What is a community buyout?

What is a community buyout?

A community buyout is when a community group comes together to take on an existing business or asset. This is different to when a community establishes an enterprise to take ownership of a new business or asset, such as purchasing solar panels to generate renewable energy.

Community buyouts are increasingly common in the UK, with local groups running existing shops, pubs, football clubs, piers and transport services. Most of which are delivered through setting up a community co-operative. They mainly arise when a community is driven to rescuing a local business threatened with closure or, in exceptional circumstances, where the community feels poorly served by the business.

The benefits of a community buyout

• The community are no longer passive customers, but co-own the business, which often means improved customer loyalty

• Members of the community often volunteer to help in ways which they would not do for a privately owned business

• Community owned businesses tend to be more sustainable (less likely to fail than traditionally owned businesses) and are able to take a longer-term view as there are no external shareholders requiring short-term returns
• Of the 300 community shops taken over in the last decade, only a handful have failed. Every one of the community co-operative pubs in the UK is still trading
• They benefit their communities because rewards are shared among the people who work within the business rather than going to a single owner or external shareholder as is the case in more traditional structures