interim co-executive director of ASSETS, Lancaster.
ASSETS is a non-profit organization focused on transforming communities through businesses which are focused on social change and economic development
Coleman spoke Thursday at a program co-sponsored by Berks Nature and Penn State Berks. The event was held at The Nature Place in Angelica Park.
“We take a holistic view of what sustainability means, and that is being environmentally, socially and economically sustainable,” Coleman said. “We envision an equitable, ethical and prosperous economy that works for everyone. Businesses should play a more vital role in helping economies and ecosystems thrive.”
Coleman said ASSETS has programs which focus on entrepreneurship, as well as resources to help existing businesses grow their impact and sustainability.
Coleman used his home-base of Lancaster as an example of what he called a system failure.
Even though the city has experienced a revitalization of its downtown, it has also seen an increased poverty rate and a need for more businesses which are owned by women and people of color.
“The community has a rising tide, but a rising tide lifts all boats and way too many get stuck in the mud,” Coleman said. “There are negative environmental outcomes of economic success.”
Coleman quoted Larry Fink, CEO of BlackRock, an American investment management corporation, who wrote a letter to his investors saying: “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”
Coleman said business-as-usual has not worked and that businesses need to think outside of the box.
“We help businesses take high level thought and move it into action,” Coleman said. “Good businesses operate with a triple bottom line of how they can impact profit, people and the planet.”
Craig Dalen, director of impact business strategy at ASSETS, explained that businesses shouldn’t be profiting while the communities around them are failing.
Dalen said companies should seek to be different to have a competitive advantage and cited the example of Patagonia.
“Patagonia differentiates itself from other outdoor retailers who haven’t made a push for an environmental advocacy,” Dalen said. “Brands which create a different narrative in the marketplace will attract values-based customers. Be proactive in your approach; create a niche in your marketplace and tell a different story.”
Dalen said businesses worldwide are taking what is known as a B impact assessment, which is an assessment to look inside business models.
“We can self-regulate ourselves in order to create more value over time,” Dalen said. “The virtuous part is that business grows and the cycle perpetuates itself.”
“A nature-inspired road map could help you and your business disrupt traditional industries,” Dalen added. “Research shows that businesses which start prioritizing values to its stakeholders start to realize long-term benefits.”
But those values would also include such things as investing in a workforce with barriers or providing incentives to employees that typically leave after a certain amount of time.
“That is investing in a community to tell a different story,” Dalen said.
Coleman said it’s about creating ecosystems for truly sustainable business in the community.
“We want to merge business concepts with social and economic concerns,” Coleman said.
“Lancaster is a city revitalized and we (ASSETS) are cleaning up the messes,” Coleman said. “Reading is a bit behind other cities when it comes to revitalization, so it has an opportunity to do things right from the beginning.”
Coleman said ASSETS would like to become involved with businesses in Berks County to give them tools and resources to create more equitable and sustainable business models.
Your company’s next owner could be sitting in a cubicle down the hall, assembling parts on a factory floor or laboring on a construction site down the street. That, at least, is the hope of a burgeoning movement concerned about what will happen to the thousands of small and mid-sized businesses owned by baby boomers in Central Pennsylvania.
Most, if not all, of those owners will be looking to sell their companies over the next few years.
While many will turn to family members, industry peers or even private equity firms, an effort led by a Lancaster-based nonprofit is hoping owners will at least contemplate handing over the reins to employees.
“Widespread ownership transitions in our community offer us an opportunity to harness the moment to retain local jobs, root wealth locally and maintain a vibrant local economy. Employee ownership structures are a powerful way to do this,” said Craig Dalen, director of impact business strategy at Assets, the nonprofit that is leading the charge to spread awareness about employee ownership.
The nonprofit is describing the wave of anticipated sales as a “silver tsunami.”
At stake is the fate of roughly 11,550 businesses employing nearly 135,000 people in Berks, Dauphin, Lancaster, Lebanon and York counties, the areas covered by Assets, according to data the nonprofit gathered from the most recent U.S. Census survey of small-business owners, taken in 2012. The region’s boomer-owned companies represent $30.87 billion in sales and $4.79 billion in payroll.
As it looks to put employee ownership on the menu of exit strategies, Assets is collaborating with local lawyers, advisers and business owners, as well as an Oakland-based nonprofit, Project Equity, that is undertaking similar campaigns in other communities around the country.
Employee ownership remains relatively rare. Out of nearly 6 million companies of all sizes nationwide, just under 7,000 are held by employee stock ownership plans, or ESOPs, one of the most common vehicles for selling a business to its workers, according to the National Center for Employee Ownership. Another 1,000 companies operate under other forms of employee ownership, Project Equity estimates.
Employee ownership is not a fit for every business, its advocates acknowledge. And it is not the only way to preserve local control. Passing a business from a parent to a child or children, for example, also keeps wealth and ownership in a community.
But it is better than simply shutting a company down, which is often the path of least resistance, or selling to a third party from outside the community, said the co-founders of Project Equity, Alison Lingane and Hilary Abell
“Typically that means you’re going to lose at least some portion of the jobs in administrative and back-end operations,” said Lingane, noting that a company’s spending and profits also may leave the community after a sale.
Advocates of employee ownership want to ensure departing owners are rewarded fairly for what often represents their life’s work. But they also hope owners will value other factors besides the final sale price.
“The problem is that many advisers are pushing cash and that becomes a proxy for value,” said Ed Renenger, an attorney and ESOP specialist with Reading-based law firm Stevens & Lee. “In our experience if a business owner receives enough cash consideration to take care of their personal, family and charitable needs, it frees them up to think about other value drivers. There are lots of owners that find value in other things, such as legacy, community and employees.”
A sale to employees often entails risk and complications that don’t arise during a sale to a third party, Renenger and other advisers acknowledged. But the complexity ultimately is no greater than it is for a more typical sale.
“The reality is that the transition of a business to a third party, with the exception of an intergenerational transfer, is a very emotional event for the owner,” Renenger said. “It’s a complicated transaction that involves a detailed examination of current operations, current compliance with the law, current financial statements in ways that may feel very intrusive, and a sale to an ESOP is not unique in that.”
The ESOP, however, creates an opportunity to reward employees and preserve a business owner’s legacy, advocates said. And there are tax benefits, Renenger said. For one, an ESOP is considered a retirement plan, so a company that buys stock for its employees via contributions to an ESOP can use pre-tax dollars to do so, just like it would if it were making contributions to an employee’s 401(k) account.
Employee ownership also dovetails with changing expectations for the workplace, said Roger North, president of North Group Consultants Inc., a Lititz-based leadership consulting firm.
After World War II, workplaces followed a command-and-control approach fashioned along military lines, North said. Employees mostly accepted decisions handed down from above.
People entering the workplace today expect to have greater input into decision-making, he said. An ownership stake, whether held by children or employees, can help sharpen that input.
“My observation would be, if you don’t shift to that way of thinking, particularly over the next 10 to 15 years, you’ll likely be behind your competition,” North said.
It’s a way of thinking that has become ingrained at business software company Cargas Systems Inc. Employees have owned a growing stake in the company since 1998, said founder and CEO Chip Cargas.
Cargas now owns about 40 percent of the company. About 70 of the firm’s 100 employees hold the remaining 60 percent. Employees have two opportunities a year to buy at least $600 worth of stock. Shareholders help elect the company’s board, but all employees have access to the company’s financial performance and profit-sharing bonuses and other perks.
Cargas may no longer be the majority owner. But, he said, he feels he has a more engaged workforce and a sustainable company where people want to work. They pitch in when times are hard and celebrate when times are good.
“When we started employee ownership, I was 100 percent owner of a small pie,” he said. “Today I’m the 40 percent owner of a much larger pie and 40 percent of that much larger pie dwarfs the 100 percent of the smaller pie.”
The pie, he said, would not have grown as large without the effort and engagement of employee-owners. “Yes, we have a hierarchical organizational structure with titles and whatnot, but the way we operate is so collaborative,” he said.
And Cargas doesn’t have to fret about what will happen to the company when he retires. The succession is already under way, allowing employees to focus on customers.
“We don’t need to be worried about shocks to the system from huge ownership changes,” Cargas said.
As they move ahead, Assets and Project Equity plan to do more than raise awareness. Their goal eventually is to conduct feasibility studies for companies interested in employee ownership and to work with them to make it happen. Details are still being worked out, Dalen said.
Project Equity already has undertaken several transitions in the San Francisco area and has been developing studies for companies in western North Carolina, where it is working with a local partner called Industrial Commons, Lingane and Abell said.
The chief risks for retiring business owners include ensuring employees are prepared to become owners, both mentally and financially.
“Most small businesses are looking to rely on key employees who have management potential, who can keep the ship sailing and keep things going,” said Peter Kraybill, an attorney and leader of the corporate practice group at Lancaster County law firm Gibbel Kraybill & Hess LLP.
The key employees also need money to pay for the business. It typically involves a combination of debt and a promise to pay the selling owner over time as the buying employees acquire ever-greater chunks of the company, Kraybill said.
Among the risks is less-than-complete payment to the seller, especially if the new owners stumble during the transition, Kraybill said. The new owners may not buy in at the original rate preferred by the seller, or they may not earn the full confidence of customers.
“It’s quite a bit to navigate for an owner,” Kraybill said. “There are a lot of nervous-making moments.”
But, he said, there is a risk when a business is sold to an outside party. A third party could require payments over time instead of in a lump sum, and it may run the company very differently.
“That’s also a risk to a departing owner who very often, particularly for small businesses, has built this as their life work,” Kraybill said.
The owners of The Stroopie Co. didn’t need a label to let customers know they wanted to make more than profits and cookies. But they decided to pursue one anyway.
The business, which bakes and sells crispy Pennsylvania Dutch cinnamon cookies, was founded in 2008 with a mission of providing employment to refugee women. Jennie Groff and her husband, Jonathan, doubled down on that cause when they assumed ownership of the business in 2010, even taking the top prize in The Great Social Enterprise Pitch, a local competition for socially responsible businesses.
The Groffs decided to take the company’s mission one step further by becoming a certified Benefit Corporation. The certification, also known as B Corp certification, comes from B Lab, a Philadelphia-area nonprofit that combs through companies’ operations for evidence of socially and environmentally responsible business practices.
The Stroopie Co. is now one of 56 Pennsylvania businesses to boast B Corp certification. The Groffs see the recognition as a formalization of their for-profit company’s commitment to a cause.
The certification, though, exists outside of any legislative framework and carries no direct legal or financial benefits. And business owners that opt to pursue it have to pay fees based on the size of their company and, in many cases, commit dozens of hours to the application and documentation process. They must also adopt enough B Lab-approved procedures — like offering employees paid time off for volunteering or creating written policies for prioritizing local vendors — to receive the requisite 80 of 200 possible points on B Lab’s assessment.
The commitment needed to pass muster with B Lab — on top of the fact that certification carries no promise of financial benefits — might be why The Stroopie Co. is one of only four midstate businesses that can boast a B Lab seal of approval. Other companies have gained certification over the years but were not recertified, another level of scrutiny to which B Corps have to commit every several years.
The expense in time and resources has not dissuaded the Groffs. Nor has it dissuaded a growing number of other business owners, mostly in Lancaster County, from chasing the B Corp label. At least 70 businesses in and around Lancaster have taken an initial assessment this year, with hopes of either becoming fully certified or at least learning some good business practices from the process.
Many feel that adding an additional layer of scrutiny to their practices is simply the right thing to do.
“These businesses we have in our hands are incredible gifts to nurture and use well,” Jennie Groff said. “This is just one more way we can do that.”
Leaders at these businesses said they, like Groff, felt that B Corp certification provided an extra layer of authenticity to social and environmental practices they already had in place.
Two Dudes is the oldest and largest of the midstate’s B Corps, with 53 employees and a history dating back to 1987. Company co-founder Peter Barber started pursuing the B Corp certification around early 2016 before receiving the official approval in September of that year.
The biggest hurdle in the certification proved not to be implementing major policy changes, but rather documenting informal practices and principles that already existed, Barber said. The company, for example, had a general preference for local vendors before starting the certification process, but had no written buy-local strategy. It also tried to save energy where it could, but had never formalized a framework for doing so.
“There’s nobody out there that’s going to tell you their business doesn’t care about the community, they don’t care about their workers. Everybody is going to talk the game that they’re doing that kind of stuff,” Barber said. “How do you create very definitive standards?”
Kate Gallagher, CEO of coLab, and Kedren Crosby, president of Work Wisdom, say they had similar experiences.
Both consulting firms were founded specifically for the purpose of creating positive social impact — coLab through consulting services for nonprofits, and Work Wisdom through consulting services for socially responsible organizations. But putting everything into writing, they said, took time.
Crosby estimates the process took her company about four months from start to finish before it received certification this past March. Gallagher’s firm, which was already legally structured as a benefit corporation at the state level, received its certification this November after several months of trying to find time for the process while juggling all of the other obligations that come with running a business.
That’s not to say they did not have to make any changes. Gallagher, for example, added a money-back guarantee into coLab’s contracts — a big step for a consulting firm that might devote months of services to a single client.
Gallagher, Crosby, Barber and Groff all say the process was worth the effort — and not just for the privilege of putting a B Corp certification logo on their websites.
While Two Dudes cannot attribute any increase in business directly to its B Corp certification, Barber said, the process of taking B Lab’s assessments and learning how to formalize certain business practices likely made the company more efficient.
“Has it gotten us more work? I don’t know,” Barber said. “Has it made us more profitable? It may have.”
B Corp certification also adds a layer of formality to a company’s business practice if it ever needs to bring on new investors or sell to a new owner, Groff said.
On top of that advantage, the label has given Stroopie an avenue through which to share its story with other companies looking to make a positive impact in their communities.
“I kind of have a family of other businesses that are working toward similar things,” Groff said.
Lancaster leads the way
All four of the midstate’s B Corps call Lancaster County home. The Lancaster area, in fact, ranks second in the state for total number of B Corps. Only Philadelphia — which hosts 25 — has more.
The nonprofit ASSETS sits at the hub of much of the county’s B Corp buzz. The Lancaster-based organization, which offers business development programs focused on addressing social disparities, has been educating the businesses with which it works about the certification, encouraging them to at least go through B Lab’s initial impact assessment.
The free assessment is catered to businesses based on factors like size and industry and generally takes between one and three hours to complete, according to B Lab. It gives companies a framework through which they can start thinking about ways to improve their social and environmental impact — even if full certification is not in the cards.
The assessment is also a key tenet of B Lab’s Measure What Matters program, which provides guidelines for organizations like ASSETS that want to help businesses find quantifiable, concrete ways to increase their positive social and environmental impact while increasing profits.
ASSETS hopes to see 10 percent of Lancaster County’s 12,000 to 15,000 businesses take the assessment in the next three to five years, said Craig Dalen, a former B Lab employee who now serves as ASSETS’ director of impact business strategy.
Dalen also hopes to see between 120 and 150 businesses go on to gain full B Corp certification.
It is a lofty goal, but one Dalen feels confident Lancaster County’s businesses will meet. The county already has a strong record of corporate responsibility, he said, as evidenced by companies’ contributions to events like The Extraordinary Give, a countywide effort that raised more than $8 million for local charities in November.
Dalen knows the full certification process can feel daunting, both to small business with few resources to spare and large companies with complicated procedures that might take significant time to change. But he feels confident businesses will rise to the challenge — for the sake of both their communities and their own bottom lines.
B Corp versus benefit corporation
Not all B Lab-certified B Corps are legally structured as benefit corporations, and not all benefit corporations are B Lab-certified B Corps.
Business owners can structure their companies as benefit corporations or benefit LLCs under Pennsylvania law, in much the same way that they can choose to be S corps, C corps, sole proprietorships or any other kind of business.
Legally defined benefit corporations must submit annual reports to shareholders outlining the ways in which they contributed to the public good. These reports are also shared with the state, making them a matter of public record.
The benefit corporation structure is available only at the state level, and only in certain states. Companies registered as benefit corporations in their home states have to register under different business structures — like LLCs or C corps — at the federal level.
B Lab’s B Corp certification, on the other hand, is a label that has no ties to a business’s legal structure. It is similar to the LEED certification for environmentally friendly buildings in that it is connected not to legal requirements but rather the standards of a non-governmental nonprofit.
B Lab strongly encourages its certified B Corps that are not structured as benefit corporations to pursue becoming one in states that offer the option to do so.
Lancaster B Corps
The Stroopie Co. Description: Cookie maker with an emphasis on hiring refugees
Number of employees: Seven
B Lab-certified: May 2016
Two Dudes Painting Co. Description: Commercial and residential painting company
Number of employees: 53
B Lab-certified: September 2016
Work Wisdom LLC Description: Consulting firm with a focus on workplace culture
Number of employees: Zero (Six consultants provide services as independent contractors)
B Lab-certified: March 2017
coLab Inc. Description: Consulting firm with a focus on nonprofits
Number of employees: Four
B Lab-certified: November 2017
For more information
Business owners can take B Lab’s free impact assessment test at bimpactassessment.net/assets. Creating an account on the site will also put the test taker in touch with ASSETS, which can answer further questions.
ASSETS is also hosting a series of seminars over the next several months focused on socially responsible business practices. More information is available at assetspa.org.
ASSETS works primarily with companies in Lancaster County but is also able to provide guidance and resources to businesses in other parts of the midstate.
It’s Friday night and the Horse Inn is packed. There’s a wait for a table in the main dining room and the front bar is filled with pairs of diners and drinkers sipping on craft cocktails — perhaps a “Call to Arms” (Rittenhouse rye, Zaya rum, ruby port, boiled cider, pressed lime, Angostura) or a Doctor’s Orders (Market Alley gin, house tonic, basil, cardamom, grapefruit water) — and local craft beer.
It’s a scene that could be replicated in almost any major metropolitan area in the country: buzzing voices, plenty of dapper young urbanites, vintage jukebox, nostalgic bar games and low lighting.
But in other ways, you could be nowhere else but Lancaster City. The menu is rife with products from local farms. This is an eatery just as comfortable serving galumpkis (traditional stuffed cabbage) as it pairing pork shoulder with kimchi fried rice. If you watch long enough, you realize just how many folks seem to know each other. When a young couple gets engaged two tables over, the whole restaurant explodes in applause. The Horse Inn has actually been a drinking establishment since the 1920s, and while the new owners have spruced up the interior — horse stalls from its original use as a hayloft house booths — the space’s essential spirit remains untouched. It’s a classic Lancaster story: taking something old and good, and making it better.
That narrative is being replicated all across this Pennsylvania city. A new generation of locals, transplants and repatriates are transforming this compact burg, shifting the reputation of a metropolis that’s long been in its famous county’s bucolic shadow.
Ryan Martin, co-founder of Infantree, a local marketing and branding company, can trace his Lancaster heritage back 13 generations, but that didn’t stop him from moving away after college — first to Philadelphia, then to Harrisburg.
“Growing up in the county — Strasburg, which is southeast of the city — we didn’t have a whole lot of reasons to come downtown, except for Central Market on Saturday mornings,” he recalls. “My grandmother had a stand at Market for 60 years. She sold flowers. My grandfather was a grower. My parents were florists. That was the best part of Lancaster City for me, coming downtown to be part of that community on Saturdays.”
During those years away, Martin started to hear murmurings of a change happening in his native land. That tight-knit community he recalled from his youth felt like an opportunity. He moved back and eventually teamed up with Ryan Smoker, launching Infantree out of a fourth-floor loft above Prince Street Cafe. The popular coffee shop became both their landlord and their client. The company’s team has since grown from two to 12, serving the growing slate of local retail boutiques, breweries, distilleries, restaurants, city organizations and nonprofits.
“Over the last 15 or 20 years, but really in the last eight years, we’ve seen a real significant change downtown,” says Martin. “Galleries came in and started a little bit of a groundswell. We saw some refreshed boutiques coming in. The restaurant scene followed quickly on its heels. Businesses actually wanted to move from the suburbs to find locations downtown. With that came micro-industries: distilleries, breweries. All the clients that we serve. It’s been wild to be a part of that.”
Being a local also has its advantages.
“All of the work we’ve done from a branding and marketing perspective has been through word-of-mouth referral,” he continues. “We’ve built a business on this community. I’d say 60 to 70 percent of the work that we do is within a 30-mile radius of our downtown office.”
Last year, Martin and Smoker actually became their our own clients, opening Ellicott & Co., a shop on Market Street selling American-made men’s clothing and accessories. The pair works with local makers — leatherworkers, metalworkers, textile workers — to stock their shelves.
The city is proving to be a fertile place for fledgling companies to find a toe-hold. Technology startups have a host of affordable office space and coworking options to choose from including the ever-expanding Candy Factory (profiled in our first feature on ‘The New Lancaster’) and PubForge. The latter, located above beloved bar and music venue Tellus360, is geared towards technologists: developers, programmers, designers.
One former tenant is Matthew Ranauro of BeneFix, a startup that simplifies the health insurance market for small businesses. He is another repatriate, having moved back to his hometown after stints in New York, San Francisco and Boulder, Colo.
“Being back here, it’s unbelievable,” says Ranauro. “The community is super tight. There’s definitely a lot more tech than when I grew up here. I can’t really ask for a better place, especially in this industry.”
Since last fall, BeneFix has quintupled their client list and, in doing so, outgrew Pubforge. But they didn’t go far, moving into a 2,400 square foot space on S. West End Avenue.
Mayor Rick Gray has witnessed Lancaster City’s evolution firsthand: He’s lived in the same house on Prince Street — what he calls “the best $18,000 he ever spent” — for 44 years.
“During a lot of those years, you’d look outside at 11 p.m. and there was nobody on the street,” he recalls. “Now, if I go outside at 11 p.m. and look up and down Prince Street, there are people on both sides of the street walking. People have come back to the city. I think that’s true of a lot of our cities: I hear it from York, I hear it from Harrisburg, Bethlehem, Easton.”
The mayor credits two specific demographics with repopulating downtown: young people and baby boomers.
When it comes to millennials, “they want to be in the city,” he says. “I grew up with Leave it to Beaver, Father Knows Best — TV shows that represented suburbia as the promised land. My kids grew up with Sex and the City, Seinfeld, Friends. All urban settings. They want walkability. They don’t want car dependency. I can walk to 30 restaurants from my house.”
Meanwhile, many empty nesters are tired of mowing grass. They also want to ditch their cars, especially as they age. Downtown development reflects that demand: apartments and condos are being built that specifically target those 55 and older.
Gray, whose wife is an artist, also credits the vibrant arts scene with downtown’s resurgence.
“We have work by Lancaster artists hanging all over City Hall,” he says. “There have always been a lot of artists here because of the affordability and easy access to the major markets. In the last 10 to 15 years, [we went] from a wholesale market to a retail market. I know locals now that can make a living being an artist, which is a difficult thing to do.”
After graduation, Linton spent two years in Philadelphia, but Lancaster drew him back.That creative energy translates to craftspeople as well. RudeWood Design‘s Jeremiah Linton grew up in South Jersey. He met his business partner Alex Rudegeair at Thaddeus Stevens College of Technology in Lancaster where they both studied carpentry. These days, the duo does custom woodwork with a focus on commercial restaurant and bar furniture.
“I moved [to Philadelphia], and was networking and working with different people,” he recalls. “When I moved away, I was like, ‘I didn’t make any lasting connections.’ But in the two years I’ve been here, I’ve made a lot of friends, built a lot of relationships. I think the business community in Lancaster is really into helping each other out. When one of us is successful, we can give back to the others in some kind of way.”
Rudewood is based out of an old printing facility, and they’ve created an impromptu collective, renting extra space to other artisans. Most of the company’s work is local. Very local.
“All of the jobs we’ve done in Lancaster City, we’ll walk there,” he says. “I think we’ve benefited a lot from coming here instead of staying in Philly.”
From old manufacturing facilities to heritage homes, there are all sorts of unique spaces on offer in Lancaster City. The built environment — well-lit sidewalks, historic buildings, industrial relics, charming brick rowhomes — can surprise visitors familiar with a Lancaster County brand based on buggies and dairy cows. Notably, the city boasts dozens of old tobacco warehouses that have survived and been converted into work and living spaces.
“It was the best thing we’ve ever done,” she recalls. “We really wanted [a living space] that would fit into our creative aesthetic as a couple and was more unconventional. We had looked and looked for a warehouse space and found the space that we have now. It has such a creative soul and energy to it. I knew the minute we walked through that building, it was where we were meant to be.”One of those loft-livers is Deborah Barber. An employee at Nimblist (formerly Performance Environment Design Group), Barber moved to the Harrisburg area after college, where she met her husband. Twenty years ago, they moved to Lancaster County and then, seven years after that, into the city.
Until last year, Barber’s work was still in the capital, but she wanted a job closer to home. Nimblist is a perfect example of the kind of mid-sized, creative-economy company that thrives here. The seeds for the enterprise were sown almost 20 years ago by Spike Brandt — who’s local to Lancaster — and L.A.-based Justin Collie. They met as roadies and came up through the lighting and design world. The business, which creates environments for live events, has since grown to about 20 employees. Clients include the NFL, musical acts, the Robin Hood Foundationand the SyFy network. The company is part of a booming event production industrycentered around Lancaster City and nearby Rock Lititz.
As Nimblist grows, the staff is evolving.
“When I came in, pretty much everyone was local,” recalls Barber. “Since I’ve been here, we’ve hired and relocated two people from out of state. We have a third person slated to start with us [last] December who is moving from another country. We have a fourth person who we hired as a result of her partner being relocated to TAIT [in Lititz].”
Barber thinks there are still things Lancaster City could do to ease the way for those transplants.
“One thing I’ve noticed and heard from our staff is that we don’t seem to have many realtors who handle the rental market,” she explains. “We’re looking for highly-skilled programmers and lighting designers — it’s a competitive market. It’s not easy to find those people, and when you do find them, I need to be able to tell them there are some cool places for them to live and a range of cool places for them to go out and eat.”
Part of that mission includes dispelling preconceived notions. Fortunately, often all it takes is a visit.
“We rent out one of our rooms on Airbnb,” says Barber. “The people we’ve had stay all say, ‘We had no idea that Lancaster would be like this’ or that ‘you have so many cool places,’ or that ‘living spaces like what you have exist.’ If you want that funky warehouse, there are those spaces. There are condos. There are single-family homes that are gorgeous and historic. And there are really quaint rowhomes that people have taken and redone.”
If all it takes is exposure to fall in love with Lancaster City, then Susan Louie and her husband Rafael Perez are Exhibit A. Before opening their charming French BYOB Citronnelle, the longtime New York City residents experienced the city via friends who moved south.
They purchased the property on Orange Street in 2009, moved to Lancaster City permanently in 2012 and opened Citronnelle in 2013. The couple were not experienced restauranteurs: Louie was fashion designer and her husband a chef. They had to learn the business from scratch, and figure out what exactly people wanted to eat in this part of Pennsylvania. The team buys everything locally, mostly from nearby Central Market. Seasonal ingredients go into dishes like grass-fed, pasture-raised New York strip with a mushroom-and-potato roulade or their signature creamy crab croquettes, served on a bed of cucumber salad and topped with yuzu wasabi aioli.“We started visiting them and fell in love with the place,” recalls Louie. “We bought a [weekend] house, but weren’t fully committed yet. We were both still working in New York. Then we saw this building — which was an abandoned print shop — and thought, how about changing our lifestyle?”
“We don’t have shoo-fly pie here,” explains Louie with a laugh. “We don’t have buttered noodles…We see a lot of people who come in here a little trepidatious. They read an ingredient on the menu and aren’t sure what it is. But we’re so happy to explain it to them. We’re not an uptight restaurant. We’re not hoity-toity — we just want to feed people. And if they learn a little something about what they’re eating, it’s great.”
Fortunately, a growing number of eateries are catering to the city’s changing palette, whether it’s students looking for fast-casual poke at Chop Sushi or couples nibbling on Neapolitan pizzas at the perennially packed Luca. The restaurant community knows that the city’s growing reputation as a foodie haven benefits them all.
“In New York, there are so many restaurants that you can’t really get to know anybody; they come and go so fast,” says Louie. “We’ve made friends with so many other restauranteurs. They’re so supportive of us, especially because we’re so little and just starting out. There’s a really nice sense of community here.”
Daniel Falcon is another local restauranteur. He came to the area from Puerto Rico 38 years ago when he was two. It is hard to tell the story of Lancaster City’s resurgence without talking about the Latino population which makes up almost 40 percent of the municipality’s 60,000 residents. They are an essential part of the small business community, whether that’s running neighborhood groceries or contributing to the diversity of downtown offerings.
Falcon was always trying to find a way to work from himself, growing a mall kiosk business into four clothing stores before changing course and getting into two of the city’s booming industries: real estate and night life. In September 2014, he opened Lancaster Cigar Bar on King Street. He has since bought up more property in the same building, launching Old San Juan Latin Cuisine and Rum Bar, and is hard at work on another concept across the hall: a neighborhood pub with a Prohibition-era vibe.
“Lancaster has a solid economy, and one way to attract young professionals to your city or town is to give them something to do when they’re done working,” he explains. “I think Lancaster is doing a good job at providing night life. I think we can do better, and we’re on our way there. I think the local government has been pretty supportive of that whole idea.”
“There seems to be more a demand for people wanting to live in the city,” he says. “People are actually selling their homes in the suburbs and moving into the city. Once that started happening, the demand for higher-end rental properties went up. Investors are meeting those demands. I’m in the rental business, so that’s what I’m doing with my units. I’m fixing them up and making them a little nicer, collecting more rent as well.”While the city’s growing population is obviously great for Falcon’s bars and restaurants, it has also impacted his real estate investments.
Nicole Vasquez is another young Puerto Rican entrepreneur. She grew up in Lancaster City, spending most of her childhood on West King Street. From a young age, she loved fashion and dreamed of opening her own clothing boutique. Flash forward to 2012, when she launched That Shuu Girl at the tender age of 25.
“Something I love about downtown Lancaster City is you don’t see any franchises,” she says. “When you go into a small business, you’re pretty much meeting the owner and you feel welcome, you feel comfortable.”
That reliance on community — both in terms of organized resources and likeminded peers — was something repeated again and again by residents and business owners.
“I have found an absolute love for the community here,” says Martin from Infantree. “If you do right by them, they take really good care of you. We’ve been able to survive because of the whole ‘buy local’ thing. Lancaster has a whole different appreciation for it: People here want to support anything that is authentically Lancaster.”
LEE STABERT is editor-in-chief of Keystone Edge. Tell her your favorite things about Lancaster @stabert.
ASSETS client and participant in the 2015 Great Social Enterprise Pitch, NuLife, is making news!
A couple of months ago, Schirlyn Kamara stopped by the Nimble Thimble sewing shop in downtown Lancaster.
She runs NuLife, a social enterprise that teaches at-risk women to sew. They make items from recycled fabric — clothing, accessories and household goods — to sell online.
Kamara thought Nimble Thimble might have some leftover fabric or other supplies to donate. While there, she got to talking with Mort Nierenberg, who runs the shop at Central Market Mall with his wife, Ruth. The couple are in their late 80s.
“He jangled his keys at me … and said, ‘I think I’ve been waiting for you,’ ” Kamara recalled.
Sometime this spring, Kamara plans to move NuLife into Nimble Thimble’s location on the lower level of the mall at 45 N. Queen St.
The details are still being worked out, but NuLife is planning to have classroom and retail space there. Nierenberg, an expert sewing machine repairman, plans to continue doing repair work there while passing on his skills to a new generation.
He said the prospect of handing off the shop space to NuLife makes him “joyous.”
The Nierenbergs have owned and operated Nimble Thimble for about a half-century. They moved it into the mall when they bought the building in 1978, according to newspaper records. They subsequently sold the property, but remained as tenants.
“It’s a huge project,” said Howard Jones, a board member of Handz on Hope, the nonprofit organized by Kamara that is NuLife’s parent organization.
Kamara has plenty of help, thanks to two Millersville University professors and their students.
About 25 undergraduates in professor Minoo Ghoreishi’s service learning seminar have been visiting Nimble Thimble weekly this semester to take inventory and clean out decades of clutter.
Later on, the students will design and set up displays, create signage and complete other tasks. Last semester, they taught basic business classes to NuLife clients, and that will continue, Ghoreishi said.
Meanwhile, more than 65 students in classes taught by professor Lexi Hutto have been creating brochures, videos and a social media campaign for NuLife.
Future projects include a marketing plan, merchandising and fundraising. Hutto said she is seeking donations of displays and other supplies.
The two professors’ classes are independent of each other, though some students have been in both, including senior Juan Martinez.
The seminar, he said, “teaches us to teach other people,” as well as to identify community needs and take action.
“A lot of people who go to Millersville (University) plan on owning their own business,” senior Courtney Lynn said. The seminar gives students a realistic feel for what’s involved, she said, likening it to an apprenticeship.
Senior seminars are required in a number of MU majors; service learning is one of the options for business majors.
“We want students to be community oriented,” Ghoreishi said. “We really emphasize the ethical angle.”
Each year, participants enter a national competition sponsored by Enactus, a nonprofit devoted to using entrepreneurship to promote social welfare. MU has won the regional championship five times since 1998, Ghoreishi said.
Hutto and Ghoreishi have worked with other nonprofits. Students get hands-on experience, and cash-strapped organizations get assistance they could not otherwise obtain.
When students work for a real-life client, “I think they take it more seriously,” Hutto said. “It takes a lot more effort, but I think the rewards are worth it.”
Kamara said it’s been her dream to have a shop to sell NuLife goods.
Besides a retail area in the front room, there’s a workshop, a storage room, a back room where the classroom will be, and even a small kitchen: about 4,000 square feet in all.
ASSETS client and participant in the 2015 Great Social Enterprise Pitch, The Stroopie Co., is making news!
If you’ve ever heard of Lancaster County, Pennsylvania, you’re probably aware that it’s home to one of the biggest populations of Anabaptist religious sects, such as the Amish and Mennonites, in the United States. You may not know that it sits near the heart of Pennsylvania’s enormous sweets industry, just next door to the candy-making mecca of Hershey; and that the county accepts hundreds of refugee immigrants every year.
The Stroopie Co., a small Lancaster company that manufactures Dutch-style cookies, has a mission to hire and train refugee women as its workforce. The company’s hiring practices reflect its community’s history and spirit.
“We were looking for a really practical way to love our neighbor well,” says Jennie Groff, who co-owns “Stroopie” with her husband, Jonathan. She worships in an Anabaptist church that focuses on supporting refugees. “The company fits my roots,” she says.
Stroopie’s was started in 2008 by Ed McManness and Dan Perryman, who remain part-owners. The goal was always to provide “meaningful employment” to local refugees; McManness’s family had enjoyed Dutch “stroopwafels” — a cinnamon cookie made in a waffle iron with a layer of caramel inside. The circular cookies rest perfectly on the lip of a mug of steaming hot tea or coffee, which softens the caramel filling. The Stroopie Co. makes one version half-dipped in chocolate.
“They’re hard to find in the States. It gave us something we could market,” Jennie Groff says. “We knew if we were going to establish a social enterprise, we needed to provide a great product.”
The Groffs joined the enterprise in 2010, bringing with them Jonathan Groff’s lifetime of experience in his family’s candy-making business.
Today, Stroopie’s employs six refugee women — three from Myanmar and three from Syria. Another employee manages the staff and acts as an ESL teacher. Employees typically stay a year or two before moving on, Groff says.
“The refugee women we’re hiring, they’re super-motivated, thankful, great workers. Just a huge, huge asset to our company. I just can’t imagine taking our family and having to start over in a new place. We view it as a deepest privilege to provide a job with dignity.”
Mary Myint, an “expert Stroopmaker,” offers her testimonial on the Stroopies website: “I like my job because my schedule is nice for my children. When we lived in Myanmar and Malaysia, we were scared of the police. In the USA all the people are equal, so my family loves the USA.”
Workers start out making $11 an hour, Groff says, then move up to $12 an hour after training. The owners want to eventually pay a wage of $15 an hour, and perhaps even start giving the women part ownership of the company.
Getting to that point, however, requires that Stroopie’s take a big next step.
Filling Out the Mission
“We need to make a profit in a more sustainable way before we can consider granting ownership shares,” Groff says. “We are holding our own, we’ve been breaking even. … For a small company, that’s something to celebrate.”
In 2015 Stroopie’s won “The Great Social Enterprise Pitch,” a local competition meant to encourage businesses that “perform a social good while also making a profit.” The prize: In-kind products and services worth more than $25,000, meant to help the company grow. Stroopie’s used its winnings — along with money raised from Indiegogo as part of the competition — to open a retail storefront in Lancaster, where the cookies are made and sold directly to the public.
“The biggest thing — it gave us a platform to tell our story,” Groff says of the competition. “The community really rallied behind us.”
The company also distributes its product in nearly 70 stores across the United States and is pitching bigger retailers.
“We feel like we’re poised and ready to grow,” Groff says. “We’re still relatively small, but every year we gain momentum and get our story out there.”
Groff says she is confident the company will continue to grow, increasing profits and employing more refugees.
“Both have to be equally strong — you have to have passion for both things — or it’s not going to be sustainable, it’s not going to work,” Groff says.
ASSETS is the #GiveLocal recipient of March and April 2017!
Launched in 2017, Lemon Street Market’s #GiveLocal project is a register round up initiative designed to support Lancaster organizations whose missions align with ours.
Customers can elect to “round up” their purchases to the nearest dollar when they check out, with proceeds donated to the featured organization for that month. Customers can also choose to increase their at-the-register donation by adding to their round up value. By shopping at Lemon Street Market, customers are directly supporting more than 75 local farmers and vendors, and even more through local distributors like Lancaster Farm Fresh, Oasis, and Four Seasons. For each dollar spent at a local, family-owned business, 80% is put back into the local economy. For every dollar spent at large, corporate owned stores, only 20% makes it back into the local economy.
Help us to contribute even more to our community by choosing to #GiveLocal when you check out at Lemon Street Market.
WITH HOLIDAY DEMAND ON THE UPSWING, The Stroopie Company went to two shifts in early November, allowing them to churn out up to 6,000 Dutch stroopwafels (cinnamon-y, carmel-y goodies best enjoyed with a hot beverage) a week. All six workers running the show at the company’s small production facility in Lancaster, Pennsylvania, are refugees: three from Burma and three from Syria. Once a day, they sit down with the store manager, who is also a certified ESL teacher, for a half-hour English lesson.
As a certified B Corporation, The Stroopie Company measures its success by social and environmental standards in addition to the profit column – hence the language classes and $11-an-hour starting wage offered to refugees otherwise facing limited employment prospects. Alone, however, these commitments don’t solve the challenges of solvency and profitability facing any small business. To help meet them, The Stroopie Company has turned to ASSETS, a nonprofit that has worked to create economic opportunity and reduce poverty in and around Lancaster for more than 20 years.
One of the organization’s new programs, says executive director Jessica King ’96, is called the Great Social Enterprise Pitch, which offers a series of business-planning workshops to 10 entrepreneurs who prioritize social and environmental well-being. After the workshops, five participants pitch their ideas to a panel of judges and compete for more than $50,000 in cash and services.
“It gave us the confidence that we had a great idea going,” says Jennie Groff, one of the company’s owners. “We really feel like we’re poised to grow.”In 2015, The Stroopie Company won the competition, coming away with donated legal services, a free photo session for a new product catalog, and cash that it invested in new equipment.
Lancaster is a welcoming and generous community that resettles more refugees and gives, on average, more to charity than anywhere else in Pennsylvania. By integrating this philanthropic impulse into a workable business model, King says, “impact businesses” like The Stroopie Company are able to fund their own pursuit of a greater good.
“[The Stroopie Company] is a means to an end. The end is about helping their neighbors have better lives,” she says. “There are a lot of ways you can do that. Making cookies is their way of doing that.
“It’s amazing to see the kind of impact that [employers] can have on the lives of people around them, their neighbors and their employees, regardless of what their business is. It’s the spirit of ‘how’ they do it,” King continued. “It might not be all that bright and shiny, but it really matters to people. That’s what really gets me excited.”
Through its various programs, ASSETS provides training and lending to entrepreneurs from underrepresented groups as well as the impact businesses committed to social and environmental goals. During the most recent fiscal year, it supported the creation of 40 new businesses and more than 70 jobs, provided loans or long-term training to more than 150 entrepreneurs, and involved nearly 1,500 businesspeople and community members in other programs and events.
“We believe in the power of business to transform our communities for good,” says Tina Campbell ’99, director of development. “But we are also convinced that it must be equitable transformation – that all races, ethnicities and cultures must be included for true economic development to happen in our own communities.”
According to board member Kevin Ressler ’07, an important part of this vision has been ASSETS’ expanding focus over the past several years to supporting impact businesses in addition to entrepreneurs from underrepresented groups.
“This work breaks down the barriers of ‘us’ and ‘them’ and begins to see that ‘we’ is our only hope moving forward to maintain a country full of communities that don’t just co-exist but co-create and thrive together.”
Since 2008, The Stroopie Company has employed 16 refugee women in its kitchen. Many have used it as both a landing and a launching pad, a welcoming place to build experience and improve their English before moving on to other things. Recently, when a TV news crew stopped by for an interview with one of the Syrian workers, Groff called in an employee who’d just left to provide some translation help. Watching from the sidelines, Groff was struck by the poise and fluency the former employee had developed, at least in part, right there in the stroopwafel kitchen.
“She came here hardly wanting to say anything. To be able to see how she’s leaving us – it just was hugely encouraging,” says Groff. “That is totally what motivates my husband and me. It is just so rewarding to see our refugee employees come in and gain confidence. You can just almost see it happening before your very eyes.”
ASSETS client and participant in the third annual Great Social Enterprise Pitch, Will Kiefer of the Bench Mark Program, is making news!
When Will Kiefer took a study abroad trip to South America as a pre-med student at Franklin & Marshall College, he had no inkling that the trip would lead him to the unique idea to start his own business.
January marks the three-year anniversary for the Bench Mark Program, one of the more selfless and significant small businesses in the region. Kiefer and his staff provide long-lasting, positive support to at-risk youth who wouldn’t receive that support from anyone else.
Bench Mark uses a unique approach to provide an outlet for physical fitness, academic counseling and career coaching. Students received guidance for as long as is needed with the ultimate outcome being academic success, employment and mentorship opportunities.
“When I was in South America, I did research on the communities that I was involved with,” Kiefer said. “When I came back to Lancaster, I was looking for the community connection. I realized that I didn’t really know Lancaster at all. I started asking myself, what do I have to offer other people? I enjoy weightlifting and fitness.
“I asked some professors for their thoughts on what I could do,” Kiefer continued. “I thought that I could have a positive impact on high school students who had low self-esteem.”
A few connections later, Kiefer found himself working with at-risk youth and youth who had been incarcerated. That was the start of the Bench Mark Program. Rather than relying upon traditional therapy methods that have been used and reused over and over again, Bench Mark focuses its program around weightlifting and fitness as the bond to overcome adversity, and it creates a safe and positive environment that doesn’t exist on the streets.
Despite the program’s growing reputation, what Kiefer and his team do isn’t something that comes naturally, and it also isn’t easy to make connections with these kids.
“On the back of my business card it says two things: ‘Be who you are’ and ‘Figure out who you want to become.’ ” Kiefer said. “That philosophy has allowed us to build a connection that allows the young people to ask for help. They come in with low expectations — it’s just another program, it’s just another white guy who has the solution to all my problems.
“I allow them to explore the space, listen to music and they can work out if they want to, or not,” Kiefer went on. “I give them days, sometimes weeks, before I even ask them about what’s going on at home or if I can help them. Then we go through this period of confusion — What’s this guy trying to do? Is there a fee? Is there some work I have to do here? After that phase passes, then they let me in a little bit. They are refreshed when they come here and figure out that we don’t have an agenda.”
Many of the cases that are referred to Bench Mark are kids involved with selling drugs. Kiefer and his team know that being involved in the illegal drug trade is easy, and it’s lucrative for these kids. If Bench Mark doesn’t provide them with a viable alternative, those youth will not give Kiefer and his team the time of day. That’s why they move quickly to find jobs for these kids that keep them busy, safe and making money, so there is no reason to go back to selling drugs.
One of the most challenging aspects of Kiefer’s work is when he wears his hat as development director. As a nonprofit organization, Bench Mark essentially survived the first two years strictly off of private donations. Board members kicked in substantial funds, and then some corporate donors came on board. In year three, Kiefer now has all of the paperwork and documentation required to go back to foundations and other entities in order to create the funding that would make Bench Mark a sustainable business model — a model that Kiefer hopes to export to other communities.
“I was ready to pull the plug on this so many times,” Kiefer added. “A year and a half later, the kids are saying, ‘this has changed my life’ and ‘you are the dads that I didn’t have.’ We really hope this can be a sustainable program, and we are closer to that happening than ever before.”
When young people move into adulthood and out of home for the first time, there is a predictable response to the lack of structure that had previously been provided by parents.
For the newly unhindered, that freedom is exhilarating — all-night parties, new clothes and dinners purchased on that first credit card as well as a choice about whether to attend class or not.
With the possibility of massive deregulation, the Donald Trump political era is likely to bring some profound changes to our political and economic system.
For the newly unregulated, that could mean a level of freedom — and peril — similar to the example of the college freshman.
Case in point, if the cabinet nominees of the president-elect are confirmed, we will have a labor secretary who is an ardent and vocal opponent to workers’ rights and a head of the Environmental Protection Agency who is strongly aligned with oil, gas and coal interests and vehemently opposed to regulatory oversight.
Whether you love these choices or hate them, there is no denying that there will be deep and long-lasting effects of the desired policies — or lack thereof — that are being proposed.
As a business community, we are being “pushed out of the nest,” whether we like it or not.
Herein lies the challenge: if the regulations go away, are we going to act like the 18-year-old in his/her first semester at college?
If the EPA ceases to exist or at least decreases its environmental regulations, will Lancaster’s farms and production facilities allow our air, waterways and forests to be irreparably damaged by choosing short-term profits at the expense of long-term environmental stability?
If workers’ rights are subverted, will local businesses use that opportunity to exploit employees, further exacerbating poverty and economic inequality in our community?
Are we going to overindulge, or are we going to consider the full, long-term impact of our actions and business decisions?
If we enter a new era of an unfettered business rights and limited regulation with a short-term mindset —similar to that college freshman — we could very likely lose much of what makes Lancaster such a desirable place to live.
Our natural places and our water sources could be negatively impacted, and our air quality could continue to decline.
We may see more Lancastrians dealing with the reality of living in poverty and economic distress, which tends to result in more crime, higher incarceration and associated costs, and decreased educational attainment, among other outcomes.
Importantly for the businesses themselves, we also will see a community in which potential customers have less expendable income to spend in local businesses.
Our call to Lancaster’s businesses is to be the responsible college freshman who attends every class, studies hard and considers the future impact of their decisions.
Let’s make a decision, here and now, to protect our air quality, our waterways and our forests from degradation.
Let’s treat our employees with the respect and decency that we would want to be treated with ourselves, including ensuring them a livable wage.
Let’s not make the dwindling government programs or nonprofit sectors clean up our messes.
Let’s keep the messes from happening in the first place by considering the social and environmental impact of the business decisions we make.
More than 40 studies from sources including the Economist, Harvard Business Review and Deloitte all say that higher corporate standards around environment, social and governance practices reduce the company’s financial risk and create greater profitability.
The Trump economy is here for the next few years, so regardless of mandates from Washington, D.C., let’s continue to show this community, and the world, the long-term view, ethics and responsibility for which Lancaster businesses are known.
Evidence shows that this will have a positive return on investment for both our businesses and the community.