Making Dough in the Heartland; A. Rogers

Randy had been a hog farmer for 15 years be fore he decided there had to be a better way to make a living. He thought a steady paycheck would be the answer to everything he ever want ed, but several years of working for others changed his mind. Consequently, when he saw that building for sale in Stoutsville, Randy didn't see a run-down, old structure that needed a tremendous amount of work, he saw an opportu nity for self-employment. Since the two apartments were basicallyset up, Randy's first priority was getting them ready and Ann Weiss Rogers is an attorney living in Ormond Beach, Florida. rented. He had used the equity he had in his farm to purchase the building, and he had given up his steady paycheck in order to work full time on it. As a hog farmer, though, he was used to livingon next to nothing, and his children also knew that whatever money there was would go into the business. And, initially,everything was progress ing according to his plan; after several months of cleaning, dry-wall work, painting, and some elec trical work, he had both apartments finished and rented.

He then began working on the pizza shop. I followed his progress mostly through phone calls. I heard about the work he was doing at the time-putting in the counter wall, for instance-and all the jobs ahead: the plumbing that had to be done for the work-area sink and the rest room, the rewiring for the ovens, the floor he had to lay down, and all the painting and finishing work. I rejoiced with him when he called and said he was ready to move in his equipment. Then I got his next phone call. There wasn't going to be a pizza shop, he told me. He had talked to the local Health Department the previous day, and had learned that everything he had done was wrong. Before he could build a pizza shop, the Ohio Environmental Protection Agency had to approve his water supply and sewage system; the Bureau of Environmental Health had to approve his plumbing; the Ohio Department of Industrial Relations had to ap451 Before Randy could build a pizza shop, the Ohio Environmental Protection Agency had to approve his water supply and sewage system; the Bureau of Environmental Health had to approve his plumbing; the Ohio Department ofIndustrial Relations had to approve his building plans; he also needed zoning approval from local authorities.

prove his building plans; he also needed zoning approval from local authorities. for example, to get approval from the Ohio Department of Industrial Relations, Randy had to file an Application for Certificate of Plan Ap proval, which had spaces for him to fill in the Ohio Registered Architect, the Ohio Professional Engineer, and the Ohio Sprinkler System Design er he had·used. For this certificate alone, process ing fees were $500 plus an additional charge, based on the square feet of the establishment, for each of five categories (Structural, Electrical, Sprinkler, Industrialized Unit, Life Safety Code Review). And all this came prior to dealing with the Health Department, which had its own set of re quirements. In addition to duplicates and tripli cates of the previous approvals, the Health De partment wanted plans drawn to scale of the location of water supply; sewage disposal; total area used for food service operation; entrances and exits; location, number, and types of all plumbing fixtures; lighting, both natural and arti ficial; general layout of fixtures and other equip ment; building materials to be used; outside openings; and manufacturer's name and model numbers on all equipment. Randy was told to ex pect the whole application process to cost a few thousand dollars.

A Changein Plans It wasn't the cost or the arduous nature of the application process that caused Randy to change his plans. And it never reached the point where Randy's construction, plumbing, or electrical work became an issue. Rather, the whole issue came down to whether his water supply and sewage system could pass the Ohio Environmen tal Protection Agency's (EPA) inspection. Stoutsville doesn't have a town sewage system. If it did, then its water disposal and sewage sys tem probably would already have had EPA approval. The EPA clearance would involve merely testing Randy's tap. Prospective businesses in big ger towns and cities, and facilities that already have businesses in them, basically get an auto matic EPA nod. But the poorer rural areas, which have no businesses in them, stay poor. "Isn't there any way to get EPA approval?" I asked Randy. He said it would be too expensive, and he was afraid even to try. They might ques tion his having apartments, and then he'd risk losing his entire investment.

His only recourse, he told me, was to convert the pizza shop into a third apartment. I was dis heartened. Randy wasn't a novice in the pizza business. A few years back he had botfght a pizza shop·near his farm in Williamsport, and had sold it a year later after doubling its business. But that pizza shop was established before all those regu lations had gone into effect. Under a grandfather clause, it could continue to operate even though Williamsport wasn't much bigger than Stoutsville and wouldn't meet EPA requirements either. So what hope was there for the rural entrepreneurs yet to come? Were they all destined to leave for the city? Randy concluded that the individual en trepreneur hasn't got a chance because govern ment regulations favor established businesses. The big pizza chains have the money to hire ar chitects and sprinkler designers and to pay thou sands of dollars for government processing fees-not to mention the real estate costs of starting a business in the city. But in the rural ar eas where buildings and land are more affordable to the individual, government regulations make starting a business unaffordable.

The next time I heard from Randy, however, he was jubilant. He had figured it out, he said. He was going to have a pizza shop in Stoutsville after all, but it wouldn't be subject to any EPA or building or plumbing approval. He was going to convert a trailer and park it behind his building. A trailer is a mobile food service operation, 452 THE FREEMAN • NOVEMBER 1989 Randy's solution: "a mobile/ood service operation," parked behind his building. which is subject to different rules. And this time he had talked to the appropriate authorities. He would need just a Health Department inspection. And he could get his trailer licensed by the Health Department in Pickaway County, which was where he lived, even though he was going to operate his business in the adjacent Fairfield County. This is because the license for a mobile food service operation has to be honored in every county in the state no matter what county it is licensed in. The licensewould cost $25 a year.

He had discovered a loophole, but like most loopholes, it carried a price tag. Buying and con verting the trailer cost $3,000 more than he had figured to spend. And it took several more months than he had planned. But he had his first pizza ordered before he had even officially opened for business. "It's about time something like this opened up here," the customers tell him. Little do they know just how much it took. 0 453 A REVIEWER'S NOTEBOOK The Wealth Creators by John Chamberlain T here is a widely disseminated complaint that our college faculties are still living in the Sixties. Maybe the secret opinions of the tenured Left remain what they were. But when Ben Hart, a founding editor of the conser vative Dartmouth Review, says the campuses are moving to the Right, we must believe him. Hart 'gets his knowledge from talking to stu dents who are going for Ph.D.'So They are not lib eral. William 1. Dennis, Jr., writing on the Ameri can entrepreneur for Hillsdale College's Imprimis, corroborates Hart. "Students," he says, "flock to college entrepreneurship courses. Aca demics produce scholarly articles on subject mat ters previously confined to 'C' level journals....