Rural Business
 Sustained rural lands; sustained profits




The Concepts and Rationale of
Rural Business

Most of the following (with elements for Craig County) is now included in the generalized draft Business Plan

Contents of this page are within
www.RuralSystem.com
Click to see specific topics

About the Author
First Thoughts
Center of Action
Scenario #1
Scenario #2
Scenario #3
The Pathways to the Strategy
The People
Additional Strategic Elements
Groups: The Elements of the Conglomerate
Getting to the Bottom Line
Venture Capital Repayment
Cost Management
Venture Capital/ Line of Credit
Financial Estimates
Table: A Range of Estimates Sophisticated Rural Resource Management
Hard Questions - Brief Answers
References

This page is part of a design document. It describes the best current view of a new, sound, diverse, extended, private-enterprise-based natural resource system for people. The forming enterprise attempts:

It does that by hard work, making money for its staff, participants, and citizens ... and using earned money to improve the complex rural system for now and the future.

The company, Rural Business, is a for-profit way of doing what some people call "conservation." Some call it's work entrepreneurial conservation. Like a diverse business or industrial conglomerate, the company (still proposed only, and under design) is composed of many small enterprises that are unlikely to succeed alone. They are very likely to be highly profitable when working as a system. With elements of agricultural cooperatives and share cropping, they are a system that makes profits over the long run ... a very long run. This is only possible if the resources and land are protected, restored, and improved, and then given superior management.


The Concept

Rural Business is the only way that is now known to be able to keep and develop further a strong, vital, high-quality life in the rural areas of western Virginia, and similar lands within the region of the mid-Atlantic states. (Perhaps the results will appeal to others.) Everything seems related, but designers have cut out a very big, but manageable, concept of a county and its region with which to begin. What we are attempting in this document is to describe precisely how to allow people to acquire and protect for future uses an area. Simultaneously, we must restore, create, and manage the complex bio-geo-physical resources there and nearby. We are beginning to describe how people can participate with care for the land (or failing that, to avoid legal battles from neighbors experiencing costs and losses clearly related to our uses of the land, whether they are intended or not.)

The Center of Action

Increasingly, groups are asserting their independence and pride of being able to stay unsupported, independent of government subsidy and support. They want fewer rules, smaller agencies, fewer taxes, and more local opportunities for both their children and aged people.

Historically, everyone wants land. Wars have been fought for it. The public has pooled resources to obtain it for them, collectively, such as the National and State forests and parks and State wildlife areas. It can be purchased, but only from willing sellers. Some industries, once acquiring land, are now selling it. Alternatively, some new groups are forming to hold and manage lands. There are many acres in absentee ownership and some owners have purchased cost-effective, value-enhancing management for those lands. The land needs the same tending as it once did, but more and more people leave the rural areas for the towns, residential zones, and cities. Fewer people know what to do on or with the land. Increasingly, we believe, people will allow their land to become one of the Pivotal Tracts.

Groups of people need to overcome the results of past land use, past farming and extraction policies, past enforcement lapses, and past landowner shortsightedness. The county must prepare for the likely pressures for development, and for government efforts to control land (given land abuses). Somehow, the "beauty of the place" has to be tended well, because it is the background, the very essence of an environment that people love to visit. It is or soon becomes their special place where they experience its "re-creational" benefits.

The work of Rural Business is to address how to develop and continue a related activity regionally, nationally, and internationally in order to achieve economic viability and improved land management.

Every day, local problems overpower and imprison thoughts about the county and the future, but it may be that by thinking a little beyond "local" and "now," solutions may be found for problem being addressed. It may be that in the county there are (or can be created or brought in) valued assets in the new economy. Certainly some of these can be used (e.g., the Internet, genetics, bandwidth). Some of the old assets will gain new values (landscape beauty, old forests, re-attachment to the land, historical perspective, alternative pathways to personal success, escape from TV-addiction, dispersed living in the presence of terrorists, alternatives for groups of advanced-age people). Rural Business begins to address conditions now for the future.

There have already been great changes but some people are now suffering. Others fear for their land and its quality for their children. At least they are not likely to reach readily their full potential in the areas that they call "home" in ways that they once did. Many people in the county leave farming, but they love the agricultural beauty and conditions provided in the rural environment. They all, through leaders, must concentrate on their real objectives, find the gaps between where they are and want to be, assess the probable magnitude and duration, and work on the set of important gaps ... getting the greatest total desired change per dollar or hour spent.

Citizens can appeal for government funds or they can find local solutions. Rural Business is a set of solutions for local people to avoid facing the uncertainties and stigmas of becoming tax-subsidized. When developed, it requires no agency expansion. It avoids the actionless impasses on federal lands, the endless meetings, the changing rules and policies, the increasing costs of maintenance, the instabilities and wastes, the low morale of staff on state and federal areas.

Rural Business is a way that people can retain a natural area and protect scenery and certain aspects of the environment that they love. Doing so is expensive to manage and maintain. Federal and state costs of doing so are hidden from the general public in incomprehensible, long-term budgets with changing subsidies. It may be possible that a new way to have and hold beautiful lands and resources can be created. It may assist in building meaningful, vital lives in and nearby these areas. One way is to use the discoveries of the past, work hard, and to develop new processes of a private enterprise. Herein are described the pieces of a diverse enterprise. Readers need to be suspicious, given past experiences and "sure-fire fixes." The dimensions and bases for the Rural Business are presented in some detail. Several people have said that the concept is "difficult to wrap your mind around it."( I appeal for help with some of the elements suggested.)

Vision

Call it a vision if necessary, but when Rural Business is followed, there will be a large corporation with a main office existing within some county of the region. "The" main office (System Central) may be located elsewhere to accommodate some major business transactions, but that will not matter because the Internet and emerging related technology will provide for the elements of the company to be united. There will be more than 20 largely-indoor or office-based enterprises and more than 20 largely-outdoor-related enterprises. Much of the outdoor-based work will be on private lands under contract. These Pivotal Tracts, each with private ownership and under contract, will be like a series of little national or state forests or parks, but each having computer-aided prescriptions for management. Special use permits, where and when necessary, will be sought from the relevant National Forest and state lands.

The "not-for-profit" legal status allows net gains to pay salaries and to built units of the conservation-and-education corporation. There are no boundaries to where the corporate work will be advanced. There are clear strategies for developing specific units of international tourism. First efforts are for local work on and with private lands. Later contracts will be sought for special uses and contract-management of state and federal lands. The objective is very clear: make profits ... but they must be sustained profits and they are used (beyond staff salaries) for citizens and for the land.

"Making profits" is a distinctively different phrase than is usually found in conservation and "non-profit" texts. Rural Business brings an almost radical idea into the wildlife, restoration, and preservation community. (I address it here and it will be treated again briefly below, because it can influence how readers react to the remainder of the text.)

I understand and acknowledge "love of the land," ethical dimensions of forest communities, the need for personal responsibility for the land and its future, some of the theological dimensions of land stewardship, and a desire for healing the land. I know about the literature of non-market values, non-consumptive resources, and appeals to the existence and intrinsic values of Nature. I know of several theological views of Nature and the environment. But I also know that I have begged for money for education and research for years and, though somewhat successful, I have not been able to stabilize a program. I know that conservation education or environmental education have worked very poorly. Similarly, those of economic education (1930's) have had little success. I know very well how steadily the bills flow into people's house. Taxes must be paid. The electricity must be constant for medical, refrigeration, and working needs. "Discretionary income" means little more than an occasional candy bar. People in the region have to find the money to pay the bills! We cannot count on charity or politically-derived sources ... for long, for continued high quality, productive land use and management. Taxing land creates enormous harmful secondary consequences to farming, people, and settlement patterns. We have to get money to pay for the affairs of the county in the "old fashioned way" ... but the actual work can be and has to be different, because now things are very different. Rural Business is about making money, about creating a system that allows money to be made, and assuring that it continues to flow. The two main reasons ... for the good of the people and the good of the land.

Direct financial gains from the proposed corporation will, by design, benefit members, contractees, local governments, students and schools, and the land. Successful employees are likely to benefit handsomely. Secondary gains are from employment, a tax base, safety and security, improved health, and a spreading private-profit concept of improved and sustained natural resource management.

Rural Business has tested parts but it is also a concept as simple as:

To have a desirable county environment within a county and its region, there has to exist a sustained, profitable, diverse, natural resource-related enterprise. In that enterprise there must be abundant, satisfied employees, residents, visitors, and customers who must find safe, interesting, beautiful, diverse activities and opportunities, some of which are novel, others that change little. Quality living occurs within managed quality spaces. Such spaces need to be restored, created, and managed soundly and cost-effectively.

That's all!

Scenarios

People with whom I have discussed Rural Business have complained about its complexity and say that they need more information ... but fewer pages! They have asked for some scenarios that would help them understand the end results. Here are three:

Scenario #1
North-1: A Pivotal Tract Example

Every owner will be different, but it can be imagined that many individuals, families, companies, and townships that own land in a county will voluntarily join Pivotal Tracts of Rural Business. Absentee landowners will find that the services are especially appealing. There are memberships for individual citizens of the region as well.

Keep in mind that there are many profit-producing units of the enterprise that are not field based, and some conducted on public lands (e.g., hiking and ancient-forest-study experiences) and that profits from these activities are being shared with the cooperating private land owners.

It may be helpful to imagine an hypothetical tract of 180 acres. There are many large tracts of land, farms and forests, in the surrounding region. (There are many absentee owners who would like to have their land cared for and tended, lightly used, and improved in their absence for their families, for occasional use, and for their future. Such diverse services are not now readily available.) Our early-recruitment objective is to have under superior management about 30,000 acres. By comparison, there are about 177,000 acres in the Craig County, Virginia.

Assuming one such tract or ownership (call it "North 1," and realize that with our computer systems and data such as shown in the computer maps above) we treat each tract as unique), the owner received $10,860 based on the financial provisions (described later). This amount had been asserted for him or her earlier, based on computer analyses. System Central paid the real estate tax on the forested and pasture part of the farm, leaving the funds for the daughter's wedding, new vehicles, or further investments in Rural Business and the county's well being. Similar returns were likely every 2 years.

On the Pivotal Tract, North 1, five acres were logged in small groups and revegetated and 30 trees were removed by individual tree selection. Three large maples were removed, sawn, and solar dried and later sold to The Pivotal Sculptors. The strategic emphasis: value-added strategies at most decision points. Ground plants that would be destroyed during the harvests were moved to the gardens of The Plant People. Emphasis: save or recycle. Forms were completed for SmartWood certification (value increases being made of about 5-8% without major investment). Roads were improved, several re-located, water bars placed to stop erosion, and grass borders and slopes planted for wildlife. Shrubs providing wildlife food (and spring flowers) were transplanted on the road edges. Part of the old road was re-developed to lead to a trail system linked to that on an adjacent property where there were camping facilities. Emphasis: make profitable linkages.

The private trails, for both hikers and horses, were scheduled for use. Limited work by the trail safety patrols prevented conflicts found in other areas. During each of 100 days, two groups (12 each) of hikers walked the area during the year. Thus there were 2400 adult hiker-days, each at $35, resulting in $84,000 gross income or about $50,000 profit.

Three well-built, comfortable blinds were added for customers (avid bird watchers working on their birding life-lists) to add a select list of rare birds to their list. This catered activity yield $1200, a $800 profit with partial owner return.

Thirty catered "owl events"(described later) produced profits of $22,500. Twenty "fox events" produced profits of $15,000.

Deer hunters purchased managed-hunt-unit-days (not the current inefficient pricing system) and produced a profit of $2000. Reducing costs and losses is as strongly emphasized as increasing production. Keeping deer populations under control is essential for crop and landscape loss reductions, forest regeneration, and for rare wild flower protection. Hunting trophy size increased.

The Wildland Crew completed 2 projects on the area and provided financial gains for the owner of about $2000 (as well as the small footbridge).

Anglers contributed $1600, dog trainers contributed a modest $500.

An area near residences was planted in hybrid oak seedlings for the long-term future. The planted trees were fenced against deer and goats. The goatherd,rotated over the owner's pastures, was part of a county-wide dairy herd. Profits for the owner varied each year with disease and milk price (about $5000) but stabilized when a cheese-processing unit formed beside a vineyard and blueberry plantation.

Close to the owner's home, youth raised domestic rabbits. Animals were computer-selected and Rural Business provided stock and feeds. The rabbits were processed for meat, hides, bones, and garden-soil additives. The local gains: $200.

Rural Business thus produced a substantial income, $99,600. Fifty percent of which (i.e., about $49,800 annually) went to the owner, bringing the owner from having a costly and frustrating land problem with neighbors complaining about erosion and standing water to having a profitable role in a natural-resource enterprise. The enterprise improved the watershed of the region and benefited wells, ponds, and streams, provided a tax base, offered local employment, and, some said, was a financially realistic way to stabilize the rural beauty. This was one tract, 180 acres from about 18,000 growing to 30,000 acres in the county.

Scenario #2
The End of the Day

A Pivotal sign goes up, the boundary is checked, and paint is added. Computer maps produced overnight provide new insight into the land production potentials and management needs. The pond becomes listed along with 50 others in a nationally prominent inland fishery. The pasture is weeded and fences go up to allow rotations of grazing to begin. Hand-held computers are used within the forest to produce an accurate inventory. The Trevey produces a management plan available from the Internet. Deer hunting zones (variable: half-day contracts; full-day; and 2-day contracts) are created and information becomes available to hunters on how the new area fits into the county level harvest potentials, both for animals, meat, and antler size. Youth and retirees tend one of five rabbit-raising facilities where animals are fed locally-grown foods and the fertile wastes are processed for the Gardens Group.

Beautiful hiking trails, some linked to the internationally famous Appalachian Trail, are built on private lands, and, throughout the year, members of the Wildland Walkers with their colorful clothing are seen using the area and a few campsites. (Members pass knowledge tests and pledge to follow appropriate camping and trail behavior.)

A security force member hikes with the Wildland Walkers for a little ways, then moves off to check on a suspected trespass. She disturbs anglers a little as she passes, but they too evidently hold membership in The Fishery and are intent on recording fish taken per unit of time spent in the recently-fertilized pond. Records, contests, and sustained yield per investment are all part of many corporate activities.

Local lectures become available. A topic discussed (at the major US conference sponsored by Rural Business and held nearby recently) is that of sustained yield. It's a phrase often heard in forestry circles because there is a law requiring it on public land. Rural Business is for private land, but public land policy needs to be influenced. The System seeks to sustain profits. Sustaining a yield of a low- or no-valued product can lead to bankruptcy! Combined lasting profit production - that of a total system - is the intent.

The Safety and Security Group staff member walks by the area to be visited by The Owls Group from Christiansburg that night. She is on the way to the potential trespass site. Combined work, shared tasks, reduced costs - these are the recurring themes within the System. The Owls Group conducts a nightly tour to an area on one of the Tracts. A group of people, after a wonderful meal, are bussed from a cooperating restaurant to experience and learn about owls and their ecosystem, visit the tract, and see an owl "called-up" from the wild in the dark. After the excitement, a catered campfire with entertainment is held before the group makes a late return trip. The profits are made for the conglomerate in the way the land is managed and creatively used. The work is with the animals and is enhancing, not exploitative. Cards, art, and photographs are available to the participants. Membership is offered into The Owls Group and a web site offers information, international owl-related tours, and insights into the environment and behavior of these fascinating birds. Some members add a new bird to their "life-list" of bird species seen. One member of the tour made arrangements for a CD - an e-book - to be developed by The Memorial Group on the great horned owl and published in the name of her father who loved the county woodlands.

Finding no trespass (reduced by her active surveillance), she returned to her car and passed by a group by a dozer being introduced to the concept of improved rural roads used in a forest cooperative. She had heard Dale's message before - reduced down-time, reduced soil compaction, certified SmartWood products, increased growth, value-added, local processing of wood, solar drying, secondary products, enhanced hardwood ecosystems - high-tech solutions in the wildlands.

Rural Business employed local staff and created new activities. There were new organizations, part-time workers, and jobs for children. Internet education now included a new wildland contest. There were emblems, tee shirts, a bright bandanna, and even a new hat, but these local "things" hid the profound underlying motives of Rural Business. They hid the opportunities for county residents, for the stay-at-home folks, for those not very interested in the outdoors. They hid the group spirit, the "can-do" attitude, and the angry turn against wastes and abuses of the resources of the county. They didn't hide the welcoming of outsiders who wanted dispersed living, a return to nature, the healthy rural atmosphere, village life, ... all the while they were participating in world-wide information systems and in globalization.

Refinements in using data allow sites with special characteristics (high quality for growing grapes or for growing certain tree species) to be mapped. Relatively flat, southwest-facing slopes (shown here as tan) are especially favorable for many crops and pastures. Steep northern slopes (bright yellow) have low timber production but are favorable for recreational use. A profitable group supplies such map products and their analyses.

A forester finished his day's work. He had used satellites, hand-held computers and computer maps. He had found several plants of interest and drove to the office to report them. He passed by the Fire Force wrapping up training for the day. They were the new, proud "hot shot" fire-fighting unit for the region. (Imagine the costs of importing fire fighters [said to be superior] from the western states!) He passed by a dozen Pivotal Tract signs, the one sign pointing to the nationally famous cross-country-run training trail, and by two signs pointing to the Avi courses, the golf-like bird-watching courses.

In the main office several people worked at computers. Some studied computer maps on the walls. A Forest Service scientist visiting from the regional office leaned over a computer making suggestions for changes in a powerful new forest analysis and land-use decision aid. There were challenges galore for visitors, opportunities for retirees, and this was a place where people came to learn how to really do superior, sophisticated, modern total land management. The local forester handed his plant information to a person who entered it into a data bank and a new map was automatically produced showing the actual and potential locations of the plant. It was a rare plant that could potentially require impact analyses, but the computer map spotted a site for a future tour for members of Nature Folks. In the corner, someone used unfit language in frustration as they assembled a book, the hundreds of pages of a Trevey "plan" or guidance document. Plans as "those dusty little books on the shelf" now had little meaning. Most people made their own copies or read significant parts of their personal land-use plan produced by Rural Business for them from the Internet.

Scenario #3
An Exciting Day

Four-wheelers (The 4 x 4 Group) assembled. (They had met the day before in their special area.) Members of The Fire Force joined them for a missing-child search. Two dogs still in training from The Dogs Group were brought along. Their unusual barking kicked off honking by a flock of geese (The Pivotal Geese Group).

Worried people appeared on porches. One had laid aside a carving on wood from The Forest Group. It was to be shown at The Sculptors' meeting. Bill could not hear the geese over the sound of the power saw as he made the notable new bluebird houses from rough-sawn wood from thinned forests. After seeing what was the commotion, Ed processed more applications for The Old Codger, a group offering meaningful work opportunities to retirees. Two young girls peered from the pasture, no longer tending the spectacularly handsome Toggenburg goat herd (The Goat Group) providing milk and cheese (aged in a beautiful dome-shaped wooden structure). The goats needed human attention, partially because of dogs and coyotes (The Coyote Group). Fences by The Fence Group helped control the goats, engaged in a computer-guided range and forage rotation system (The Pasture and Range System) that provided dense protection and enhancement of the soil and runoff controls. The dairy goats were brought in for milking and their wastes were used in daffodil gardening and in a new soil mix (Novosoil).

That evening, everyone would be at the World Ball game, a new sport (Novosports). Tech students, trying the new game, had suggested some revisions in the rules, making it more fun to watch. A group from a bus assembled by the rented building. They had a 1-mile hike ahead of them with their three guides. Fran had prepared the catered meal provided to them at the place now known as "the overlook." Another bus was due in later with a Nature Folks group. They were interested in dragonflies and two ponds had a great variety. They too would get a catered lunch, a visit at the store (to see items of The Products Group) and an invitation to join one of the evening events of The Owls Group. From over one baffle, the sounds of Spanish were heard, one person making arrangements for an exchange with Mexicans to overcome past difficulties with the North American Free Trade Agreement. Another person arranged for a translator to join a group from Germany to see a specially mined area. The group was on a traveling visit across Virginia arranged by The Prospectors. The current group in the building was from a nearby Chamber of Commerce and it was hearing about Rural Business as related to problems of the Planning District. Triangular tables were stacked behind a moveable wall. They would be fit together tomorrow for people bussed in for a futures conference. (The serious talk would occur in the evening beside the campfire.)


There are many possible scenarios ...

The Pathways

Rural Business may be a dream, but many people believe that it can be more than that with work and some risk taking. That no private profits are made without someone taking risks is a basic premise ... no free lunches or risk-less games. Superior or "blue-chip" profits may be desired, but they are not likely soon, given current national economic pictures. They are very rare in agriculture or natural resource work ... anywhere, nowadays. Few landowners seek them because they have many other goals (for example a rural atmosphere, quality of life, pride of ownership, family place, personal freedoms, avoidance of certain stresses, recreation, an irrational gamble on major land-value increase, etc.) that are equal to or surpass the objective of planned high-financial return on stock and bond investment.

Nevertheless, the Rural Business is grounded in the premise that "money talks" for almost anyone, and it includes a highly probable financial incentive for most actions suggested as part of the land restoration, enhancement, and management program. The mental pathway to the Rural Business was not direct. The following four stories suggest the rationale for, the pathway to the business. They are: The Coal County Land, The Consultants, The Wild Animal Populations, and The Football Analogy.

The Coal County Land A Virginia Tech faculty member worked on a project in the Virginia coalfield (Wise County). The question presented for him was "What will we do with 70,000 acres of land when the coal has all been mined?" He sought to design the perfect farm/forest complex. After much work and computer modeling (Kroll 1982), he discovered that such farm units were uneconomical and that only when some great "economies of scale" were reached could things be profitable. He found that economies were available in single systems (like one for cattle or for a single crops) well distributed over the area but with centralized management, care, marketing, and product storage. The solution, for example: don't raise cows, operate an economical cattle subsystem.

The professor worked on getting profitable cattle but saw the herd as a way to manage grasses on strip-mine benches, restoring them, but also increasing insects for wild turkey broods ... leading to hunting and a recreational payoff.

Another Virginia Tech professor often spoke of the reason why forestry was failing. It was because ownerships were too small. Operations were unprofitable, equipment too expensive, local knowledge requirements (conveniences) too great, and timber harvests could not be rotated over the years to sustain either a reasonable cash flow or an operation. It was always a personal boom-or-bust situation.

The other thing he discovered (or simply "realized") that a perfect solution for one piece of land surrounded by failing neighbors and difficulties of many types was not a real solution. Regional action was needed to retain profitability of the single ownership, even if it was large. The seeds of an action for Rural Business had been sown:

The Consultants

Years ago it required legal action to get certain state and federal agencies to stop some of their operations (like doing free soil analyses). Action was initiated because private businesses could do certain tasks as well (or perhaps better) as the agencies, and there were now markets for the products or services. This was part of the free market and private enterprise systems widely discussed. Within the realm of natural resources, there remain private opportunities now performed by agencies and universities. One reason that there are few private activities within these fields is that citizens cannot compete economically with the size, scope, and financial backing of government-supported offices. This situation is changing, can be made to change more rapidly, and new private entrepreneurial opportunities are seen in the near future.

Emphasis has been on consultants and their limitations. Increasingly more urban landowners now fit the mold of college educated, urban or residential housing, small and changing ownerships. They are well informed about the environment, eager to participate, but lack experience, access to equipment, or services. They have few of the necessary "contacts" for repairs, small jobs, standard maintenance, and emergency events. They have few funds for jobs that prevent high later costs. There is little time for work on the land. They often want someone to "handle it" for them. There is high demand for a good service.

Within some field of natural resource management there are few consultants. In some areas, there are too few public agents to even begin to "cover" the problems in a state. There are many reasons for this, but the insights gained in exploring the reasons behind the current conditions and the negative lasting impacts that under-funded and unusual-priority work have on the land itself suggest strategies of the proposed conglomerate ...

The Wild Animal Populations

Students of wild animals and ecosystems soon learn that when prey (like rabbits) are abundant, then predators tend to increase. There is cyclic, "following" behavior, one species is up and the other is down. There is a kind of constancy, a steady state that can be seen when examined broadly. It comes from many animal species, many different densities, and adaptability. The example can be followed in businesses.

Indeed it has. A major recommendation of economists is to "diversity your stock portfolio." The reasons for doing so are like those in nature for stabilizing animal populations. If an animal feeds off only one type of food and that food disappears, the animal usually goes extinct. Similarly, single-interest or single-product businesses often crash. A key part of Rural Business, the proposed conglomerate, is to diversify. That includes diversifying in time, space, and richness of offerings, and potential resource users.

There are over 50 major enterprises suggested, each located on or operating from a reasonably large ownership. All are not likely to be equally successful at any time. By counting the net gains from the scheduled total group of activities, then profits can probably be sustained.

Rural Business provides for a large single ownership or several ownerships to work together in a type of "cooperative" following, as some have suggested, some principles of sharecropping. Few ownerships are large enough to sustain profits, the conspicuous objective of the corporation. By forming small coalitions close together, extra gains (above those expected from a single ownership) can be made by all. There are administrative problems that will arise, but a question of whether the benefits outweigh the costs needs to be asked and answered almost every year. The major advantage is that great "economies of scale" can be gained, those for advertising, insurance, legal service, buying, office support, computers, transportation, year-around employees, and capital investment.

Individuals considering adding their lands to the Pivotal Tracts may see Rural Business as requiring too much loss of control or ownership. Major private assurances are guaranteed but nevertheless, the loss may seem to be too great. The basic premises are operative: "money talks" and "seeing is believing." Some owners will not want to participate. This is expected and accepted. The activity must be free and voluntary. There is more work that can easily be done on lands of those that will care to participate. An early estimate is that within 5 years, over 100,000 acres in the region will be under contract. Undue emphasis should not be given to land area but to the many units of the conglomerate, only half of which are outdoors-dependent.

The Football Analogy

The developing conglomerate can use the analogy of American football. Of course, the leather football on the playing field is important, but the total football enterprise is very large and diverse. It includes uniforms, the stadium, food, drink, clothing, advertising, grounds, publications, fan clubs, and more. The ball is important, but, compared to the greater football enterprise, it is almost irrelevant. By analogy, the tree or the wild animal is essential, but in the context of a total regional rural recreational and viable economic land use system, that entity may be almost irrelevant. Perhaps people in forestry or wildlife management and closely related activities have had their "eye of the ball" too long. Perhaps just attracting visitors (as in ecotourism) or producing more wild animals has not served us well and that it is now time to concentrate on the total rural and natural resource enterprise (or more broadly, the enterprise - profits from beautiful productive land, catering, lodging, equipment, products, organizations, guides, etc., etc.)

By analogy with football, when it comes to the regional problems, we have talked about "ball handling" too long. We have talked about trees, about fish, and complained about environmental regulations. We've been "brought up" to ask for government help. We can ask for help, but that has not been and may not be forthcoming, and there has been little change after 50 years of spending the little that has been provided. We are in the grip of all of the limitations of the single "cottage industry." We have rarely pondered the potentials of an integrated regional enterprise. We have been independent landowners! We can be independent ... and lose something we hold in common, the vital county. We need some group work.

The clear objective (and there is currently none for the public resource agencies):

Rural Business holds few limits. There is no agency saying restrict thought and action; no between-agency competition for greater budgets; no overseer of definitions and proper work. The only limits seen are those of the legal system, ethical behavior, and profitable action ... over the long run.

One of the most fundamental ideas of the business is that of sustained profit making. The planning horizon is 150 years (the reasonable profitable life of the recently-planted forest tree) and it is sliding forward one year every year. Computer modeling and advanced accounting systems provide centralized, cost-effective services to the proposed members of the conglomerate. The long planning horizon tends to be unique (how can you tell when you are likely to maximize expected net-present worth from 40 enterprises together over a 150-year period?) and requires special discounting procedures for expected values. Special resource-related software as well as prognostic units are essential for managing the complex system and achieving a well-constrained micro-investment strategy. (Later these software units can be marketed.)

The above four stories suggest the origins and parts of Rural Business. There are other parts that need comments because the issues are extreme, the problems are long-lasting, and it is clear that others have worked on them with different strategies ... and successes.

The People

Sensitive to the special interests, needs, and personality of the people of the community, the corporate objective is to create conditions, better surroundings, in which peoples' lives can unfold, their potentials be approached. This means working for benefits, achieving more, and reducing losses and risks. This means that in some final analysis, one essential for rational people eager for cost-effectiveness, the measures must be in:

While written by a natural-resource person, and having clear forestry and related resource elements, Rural Business is self-consciously developed for people. The needs and desires of people are the grounds for decisions throughout. Of course plants, animals, and communities may have similar grounds or rights, but human evaluations are needed. People debate about trees, rocks, rills, as well as snakes and foxes. They act, even in life-threatening ways, on their behalf. Nevertheless, these "resource-things" cannot be assumed to have different rights. Animals may not be assigned rights, one species over another ... one age-class over another. Who shall be allowed to speak for each? If we select a "speaker," each animal or tree species will argue that it and its offspring is supremely valuable and important ... absolutely essential and of top priority! But among the wild animals there are predators as well as prey.

Rural Business takes a human-centered view, but one in which dependence on life forms and preservation concepts are well-recognized and appreciated, more than bound by state and federal laws. It speaks to the inevitable conflicts such as between land for popcorn or pulpwood or water for navigation or irrigation. Decisions have to be made by people, for people, and herein we beg for introspection as well as for applications of modern decision making technology and processes. Those processes include recognizing a reasonable degree of error (the nature of people), the limitations of equipment and instruments, the intrinsic variability in nature, the natural changes in human objectives and expectations, and the high costs of being very precise. We recommend working with the "rationally robust" ideas (Giles and others 1993). The analyses already done show that in most cases when reasonable major standards are set ... "at least this much" ...then many other objectives are achieved without other investments, even though they may be difficult to express with much agreement.

Rural Business uses the analogy of sun in ecosystems as the driving force in human communities. In the community, the sun energy analogy is money. In biological systems, the three fundamental rules are: (1) get energy, (2) store energy, and (3) reproduce. The success of these rules, seen over the eons, suggests merit for the corporation and for the people it seeks to serve. The corporation seems to be a way to gain money. To use it well over time there must be efficient people, using it well, not wasting it, being healthy, and gaining education to avoid risks and to stay alive as conditions change. Some communities have not maintained themselves or "stayed alive" (reproduced). Parallels with the three rules are easily discussed, but they need to be transformed into positive actions as if the community (at least Rural Business) was a biological organism bent on survival. Dispersal is one reproductive strategy used by animals and plants. Dispersal in the coproration has parallels with movement of ideas, products, services, and Internet and market links across Virginia and throughout the world. Rural Business is for the county, no longer a spot on a map at the edge of a state, but a pivotal place for world-wide involvements.

The human-elements of Rural Business include working with existing health and education groups. Following intensive analyses, alternative educational strategies may be designed (related to clarity of behavioral objectives, cost-effective change, and realistic performance criteria). While we work diligently for "an environment fit for people", we hold that the same computer aids and incentives of the system can be utilized in programs for the emerging needs for "expected health with expected age." The benefits of a healthy, improving environment need to be integral to similar concepts for the human population of the county. A youth element is available. Employment opportunities are expected to be motivational. A Safety and Security Group is one of the proposed enterprises of the conglomerate. Work with the courts for alternative programs with youthful lawbreakers may be sought.

Additional Strategic Elements

Education

We rarely use "education" but talk of changed behavior per unit time and invested money. For the project to work, there must be the changed behaviors of

There is a major need for the things usually grouped as education. An effective group works within System Central, because some of the work is marketing, some system development, some local classroom work, and some is in developing distance-learning units. Secondary units may form in central Virginia and an eastern Tennessee community.

Proper Scale

Why not "start small"? has been heard many times. Individuals may do so. The ideas here are available and people are encouraged to pick them up and run with them.

Few of the suggested small enterprises can be successful alone or without the economies provided by System Central. The work units, when attempted in the past, were too small, capital requirements were too great, financial instability in environmental areas was almost assured, much work was seasonal, and there was no extra resource to grasp opportunities or to sustain life during "slow" periods and while working staff also had to seek new contracts. There were inadequate backups and returns were too low. Inadequate cash flow was deadly. Only with synergism - "the extra" from work together and shared resources over different seasons - can this "work," make money immediately for the land and its people.

Why not start small? Advanced age and limited financial resources now influence decisions. There is not enough time; synergism is needed. Many small investors can make it work. It is a big idea (not a big stadium or big government project). It is of the right size for the county and region, the near future, and for the resources available - both financial and environmental. It is possible to stabilize employment, share resources, capitalize on local talents, exploit the advantages of dispersed operations, use the Internet, use the results of millions of dollars of past research and development (e.g., at nearby Virginia Tech, community colleges and local experts), use superior management, and gain the advantages of planned synergism. Planned Synergism

When 1 + 1 + 1 = 4 then synergism has occurred. When insecticides are mixed, the killing effects can be synergistic, that is, greater than the expected simple sum of the two. Studies of systems have found synergistic reactions and this principle, one of gaining extra benefits for well-planned work and exploiting the unusual properties of systems is a core of the Rural Business. An example of synergism is when three triangles are places together they form a 4th triangle on the surface of a tetrahedron (as in figure D, above at the right). The terahedron is a working symbol for a strong subsystem. The effects of planning and strategic work are symbolized at the right. Such work is underway within Rural Business.

Central Administration and Management

Some of these synergistic events are found in System Central, the common administrative group of the conglomerate. It often uses triangular or tetrahedron structures (rather than pairs) to gain efficiencies. Central software often produces synergism when used by cooperating groups. Incubator-like services are provided. The activities of this group will be discussed later.

Pooled Funds

In a conglomerate, there is no requirement (except policy) as to where the profits will be made. The funds are pooled from all enterprises within the conglomerate. We live in a trading society. Goods produced in one place are rarely consumed in the same place. Production of units is to be where that is most efficient, not where the raw materials are produced or the demand is met. The very concept of sustainable forestry, for example the Smartwood certification of land, opens doors for wood sales internationally, generally enhancing the worth of exported wood by 5-9% ... because of very different demands and willingness-to-pay throughout the world.

Some of the small, proposed groups might be very financially successful. Others may have strong linkage roles or provide security, essential but "non-market. " Working together, they profit. Only as a "little ecosystem " do they survive together and profit.

Reduced Losses

Gaining income has to be combined with reducing costs or losses when discussing profits. A soil example may be of interest.

Soil is what people build on. It is what grows trees and feeds horses, people, birds, and beautiful things. In the county, landowners are losing about 16 tons of soil per acre per year. That has been going on for years but given little attention. It just has to be stopped! New awareness suggests that phosphorus, a key element in plant growth and human nutrition, is in short, declining supply and limited access. Within that eroding soil is phosphorus, a loss worth today about $32 per acre per year. Given the size of a county, about 200,000 acres, the annual financial loss from the farmlands is staggering. Someone, a business, needs to get this loss under control in a region that is said to be in economic trouble. The key word is control, not just a tossed-around "prevent erosion " slogan as in the past. We need to cut our losses and add value to the things produced. Soil-related businesses (e.g., Novosoil) can do this; we need profit-oriented managerial control. As the Extension Service shrinks, we can (and need to) gain that slipping expertise that can be used to make profits from soil.

Incentives

When objectives are clearly seen, incentives for reaching them become clear. Rewards for doing so are usually clearly seen. The system has a scoring mechanism, R* (called R-star), that can be used with the public, a simple answer for "how are you doing? " Group pleasure with successes can be life enhancing. There are salaries, memberships, awards, reduced dues or costs, public recognition events, trips, etc. all designed to provide a lasting system that makes profits without exploiting people of the land. Members benefit financially. The government benefits directly as well as through the building tax base. The existing tourism and other local corporations benefit from the beautification and improved context of their investments.

Satisfaction

For members of the conglomerate as well as for the public and land owners, we work on the basis that we are minimizing the difference between what people expect and what they experience. As managers, we can work on either element, or both, to reduce the difference. If, for example, we can predict and communicate a low song bird population of species X, then bird watchers seeking to see that species will not be disappointed, and even those that do so may experienced an enhanced experience ... from the natural population. It may be that management needs to increase the numbers of x, reduce the users, or try to reduce the demand. Rural Business is as concentrated on changing expectations and demand as on producing goods and services in the rural areas. (Psychologists like to discuss the difference as dissonance.) The conglomerate struggles for cost-effectively reducing dissonance.

Year-Around Work

Avoiding the dis-economies of seasonal work and limitations due to weather are achieved by a shared work force, great diversity in year-around activities, and preparing workers for different, stress-relieving tasks throughout the enterprise. Emergency preparedness, guiding, patrolling, working on crews, fire-fighting training ...are as variable as marketing, software development, gardening, and product development and manufacture (The Products Group).

Value Added

Value-added concepts are well known. There seems little merit (maybe "justice") in cutting a cherry or walnut tree in the county, sending it to North Carolina, and having high-value furniture manufactured from it. To do so makes sense only if an analysis has been done and the decision maker yet chooses to send the tree bole.

A key component in maintaining a stable rural economy is encouraging secondary manufacture (in the forested region) of high-quality conventional products from previously thinned stands, as well as aggressive efforts to create and market new products.
Oliver, 1992, J. Forestry
An option is to make furniture or furniture "blanks" (handles, legs, etc.) locally (by sawing), to use the dust and scrap in soil reclamation, and to sell the blanks wherever the price is right. Value-added strategies are suggested for sourdough, birdhouses, animal wastes, and SmartWood products of all types.

Students of forestry know well the rapid change in the value of wood as trees age. Planned harvests of trees of advanced age significantly increase the value received by the owner for wood. Planned and well-scheduled harvests provide forest communities of various ages and conditions for wildlife and biodiversity and assure maximum value will be received from wood occupying such valuable space for so long. The Trevey with its Square Knot procedures (and others) provides such harvests while providing annual income to owners from the greater enterprise, Pivotal Tracts and the corporation, for alternative investments ... that also may be adding value.

Memberships

There is a general belief that people like to be members of good groups. Active or not, many people like to "belong" and to have knowledge about what groups are doing. (It reduces risks and opens opportunities.) Consistently, when people purchase items or take tours or participate in any way, there is an effort made to recruit them into a specialized membership with a group. Groups advertise for other groups. Each membership provides some funds, builds a client or customer base, builds an advertising medium, and lists potential members of a learning community. Costs are reduced by providing communications to members (and among members) by the Internet. Magazines and newsletters are produced by local enterprises. Common software (of System Central) processes addresses, fees, etc. for each organization. Organizations typically have levels or membership classes gained by participation, education, tours, or passing tests of knowledge, experience or competence. Often equipment or publication sales are needed or used to gain new levels. Competition is encouraged among members. Clubs may form (e.g., The Sculptors may have many small local groups). Annual or periodic conferences can be held and these provide some profits and offer advertising times and places for sale or renting to advertisers not within the conglomerate. Part of the strategy is to keep people involved, to respond to their changing interests and needs, and to isolate diverse groups of people for specific advertising and messages.

Warehouses and Transportation

Many rural areas are not well suited for cultivation, grazing, or other active uses. There are old mines, borrow pits, rocky areas. There are needs to accumulate a stock large enough to attract a wholesaler's interest. There are needs for warehousing materials and selling them when the price becomes (or is regulated) appropriate. There are needs for high quality hay and forage storage. Good railroads and short haul distances can convert "worthless" areas into value-adding facilities.

Vehicles have had profound influences on the environment, settlement, and ease of working in towns while living in the rural areas. Vast areas have been converted into parking lots. Available fossil energy may again become a problem and strategies for mass transit are needed for stabilizing the rural areas, allowing workers to travel cost effectively to education, recreation, and employment, all with minimum pollution and loss of land to parking lots or the the gains from working and playing in groups.

Linkages

Linkages are well known since many people use the Internet. These are important, and the Rural Business practices what is preached in ecology lectures. It studies things known about the relations of plants and animals to each other and their environment and then works with them ... to assure profit.

A forester visiting a tract will see erosion problems with a pond and refer that to The Fishery. A member of the Fishery will relay muskrat problem observations to someone working within the Nature Folks Group or The Pest Force. These could be competing groups, but by the staff having clear personal incentives, if the other group(s) succeed financially, the work gets done, resource problems are reduced, ideas flow, and income may be gained and it will be pooled. There are financial benefits from helping other groups. Costs will be reduced since much cost is added in generally-unproductive time-afield spent by staff.

Recycling and Secondary Uses

We encourage thoughtful recycling, aware that is some cases there are toxic byproducts, high financial costs, and high energy costs.

We work on an energy budget and give attention to constrained net energy budgeting being formulated within The Energy Group.

Some of our products (The Products Group) are from raw materials that may otherwise be discarded (or energy lost by normal decomposition processes). For example, physically altered walnut hulls may find special use with the Stoneworms, a trail-building group.

Not "Ecosystem Management"

In 1994 the phrase "ecosystem management" was used for a new policy in the US Forest Service and it became adopted by other natural resource groups. It remains much discussed, yet-undefined, and there are few convincing examples of how it is consistently done and results evaluated. It remains of political rather than practical use. A paper is available describing its limitations and an alternative concept that is included within this project. Rural Business can create viable, productive, managed ecosystems that are linked to people, their interests and needs, and participate as cost-effective entities in their lives (as well as in the life of the county, state, and nation). Call the approach enterpreneurial conservation or effective rural systems. This is more broad (and more needed) than managing an "ecosystem" (typically an entity like a pond or a timber stand, but now broadly misused.) (to be expanded RHG :7, 2003))

Groups: The Elements of the Conglomerate

The following units of a private corporation are proposed to be created as part of Rural Business. These are the subsystems. They can be adapted and adjusted to fit the conditions of personal tastes and experiences for the conglomerate, and certainly to meet the interests of cooperating landowners as they develop. Their successes require very personal decisions, risk taking, and decisions about how lands will be used, now and into the future. I recommend that serious consideration be given to each, that "no!" not be the first reaction, and that (as suggested above) one reaction be: "Can several of us make profits together?" or "How might my special talents be used somewhere within the conglomerate?"

Rural Business can be visualized (with overlaps) as having:

System Central

System Central is the administrative, management, educational, and leadership unit that also provides the major economies for the other enterprises. By centralizing many services and functions (marketing, accounting, legal, computer service, library, insurance, transportation, rentals, etc.) this group overcomes the major reasons why similar enterprise-efforts have failed.

Proposed Office-Based Groups

  1. Dogwood Inns - inns developed in homes nearby
  2. The Realtor Group - automated property analyses for assisting in sale or purchase
  3. Camps - existing camps, and new ones; youth and adult, and writers' camps
  4. The Memorials Group - providing a variety of awards and memorial services
  5. Pivots - an organization for everyone in the communities and all of their activities
  6. Nature Folks - organization for people interested in nature (with the following units)
  7. Coyote - interest in the wild dogs of the world, particularly the coyote, all aspects
  8. The Owls Group - night tours, publications, research, general interests
  9. Prospectors - tours, publications, web site, geology and mineral interests
  10. The Plant People - plant collection, wildflower gardens, seasonal-change maps
  11. The Butterfly Band - insect identification, collections, field trips; bee keeping
  12. The Wildland Knowledge Base - commercial library searches on natural resources
  13. The Foresters - an organization for people interested in all aspects of modern forestry
  14. The Tours Group - local, regional , and international field trips, commercial tours
  15. The Products Group - arranges for production and sale of products (suggested list available)
  16. Outfits- design and testing of outdoor clothing
  17. The Sculptors- primarily a woodcarvers' group
  18. The Software Group - federal software collection, applications, and programming
  19. GPSence - goecashing sport, sales, training and service of GPS and related units
  20. Inquire: The Unified Laboratory - a multi-purpose laboratory serving many enterprises
  21. The Energy Group - energy conservation, production, alternative sources
  22. The Safety and Security Group - rural security patrols, security equipment, safety inspections and services
  23. Belles and Whistles - auto mechanical education, primarily for women and youths
  24. Fire Force - landscape analyses, computer analyses, "hotshot" fire crew
  25. Competency - field-based performance-assurance for natural resource specialists
  26. System Base - system promotion and extension of services to corporate and other members; part of System Central

Total suggested for consideration - 26

Most of the above are enterprise units that can be operated without contracts with private landowners. While recruiting private landowners and developing their lands for profitable uses is an important activity of Rural Business, the enterprise will offer services to any landowner and will operate many organizations (merely with one or more offices within the region). Some of the activities of these groups will first be conducted on National Forest land, then others on private lands of the greater enterprise. The importance of the office-based groups is so great that it is believed that the entire corporation can operate profitably from one large tract of private land, perhaps no such land, if major federal or state-owned land is available.

Outdoor-Based Groups

A major component of the proposed conglomerate is that the corporation brings certain private lands of the region under a specialized contract and uses them for profitable developments in the other interconnected units of the enterprise. These are called Pivotal Tracts and the related enterprises for these lands as well as contract work are:

  1. The Forest Group - total forestry system
  2. The Certification Group - Smartwood certification as a sustained forest with products
  3. The Trevey - a dynamic land use planning system
  4. Walnut Vales - wood, nut-meats, and other products
  5. The Deer Group - total deer management system, guides, year-around system, damage controls
  6. The Fishery - total system with ponds, lakes, wetlands, and streams divisions
  7. The Raccoon Group - single species system, fur management
  8. The Black Bear Group - tours, management, research system
  9. The Bobcat Group - monitoring, tours, fur, organization within Nature Folks
  10. Avi- the new sport of bird watching (with golf-like courses)
  11. The Wild Turkey Group - hunting, life-list building, total system
  12. The Covey - a bobwhite quail system
  13. The Dog Group- shows, dog training, field trials, wild-dogs of the world interest
  14. The Pest Force- vertebrate pest damage management
  15. The Wildland Crew - adult good work on good projects for fun and fitness
  16. The 4 x 4 Group - vehicle interest, education, community service
  17. Wildland Walkers - hiking and camping group
  18. The River Runners - a group concentrating on all aspects of local rivers and on watershed analyses
  19. The Tree Tops - an organization and activities for the sport of tree climbing
  20. Novosports - development and promotion of new outdoor games and sports
  21. The Wilderness Group - using and studying ancient forests
  22. Stoneworms - a trail building group
  23. The Stables- pastures, rentals, trail rides, horse health, wildlife and horses
  24. The Fence Group- production of specialized local fences; fencing systems
  25. The Pasture and Range Group - pasture and range management systems
  26. The Gardens Group -system of many small flower and vegetable gardens
  27. The Vineyards of Craig - grapes grown on computer-selected areas
  28. Viewscapes - scenic analyses and viewscape management
  29. The Goats System - dairy goat system, milk, cheese, hides, services, health
  30. The Rabbit Group - dispersed rabbit raising units; centralized marketing
  31. The Pivotal Geese Flock - a system of many goose flocks

Total suggested for consideration - 31
...each described in the pages to which you may link by clicking on any of the above topics. A single list of the 57 units is available and another is available within the Table of Contents.

Getting to the Bottom Line

Roadside view,Rt 42,  Craig County, September 2002

With high-minded secondary objectives for protecting the environment, and gaining employment, regional identity, and a tax base, the primary objective ofRural Business is to make sustained long-term profits for the enterprise. We can do so because of our design, dispersed risks, low capital investment, clear personal and county- group incentives, intensive shared management, computer optimization for a clear objective, diversification, abundant never-used research results, and new technology (some which is Internet-based). We can do this only if the environment is consistently well managed. Someone said, "It's good work for the right reasons."

Farmers and Merchants Bank, New Castle, September 2002"What will it cost?" is a typical question asked about a typical project. Rural Business is not typical. A cautious answer is provided. Rural Business potentiates investments in land. It "mines" billions of dollars spent on satellite technology and forestry and wildland research over 50 years. It develops a resource base for an uncertain future. It provides inestimable public relations value for its region. It reduces losses and has its own special security and limited fire protection program. It shows an alternative to agency management of land and current tax rates and destructive real-estate taxes.

Of course there are costs, but there are expected net returns (including yet-unquantified reduced risks) from investments. Forests in the public domain (such as national forests) are usually financial drains on their neighbors. Even if direct costs are ignored, they represent a loss of land for taxation for communities. The cost of owning land is, at minimum, the annual tax burden on the landowner. One bottom line for success of the Pivotal Tracts is that, at least, the annual tax-equivalent of landowners who associate with the corporation is paid. Another line-at-the-bottom is that the enterprise produces local community financial gains from the presence of existing public lands (some enterprises use the Forest under permit or accepted practices).

Venture Capital Repayment

Depending on inventory, adopted accounting procedures and policies, and the planning horizon, the estimated costs of system development can be paid over 6 years, with difficulty, exclusively from funds derived from the office-based groups. This is exclusive of the recruitment of Pivotal Tracts and development of other groups. With Pivotal Tracts in the conglomerate, profits are more assured. Demonstrated below, profits from invested annual income from Tracts can likely far exceed the value of any managed wood harvested at the end of a long investment period on that tract. We are not asking for "charitable contributions from land owners" as someone suggested. The net annual financial gains for Rural Business are pooled from:

First efforts seem to favor cooperative work with existing enterprises. Simultaneously we shall seek a specialized grant, one for a line of credit and later payback. We'll eke additional funding sources (donations, grants, contracts, bequeaths) and develop fully the concepts here, including expansions into other areas (Nelson County and Stafford County, Virginia Clairfield, Tennessee).

These gains include carefully calibrated timber logging returns from Tracts described above. The owners of Pivotal Tracts receive 50 percent of the profits of the entire enterprise. Based on the acres (a potential-production-weighted acreage based on an index (including site index, ponds, streams, roads, etc.)) within the participating land ownership, the owner shares in a proportion of the annual profits. The more money made, the more both enterprise and owners benefit, all subject to the constraints of sustained profitability and those imposed by the land and climate.

Assuming the last option, initially, 10% will go to an enterprise building fund for 5 years. Afterwards, 40 percent remaining after disposition of 50 percent of profits to the owners of tracts will be distributed by System Central. (This is tentative and based on the description herein.) The percentages of the residual 40% will be distributed as follows:

Cost Management

The advantages of the unusual organization also create problems. All groups have a common accounting service within System Central. There are real dangers characteristic of the "Tragedy of the Commons." Each group is independently managed and very distinctive. General leadership is offered; there is group process, but each manager is autonomous. Rather than building an enterprise, as in many other businesses, each manager is building profits since these bring group and personal rewards. The costs of System Central (for the entire enterprise including repayments, described later) are large. After a few years, all groups within the enterprise share these proportionally (above a fixed amount). An additional 20% of that amount is charged as cost and spent on approved costs of group enhancement and growth for each of the first 6 years. Salaries and benefits are high and represent the major costs within each group. Merit raises are one of the expected cost increases. (Additional salary incentives are from the funds outlined above.) Each group pays direct costs for supplies, raw materials, and special services. The gross income minus these costs is the fund distributed by System Central (as indicated above).

Line of Credit

Development capital is needed to implement all of the units or enterprises within the first two years for stability and continuous development. We believe that there will be individual investors having specialty interests in many of the groups, so a large single-source investment suggested as being needed may be misleading. Long-term low-interest loans or a line of credit are desired.

Similarly, incentives from a "line of credit" allow work to progress in these new ways with speed and reduced interest charges. (A slowly developed, less profitable, and more uncertain venture may be discussed and options will be developed. The intent of this Strategy, perhaps considered a first-phase Business Plan, is to display the entire concept, its potentials, and expected future conditions and gains for the people of the region.). (Several people have said: write a business plan! Fifty separate ones are needed, then several more for versions of the total business.)

We may cautiously add funds from the various properties and activities (intensive use of forests, pastures, facilities, and creative development of ancillary operations). Driven by incentives, the shared profits will build the enterprise. Most groups within the enterprise must be started at the same time or the unique, essential advantages of interactive work will not be gained and the enterprises will probably fail.

Nevertheless, modest, rather than total, development might be selected. Such a start reduces risks in managerial skills but increases the risks of the total system failing to perform at expected levels. It delays the development of the total system by many years. Estimates provided herein are based on all units being operational. Making estimates for unknown combinations and permutations of the presented enterprise units is impossible. An evident strategy of picking the sub-units or groups from Table 1 that have the highest returns and lowest costs will not work, any more than creating an organism by combining a heart, a lung, and a nose. Of course special combinations of the enterprises will work! Exploratory work seems reasonable.

Estimates of both costs and gains are very difficult. Some groups, at least by the middle of the second year, will be profitable. Conservative estimates of the profits from each unit are shown. These are strongly influenced by the assumption of there being an effective System Central, itself an unusual concept in natural resource management, and by supportive ancillary units being developed well. Complete failure of any unit (though difficult to imagine) does not jeopardize the success of Rural Business.

Financial Estimates

Estimates for "the bottom line" are in Table 1. The financial analyses are complicated by assumptions about starting times and groups with which to start. All should be started at about the same time, depending on financing and securing enterprise managers. All starting at nearly the same time will assure maximum positive interactions and the benefits of diversification. The plan is to start System Central and at least six enterprises simultaneously, but an assumption is made that all will be started within a 2-year period. Subtle differences of personnel, equipment, recruitment, marketing, etc. all make a specific starting time impossible to specify. See Getting Started suggestions.

Approximate values are used for each unit or group. Three estimates are presented, low (a financially poor showing, only small contribution to the greater enterprise), mod (moderate, conservatively likely), and high (desired gains for self-perpetuation of the conglomerate by year 7).

Some comparable financial information is provided for similar or closely related activities. Many groups shown here have never "worked" because they were never within a larger system. In some cases, best estimates of a similar imagined enterprise are used. As always, a poor manager, a recession, or a catastrophe can deny any estimate of success. Each enterprise is described and its potential suggested, then a summary of the finances is provided. In the end, the best estimate of the bottom line is that at the end of 6 years, at 5% return on the development investment, Rural Business can be making

$3.2 million net-gains annually

From this, net gains will be made for building the enterprise, the land will have been preserved, and the system will also have provided employment, youth activities, a growing tax base, continuing work to improve the quality of the environment ... and will have begun to expand throughout Virginia.

We have noticeable payoffs (described above) for individuals as well as the region. As stated several times, there is a belief that "money talks." In Pivotal Project we have a designed a system that will provide money and many benefits to citizens. We have designed a means to stop begging for grants and gifts, for ethical concerns, and for donations from owners of large land units to restore and preserve the environment. We have dodged the tendency to ask for tax funds. In fact with maturity of the project, funds are provided the County and region. We have found a means to support and perpetuate the benefits from lands if they are placed under technical land easements within existing programs. We can thereby encourage land being productive, land taxes being stable or decreasing, and land not being clearcut and sold to pay the taxes and "get out." Herein we are not advocating creating protective easements, simply the sophisticated management of rural and "wildlands" of the region. We have found a financial base for assuring benefits from regional beauty for families and land owners, as well as from its commodities.

Hard Questions - Brief Answers

Why can't we just hike and enjoy the region? Why add money to the issues?

Rural Business encourages hiking or inviting people to see the beauties of the area and to use the resources here without spoiling or depleting them. It is a means for making money and shaping the county so that more money will be made more easily. It responds to people in cities (now about three-fourths of the population), to single parent families, to lack of outdoor experience, to new demands for safety and security. There has been some poor land use in the past. We need to correct that. There has to be a new (low-tax) way to gain all of these things that people seem to need. Hiking, alone, will not pay the bills for the care and tending of people and land that is needed.

How can we get people to come to the area?

We are in a heavily populated area with many people having abundant leisure time and many people interested in activities when not employed. We have much to offer in great diversity. We have to spend money competing in the marketplace for peoples' attention and willingness to travel. We may find solutions in becoming a processing place, a warehouse area, a development place, and a specialty educational space ... not concerning ourselves with providing abundant, quality parking spaces. Comfortable touring busses for small groups offer special opportunities for bringing specialized customers to the area. Profits can be made without having to meet the costly needs of many different visitors. Our eye must be on the bottom line, net gains, not the number of visitors.

Why will people use private lands when there is so much public land?

There is little public land within the larger region. If they come to the area or spend money in the enterprises, few will care about the answer. If private lands of Rural Business cannot out-compete public lands, the "market" will speak. Few people know about the National Forests, fairly nearby. They are not marketed. Access to them is limited or unknown. On private lands ofRural Business some people will find quality management, colorful and esthetically pleasing places, novel trails and experiences, diverse levels of use, information, safety and security, shared memberships, new friends and contacts for other experiences, and pride in participation. (There are others who will continue to use public and other lands.) Special use arrangements will be made for groups to use segments of public lands and waters locally and throughout the US. . There is a wonderful un-exploited resource that can be created here. Ponds (hundreds of them built with government assistance) offer special challenges. Funds may be found to work out the important (neglected) role of managed minnow populations in wildlife food systems. Silver Waters, a proposed trout fishery is being designed. Aquarium systems for native fish enthusiasts may be an opportunity. The envisioned fishery ranges from the headwaters to the tidewaters and as a total system is considered to be one of the most active and demanding subsystems of the enterprise.

Why not get a grant?

We have a policy of attempting to be private, attempting to avoid taxpayer funding, and avoiding competition with and costs of doing business with agencies. Private foundations will be requested to assist us, but the concept outlined here matches poorly the objectives of known foundations (often denying up front " no bricks and mortar projects." We shall request that certain foundations sponsor software development that may be used in other regions, to test the model of Rural Business for other regions, to build integrative decision-support and expert systems, and to evaluate county-level resource changes under an entrepreneurial system. Later, a Foundation may be created.

What about salaries?

This is strictly a personal-incentive-driven organization. To the extent that we "win," we all get higher pay. We, the enterprise, start as volunteers or receive low salaries but, unlike other "outdoor jobs" that are sought by many people, the conglomerate has no salary ceiling and massive incentives. Few jobs will provide such knowledge and a feeling that genuine good is being done for so many people over so many years. Benefactors and members will be attracted even though initial gains will not be great. For contributors there will be tax advantages. Citizens, however, may find the investment very desirable. There will be "dividends" or interest on loans made to the system. There will be membership rebates, reduced costs, and many special personal advantages.

Does it compete with local companies?

We believe it will enhance and add to the profits of local companies. We have a means by which they can affiliate, participate in our marketing, and share sales and services for the people to which we respond. We are willing to discuss opportunities with local people and businesses and do not seek to compete with but to complement and add to the gains of existing and developing groups. We plan to add to and employ the Internet-linked equivalent of many "cottage industries" and companies throughout the region.

Sounds communistic!? Collective farms, shared resources, and all that. Is it?

No. The enterprise displays a paradigm of a free-enterprise-based regional economic development system centered on modern, sophisticated rural-land and natural resource management for the 150-year sliding future. It seeks voluntary cooperation among landowners. Its message is that if the land and its managers and neighbors do not produce profits, the enterprise may not be working. Sustained profits are the quest but, regrettably, "cut-and-git" may prevail. We believe that managed land sale value will exceed the value of intensively logged lands and we believe we will soon have the numbers to prove that locally. (They exist elsewhere.) Nevertheless, a combination of strategies in land taxation and regulations may be needed to assure desired land use for the future.

What about Cross' statement? "A society that reduces everything to a market inevitably divides those who can buy from those who cannot, undermining any sense of collective responsibility and with it, democracy."?(Gary Cross, An All Consuming Century, 2000)

This corporation is for those who pay taxes (and those who don't) and those who want those taxes to be reduced and better results obtained from them than in the past. It's to gain legally money for people so that they can buy what they need and want. It provides incentives rather than counting on responsibility (which doesn't seem to have worked in the past). Not exploitative, it is a diverse useful market, controlled and restorative. It has all of the elements of Jeffersonian democracy, grounded in educated voters with a love of the land and a view of the future.

What if it fails?

Any enterprise can fail for one or several reasons. Low capital investment and low facility requirements of the conglomerate suggest that the financial fall will not be very great. It needs to succeed. There are few alternatives that will serve the entire region. Current land-use and natural-resource management now seem to fail by several criteria (and have in spite of substantial funds being allocated and following major educational programs) and new direction for action with a payoff is needed.

Several people have asked: "How do we start?"

No humor suggested, the answer is: "as if to describe an elephant ... anywhere that you want to!" There are many ways to get started and selecting the best one has risks. There may be 2-3 enterprises among the ideas that might provide a quick start but with only one, there is not the power to make the changes needed.

Reluctantly, I have provided a one-person, personal opinion on a start. Potential investors, managers, and landowners are invited to begin discussions. Enterprises now involved in the units listed may be interested in cooperative arrangements, a startup-coalition. You are encouraged to ask questions about me and the source of these ideas and to call me at 1-540-552-8672 (not toll-free) or write (504 Rose Avenue, Blacksburg, VA 24060) or send an e-mail. A visit can be readily arranged. I shall gladly address interested groups.

Bob Giles

References

Giles, R. H., R. G. Oderwald, and A. U. Ezealor. 1993. Toward a rationally robust paradigm for agroforestry systems. Agroforestry Systems 24:21-37.

Kroll, G. 1982. Computer aids for reclaiming eastern surface mines as rangelands. Unpub. M.S. Thesis, Va. Poly. Inst. and State Univ., Blacksburg, Va. 272 pp.

Lomborg, Bjorn. 2001. The skeptical environmentalist. Cambridge Univ. Press, New York, NY, 515p.

See the works of Giles and his students.

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