Evaluating Your Triple Bottom Line

Ok, so you want to be a regenerative entrepreneur. You think you have a concept that will help people, and the planet, and make you a profit. It’s pretty easy to tell if you are making a profit (is there anything left over in the bank account after all the bills are paid?) but how do you know if you are making the desired effect on people and the planet? How do you quantify your effect to compare different business strategies?

I asked myself the same question as I set out to assess my new edible garden business. I compared two services I am offering: Consultations and Workshops. Here is my attempt to quantify the triple bottom line of these services.

Consultations:

People

The garden consultations are helping people be more in tune with their site and grow more of their own healthy food. One client teaches cooking classes and shares her garden bounty with students, creating a domino effect. Another client’s son and several of his friends live in the downstairs apartment at her house, and sharing the garden and food also benefits them. In four consultations, I have directly affected 16 people, or an average of four people per consultation. If I could do consultations full time for six months, I would potentially impact 1560 people.

According to the USDA, an average family of four spends $355 per month on vegetables. (I can’t find the citation for this, I got it off another website that didn’t say where they got it.) If I can help them grow just 10% of their own during the three months of summer, I can help them save $106 every year. In addition, they will be eating healthier, more nutritious vegetables, have a more pleasant experience with their garden, fresh air and exercise.


Planet

According one study, (Heller and Keoleian. Life Cycle-Based Sustainability Indicators for Assessment of the U.S. Food System. 2000) we can reduce 75-90% of our food-related energy use by growing all of our own food. If a person can grow 10% of their vegetables for 3 months, then they can reduce their overall food-related energy consumption by about 0.65%. According to a study at the University of Chicago, the average American uses 400 million BTUs in food consumption annually. (http://geosci.uchicago.edu/~gidon/papers/nutri/nutri3.pdf) By growing just 10% of their vegetables in the summer an average person saves 2.6 million BTUs per year, the equivalent of 20.8 gallons of gasoline. If it takes me 3 hours to help one person reach this, it is worth about 7 gallons of gas per one hour of my time.

In my consultations I am also encouraging ecological gardening practices such as mulching, which retains soil moisture and creates a better environment for the soil life to do its job of feeding the plants. This makes healthier plants that are less susceptible to disease and reduce the need for pesticides or fertilizers.

Profit

I spent two hours at my first client’s consultation, as well as two hours driving (which I was able to combine with another errand) and about three hours drawing up the report. Seven hours for $85 is about $12/hour, not including gas, taxes, insurance and other business overhead. I need to reduce the total time to 2-3 hours in order to make consultations financially viable.

My second consultation was much closer to this goal. This client lived nearby, so I rode my bicycle, spent one hour at her house, and about two hours on her report. As I learn more, I will have fewer questions I need to research, and I will be able to do the reports faster.

If I were doing consultations full time for six months, I could do 390 consultations yielding $33,150. At current overhead rates, that would leave about $28,840. After taxes I would have $21, 630, not exactly a living wage. Luckily, this is just one piece of a diversified business, but if I really want it to pull its weight, I will have to increase the price.

Workshops

People

I had five people sign up for all six workshops, and 14 others come for one or two, for a total of 19 people. Those people collectively received 138 hours of instruction on how to live more sustainably. All five people who came for the whole series, and some of the people who only came for one workshop, reported back that they were already using what they had learned.

The participants who came for the whole series got the most out of it because each workshop built on previous ones, the participants got to know one another and develop bonds, and they had the ongoing support of the group to grow more food. They received 18 hours of instruction (as opposed to one hour in a consultation) If I was able to give them the skills to grow 40% of their vegetables in the 3 summer months, they could save $424 annually (for a family of four).

If I were giving workshops 40 hours per week, I could potentially teach 416 people per year, translating into 416 new, or improved gardens in Anchorage each year. If each of those people taught or inspired just two other people to start gardens, that would be 1,248 new people growing food. That might be enough to start a food garden epidemic.

Planet

With each person that has the basic understanding of Permaculture principles, and has practice using them to design and build a garden, a greenhouse, and a chicken coop, there are significant benefits to the environment. Not only are they growing their own food, but also they are doing it in a way that is low maintenance for them and regenerative for the planet. They also have the capacity to use Permaculture principles to design other systems or tackle other issues in their lives.

Quantitatively, if workshop participants were to grow 40% of their own vegetables for three months, they would reduce their food-related energy use by 2.6% annually, which is 10.4 million BTUs, or the equivalent of 83 gallons of gasoline. Theoretically, if my workshops were full with 12 people, I would spend 30 hours over six sessions to help them grow 40% of their summer vegetables, which would be equal to 33 gallons/ hour. This is a better return on my time than 7 gallons/hour for consultations.

In this exercise I am making a lot of assumptions, but I just wanted some sort of a comparison. For instance, I am using a USDA statistic that says an average family of four spends 26% of their food budget on vegetables. However, if you have abundant vegetables in your garden, you might tend to eat more of them, and your overall food budget might go down even more than 26%. On the contrary, if the family still wants to buy corn, tomatoes, peppers, and other things that are difficult to grow up here, their vegetable budget might not go down as much.

Profit

I charged $30 for the three hour workshops, or $10 per hour which was consistent with similar workshops elsewhere. I offered one free workshop if people signed up for the whole series, and interestingly, several of the people who registered and paid for the whole series missed at least one workshop. My goal was 10 participants per workshop, but the actual number fluctuated between 5-13. In the future I think I could handle up to 12 people per workshop. My total income for the workshops was $1195. Total expenses were about $40 for treats and handout printing, giving a net of $1155, or $192.50 average per workshop.

I spent a lot more time preparing for the workshops than I anticipated. Even though I thought I knew a lot about these topics when I created the schedule, I found I needed to become even more familiar with them in order to teach them to others. I read an entire book on the soil food web the week before the workshop. Designing an effective outline with engaging activities and developing a useful handout took significant time. I also scrambled around gathering materials, and trying to get our own projects with the chickens and the greenhouse somewhat finished before the respective workshops.

Most workshops took a better part of a week to prepare for, averaging about $5/hour, but this heavy investment of time could pay off well for repeat workshops. With just a few hours of preparation and full attendance of 12 people, I could earn up to $360 per workshop or $72 per hour.

If I were doing workshops full time, I would be giving 8 per week, earning $2,880 if they were all full, or $74,880 for six months (to compare with consultations.) This is significantly more money, but I would also need to find 416 people each year to take the full 6-week course. Alternatively, I could offer a greater variety to fewer people.

You can see from this synopsis that I should focus on workshops for the biggest bang for my time. I hope this helps when it comes time to evaluate your own triple bottom line. If you think of things I haven’t considered, let me know!

Don't Call Me Green!

There seems to be quite a buzz these days about Green Businesses. But what is a green business… one that has a recycling center for plastic bottles, or uses toilet paper with recycled content? Yeah, right! Businesses that claim to be green in this way are said to be “green-washing,” and it is so pervasive that the word “green” has very little meaning. So, maybe we can come up with a term that is more fitting.

It seems that for businesses whose sole goal is to turn a profit, it is very difficult to green up because many of the social and environmental costs are externalized, that is, they are not held accountable for. Truly sustainable businesses use triple-bottom-line accounting, where they see positive social and environmental effects as important as earning a profit. In fact, all three must exist to make the business truly sustainable. This idea is graphically represented in the diagram below.




The triple bottom line
This diagram is very similar to a graphical representation of the ethics of Permaculture. In the diagram below, the green represents the ethic “Care of Earth” which correlates to “Environmental Stewardship” in the previous diagram. The red is “Care of People” which correlates to “Social Progress.” The blue is the ethic of “Fair Share” or “Return Excess to the System” which correlates to “Economic Growth.”



Permaculture Ethics
Some people took this idea one step further. If one who starts a businesses solely for profit is an entrepreneur, someone who starts a business to benefit the environment is an eco-preneur, one who starts a business to benefit humanity is a social entrepreneur, then one who seeks to do all three is a sustainopreneur. I can’t say I really like the word, but I really like the concept that you need to have a balance of all three for it to be sustainable.

But why stop there? A business that is sustainable is one that is neutral on the earth. However, a regenerative business finds ways to renew, restore, and revitalize natural earth systems, thereby increasing its ability to provide for human needs. It is truly about care of the earth and care of people, as a means of making a profit.

So, who is an entrepreneur? An entrepreneur is “someone who creates value by offering a product or service, by carving out a niche in a market that does not currently exist.” (http://en.wikipedia.org/wiki/Sustainopreneurship ) Sounds like a Permaculturist observing the nature of a forest garden and choosing a species that offers the exact product or service that will balance the system. The article also states that entrepreneurs view problems as possibilities, obstacles as opportunities, and resistance as a resource. So entrepreneurs are seeking to solve the same challenges in business as Permaculturists are solving in natural systems or communities.

As I seek to grow and develop my new business, I don’t want to be called green. I’m going to set my sights higher than that. You call call me a “regenerative entrepreneur, and if you can call yourself that as well, I’d love to hear from you!

Financial Permaculture

I've spent the last four days at a conference focused on Financial Permaculture.  "What is Financial Permaculture?" you might ask.  Well, that was one of the things we tried to define.  In my own words, it is integrating the concepts of both finance and permaculture in order to make finance more green and permaculture more effective.  The financial guru in our corner is Catherine Austin Fitts, a former insider who saw what was wrong and tried to fix it, and in doing so realized that it was meant to be that way.  All of the poverty, death, and destruction on this earth is a result of the centralization of the financial system.  The rich continue to get richer at the expense of the earth and all the rest of its inhabitants.  Using Permaculture, we have developed methods and tools to heal the earth and re-forest the deserts, but we will never succeed if we cannot heal the financial system.  

Permaculture teaches us to solve problems creatively and strategize.  We realize that to combat centralization we must decentralize.  We must take back every county, every city, every town, and make them serve the inhabitants of those places.  To do that we must know who the players are in our financial ecosystem.  Where are the pools and flows of money in our community?  Most communities are like a leaky bucket.  Money comes in and goes straight back out again.  If people start shopping locally, the money circulates like a fountain.  

Another important aspect is banking.  For each dollar you keep in the bank, it can lend out $10.  If you keep your money in a national bank such as Bank of America, your money is used to fund projects such as coal power plants in Chile and Pebble Mine.  If you keep your money in a local bank, your money is used to fund projects that increase the health and wealth of your community.

The third thing that everyone can do to increase the wealth of their community is to vote.  Not just for the person they think will win, but for the person who has integrity and is truly looking out for the long-term health of the community.  Get involved in local politics and find out who these people are.  We need leaders that are not just looking out for their friends.

The economics of growing my own food

I will not kid myself that all the hours I spend tending my garden provide me with a lot of economic return.  I do it mostly because I enjoy the challenge and the fruits of my labors.  The tomatoes I grow myself taste ever so much sweeter than the ones from the store, even more so because I have tended so many tomato plants that have yielded not one ripe tomato.  But every year my garden gets better, more efficient as I learn.  

But besides the pure pleasure and enjoyment I am getting out of my garden, sometimes I wonder what is the monetary value of my work.  This was acutely brought to my attention last Sunday when Matt and I bought four cabbages (because the moose had eaten all of ours) and some pickling cucumbers (because we aren't very good at growing them yet) at a farm stand out in Palmer.  I love supporting our local farmers, but I almost choked when Matt handed over $27.  I felt completely inadequate as the provider of our vegetables.  So, I have started to pay more attention to what I'm eating and putting away for the winter.  

I packaged up just over 5 pounds of blanched kale (from my mother's garden because the moose ate ours.)  It took me about 5 minutes to harvest and 25 minutes to wash, blanch, package, label, and freeze it.   That is not taking into account the time it took to plant and tend the kale, which is a more complicated calculation.  A bunch of organic kale from Freddies is, what, $2.50?  So, if a bunch of kale is about a pound ( I should check these numbers) then I froze the equivalent of about $12.50.  If we pretend that it took about another half-hour of tending for those five bunches of kale, then the hourly rate would be about $12.50.  Not stellar, but it is something.  And the carbon footprint of the kale is much smaller than the stuff that comes from Cali in the dead of winter.  

Perhaps the raspberries will be more economical.  I spent about 15 minutes collecting about a pint of raspberries today.  

A Site Visit

Following up on a seed that was planted over a year ago, a small scouting party goes to explore a possible site for a Permaculture Design Certification course for next summer.  I am the pilot of the trusty new Volvo.  Sharon, fellow Permaculture Designer is my copilot, and in the back are our spiritual guide Liz and her daughter, Raquel, the animal tamer.  The weather is beautiful as we drive out to the valley, past the state fair where families are lined up with strollers to get in and the ferris wheel turns endlessly.  We turn onto a smaller farm road, and drive just past our destination.  As we turn around we see a sign on a mailbox... "The obstacle is the path."  

As we pull into the driveway of Yoga in the Valley, tranquility engulfs us.  A picture-perfect farm house, flowers everywhere, the snow peas beckoning us from the garden, "come eat me!"  We meet our hostess Tammy who is a bundle of light and energy and has a contagious laugh.  She shows us the yoga studio where we can hold the classes.  It is not huge, but peaceful.  We walk around the site, through the hayfield, by the creek, through the woods.  There is so much to talk about... where people can camp, what their hopes for the property are, which mushrooms are edible.  

I am floored by the beauty of all this raw land.  How lucky their three daughters were to grow up with all of this.  It is no accident that they all decided to study environmental science and education.  Tammy and her husband Mike are at a turning point, they are sending their youngest off to college and need to figure out what to do with all this property and their big house.  They are thinking of making it into an eco-village.  The big house could be the common house, and many smaller homes could be built around it, with thriving gardens and a community aspect.

A permaculture design on this property would be ideal.  Drawing people into the project and possibly even having work parties to implement some aspects of the design.  Mike and Tammy don't know that much about Permaculture yet, but it as if we have all been sent there to help them achieve these dreams.  We arrive on their doorstep with the right information just at the time that they need it.  And they provide us with the space to help others feed their hunger for knowledge.  Some might say, "the obstacle is the path."  In Permaculture we say, "the problem is the solution."

Marriage

Ok, ok, so I kind of skipped over a very important event in my life that happened almost two months ago: I got married to the love of my life, Matt.  

The wedding was more beautiful than I ever could have imagined.  We were married on the beach by our good friends, Margi and Scott, with our parents standing in support behind us.  The sun was beaming down on us as a black rain cloud threatened, making the backdrop of the tall mountains across the fjord even more dramatic.  Our friends KB and Emily sang the song "All You Need is Love" by the Beatles.  Matt's mother read a poem.  Matt and I exchanged vows and rings and a kiss.  The rain blessed our marriage as we ate elk kabobs under the tent.  The amazing food was generously prepared by our friend Sarah entirely from scratch.  We cut the cake, lemon-raspberry, with real frosting, and had a champagne toast, and then the band played.  We danced, sang, played games, laughed, and hugged, surrounded by all the people most important to us in life.  All the stress and work of putting together this event was gone, we were married and we were happy.

I can't tell you exactly how it is different, but I love being married.  It is somehow comforting to know that we will be together no matter what.  Other people now know the strength of our commitment to each other as well.  Every time I look at my ring, I think about the symbolism of the circle, and I know that Matt and I are in for an amazing ride.  

Moose Battles

It's after midnight and Matt and I are cuddled up on the couch when we hear a flowerpot crash to the ground.  I jump up and run to the window and there is a huge cow moose in the middle of my garden with a big leaf of kale in its mouth.  I run outside and I'm yelling at her, but she doesn't want to leave... there are too many tasty treats in the garden.  I pick up some wood chips from the path and throw them at her, but instead of scaring here away, it looks like she wants to charge me.  Matt comes out and the two of us convince her to move on.  But she runs around the house and comes back into the garden behind the house!  She really wants our goods!  I put a ladder across the back to keep her from going in that way, and pull out the fencing we had up over the winter to keep them away from the fruit trees.  Matt is trying to help me but he is quite sleepy and the whole thing is starting to feel a bit like a bad dream.  

The moose seems to be gone, so we go off to bed.  I toss and turn, thinking about my precious vegetables and all the hard work we have put into them.  Just after we drift off to sleep, we are woken up by a loud CRASH... the ladder in the back, the moose had returned!  She is scared off  by the crash and she runs off, so I go out and put the ladder back up.  I see that she has eaten all the cabbage in the back, unfenced garden.  What was I thinking, planting it there?  We just have not seen any moose this year or last, and we are letting our guard down.  

I go back to bed but I sleep with one ear open, listening for any sound of the moose returning.  In the morning we get up and with sleepy, disbelieving eyes, we see that she got through our shoddy late-night fence.  She had a gourmet late-night buffet of beet greens, chard, kale, cabbage, broccoli, lettuce, and even young birch leaves.  I wimper and Matt hugs me.  I pick up the tiny young beets she so carelessly left on the ground.  I right the garlic she trampled on her way to the cabbage.  What about our sauerkraut we were so looking forward to making this year?  What will Matt eat for breakfast?  I feel sick to my stomach.  How could we let this happen?  

Only in Alaska do we have to deal with the world's largest herbivore.  One that can wipe out an entire garden in a late-night snack.  It takes an eight foot high fence, minimum to keep these guys out.  And it has to be strong, as we found out.  We did discover what moose don't like to eat, however.  Mustard greens, tomatoes, potatoes, carrots, squash plants, herbs, and parsnips.  And we were very lucky she didn't find the fruit trees.  Today, construction of the fence continues, and this time, she is not getting through!