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Never say never.

Seventh Generation, one of the best-known socially responsible companies and a seller of environmentally friendly cleaning products, just announced it’s officially selling its wares through 1,500 Wal-Mart stores and, also, online.

There was a time, some years ago, when founder Jeffrey Hollender said he’d never team up with Wal-Mart. But that was before Wal-Mart started its big big push to make itself into an environmental leader.

The first phase of this odd pairing happened about two years ago, when Seventh Generation started selling its products at Wal-Mart’s more low-key Marketside stores. At the time, Hollender compared the effort to “a software product that’s entering beta.”

Then, last year, a former Quaker Oats, Tropicana and Gatorade  executive Chuck Maniscalco took over as CEO, something I wrote about at the time. The idea was to bring in someone with the kind of background and savvy that would lend itself to a successful expansion. But the question at that point was, could a person with such a buttoned-down resume fit with the triple-bottom-line principles of Seventh Generation?

Now, this second phase–selling in Wal-Mart supercenters–clearly is key to Maniscalco’s plan to expand. And Hollender clearly is down with the Wal-Mart move, since he just blogged about it.  As for Wal-Mart,  Al Dominguez, vice president of chemical and paper goods, said in a statement: “. . .  we are always looking to expand our number of sustainable offerings.”

For Wal-Mart, teaming up with Seventh Generation is a nice pr move, because, for those who follow such things, Seventh Generation is the gold standard for socially responsible consumer products. From Seventh Generation’s perspective,  since Wal-Mart has redeemed itself over the past few years through a variety of ambitious programs to reach out to green suppliers and create a greener supply chain, why not do business with the retailing giant?

Of course, there still are a lot of pesky questions about Wal-Mart’s labor policies.  Perhaps in its eagerness to expand, Seventh Generation decided it would be better to overlook them.

The idea behind these efforts is that this type of company doesn’t need a lot in seed funding, since the founders are 20-somethings and the business requires only a small amount of capital to get going.

But this doesn’t mean these companies don’t need big capital infusions at some point. Plus there’s a dark side to these efforts, an implicit prejudice, a sort of don’t trust anyone over 30 thing.

First, I’m just catching up with a series of posts by assorted bloggers about the funding issue. While these companies don’t require a lot to get started, what about the next stage? In other words, these folks might be able to launch their business on the cheap, but after a year or two, it’s a different matter altogether. Here’s one comment:

What has changed in technology venture capital is not so much the total capital requirements, but when they are required.

via A VC

In fact, it takes an average $20 million for one of these startups to reach a sustainable cash flow level, according to this post. For entrepreneurs, it’s largely a good thing, because it means they need to raise big bucks when their business is worth more and they don’t have to watch their stake become really diluted, which is what happens when you accept large chunks of funding from VCs and angels early on.

So this is all well and good for web entrepreneurs. Or at least for some of them. But what about the people who can’t afford to pick up and move somewhere for three months? What if, God forbid, you have a family? Seems to me, a large number of potential founders are left out of this equation. And in fact, there’s a real age bias here.  Really, people in their 40’s, 50’s and above have innovative ideas, understand technology, and deserve consideration.

Of course, why should this bias be a surprise? Our culture is profoundly biased against the non-young.

But I’d like to see some alternatives.

But his argument might be only partially relevant.

Shane analyzed Census data for average and median six-year revenues of startups by industry sector. He used that time frame because most new businesses fail in their first five years.  What he found is that average and median numbers tell different stories. Only a small number of companies survive past the six-year mark and, also, make over $100 million in sales. So, the average number skews high. But, the median is much lower. In fact, it’s zero in some cases. ($2.1 million is the average for manufacturing, for example, while the median is zero).

His conclusion is that most entrepreneurs are spinning their wheels–”spending a lot to get relatively little”. And he says:

Before policy makers tell everyone that it’s a good idea to be an entrepreneur, they should keep these numbers in mind. The people they encourage are more likely to have the typical outcome than the average one.

via The Typical Entrepreneur’s Sales Are Below Average | Small Business Trends.

So, it’s hard to dispute that many small businesses aren’t rolling in money after six years. But, for one thing, some of them seem be doing just fine. The median for agricultural services, forestry, and fishing, as well as finance, insurance, and real estate, and services,  is $50,000. Not huge, but something. Plus, during those years the companies were in business, presumably they made some money, employed some people, helped the owners and their workers pay their rent and feed their families.  If they didn’t become tycoons, that doesn’t necessarily matter.

In fact, one conclusion is that government policy makers should, indeed, advise people to go into business for themselves. But they should find ways to offer constructive help to entrepreneurs to boost their chances of success.  That means more classes at community colleges, for example, or expansion of SCORE. ( Too often, I hear mixed reviews from patrons of SCORE. It’s like dealing with customer service. You have to keep calling until you get someone who can help. In the case of SCORE, that means someone with solid entrepreneurial experience who knows what he or she is talking about).

This wouldn’t be about becoming super-successful, necessarily, but about operating at a level that allows owners and employees to remain solvent. And that’s important.

Image by Gage Skidmore via Flickr

Just read a post on the New York Times small-business web site summing up why we’re never going to get a small-business bill that really helps small companies.

The Obama administration’s efforts have included a variety of approaches: boosting SBA funds for loans, introducing tax incentives for investment and hiring, and creating a $30 billion fund to encourage community banks, which account for the lion’s share of lending to small businesses, to step up to the plate.  But there’s been such partisan fighting–including what seems to be cynical push back from Senator Mitch McConnell and his colleagues, who see tax cuts and only tax cuts as the uber-solution to everything–that nothing much has been done so far.

The ultimate cynical ploy is how Republicans are maneuvering to brand the $30 billion lending plan as that horrible thing–another TARP–just so they can turn around and use that label to convince community banks to reject the idea.

Though Democrats tried to inoculate the lending fund with a legislative provision that specifically disassociates it from TARP, Republicans derided it as “TARP 3.0″ and even tried to change the bill’s title to the “TARP Junior Act of 2010.” At the same time, Republicans professed concern that, as they wrote in a Financial Services Committee report, “banks could shun the program for fear of being stigmatized by its association with the TARP.”

via Will Obama’s Small-Business Agenda Survive Congress? – You’re the Boss Blog – NYTimes.com.

How utterly Orwellian.

To be clear, I’m not completely sold on the proposals. There’s a continuing question about how much of a problem tight access to bank credit is for small businesses, something I just wrote about. SBA loans are especially problematic, since they account for a very small percentage of total lending.

But community-bank lending is another matter.  There’s a contingent of healthy companies that might expand, if only they could get some bank credit. And these are the businesses that are more likely to hire.

So, bottom line: These proposals aren’t perfect. But the craven maneuvering by Republican partisans who mostly want to stop anything Obama does so they can win the next election–that’s distasteful.

Let’s have a constructive dialog.

A few months ago, the NFIB produced research showing that the vast majority of small businesses don’t think the lack of bank lending is their biggest problem. Poor sales are.

To judge from the experiences of one New Jersey bank, that situation still exists. In a big way.

I recently talked to Frank Sorrentino, president of North Jersey Community Bank in Englewood Cliffs. Most of its customers are small businesses.  And according to Sorrentino, overall demand for borrowing is down, although he didn’t want to get into specifics. “There’s less home construction, less manufacturing. Law firms are laying off. People are afraid for their jobs.  They aren’t borrowing as much. Everyone is deleveraging. They’re not going to take on extra debt,” he says.

According to Sorrentino, banks want to lend. Or, at least, his bank wants to lend.  And, in fact, his bank is actively engaged in trying to get more companies to borrow.  (For example, they certainly seem to be revving up their media outreach).

Obviously, it all has major implications for appropriate government action. Should the Obama administration be spending $30 billion to boost bank lending? For  Sorrentino, the answer isn’t to throw a lot of money at banks.  His suggestion is to provide more tax incentives. That means giving breaks to banks for loans made to small business and to companies to borrow in order to expand or hire.

Of course, he’s not the most unbiased observer in that regard. So, let’s take his suggestions with a grain of salt.  Still, he’s there at ground level. And, judging from his experience, it seems pretty clear that loosening access to credit isn’t the Holy Grail of small-business recovery.

That’s according to a new study conducted by a European Union commission.

First, there’s the matter of just how much people admire small-business founders. Fact is, in this country, entrepreneurs are close to heroes, all-American, independent-minded, do-it-yourselfers, the heart and soul of our economy. So, it’s not surprising that  73% of Americans have positive opinions of entrepreneurs.

But, apparently, that admiration is not shared by others. The study found that just 49% of EU residents have the same high opinion of entrepreneurs.

At the same time, a significant number of  Europeans–45%–want to be their own boss.  That’s substantial, especially when compared, say, to the Japanese, where 39% have that preference. But it doesn’t compare to the number of those in the U.S. who’d like to be on their own. (55%).

When you drill down to specific European countries, however, you see different patterns. In Cyprus and Greece, for example, a preference for self-employment is even larger than in the U.S.  (Perhaps a good thing in Greece, where entrepreneurship may be the only way to make a living right now). But, in Slovakia, Belgium and Denmark, a mere one third of the population or less wants to be an entrepreneur.

But, where’s the strongest preference for entrepreneurship?

It’s China, where 71% of the population studied wants to be self-employed.  Whether that’s thanks to encouragement from government policy or reluctance to work for such companies as Foxconn , with their grueling, totalitarian-like policies that have contributed to a recent spate of suicides, is unclear.

But, it’s quite a remarkable finding.

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In all the coverage of Zipcar’s recent announcement that it’s planning to go public, one important point has been mostly ignored:  This is not just any old IPO. This is an IPO of a not-only-for-profit–and that’s unusual.

Of course, whether it’s ultimately a positive–or wise–step for any mission-driven company isn’t clear, as the famed Ben & Jerry’s-Unilever experience showed. In that oft-discussed situation, after Ben & Jerry’s went public in 1985, it was forced to accept an acquisition offer from Unilever in 2000. That, ultimately, forced the company to backtrack on part of its social mission. It’s often referred to as a cautionary tale for social enterprises and one of the reasons behind the move to form a new corporate form, something I recently wrote about.

There are other potential hitches, as well.  The Cambridge, Mass-based car-sharing pioneer filed for its $75 million IPO to take care of its mushrooming debt.  In April, the company bought Streetcar, the UK’s largest car-sharing service; the deal reportedly was worth $50 million.  But, while Zipcar has said that it sees great potential in the London consumer–it’s pretty much an ideal market for the company–the deal poses lots of challenges. It’s the first large-scale international acquisition for Zipcar. And UK antitrust regulators  are still evaluating the merger.

Another pesky issue is profitability or lack of it. In fact, the company isn’t profitable and, not only that, expects a loss for 2010. In the three months that ended March 31, losses were $5.33 million compared to $2.97 million the year before.

And, there’s the matter of timing. The market for IPOs is uncertain at the moment. About one-third of IPOs planned in May were postponed or withdrawn, according to AP. The ones that stayed the course were deeply discounted.

Put it all together and you don’t see a recipe for great success. Still, if the move works, it will be more than an IPO of an unprofitable company with a lot of potential: It could spell a new chapter in the world of social enterprise.

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Next week is the second annual conference of the Slow Money Alliance. That’s the group recently founded by Woody Tasch, co-founder of the social enterprise angel group Investors’ Circle.   Its aim is ambitious: developing a fundamentally new approach to investment–to capitalism, really.

And, judging from response to the conference, it seems to picking up speed.

Borrowing a lot from the Slow Food movement, the Slow Money philosophy seeks to encourage investment in local food enterprises, an approach explained in Tasch’s book, Inquiries into the Nature of Slow Money: Investing as if Food, Farms, and Fertility Mattered.  He calls for investors to put some of their money into local sustainable farming. And that, he says, would discourage the unfettered growth -at -any- cost attitude that has created the  current, untenable on-the-precipice of environmental collapse situation we now face, forging, instead, a stronger, healthier, more solid and sustainable economy.

The system to support these efforts would include regional financial hubs where investors and entrepreneurs could meet.  Investors’ returns would be relatively modest, but still healthy, steady–and, well, sustainable.  Revenues from these mostly farming, agricultural ventures also would strengthen local communities and,  at some point, other types of businesses could also get in on the act.

To spread the risk–investing in one little farm could be a recipe for losing all your money–there would be Slow Money funds, with many farms in the portfolio. In fact, Tasch is trying to raise $50 million to $100 million to launch a series of funds, which could bankroll hundreds of businesses.

One thing seems sure about the movement: the timing is right. Tasch’s book came out around the time the economy crashed and disenchantment with traditional approaches to investment started growing.  I’ve heard people say that the local food movement–and, with it, Slow Money–may be the new youth  movement of the decade,  the thing that really galvanizes the current generation of disillusioned young people.

In the meantime, the conference, which meets June 9-11 in Shelburne Farms, Vt, has a series of well-known socially minded speakers, like Bill McKibben, author of Deep Economy, and a roster of 22 interesting sustainable small businesses, like Rotokawa Cattle, a Jericho, Vt., farm selling grass-fed beef and Greenling, an Austin, Tx, online service for grocery delivery from local organic farms.

It certainly will provide a first-hand look at the birth of a movement.

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As far as small business is concerned, New York City is famous for one notable feature:  its unfriendly climate. Red tape, hundreds of regulations,  lots of taxes: not a real small-company Mecca.

But, it looks like Mayor Michael Bloomberg is trying to change that.

For one thing, he’s launching an aggressive program to cut red tape and make it easier to navigate the city’s overwhelmingly complicated labyrinth of regulations. At least 20 city agencies are involved in the effort, according to Crain’s New York Business. For example, a new web site, NYC Business Express, explains all the permits and licenses needed to open a business.  The ultimate goal is to provide entrepreneurs with one source to visit for learning about and applying for licenses and permits.

Also, the city is trying to streamline the hundreds of rules agencies issue each year and to introduce a process whereby companies can pay or adjudicate violations online, says Crain’s.

In other areas, Bloomberg just announced a new $22 million investment fund for fledgling technology startups. The city is contributing $3 million; the rest is coming from venture capital firm FirstMark Capital.  It’s part of a larger effort to boost technology startups in the city.  The fund’s first investment will be  $300,000 in MyCityWay, which has a mobile application aimed at helping users search for such things as restaurants and jobs.

Obviously, the friendlier the climate, the more likely it is  small companies will stay in New York or will start up there–and, ultimately, will thrive. And, while chances are slim New York can become another Silicon Valley, there is a critical mass of venture capitalists in the city now.

Bottom line: It’s hard to imagine New York City becoming symonmous with entrepreneurship–but stranger things have happened.

You’d think that small business employees would have it the worst, right? After all, small firms have many fewer resources than bigger enterprises, which are, well, a lot bigger.

But that assumption is wrong, at least according to the results of a new study. It surveyed more than 800 people in North America and discovered that: 1) 79% of all employees report that their workloads have increased; 2) 57% say their work has grown “a lot”; 3) 68% of employees at large organizations think their work demands have increased “a lot”; and 4) 33% of those at small firms feel that way. (Full disclosure:  I do freelance work for the company that produced the survey, Right Management).

In other words, the percent of employees at small companies who think their workload has gone through the stratosphere is half of those at bigger places.

Don’t you think that’s odd? After all, both large and small companies have been afflicted by big layoffs. And, as I wrote last time, the trend is now worse at smaller establishments.

It does get you wondering.  Like, for example, why on earth would small-company employees feel less hassled than counterparts at larger organizations?

As you think it over, though, the conclusions make sense. Perhaps people at small companies work so hard under any circumstances–back to the fewer resources thing–that the current situation isn’t  overwhelmingly different.  Maybe demand at small companies hasn’t risen much, so there’s simply less work to do. Maybe employees at big companies didn’t have to work that hard before.

In any case, it’s sort of a silver lining, at least for those people who are employed by small businesses.