I think Bill is way off base here in suggesting a gag order on informing
the membership of any financial crisis. That type of strategy may be
appropriate for private business, but not for a member owned co-op.
I don't buy the `self fulfilling prophecy' line either. The
co-op is sustained by people who believe its a special place and will go
to a little extra effort to do more shopping there if they think the co-op
is in danger.
cheers to all
dave
On Fri, 8 Aug 1997, Bill London wrote:
> Alan Lifton sent a message to this list a few weeks ago regarding his
> concern for the Moscow Food Co-op's financial future...and even the
> Co-op's continuing existence.
> I am responding to that posting, as a long-time Co-op volunteer
> (editor of the Co-op newsletter) and supporter. I have spent lots of time
> trying to understand the Co-op's financial picture, as well as the
> present relationship between the Co-op board and staff. The information I
> have uncovered paints a very different picture from the one Lifton
> offered.
> Lifton's posting was filled with dire warnings of the Co-op
> closing down. I disagree with his posting for two reasons:
> 1. The numbers he used, and the assumptions he holds, are just
> plain WRONG.
> 2. As with any human endeavor, a significant danger is the
> self-fulfilling prophecy. If enough people believe a business is dying,
> and quit shopping there and/or tell their friends, that business will
> die.
> Now, as to why I think Lifton is wrong. There is no profit/loss
> crisis at the Co-op. Yes, as he says, the Co-op did lose $11,000 last
> year (1996)--but that is $11,000 of $1,050,000 in sales (about one
> percent). More important is any trend in losses. If there is a trend
> it's in the opposite direction. In 1994, the Co-op made a profit of about
> $15,000. In 1995, the Co-op made a profit of about $1,000. In 1996,
> there was the loss of $11,000. For the first half of 1997 (the June
> financial report), the Co-op made a profit of about $4,000.
> What I see happening is that the Co-op staff learned from the
> errors of 1996 and has turned the problems around. How? by hiring and
> learning from a financial consultant and tightening expenses.
> I don't want to appear too optimistic here, since I think any
> small business in today's market can not really feel safe. The Co-op
> suffers from the severe limitations of the present building. Sales have
> plateau-ed as a result of that building. Competition is growing, and will
> certainly not go away.
> But overall, the Co-op's condition is good. The Co-op has
> virtually no debt (only a $10,000 short-term debt from the purchase of the
> espresso cart) and $160,000 in equity. By any definition, the Co-op is a
> healthy business.
> Add to that some real customer loyalty, and the future looks
> bright for the Co-op.
> That brings us to my concern #2--the self-fulfilling prophecy.
> Nobody likes to support a loser, whether that is a losing political
> candidate or a losing business. I would be very sad to learn that people
> don't shop at the Co-op because they "heard" it was going out of business.
> The fact of the matter is that the Co-op is an integral part of
> this community. Moscow would be a different--and much more sterile and
> boring--place without the Co-op.
> The Co-op started the Farmer's Market in Moscow, pioneered bulk
> food and organic food sales in Moscow, and still is (after a quarter
> century of operations) the best alternative.
> BL
>