Business

Making Small Business a Cause

Carlene O’Garro’s cake business was barely a month old when she arrived at the Samuel Adams brewery in South Boston recently to meet with business counselors, but she brought with her an agenda that hinted at outsize ambitions. Ms. O’Garro bakes nondairy cheesecakes that she was selling at a handful of grocery stores, including two Whole Foods outlets, in the Boston area. She hoped to learn how to expand the business and distribute the cakes nationally. “I know Jim is all over the place,” she said, “and I want to be like that.”

Jim is Jim Koch, the founder of the Boston Beer Company and one of 36 advisers who spent an evening last August “speed coaching” fledgling food, beverage and hospitality businesses. In 20-minute sessions, some 95 bakers, brewers and restaurant owners peppered the coaches — Boston Beer employees and consultants who included lawyers, accountants and small-business counselors — with questions about both basic day-to-day issues and more strategic concerns.

Speed coaching is one element of “Brewing the American Dream,” a program Boston Beer established with a microlender, Accion, to help small businesses. Mr. Koch, who started brewing Samuel Adams Boston Lager at his house in 1984, remains central to these efforts even as he presides over a company with a market capitalization of $1.4 billion and annual revenue of more than $500 million. He said he had not forgotten his early days, when he struggled to find capital, get his beer into distribution networks and expand.

In six sessions that August evening, Mr. Koch spoke with perhaps a dozen entrepreneurs and then stayed another hour to visit with six or eight more. This year, Boston Beer and Accion are staging 12 speed-coaching events in 11 cities, and Mr. Koch expects to attend about half of them.

Big businesses reaching out to help smaller businesses has come into vogue since the recession. In 2009, Goldman Sachs introduced its 10,000 Small Businesses campaign. Starbucks raises money from customer donations to finance small-business loans. American Express encourages consumers to shop locally on “Small Business Saturday” after Thanksgiving. The New York Stock Exchange links small vendors with large corporations and finances loans through Accion. And several corporations have run contests — Wal-Mart, Chase Bank and Staples have furnished winning small companies with opportunities for retail distribution, capital and office equipment.

It is the latest example of what is known in corporate circles as cause marketing — hitching a brand to a social issue. “How you improve the American economy and create jobs is on everybody’s minds these days,” said David Hessekiel, founder and president of Cause Marketing Forum. “Companies know that it’s on the minds of their consumers, and they want to be seen as part of the solution, not as the enemy.”

That has been a particular concern for chains like Wal-Mart and Starbucks, given their longstanding reputations for forcing local competitors to close. Helping small businesses, Mr. Hessekiel said, “helps them deal with an old issue.”
But some critics of the big chains dismiss their chivalry as mostly cosmetic.

“The public relations value of being associated with small business is quite high,” said Stacy Mitchell, a senior researcher at the Institute for Local Self-Reliance, a nonprofit based in Minneapolis and Washington that promotes strong local economies. “You’ve got companies that have very aggressive expansion strategies — they’re really squeezing out opportunities for small businesses. These programs do very little compared to the larger shifts in market share that these companies are driving. They’re drops in the bucket.”

For its part, the Boston Beer program actually predates the recent economic crisis. The seeds of the idea, Mr. Koch said, came to him in 2007 as he walked to his car after he and his employees had volunteered to paint a nearby community center. “I should have felt really good, and I didn’t — I felt a little depressed,” he said. “What I realized is, I’d just taken about $10,000 worth of management time and talent, and turned it into about $1,000 worth of painting. And it was pretty bad painting, too.”
Mr. Koch retooled his company’s philanthropy to take advantage of its resources, particularly its employees’ expertise. The company has committed $1.4 million to finance loans, which are handled by Accion. The loans are small, typically $5,000 to $7,000, with terms of 18 months to two years and interest rates that vary regionally. (In New England, the rate is around 13 percent, typical for microloans.)

Perhaps as important as the money is the tutoring by Mr. Koch and his employees. Most microloan programs provide borrowers with rudimentary counseling, but Boston Beer is unusually “high touch,” said Shaolee Sen, vice president for strategy and development at the Accion U.S. Network.

Ms. O’Garro was one of the program’s original clients — she has had two loans, totaling $4,000 — and though she’s repaid that debt and though the muffin business it helped finance has been dormant since 2010, she continues to derive benefits from the program with her cheesecake business, Delectable Desires. She learned how to price her cakes from an employee in Boston Beer’s finance department, Mike Cramer, who went to Whole Foods and scoped out the competition. “He actually made a spreadsheet for me of how much the high-end and low-end desserts cost,” she said.

A version of this article appeared in print on November 15, 2012, on page B1 of the New York edition with the headline: Making Small Business a Cause.

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