Social Entrepreneurship, Coffee House Style

Coffee shop The Meeting Place on Market in downtown Lima, Ohio. Photo taken by Daniel Ross in 2018.

While I previously wrote about how all entrepreneurs should be considered Social Entrepreneurs if they are truly providing a good or service that benefits their customers, the reality is that when a business both wants to do good and make a profit we call that Social Entrepreneurship. Back in 2003 when my family and I started The Meeting Place on Market, we didn’t know about that phrase. We started a coffee shop because we saw a gap in the market (no coffee shop existed in Lima in 2003), we loved coffee and had knowledge about the industry, we were looking for a career change, and we wanted to impact our community in a positive way.

When we brought our business plan to the Small Business Development Center, we thought our numbers proved our concept would work. More than ten thousand people worked in downtown Lima at the time, within a couple miles of our location. No competitors existed. And while our Rust Belt downtown had been in a state of decline since the 1970s due to the decline of manufacturing, we saw other businesses tough it out - like the Bistro, a fine dining restaurant, Nitza’s, a fashion boutique, and Don Jenkins, a long time jewelry store. We wanted to be another positive spot that would draw people back to the downtown. So, we were rather shocked when the advisor told us that he didn’t think our concept would work in downtown Lima and that “I was busy enough with work and taking care of my two young children” (which is a whole other future blog topic).

Looking back, he was wrong in many ways but his advice had some element of truth. While our coffee shop quickly became a popular lunch spot, the downtown emptied out after people left work for the day. Parking became an issue for our customers due to inconvenient one way streets and city parking tickets. Our 1917 former Savings & Loan building provided a beautiful backdrop for the coffee shop, but required expensive maintenance. The lack of a drive through allowed other competitors to take over market share once chain coffee shops came to town. The quirks we loved about our downtown frankly turned a lot of potential customers off.

Economist Michael Porter writes that “distressed inner city communities can only prosper when they are integrated into the regional and national economy” (2011). When we launched The Meeting Place on Market in 2003 we thought we could do that by drawing people from all parts of our region into our coffee shop and other downtown businesses. While we have done that to a certain extent, there are a lot of barriers that we never overcame which hurt our bottom line. We have come to realize we need to connect to a larger market in order to be successful. To do that we have launched coffee and gift box lines that are shipped nationwide. We have expanded the utilization of our beautiful yet expensive building by creating a Coworking Center that hosts remote workers and entrepreneurs. All of these endeavors tie back to our mission of social impact + profit.

The profit goal has been much harder to meet than we imagined, but we are hopeful that our new direction will be a more sustainable business model. Would we do it again? Yes, but with our eyes more open. There is a reason that economist Milton Friedman (1970) wrote: “there is one and only one social responsibility of business—to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game.” With this logic, opening a coffee shop in downtown Lima in 2003 was an entirely useless activity that did not maximize profit. We don’t subscribe to that narrow vision of business, however. Our business created a bright spot in a previously empty building, a place for people to connect, and an experiment of Social Entrepreneurship that has succeeded regardless of the bottom line.

References

Friedman, M. (1970)'. “The Social Responsibility of Business Is to Increase Its Profits.” New York Times Magazine, 13 September 1970, 122-126.

Porter, M. (2011). “Economic Development in Inner Cities.” Institute for Strategy and Competitiveness. Harvard Business School. https://www.isc.hbs.edu/competitiveness-economic-development/research-and-applications/Pages/economic-development-in-inner-cities.aspx

Our building in downtown Lima, Ohio taken in 1923. The building was built in 1917 as a Savings & Loan, which went under in the Great Depression.