By Bruce B. Brugmann

I STARTED IN small business at age 12, selling stamps and peanuts in my father's drugstore in the small northwest Iowa town of Rock Rapids. I worked after school and Saturday nights till 9:30, all through high school and much of college, waiting trade, graduating to selling everything except jewelry, and trimming wallpaper in the basement.

I also wrote a column and worked for a summer for the Lyon County Reporter, under fourth-generation publisher Paul Smith, whose family founded and still owned the paper.

My grandfather, the eighth child of a German immigrant farmer who homesteaded near Spencer, Iowa, had bought the store in 1902, picking Rock Rapids as the place to set up a general-store type drugstore. He and later my father spent their entire lives in that store, known throughout the territory as "Brugmann's Drugs, where drugs and gold are fairly sold, since 1902."

My wife Jean Dibble's family members were small-business people in three states. In Kansas, her father's side founded and ran the Dibble family grocery in Topeka. On her mother's side, her grandfather was a banker in Dwight and other small Kansas towns. Her father had lumberyards in Bennet, Neb., and nearby towns, and later a hardware store in Le Mars, Iowa. The Brugmann and Dibble families have all been continuously in small business for well over 100 years.

When Jean and I started the Bay Guardian in 1966, we came with the values and virtues of the Midwestern small business, the family farm, and the small-town community. And so the Bay Guardian from the start, as a stand-alone independent newspaper, was of, by, and for small, locally owned business. We still are.

We were delighted to find that San Francisco was a city rich in small, locally owned businesses and rich in a wide swath of neighborhoods bristling with distinctive small businesses, backed up by vigorous small-business associations and the umbrella Council of District Merchants, and covered by feisty neighborhood newspapers. When I first walked into a Potrero Hill merchants meeting, hosted by Philip De Andrade of Goat Hill Pizza, I thought I was back in Rock Rapids and my dad was taking me to a Chamber of Commerce meeting. All independents, no chains, everyone committed to getting more business in their stores while helping out the Neighborhood House, building up Potrero Hill history night, and doing one worthy community project after another.

. . .

And yet, despite the central role small business plays in San Francisco, public policy often seems stacked against the little folks. Small business has won some recent major victories, notably the no-chains-allowed legislation for North Beach and the one-year moratorium on building in the Potrero Hill area. But all too often, those victories come despite the staunch opposition of the major business groups, like the Committee on JOBS and the Chamber of Commerce, which consistently side with the big chains and the developers and push City Hall to set policies damaging to local independents.

That's a real problem – because small, locally owned businesses are the essential economic engine of the city. They are widely diversified as an economic base, and they are the ones who create most of the city's jobs.

During the days of high-rise mania, when then-mayor Diane Feinstein and the chamber were claiming that high-rise development created thousands of new jobs, we commissioned David Birch, a job-generation expert, to do a study of the issue. He found that small businesses created all of the net new jobs in the city – and his study directly contradicted the fundamental assumption driving Feinstein's city planning policy. Feinstein and the chamber challenged our study, saying that many of the small businesses were moving into new high-rises. So we did it again the next year and found that to be completely untrue.

Let us go to Chicago and Austin, Texas, to update the point. In Chicago, a 2004 study commissioned by the Chamber of Commerce of Andersonville, a neighborhood on Chicago's North Side, found that locally owned businesses "substantially exceeded" their chain competitors in four key economic components (labor, profit, procurement, and charity).

The study said, in a conclusion that could be applied to virtually every San Francisco neighborhood, that "local firms spent an average of 28 per cent of revenue on labor compared to 23 per cent for chains." Additionally, 8 of the 10 firms in the study are owned by Chicago residents, so profits largely remain in the city. (The study, by the firm Civic Economics, can be seen at www.civiceconomics.com.)

In Austin, Civic Economics conducted a study assessing the economic impact of a "publicly subsidized" Borders Books and Music store seeking to locate across the street from the locally owned Book People and Waterloo Records. This study demonstrated that "local merchants generated three times as much local economic activity as the chain store, adjusted for revenue." That study was replicated in different circumstances with similar findings in Maine's Mid-Coast region and Toledo, Ohio. The key questions: Will City Hall fund this kind of study and provide solid information for public policy guidance to help protect and save the city's valuable small businesses and neighborhoods? If not, will the small-business community figure out how to do its own study?

We like to say that too much of big downtown business too often sees San Francisco as a place from which to extract money as quickly as possible, much like the strip miners in the Sierra, and small, locally owned businesses see the city as the place to invest human capital to build real community.

Jean and I and our staff are happy to salute the small-business community with our first annual Small Business Awards. Our congratulations to the winners and to all of the small-business people in San Francisco that daily struggle against daunting odds to keep their businesses going, their neighborhoods vibrant, and San Francisco an incomparably great city.

Neighborhood activism

Guardian photo by Lori Spears

Starting last summer, the newly formed North Beach Merchants Association, working with the venerable Telegraph Hill Dwellers, approached Sup. Aaron Peskin and asked him to author a similar law for a much larger area. Peskin was already thinking along those lines and quickly agreed.

"It was already on [Peskin's] mind," merchants association vice president Tony Gantner, a North Beach lawyer, tells us. "But he needed the small-business community to come together and support it."

Brad Willmore, president of Telegraph Hill Dwellers, notes that his group "has a long history of pushing things to support small-business owners.

"A lot of the charm of North Beach is that it's populated by people who own their own businesses," he says.

The ordinance drew the opposition of big-business groups, including the Committee on JOBS. But with the two neighborhood groups pushing the issue, and Peskin running with it, the measure, which bans all "formula retail" – that is, chain stores – in the North Beach business district, easily passed in march. "Even Gonzalez was surprised that we could take his idea and make it work on this large a scale, all the way from Broadway to Bay Street," Peskin says.

The North Beach merchants group, which started with a handful of people, now has 50 members and is growing. (Tim Redmond)

Small-business activist

Guardian photo by Lori Spears

He lives on a houseboat in Mission Creek, in the heart of the emerging Mission Bay complex. (The houseboat sank a few months ago, creating a dramatic ongoing news story zipping around the Potrero Hill community, as he and his hardy creek-savvy friends labored for weeks to get the boat righted and his household restored.) He works a few blocks away on the slope of Potrero Hill at Goat Hill Pizza, the landmark neighborhood restaurant he founded 30 years ago and still runs today as the owner and operator. He produces some of the best pizza this side of Chicago and New York.

De Andrade calls it pizza Potrero Hill-style, with a rich sourdough crust and a sauce he claims gets special zest from the fennel that grows wild on Potrero Hill. In three decades, he figures, he has served more than 1,050,000 pizzas. He often delivers them himself.

De Andrade is the first and only president of the Potrero Merchants Association, a collection of locally owned small businesses with nary a chain store in sight. Its members meet the second Tuesday morning of each month in the back room of Goat Hill Pizza, its walls covered with Potrero Hill pictures, posters, and memorabilia. De Andrade has built up the organization from a handful of local merchants into one of the city's most vigorous neighborhood associations. It does everything from producing the unique Potrero history night (De Andrade always does the old-timer interview) to hosting an annual bash at the Anchor Steam brewery. He represents Potrero Hill on a blizzard of citizen advisory committees handling issues ranging from the UCSF Mission Bay campus and community center to the waterfront and closing down the Mirant power plant. He also does part-time consulting work for Rep. Nancy Pelosi on computer systems for her office and helps set up neighborhood meetings.

His influence helps ensure that the merchants group and other groups work in friendly cooperation with the Potrero Hill Boosters, a residential advocacy group, thus giving Potrero Hill some much needed political punch inside and outside City Hall on such crucial ongoing neighborhood battles as the one with the Residential Builders Association over neighborhood development and the one with Pacific Gas and Electric Co. and Mirant over their power plants. (Brugmann)

Best new business

Guardian photo of Leile Fakouri by Mirissa Neff

Local photographer Leila Fakouri bought the dilapidated but beautiful Victorian on the corner of Fell and Divisadero Streets and transformed it into an art gallery, lounge, bar, live music venue – and home away from home. And just think: it could have been a Burger King.

For the better part of the past century, an apothecarist ran Green's Pharmacy in the building, and a vintage sign is still perched above the entrance. But in the recent past, the building was boarded up and vandalized while a battle raged between community activists and a developer who planned to open a Burger King. But Burger King didn't win – and neither did urban decay.

Since Madrone's doors opened last October, there has been a constant rotation of exhibits by Bay Area artists, with entertainment every night of the week. On Monday nights, neighborhood residents are invited to trade in their living room for Madrone's plush couches, subdued lighting, and mellow atmosphere, all part of Fakouri's effort to create the equivalent of a town square. And soon, Madrone will team up with Club Waziema (543 Divisadero, S.F. 415-346-6641) and the Independent (628 Divisadero, S.F. 415-771-1421) to create "Barmuda Triangle." One pass will give you a license to wander from restaurant to bar to club under the flickering lights – and take part in the rebirth of Divisadero. 500 Divisadero, S.F. (415) 241-0202. (Maya Melenchuk)

Best co-op

Guardian photo by Mirissa Neff

The worker-owned grocery is exclusively organic and vegetarian, and it offers great deals on juicers, pressure cookers, and other crucial appliances for the vegetarian kitchen. Collective ownership means that all 12 worker-owners sit on Other Avenues' board of directors and reach decisions by consensus. (There are also employees who aren't owners, which has been a tricky situation the co-op is trying to work out.) The store is open to anyone, and customers who do most of their shopping at Other Avenues can buy a "red card" for $25 that entitles them to a 5 percent discount on all purchases for six months. Not only is Other Avenues a great place to buy groceries, but it has also been instrumental in the positive changes that are taking place in the area.

When Starbucks tried to open in the neighborhood, several worker-owners from Other Avenues teamed up with other Judah Beach residents to form Sunset Neighbors for Action and eventually blocked the deal. The storefront that Starbucks was eyeing is now home to Judalicious Juice (3906 Judah, S.F. 415-66-JUICE), an independent organic juice bar. Jun Q of Feel Real (4001 Judah, S.F. 415-504-REAL), a vegan café that recently opened in the neighborhood, says, "If it wasn't for [Other Avenues], we wouldn't have been able to create this. They're the pioneer." 3930 Judah, S.F. (415) 661-7475. (Matthew Shechmeister)

Best chain-store alternative

Guardian photo of Jeff Lerner by Mirissa Neff

Floorcraft has two separate operations in Bernal Heights as well as a satellite showroom on the peninsula. The main store houses an enormous number of displays, comprising kitchen and bathroom equipment, flooring, carpets, and appliances. For customers, that means whether you are remodeling your house or just choosing a new towel rack, you will have dozens of choices. A few hundred feet away, the Floorcraft Garden Center is home to hundreds of plants of all shapes and sizes. On a Saturday afternoon, both stores are buzzing with activity, as young couples pick out new kitchen cabinets and salespeople explain the pros and cons of different refrigerators. "They have been a fixture in San Francisco for years and are a highly respected business, with fair pricing and quality product," says Rick Karp, president of Cole Hardware, another locally owned, independent hardware chain.

Members of the No Depot Campaign have been fighting to keep the megachain from building a store in Bernal Heights. Ron Morgan, a No Depot campaign member, Bernal Heights resident, and former contractor, considers Floorcraft "a great alternative [to Home Depot]. They have been an anchor store for decades." 470 Bayshore, S.F. (415) 824-4056; Garden Center, 550 Bayshore, S.F. (415) 824-1900. (Shechmeister)

Golden survivor

Guardian photo of Michael Chung, Mary Chung, and Burk Chung by Lori Spears

The Chung family were purveyors of alternative medicine before it became "alternative." Though they are benefiting from the surge in popularity of herbal supplements, Chinatown merchants haven't always been so popular. "They have survived through rough times ... racist times," Rev. Norman Fong, a community activist who was raised in Chinatown, tells the Bay Guardian. "Everyone in Chinatown knows about Superior Trading Company; even new immigrants go there." Michael attributes the company's longevity to its excellent reputation in the community and its commitment to quality. 837 Washington, S.F. (415) 982-8722. (Melenchuk)

Unsung hero

Guardian photo of Mary Jane Evans by Mirissa Neff

"In general, wholesalers are invisible," says Bu Nygrens, purchasing manager and number two in the organization. But this organization's community contributions and activism for fair and sustainable food programs have been anything but. Nygrens, CEO Mary Jane Evans, and other staff members are active in the San Francisco Food Alliance, the Organic Farming and Research Foundation, and the Organic Trade Association, and they sit on the board of the San Francisco Food Systems Council. They're also involved in other initiatives in public education and in a prison-gardening program.

For V.V., fair labor is also a critical component of healthy farming. In addition to other in-house worker-enrichment programs, all employees start out at twice the minimum wage, and a 4:1 salary ratio applies to all 80 employees, meaning the highest-paid worker can't earn more than four times what the lowest-paid person earns. (And psst! They're hiring.) The company recently became a certified fair-trade distributor, meaning that it guarantees that the majority of profits from all products find their way back to the farmers. And the organization is trying to ship produce with minimal environmental impact, replacing its truck fleet with compressed natural gas-powered vehicles and supporting initiatives behind biodiesel alternatives. 1100 Cesar Chavez, S.F. (415) 641-3500. (Karen Solomon)

Community service

Guardian photo of Arthur Jackson by Lori Spears

Check it out: He served seven years on the Health Commission. He's been the president of the Commission on the Aging. He's the head of the Taxi Commission. He's a board member of the United Way, the National Kidney Foundation, San Francisco Suicide Prevention, and the San Francisco Senior Centers. He helped found the San Francisco Public Health Foundation and In-Home Support Services.

And along the way, his company, Jackson Personnel, has placed some 25,000 people in local jobs since he opened for business in 1969, under the name First Personnel.

That name lasted less than a year. "My lawyer asked me if I was in it for the long haul," Jackson recalls. "I told him yes, and he said, 'If you're in it for the long haul, put your own name on it.' "

Jackson, 58, never lets down for a moment. In the 1990s, when his kidneys had failed and he was on dialysis – for several hours three times a week – he never missed a single Health Commission meeting. In fact, he found time to run (unsuccessfully, it turned out) for supervisor.

"I have to stay busy," he tells us. "This is too good a town to lose." (Redmond)