One of the biggest- if not the biggest – danger to any business is a cash flow crisis. You could have a profitable business in general, but if the money you have and the money you need don’t match up, then you’ve got problems.
One village shop is benefitting from a novel solution by getting its customers to pay for their goods in advance.
That gives them money up front to pay suppliers, and gives those customers an incentive to shop, as they’ve already got money there. It also makes administering purchases easier, as the money’s already being paid over.
Of course, that’s a solution any business could try, but from Farepak through to football club season tickets, people have seen the dangers of pay now, buy later – the main one being that if the business goes under, then you’ve lost out.
Co-ops have an advantage though because they’re trusted enterprises which exist because a community have come together to make something happen. They’re one-member, one-vote and accountable to members, so those members are far likelier to know the reality of the business’ position and trust the people running it.
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