Challenges to Starting a Sustainable Business at DR

This is the second of two articles I wrote on sustainable economy at DR about 2 years ago.  Some of the information may be a little outdated, such as the electrical grid references.  We are now hooked up to the power grid (and feeding power back into it), though we are still not on the water or heating grid.  Most information is still relevant though.  If you haven’t read the previous article, look here.  Just a disclaimer–these articles are my thoughts and opinions and do not represent the views of everyone at DR.   My goal is to get people thinking about these things.

While nibbling on some organic crackers recently, I noticed a note on the box stating that the manufacturer buys renewable energy credits. My first thought was “I wonder why they don’t fit their entire production facility to run on renewable energy instead of just buying credits?” Wouldn’t that be a bigger step towards making their business sustainable? Going through the process of planning a sustainable land-based business at DR I’ve been learning the answer to this question.

Nearly every step of every process of production in the global economy is destructive to the planet, and it’s not surprising. The market values profit over sustainability. In our economy, it’s a rare forest that is worth more quietly growing in its ecosystem than cut up into lumber or paved over with a housing development. And often the easiest, most profitable business practices are the most destructive to the environment.

At Dancing Rabbit we follow our covenants and guidelines to reduce our everyday impact on the planet, yet many of us depend on the unsustainable economy outside DR for our income and many of our basic needs. As well, the global economy provides us sustainable technologies that we cannot manufacture ourselves, like solar power systems. Living a sustainable lifestyle as individuals is one step in creating a sustainable society, but building an economy where sustainability comes before profit is vital to our goal of saving the planet. A lot of rabbits, me included, feel that building a sustainable economy means producing our basic necessities locally and if possible within DR. This way we can be certain that the products or goods we are using at least meet our covenants for sustainability. As well, with locally made products the environmental impacts of transportation are eliminated. We can imagine a village much like in the old days with a baker, a cheesemaker, a shoemaker, etc, with our staples produced and traded here. This doesn’t mean we would isolate ourselves from any part of the economy outside our community or that we have to be building our own solar panels, but until the wider economy becomes more sustainable, we should contribute to it as little as possible, unless our contribution is in offering sustainable alternatives.

One major step towards this future is creating viable land-based businesses. Doing this will connect our community and our livelihood to our land, something we should be intimately familiar with if we are to live sustainably. If we build businesses along the same covenants and guidelines that guide our personal lives, we can create a sustainable economy. When we can produce staple products and offer basic services for ourselves using sustainable practices, we will truly be making a difference. By trading or using local currency we can exchange these goods and services independent of the outside, unsustainable economy. We do this now to some degree with Elms, our local currency, but this remains a small trade (in terms of what we consume) in products and services actually produced by those at DR.

In the same way that living sustainably here can be challenging, starting and running a sustainable business at DR presents challenges that businesses in the unsustainable economy do not have to worry about. Running up against these difficulties, I wonder if a truly sustainable production business can be viable here (or anywhere right now in the global economy). For one, building and maintaining simple overhead here is a major investment, even for a very small business. In the unsustainable economy, starting a business might be a matter of renting a space that provides a production area, utilities, customer traffic, etc. It can also involve the purchase of a production facility, but even then, getting power, water, cooking fuel, and climate control is only a matter of plugging into the grid. Here at Dancing Rabbit all these things businesses normally take for granted impart huge start-up costs on the would-be entrepreneur. Granted, after the initial investment businesses would not have to pay a utility bill, only for upkeep of the system, but even over the long term, renewable energy by and large costs much more than energy from fossil fuel. Another factor to consider is that all the things that the larger economy relies on to function, such as electricity and refrigeration, are much more unpredictable at DR. The more predictable you would like them to be, the more it will cost you.

Creating a successful business is hard enough when you have the luxuries of a fossil fuel economy at your disposal. The fact that this kind of overhead is so cheap accounts for the low cost of many products in the global economy. When you invest in sustainable technology and business practices, you have to pass the extra cost on to the consumer. These sustainable practices have to be valued enough by the consumer for them to want to pay extra for them. If that cracker company were to retrofit their production plant to run on renewable energy, it’s possible their products would be priced out of the market, which is why they buy energy credits for a portion of their power needs instead. If its customers were willing to pay more for their product so that the company could run entirely on renewable energy, the company could be more sustainable. In this way sustainability would come before profit. Of course, this outcome is determined by the consumer, not the business.

But creating a sustainable business is not just a matter of replacing unsustainable business practices with sustainable versions of the same practices. There are many things a business just could not do without cheap fossil fuel. Imagine running a facility with several thousand square feet of deep-freeze storage on solar panels. It would simply not be possible. Even running a typical restaurant walk-in cooler would be a major power system investment. An economy adapts to what it has to work with, and ours has adapted to the abundance of fossil fuel. These resources make it possible for the global economy to function on the scale and at the speed at which it functions, but if they were taken away it would crash and burn.

Then there’s the unpredictability factor mentioned earlier, which comes from having your power supply determined by the weather. You can’t just plug into unlimited power or water as you can with the grid. At DR there are times in the year when there is no power left in the village. If you want to be sure you will have a lot of power, you can buy more panels and batteries, or use wind to supplement your solar, but larger capacity means more overhead. And even then, you can run out. One change we have recently decided to make, allowing grid-tie at DR, will pretty much eliminate the unpredictability of power supply (at least outside of the grid going down). Having reliability in water supply, however, is something that can’t be changed if we want to continue to use water in a sustainable manner. Because we try to catch all the water we use from the sky, a drought could limit a business’ ability to produce.

An Example: A tofu business

To give an example of the difficulties in planning a business here, I offer my tofu business idea. Tofu is a vegetable-based protein source a lot of people at DR would like to be able to eat on a regular basis. We don’t have any local source of fresh tofu, though it can be bought at Zimmerman’s for about $2.30 for a pound block in a sealed plastic container. Because tofu is in high demand and short supply and because fresh homemade tofu is far superior to store-bought tofu, I once thought starting a tofu business could be a good idea.

Immediately, I ran up against difficulties. First, making tofu requires a large amount of clean water, not just in the production process, but also in the cleaning of the equipment and production area. Since wells and county water are not as sustainable as rainwater catchment, to get this water I would need a cistern to collect rain, and I would need a roof to direct the rain into the cistern. This roof could be on the top of the production facility, which could be a small structure, but it would have to have a big enough roof to collect enough water to meet the demands of tofu production. I would also need an electric pump.

The tofu making process involves soaking the beans, which obviously requires water. Then the soaked beans are pureed in hot water. Large scale tofu production is made much easier by the use of special equipment that would need a lot of electricity, which would mean investing in a solar or wind power system. Hand grinding that many pounds of soybeans would take all day. The heating of the water and subsequent heating of the soymilk would require some kind of fuel. Here at DR we are allowed to use propane for cooking (but not heating water), but this is a fossil fuel, so ideally I would find another option. Wood cooking is probably the best bet, though I’d have to have a system that would allow me to carefully control the heat since soymilk scorches easily. Wood was likely the fuel used in tofu making for hundreds of years before fossil fuel. It would be possible to build a wood heated steam system such as Sandhill uses for it’s sorghum syrup. And in some countries, people are recapturing methane from landfills or human waste biogas systems. Both of these options would require a major investment in infrastructure. If I wanted to make larger batches at a time, which would be more efficient and reduce labor costs, I could refrigerate the product until it was sold to the consumer, but that would potentially take a major investment in power and refrigeration. I’m sure that by now you get the idea that sustainability offers plenty of challenges. Given the start-up investment I figured I’d have to charge many times more than the going rate.

Other Challenges

There are many other handicaps in establishing a small producer business here, many of them having to do with finding a market. Our location in rural Missouri, far from any metropolis, in many ways limits our market. It’s questionable as to whether we have enough people living at DR to support production businesses right now. Still there are things our small population needs that some new business could be based on. One problem is that many here may see the high price of sustainably produced products as beyond their means. Would people here pay $8 for a pound of tofu? Maybe, if we understood what it means to creating a sustainable economy. I think that by isolating ourselves from the mainstream economy, we will set our own values for products. The value will be based on our need for something, not on the going rate in the unsustainable economy. Why should we be unwilling to pay more for a product that is sustainably produced here just because we can get it cheaper at Wal-mart thanks to fossil fuel and cheap Third World labor? Why shouldn’t we pay $12 for a quart of organic home-canned tomato sauce? On the other hand, products like TVs can be expensive at big box stores, but they have almost no value here at DR. So if our economy values tomato sauce more than TVs people will be more willing to spend the extra money on tomato sauce. The barter economy and local currency would also help establish an alternative system of valuing products and services, by requiring that things be valued by comparison of their necessity here at DR.

Still our population may be too small to support a business and we will have to find customers outside DR. Bringing our products to the larger, unsustainable economy would help make it more sustainable. One way to do this is to bring customers here. Our location has one advantage in that each year people come from all over wanting to find out what we are doing here. This flow of tourists will only increase as we grow and add more attractions, such as a bed and breakfast, a winery, or a natural building school, and will be vital to the building of our economy.

Another option is to distribute our products to the larger market. It’s possible that in the future we could have some cooperative truck for shipping our goods regionally, or we could cooperate with Sandhill, who have a large distribution that carries their products all over the country. Outside of this option we would have to deliver the products ourselves using a DRVC vehicle. To keep the miles off our products it would be ideal to have them travel as little as possible and have our customers travel as little as possible to buy them. But unless we can tap into a larger customer base, our businesses may be limited to a market that is too small to sustain them.

Unfortunately, transportation is not the only difficulty in selling to a larger market. Finding a market outside DR will probably be harder than finding a market within–how can we produce at a price that can compete with products made with unsustainable practices? There is presently a high-end market for organic, sustainably and responsibly produced goods, but products made here would likely be more expensive than these goods because of our added “handicaps”. These “handicaps” could be marketing assets if we can get customers to value them. The question is how far this will get us. Some government grants and tax breaks for sustainable practices could help subsidize new businesses here, but these sources of funding are variable and never something to be counted on. Any way you look at it, high operating expenses are often a reality of sustainable production and if consumers aren’t willing or able to pay them for basic necessities, we won’t be able to build a sustainable economy.

One hope for competing in the global economy is that the rising price of oil will increase food and other product prices such that sustainably-made products can compete. Also likely is that our sustainable economy will adapt to what it has to work with. We will figure out the things we can and can’t do and we will develop new, more efficient and sustainable ways to produce the things we want to produce. One other advantage we have is that we are not as greedy as most entrepreneurs these days who require not just a profitable business, but exorbitant profits for themselves and their stockholders. Though we don’t have the economies of scale, we aren’t greedy so it’s likely we could sell products at more competitive prices than some high-end companies whose products are made with slave labor.

At our retreat this year (two years ago now) it was mentioned that DR will be paying off many of its major debts in the next five years. Besides necessary capital investment in infrastructure such as new common buildings, visitor housing, and roads, we would be wise to invest in our sustainable economy. Offering loans or even grants to DR members to start businesses that provide basic necessary goods and services would be a great way to ease the burden of starting up a business here. Building a business incubator space is another idea for building capacity for small businesses. Another option for reducing the start-up costs of small businesses is to incubate them on the grid in Rutledge and move them to Dancing Rabbit when they have grown enough to afford the capital costs of running the business more sustainably here.

Though often we as environmentalists look askance at the notion of business, our economy provides us the things we need to live. We can’t ignore it. If we don’t embrace it as part of our model for more sustainable living, we will continue to contribute to the unsustainable economy and turn a blind eye to the impact we are having on the planet.

10 thoughts on “Challenges to Starting a Sustainable Business at DR

    • Yes, of course we could try something like this at DR. I think it’s a great system. I went to Growing Power and met Will Allen when I lived in Madison and worked at Troy Gardens. It is a very inspiring project. Aquaculture, vermiculture, hydroponics. They also make use of duckweed, which we used a lot this season to feed our chickens. Watching this video it looks like their system has evolved much since I was there about 6 years ago. They were just starting to experiment with tilapia when I was there and now they have long tanks under the plants and are raising perch too. This is all brilliant. My take on agriculture is to use animals where they benefit the system, but not have the goal be meat production. Animals products would be a byproduct of food production. I haven’t thought about the handicaps of something like this, but its possible it would fit our village well. The water pumps might be a little tricky in terms of power supply if they have to circulate water all the time, but the climate here would probably be milder, so some things might be easier. Maybe we should organize a field trip.

  1. Dan
    Thanks for the rumination on the reality of the sustainable economy. It seems that the concept of sustainable economies is a question of degree. Your observation in how the DR economy is very dependent on external wealth instead of locally produced prosperity is refreshing.
    Background info on me…I am a small business owner here in the Midwest that is concerned about the trajectory of our society. I have spent considerable time in reading all the blogs of DR members, and those of Red Earth and Sand-hill IC’s as well. I am inspired by your collective will to seek a sustainable life. I am not a member of any IC, yet am empathetic to the need for individuals to redefine how we as a society should support building alternatives communities such as DR.
    In spite of the fact that I am in business to make a profit, I have noticed that there is a polarity of attitude towards profit. On the one extreme are the epic Machiavellian capitalist that feel the environment represents resources that need to be consumed for personal gain at any cost. On the other end are those that consider subsistence as the higher goal; that any profit is sinful and greedy and to be avoided…. There is no glory in either extreme. The happy medium could be Paul Hawkins Natural Capitalism concept, or perhaps what I think you are headed is the equilibrium that comes from wise use of renewable resources, frugal reinvestment of capital that will create future opportunities for communities, and mindfulness of the impact of actions beyond one’s personal existence.
    I have wondered how the transition to a post capitalist economy may play out. Do DR and other IC’s represent the fragile “arks” of culture and that will continue to function in the face of social breakdown and the collapsing thin veneer of civilization? Will New Urbanism take hold quickly enough that will make cities sustainable? I read of the Seneca Cliff theory of peak oil and how the oil economy will potentially collapse: http://cassandralegacy.blogspot.com/2011/08/seneca-effect-origins-of-collapse.html
    And you described the tenuous nature of DR’s current dependence and sometimes symbiotic relationship with the external oil economy is a necessary evil that needs to evolve. You mentioned in your post of your ideas for bootstrapping or incubating businesses in Rutledge as a transitional means to an end, eventually moving them to DR; and the need for creativity in reconciling the few internal opportunities in the local DR economy. I do not want to come off as someone whom likes to pontificate or suffers from excessive hubris. I do know what it is like to operate in a rural environment though. There is a reason why that there has been a mass exodus from family farms for more than 4 generations. And with the rapid depletion of natural resources, 21st century technology may be seen as both a curse and a blessing.

  2. I am in a class called Sustainable Design at ITT Technical Institute, and I am researching Dancing Rabbit. I really like what i have seen on the webcites and was wondering if there was any way I can get some more information so I can further elaborate on what Dancing Rabbit is all about.

  3. Hello,
    I have been reading almost everything I can get my hands on about Dancing Rabbit and just read your post. It has my mind swirling. I am definitely very interested in DR! Anyway…my husband has been researching aquaponics for awhile. We raise and sell fancy aquarium fishes currently and he loves the idea of raising food and growing bigger and better vegetables…

    • Some people here have talked about the idea of aquaponics. You all should look into our visitor program and come see how we live. We usually have 5 of them each season from 1-3 weeks long. You can find it on our website dancingrabbit.org.

  4. Biogas systems can be built on a shoestring budget. http://www.ruralcostarica.com/biogas.html Any attempt to push around the temperature of liquids or air require large amounts of reliable energy. Choose export products that don’t need this. They do exist. Like steam beer. Or engineer a wort cooling based on renewable energies. I’d guess many types of food manufacture require substantial water use. If you’re limited to rainwater cisterns, you might not be able to achieve export level scale.

  5. @Dan Durica & Mandy Creighton

    Greetings! I was inquiring on a post from 12/17/11 from this thread and I was wondering what type of aquaponics work is going on or being researched at the Dancing Rabbit currently and if there will be any for the 2013 season. I can not explain enough how inspired I was when I saw the shared link by @M. Creighton:
    http://wakeup-world.com/2011/07/14/how-1-million-pounds-of-organic-food-can-be-produced-on-3-acres/
    This changed everything for me. Anyway, I have been doing some research and have tons reference links on aquaponics and aquaculture and the like on all different scales and designs. I would be more than happy to share a collection of HTML bookmarks this idea has inspired to research for one reason or another to aid with research or to get a good laugh out of a noob. I look forward to hearing from any of you at the ecovillage!

    Mark Hines
    Fort Worth, TX

    • Hey Mark,
      Thanks for the link. We don’t have any plans for aquaponics at DR and as far as I know no individuals are working on it, though some have talked about it. It seems like a good idea. I went to Growing Power when I lived in Madison many years ago and was able to see their operation. It is impressive. We are now focusing a lot more on agriculture and there are many here interested in growing more of our food sustainably. I plan to have more articles on it soon. Dan

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