5 Practices of Group Economics to move your business forward
What is Group Economics?
There is no formal definition, but Group Economics can be defined as one group of people who have a common economic interest. That group agrees with active intention to pursue that economic interest together to create a sustainable and secure economy for themselves. Primarily when one thinks of group economics, they think of it on a community level. But, group economics can start within large families, as well. Group economics is a great business model too. You can take your small business to new heights by focusing on and fostering group economics values.
As we have seen, many communities in America practice group economics; the Jewish community, Italian community, Asian communities all use Group Economics. This is a form of preservation for self and the community. Before banking systems were what they are today, Group Economics was used successfully by many thriving black communities from the 1890s – 1920s (Tulsa, Oklahoma, Redwood, Florida, and Wilmington, NC are the 3 most popular yet there were many others) in America.
There is a well-known African proverb that says, “If you want to go quickly, go alone. If you want to go far, go together.” This is the ultimate spirit of group economics.
If other communities use Group Economics, How can you start?
- Produce a Product or Service
In your group, you must contribute a good or service that others would purchase from you. This will allow alternative options to what is being nationally sold or offered. You provide your group with options. This helps you as a business owner. You will care about the product or service your customers receive because they are a part of your group. In turn, you should value their feedback more, as well, helping to improve your service or product.
- Support the business owners within your group
While an outside business may provide a good service, put your money into your community. Go to a local small business handy man that is within your group. Now, you also know that your dollars are specifically helping someone directly that is in your group. You are feeding that family with your dollar. You are also allowing that member to hone their skills for greatness. Who knows? Later, this group member, that your dollars supported, may go on to open a school to teach their trade or skill. As they say, “each one teach one”.
- Hire members from within your group
This allows you the opportunity to give the dollars back to the community that supports you. You hire your own. This is rich with benefits. It becomes a cycle with positive returns. You hire your own, then you are enriching them with skill. A skill that they can go and expand on. It may just serve as a way to be a human investment into your community. This cycle creates pride and now that pride becomes protective of the community. It strengthens the community.
- Host and Attend community events
Be present. Show whatever community that you work with, that you are there to be a part of the solution and upward movement of the group. For example, if you are a part of a construction group, then be there for each contractor as a support. You may go to openings of projects they have created or any business launch parties. Again, it would continue that cycle of you offering a service/product in which you are able to provide to the other contractors and vice versa. Then, each member of the construction group is benefitting from each other with services, products, capital, as well as human moral support. This bolsters group pride and if one succeeds, then the group succeeds.
- Create a financial investment group
This is a two-fold situation. One, it can be an informal lending system within a group. A community contributes a nominal sum of money into a pool that is loaned to a single person or family to help them get on their feet. This system is used by Arabs and Koreans. Arabs call it "jam'iyah" while Koreans refer to it as “keh”. Everyone who contributes in this system receives the pool at some point throughout the lending cycle and it never ends. This system allows a community to help their own on a regular basis.
You can create this with your own family or group. It works with any increment of money. Let’s say, you already know that June will be a rough month for expenses. You contribute to the family money fund and you all decide that you will get the money in June. So, each month you each may have contributed $50 and there are 10 of you contributing. On the first day of June, you would receive the $500 from the group compiled money. Then, you continue to contribute for the year for the group members that will get the money each of the months for the rest of the month.
Second, the investment group can be each giving a decided amount of money to a business venture. The group becomes like a board of investors. You, as a group, decide to purchase homes and make them rental properties. But, you each decide on the properties and who will maintain what. This may continue until the group member who decided this business venture is able to buy his or herself out of the group. This form of group economics creates more products/services for group members, financial freedom, and promotes financial stability.
The use of group economics is a win for everyone involved. Any family, business, or community can thrive off of these 5 basic practices of group economics. See where you can start in your personal life. Empower your dollar by working with your group. As they say, “many hands make light work.”
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