Community buyouts preserve key community assets & facilities
Alan Greig of the not-for-profit Mercury Centre Cooperative has written to PWF about the work his Centre does in helping businesses – and their communities – through a successful change in business ownership.
Alan points out that the closure of a business can be a missed opportunity for a local community, particularly in rural and regional areas where there are no other businesses to fill the gap of lost services or jobs, as happened in Kaniva.
Apparently in the northern hemisphere the ‘ageing demographic’ has hit earlier than in Australia, with many ageing business owners wanting to retire, leading to the problem of too many sellers and not enough buyers. Many employee and community groups are securing their interests through community/employee buyouts. Alan says the community purchase of village stores in the UK is the fastest growing ‘movement’ with 200 in the last 5 years!
In Australia today when ageing business owners want to sell, there is increasing interest in community or employee buyouts. The businesses are frequently viable but often they are not profitable enough to attract buyers outside the community.
It was a grim situation for Kaniva – near the SA-Vic border
A little over a year ago in Kaniva in Victoria’s West Wimmera, Mobil decided to sell the town’s service station and a buyer could not be found. Without it the locals would have faced a 90 km round trip for fuel!
Teacher Ashley Munn told the Age newspaper losing the petrol station would have cost the community more than just convenience if it closed. “You lose population, you lose services across the board – teachers, schools, retail trade…you could walk around the town and just wipe 10 grand off everyone’s house” he said.
The Kaniva Community Cooperative was formed. 200 people – a quarter of the town’s population – turned up to the first meeting and pledged investments of $250,000 to help save the station. Retirees, business people, employees, former residents and even people from neighbouring towns invested between $500 and $10,000 each. This was well on the way to the $350,000 needed. The process took nine months and there were a few false starts but the Cooperative did make the purchase and offered discounts and dividends to investors.
Have you been involved in a process like this? How did it work for you?
The Mercury Centre Cooperative Limited
The Mercury Centre can work in tandem with local business advisors to help businesses through a successful transition. Case studies and ‘how-to’ materials can be supplied by the Centre on request. Alan says most buyouts will require professional advice during the process but unfortunately cost effective solutions such as community and employee buyouts – particularly involving the cooperative legal structure – are sometimes discounted because of a lack of knowledge.
We will?forward Alan’s letter with Fact Sheets on Business Succession; Business Succession in Regional Australia; Typical Buyout solutions; Employee Ownership to all interested PWF readers – just?email email@example.com with ‘Buyouts’ as the subject title!
?If you are not already a Pigs Will Fly subscriber, subscribe now!