Elizabeth Bretko's locally made herbal tonics can compete with corporate giants like Coca Cola &

if she could secure the financing — she said.

Bretko, 36, started bottling her Chai drinks one bottle at a time from Evo's Java House kitchen late at night about eight years ago. Heartsong Herbal Brewing Company then moved to her Jacksonville garage, where it continued to be a stovetop operation.

Bretko's Chai drinks and Hot Pepper Brews have a cult following from British Columbia, Cananda, all the way down to Los Angeles, she said. A big year for investments was 2007, when Bretko bought 350-gallon brewing equipment, automated bottling and labeling equipment, renovated the vacant Pizza Hut building on Ashland Street and opened the Chai Hut.

Heartsong drinks now sell in Ashland, Eugene, Bend, Portland, Seattle and Mt. Shasta; but with the increased production came an increased grocery bill.

"We used to buy a pint of Oregon honey," Bretko said. "Now we need gallons."

She said plenty of people have offered to invest in equipment because it's a safe investment opportunity.

"But we already have the equipment. What we really need is money for fruit and honey," she said.

In a creative attempt to secure funding, Heartsong launched the 100 for 100 campaign, which asked 100 investors for $100 short-term loans or gifts.

"So far we've received 36 responses, with some people loaning us more than $100," Heartsong vice president Chad Derosier said.

Jack Vitacco, with Southern Oregon University's Small Business Development Center out of Medford, said he understands the financial struggles faced by start-up and early businesses.

"It is difficult for these businesses to obtain traditional financing," Vitacco said. "But we all are in favor of seeing local businesses thrive."

Vitacco said most new or young business operations generally have to rely on 3F financing: family, friends and founders.

— — Chai Guy Chad Derosier, left, and Chai Mama Elizabeth Bretko fill up a 250-gallon steam kettle in their brewing area Monday in Ashland.

Other creative business practices

Caldera Brewing Company in Ashland, the first craft brewery in Oregon to brew and can its own beer, has used creative marketing to increase sales, which in turn have bumped up profits for any future expansion or upgrade expenditures.

Jon Beickel, an employee with Caldera, said the company has entered and won lots of beer contests, which has increased the company's exposure. Caldera took the Gold award for cellar or unfiltered beer in the 2006 World Beer Cup and won a silver award in 2007 at the North American Beer Awards.

Caldera also teamed up with Sawyer Paddle and Oar in Talent, developing a limited-edition special brew called Smokers Stout in honor of the company's 40th anniversary. The Talent paddle and oar manufacturer has supplied Caldera's tap handles for years. Just 10 kegs of the special stout was produced and can only be bought on tap at a handful of Ashland and Medford establishments; but the collaborative effort was mentioned in several trade publications, including Paddle Dealer Magazine.

"Both of these efforts create a boost in business in the long run," Beickel said.

Jeanne Louise, owner of Jeanne Louise Vintage and New in downtown Ashland, said her secret to surviving Ashland's offseason is to offer locals something unique.

Her clothing retail store sells vintage clothes, but also carries new outfits with a retro look.

"Most people can't tell the difference from the new and the vintage clothing," Louise said. "So it's that unique style that sets us off from other stores down here. We also carry a small segment of men's vintage clothing. That's something you don't see very often in vintage clothing stores."

She said it's important for businesses to not overlap products.

"Each one has to offer something rare and unique. I'm always going to shows to try and find lines that no one else has."

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