The deeper motivations of independent businesses

Written by Tyler Ibrahim, Local Frequency
Photo of James Magnus-Johnston. Photo credit: cmu.ca.

There is often a deeper motivation that drives independent businesses. Spending time with local business owners everyday allows us to discover the many thoughtful entrepreneurs in our community that run their businesses for reasons beyond their pocketbooks. James Magnus-Johnston from Fools & Horses, The Centre for Resilience at CMU, and Transition Winnipeg (among many other things) is one of those people.

There is a greater reason that James and the others who are part of their co-operative ownership model started that coffee shop. I’ve referenced a piece below that James wrote where he explains how Fools & Horses is an example of a business that sees its future in a steady-state economy – an economy that focuses on stability and self-sustainability over the long-term instead of constantly seeking growth. This is not something that 3G Capital (owners of companies like Tim Horton’s, Burger King, Anheuser-Busch InBev, Heinz, and Popeyes Chicken) would ever talk about. Their focus is different. The owners of Fools & Horses don’t watch the commodities markets to find cheaper milk or coffee beans to increase their profit margin. Their staff don’t greet you by upselling their latest high margin item. They are more interested in serving you a nice cup of coffee. They are aligned with you. They are not trying to scale, cut costs, and pay shareholders. That is not their reason for being. 3G Capital is what drives the drive through upsell. Fools & Horses does not engage in that kind of behaviour.

I don’t mean to open up a debate about coffee, but merely point out that businesses exist for different reasons. This doesn’t mean local independent businesses are not trying to make money. It just means it isn’t the sole, or even primary, reason they got into the business. 3G Capital looks at Tim Horton’s as a means to grow their portfolio. It is a way to leverage a large consumer-facing brand, cut costs, and grow profits. It is a financial entity that they wouldn’t pursue unless they saw financial opportunity. James and the others at Fools & Horses look at their business and their customers in a different way.

I like getting coffee at Fools & Horses. I like talking with James about his worldview. I like hearing about the other things he’s up to. I want to support that. I want to support businesses that are aligned with me and have a deeper intrinsic motivation than reporting higher earnings.

Excerpt of James’ article:

Our Fools & Horses wants to demonstrate the benefits of a more flexible, equitable work arrangement for its employees. Workers earn a living wage when they join us, are invited to have a say in how the business should be run, and are given the opportunity to become owners. Worker-owners look forward to more than the accumulation of money and a periodic hike in their hourly rate. They are given greater autonomy in their work, freedom to experiment and innovate according to their talents, and enough flexibility in their schedule to pursue other interests or spend time with family and friends. Autonomy and flexibility are not just tolerated, they are encouraged.

The businesses have also been designed to provide benefits to the local economy by keeping dollars circulating locally. Fools & Horses is designed to re-localize the economy wherever possible by supporting budding entrepreneurs in the local food industry, including farmers, bakers, craft brewers and roasters, and chefs.

There are other sustainable business models out there, and people doing far more important and captivating things to shift the economy in a new direction. But this is one example of a small effort to demonstrate the shift in thinking at the macro level.

Perhaps it says more about the present state of business–and the prevalence of monopolies–that it’s considered novel to do so.