Delaware Small Business Chamber
Delaware Small Business Chamber
“We just wanted something other than chicken dinners.”
That’s according to Bob Older, founder and President of the Delaware Small Business Chamber in Newark, Delaware. And although the above statement was made in reference to the chamber’s Beefsteak Dinner (more on that later), it serves just as well to capture the ethos of the Delaware Small Business Chamber’s business model: a new take on an old tradition.
The Delaware Small Business Chamber was officially founded on December 27, 2011, but for the sake of convenience, the staff recognizes January 1 as the chamber’s anniversary. Before starting down the path of creating his own chamber, Older already had a career’s worth of experience in the small business world: currently the owner of a travel agency, Older has been an entrepreneur for his entire adult life, and has many years of experience with other local chambers.
Prior to the chamber’s inception, there were already fourteen other chambers of commerce in the state of Delaware. There were also chapters of the Small Business Association, and SCORE—all of which, Older said, are great organizations, doing good work in their own right.
“But I was finding that the definition of ‘small business’ was getting lost in translation between [local] organizations, and the state and federal organizations,” Older explained. “Many of them say 250; 500; or 1,000 employees is a small business, and I don’t agree with that. I think a small business is really zero to 50 [employees], maybe 100 at most.” And, Older added, despite all of the available options for Delaware-based small businesses, “nobody was really focusing on the demographic that we were looking at.”
Enter: the Delaware Small Business Chamber.
In order to join the ranks of the Delaware Small Business Chamber’s 200-plus current members (who span the entire state of Delaware, plus parts of New Jersey, Maryland, and Pennsylvania), there are specific criteria that an institution must meet. For starters, any member must be a small business, as defined by the chamber; that is, between zero and 100 employees. Any bigger than that, and if the company wants to join the chamber, it must support or do business with other local small businesses. What does that mean, exactly? Well, first of all, it means that, technically, no business would ever be too big to join the Delaware Small Business Chamber, unless they stopped doing business with other local businesses. That business-to-business relationship, however, can come in many forms: does the bigger company have its business cards printed by a small, Delaware-based firm? If so, they’re eligible for membership. Does a local agency handle their advertising or marketing? That counts, too. What about water delivery? Or landscaping? Does the larger business contract with small, local businesses? If the answer to any of those questions is “yes,” then that business might be eligible to join the Delaware Small Business Chamber, regardless of how many employees it might have.
“We’re probably the only chamber in the world that will turn down members,” Older explained, noting that his chamber has had to do that in the past. “If they’re a [larger] business that is just one-sided and they’ll take business away from the small business community, but not do business with them [in return], that’s not someone we want as a member,” he continued. “So, we’re proud to say that Wal-Mart will never be a member of ours.”
But there’s another important stipulation to joining the Delaware Small Business Chamber, and it’s one that Older believes further separates his institution from others like it: it’s an ethics clause.
“You have to be an ethical business person; you have to be in good standing with things to become a member of ours,” Older said. “We’ve actually removed businesses due to ethical reasons … and we’ve not accepted businesses because of ethical concerns.” Some disqualifying factors include a business owner with a felony record, or an owner who has a known propensity for shady business practices. Another possible cause of exclusion is numerous online complaints against a business, or a poor rating with the Better Business Bureau.
The reason for this is actually fairly simple, and also quite understandable: “It’s our name,” Older said. “When we’re talking about small businesses doing business with each other, it’s our reputation, our name on the line. So we only want companies that represent that.”
Like I said before: a new take on an old tradition. Older is proud of the fact that, at the Delaware Small Business Chamber, “just writing a check isn’t good enough to become a member.” But the departures from the industry standard at the Delaware Small Business Chamber don’t end with the enrollment process; they continue to color the entire chamber experience.
For one thing, the Delaware Small Business Chamber was the first chamber in its area to do away with basing the cost of member dues on the number of a firm’s employees. “If you had zero to one employees, you paid one amount; two to ten [employees], a different amount; eleven to twenty, this amount,” and so on, Older explained. “And then I started thinking to myself, ‘Wait a minute, why am I penalizing small businesses for growing?’ Because that’s exactly what we were doing.
“We were saying, ‘If you get more employees, we’re going to charge you more,’” Older said. Under this model, a company that pays $4,000 a year because it has 300 employees is not getting a single benefit more than a business that has one employee and is only paying $300 a year. Older noted, “It made no sense to me.”
So, true to form, Older and his staff reimagined the traditional “tiered membership” model. Here’s how it works: to be a first-tier member, a business can’t have more than 25 employees. To be in the second tier, it can’t have more than 50 employees. Other than that, member dues aren’t based on size, but on value, and different memberships have different things attached to them. For example, if a business wants to sponsor an event, or maybe just have a table at the chamber’s expo, there’s a price value attached to those things. You can buy them individually, or you can sign up for them all at once. Here’s how Mr. Older explained it:
“I’ll give you an example,” he started. “If somebody wanted to be a gold sponsor of all of our events, we have a price attached. To be a gold sponsor of this event is $2,000; to be a gold sponsor of this event is $1,500; to have a full-page ad in our program is $395,” Older explained. “If somebody wanted to be at the top level of everything we do for the year, it would cost them $9,500,” if they had to buy a la carte style. “Well, I’m not going to charge anyone $9,500. I’d never get it,” Older continued. “But, if somebody says, ‘Look, we want to do everything across the board at the highest possible level,’ we’ll still give them that $9,500 value, but we’ll only charge $4,000 for that membership level.”
In the end, the package deal can mean a membership valued at more than twice the cost of the annual dues. “We knew we were going to take a loss doing it this way,” Older stated, “but it was the right way.”
Which, again, speaks to a greater foundational principle at the Delaware Small Business Chamber: they’re definitely not in the chamber business just for the money—and that’s something that Older really prides himself on. It makes sense, then, that it would only be further reflected in other aspects of the chamber.
The Delaware Small Business Chamber gives 72 events a year—for free.
You read that right. 72 events a year at zero cost to chamber members.
“When we started this chamber,” Older said, “a big issue I had was ‘pay to join,’ or ‘pay to participate.’ I have a problem when a chamber gets something for free, and they charge their members for it.” It is, of course, entirely in keeping with Older’s approach to running a chamber that when he sees something he doesn’t like, he does it differently. “We won’t do that,” he said. “If it’s free to us, it’s free to our members.”
Now, when it comes to prospective members, well, that’s a different story, and rightfully so: Older says that those businesses will absolutely be charged, in the hope that they’ll realize the value of a membership.
Older also noted that this particular practice has begun to take hold in other area chambers as well. “It’s funny how some of these organizations have been around for 100 years, and now that we’ve come along, everyone’s changing the way they do things,” Older explained. “[Other local chambers] would never give anything away for free.” Now, because of the Delaware Small Business Chamber, other chambers in the area are doing exactly that.
Another area in which the Delaware Small Business Chamber is at the helm of innovation in the chamber industry is in its organization classification.
“There’s another thing that I felt was broken about chambers, and we did not do that here at this chamber,” Older said, on the topic of upsetting the industry status quo. “We’re not a nonprofit.”
Chambers of commerce are typically registered as 501(c)(6) organizations and, as such, may not oversee any profit-generating enterprise. But to Older, that seems like an almost counter-intuitive move for an organization looking to help businesses, and the local economy, grow.
“This was my philosophy: If we’re going to help small businesses, if we’re going to help them do it right, then we should be one of them, too,” Older said. “And to me, that meant that we had to operate the same way that [our members] would operate.” That isn’t to say, however, that the Delaware Small Business Chamber simply pockets all of its money; they give it back to the community. Older says that one of the drawbacks of being a nonprofit is that any extra money has to be “earmarked” every year; without that nonprofit status, the Delaware Small Business Chamber has significantly more leeway in how it spends the money it makes. And while not going the nonprofit route is ultimately beneficial to the chamber, the chamber’s tax status doesn’t affect members at all: their annual dues still qualify as a business expense, so all of the chamber’s members still qualify for tax write-offs either way.
If you’re wondering what all of this has to do with the Beefsteak Dinner I mentioned earlier, it’s this: where most chambers of commerce host an annual chicken dinner, Older and his staff have opted to go a different route.
“We did it last year for the first time and it was such a success we’re going to do it again this year,” Older said. “It’s called our Beefsteak Dinner.”
“An old beefsteak dinner back in the day, in the last 1800s and early 1900s, was a big long table filled with … politicians, business people, and criminals,” Older explained. “Sometimes the same person was all three,” he added, chuckling. All of these people would gather together at one table and eat together, typically with their hands, and often with a generally jovial atmosphere. “So we brought this event to Delaware, but we’ve elevated it quite a bit,” Older continued.
For the Delaware Small Business Chamber’s Beefsteak Dinner, three regional steakhouses (and, given the nature of Delaware’s geography, they could be from Delaware, Pennsylvania, New Jersey, or Maryland) compete with each other, each serving three dishes. The guests end up with a nine course meal, and then vote on their favorites. “We have a blast,” Older said of the occasion. “It’s a very unique signature event.”
The Delaware Small Business Chamber, with everything from its membership and pricing policies, to its decision to forego the traditional nonprofit status, to its slate of unique events, is fairly well summarized in Older’s analysis of his own approach to the chamber industry: “I have to be different. I don’t like copying people,” he said. “I think that shows quite a bit.” I’m inclined to agree.
For more information on the Delaware Small Business Chamber, visit www.dsbchamber.com.