CAPACITY CLUBS and CIRCLES

(Credit Commons, branded for SME resilience post Covid-19)

A SIMPLE PROPOSITION

SME's! This recession is all about lack of demand. You've got the capacity, the setup, and the skills, but there aren't enough customers! As a customer yourself, you want to buy, but don't have the cash.

Here's something that can really help. Do you have capacity, but not enough customers? Do you trade with other SME's - buying and selling, for at least 10% of your turnover?

Together, you can form a CAPACITY CLUB.

It works like this - get together at least five businesses who trade with each other, and you'll be eligible to form and own your own CAPACITY CLUB (with straightforward free software, free website, free tools).

Members of the CLUB agree to trade with each other by keeping a TRADE LEDGER with NO NEED FOR ££. Each Member is assessed by the others as to their spare capacity over the next three months, and allocated the value of that capacity in TRADE CREDIT - for trade INSIDE the CLUB only. It's a simple and well tried idea, that works all over the world. We've made it simple and put you in charge. You can add members at any time. The software includes tools to help with this and everything else you will need to get started, and cheap support is available.

THAT'S JUST THE START: Your CAPACITY CLUB will automatically become a trading member (and part owner) of a wider CAPACITY CIRCLE - connecting CAPACITY CLUBS in your region. Your CLUB will have a group TRADE CREDIT limit assigned for trade across the CIRCLE, so you can trade with other businesses to get access to the goods and services you need to make your business survive and thrive.

WHAT's MORE, there are BIG BUSINESSES that connect to the CAPACITY CIRCLE, like energy suppliers, phone companies, haulage companies, wholesalers and stockholders.

SOUNDS GOOD? SO WHAT'S THE CATCH?

The catch is only this - that you have to take the initiative - get to grips with the basics, call your trading partners, help them understand, fill in the forms , assess your trading capacity and share the information with your partners.

THE FIRST SIX MONTHS ARE FREE - after that Membership fees are payable - but remember - you are a voting member and part owner - so you get a say - all members are SMEs like you, and will want to keep fees down, so you can feel confident that this is a network for business, for trade.

WHO IS BEHIND THIS?

CAPACITY CIRCLE SERVICES is a small organisation that has been supported by large companies, utilities, banks and Local authorities to keep the small businesses of the UK healthy during this terrible crisis. These companies support us because they know that without you, their customers, their business will suffer. They will make a return as investors, but are not shareholders or controllers. We know that if trading partners trust each other, that trade can flow, and that that thrust can be the building blocks of an economy that depends on our capacity, not on the banks or the government.

The first credit card (technically a charge card, as balances had to be paid off in full) was Diner's Club - banks were needed to finance balances rolling over. As an 'adjacent possible' I advocate Community Credit Cards/Apps. The software exists eg Richard Logie's GETS software or Giuseppe Littera's Sardex accounting based on Cyclos.

What is necessary for implementation is 'guarantee society' / P&I Club risk/cost sharing agreements mutually assuring performance and service providers to manage the system, determine guarantee limits, handle non-performance and so on.

Actually, there's another idea hidden behind 'cards' and that is 'convenience'. My feeling has always been that whatever 'alternative exchange' (to coin a phrase) 'is' it must also compete on convenience with ordinary exchange. Hence, I'm for cards, SMS, apps (ugh, but) and Oauth + APIs in existing cart and social media software (well, I'd certainly want to exclude facebook).

The trick will be (or one of the tricks will be) avoiding (what I call) the Animal Farm problem,. “The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which.”

Chris, Hugh - I am working up an outline and will be seeking team members next week - this stuff will be fundamental. It will either attract investment rather soon, or not fly. See the gdocs.

Point being that is looks like a local credit card, spends like a local credit card, but is completely different under the bonnet, and is implementable now simply by mutual consent.

Well, and a significant investment in getting an accredited card into the system. Far simpler to just integrate with mobile pay.

Sounds great Dil. I can't help but think there is a better word than 'capacity'. To me this word feels very jargonistic. Not sure what you're driving at in the last paragraph.
I enjoyed your article, Chris

all text will be market tested in early stages of the build out. This is a 'working title'.

"We know that if trading partners trust each other, that trade can flow, and that that thrust can be the building blocks of an economy that depends on our capacity, not on the banks or the government." This is a worthy aim, but may miss its mark.

For instance, if the transactions in the circles are full price, then some business will run up a cash problem, while for others it's a cash yield - which isn't good for trust. See Society of Friends - particularly the closing paras. Applying the circle interactions to that component of price that is value added over "cost of goods sold, inc tax" would resolve this potential imbalance.

On the whole however I think it may be some time, perhaps months before panic subsides enough for rational action. UBI entry points is a recent email that raises the idea of actually capturing at least some of the "helicopter drops" and turning them to good advantage.

We know (don't we?) how easy it would be to convert a cash-backed pseudo currency like the Bristols and Brixtons to mutual commitment underwritten by local business issue to community, but the administration of course don't want to know about it. However, helicopter drops will be much bigger than all Brixtons and Bristols combined, more widely distributed, and less stuck in pride and prejudice, so maybe a lower hanging and higher yielding fruit?

Michael - thanks for this. Your para which has this makes lots of sense.

Applying the circle interactions to that component of price that is value added over "cost of goods sold, inc tax" would resolve this potential imbalance.

From the 'Economic proposition' doc linked to from the outline (very much WIP):

Let us call the larger, ‘utility’ SMEs ‘Capacity Circle Anchors’ - or ‘CCA’ for short. For them, we would propose an approach as follows; allow member SMEs  (Club Members - ‘CMs’ for short) to pay a proportion of any invoice in Mutual Credit Units roughly equivalent to the profit margin of the CCA. This is relatively risk free, and beneficial to chances of survival of customer CMs. Of course, if the proposition works, this proportion may be increased.