I’m in the process of filming a story about a woman who is opening a new business she’s calling the Locastore. Her goal is to provide a high quality alternative to corporate chain convenience stores that can be replicated and scaled up in many other rural communities. She will only be selling items that are produced within the county in order to build local economic resilience and foster community. Her initial focus will be on fresh seasonal produce, honey, dry goods, and baked goods produced within the bounds of the relatively new California Cottage Food Law regulations. She identified a prominent intersection and arranged to rent the vacant parking lot from the land owner who shared her vision of economic re-localization. She built an attractive 8′ x 12′ building with an estimated cost of about $12,000 once the windows, doors, and insulation go in. This building will intentionally not have electricity or running water since her business model avoids items like meat that would require refrigeration and the mild California climate makes heat and air conditioning unnecessary. What we have here is a classic roadside produce and pie stand of the kind that everyone’s grandparents will remember from their childhood. It also happens to be the kind of thing that a single person can self-finance without need of bank loans. She gathered the initial cash from her own savings and a Kickstarter campaign. See here.
But here’s the rub. Even after working very carefully with sympathetic local officials who want to see the store built and watch the business thrive and who graciously extended special code exemptions there are still regulatory mandates that boost the cost of the project by $85,000. The county building department insisted that the structure have a permanent foundation of a certain type. The foundation will lift the shop high enough off the ground to necessitate expensive handicap accessible infrastructure. The handicap infrastructure raised the square footage of the project to a point were new regulations came into play. And so on. These code compliance upgrades were imposed on the project and necessitated a Small Business Administration loan to cover the additional costs. So here we are looking at the construction of a $100,000 rural off-grid produce stand. The problem here is that there is no regulatory distinction between a 96 square foot shed and a Walmart. Susan is gracious and optimistic about the process and praises the people on the local council and economic development board who have helped her through the red tape so far. She also believes in her business model and is confident that she will generate more than enough profit to repay the SBA loan. But it bothers me that each level of bureaucracy inevitably drags in other bureaucracies and institutions that all have their own demands and costs that raise the bar of entry without actually adding value to the finished building or business. In essence an entire class of unproductive middlemen have to be fed in order for neighbors to buy and sell onions and bread to one another. There has to be a better way!