2.2 The Farmers’ Truck Robin Hood Model
The ultimate vision for the Farmers’ Truck is to provide a business model that covers operating expenses and generates some profit so that you are free of funding concerns and can expand your offerings. Being independent of funding means that you own your own future and don’t have to constantly worry about the source of covering costs. This allows you to focus on serving your primary purpose.
It is for this reason that we created a business model we call The Farmers’ Truck Robin Hood Model.
What is The Farmers’ Truck Robin Hood Model?
Firstly, a business model is really just a business’s plan to make a profit. At The Farmers’ Truck, we have devised a business model that enables social enterprises to maximize profits in order to achieve their primary purpose. We call this the Robin Hood Model. The goal of the Robin Hood Model is to achieve sustainability for a mobile market by using a strategy that serves low-income communities in the morning and then high-income communities in the afternoon. The basic idea is to split your day in half to sell your produce at a 3-4x higher ticket price in the higher-income communities. As simplistic as it sounds, this model takes some planning, but it will enable you to remove the funder from the equation and become a sustainable business
The Power of Marketing in the Robin Hood Model
We’ll say this outright –– the key to executing on the Robin Hood Model is marketing. In order to drum up the customers you need, you will need to ensure your marketing and advertising campaigns support the number of sites you are visiting. For example, if you are set up at 10 sites per week, you will need to be doing 10x the marketing. This will have an impact on where and how you spend your time and energy: You’ll need to think about 10x the launch days, 10x the advertising campaigns, 10x the customer acquisition to keep things fresh and keep offering new deals, 10x new displays, etc…
Upfront and ongoing marketing efforts will be needed in order to drive new customers and retain existing ones. You’ll need to think about how you merchandise your products at each stop. Take a cue from grocery store marketing and promotional strategies to see how they communicate with their customers, and how they position items and organize their in-store products to grab the attention of customers and create delight with the use of color and groupings of products. Pay attention to what grocery stores sell and what they don’t sell. Your local grocer is a wealth of information for you to draw from in understanding the mechanisms that drive and retain customers.
A minimum of customers for every stop is essential to achieve. Ideally, you will want to ensure that you have at least 50 customers per location. If your stops aren’t reaching these targets, you may require fundraising options (perhaps a sponsored event or an employee wellness program), or a different marketing solution. Corporate partnerships are a win-win strategy. If you are able to line up two employee wellness programs as part of your offerings, you can cover a great deal of your overhead.
We’ll cover some of the other considerations that impact the sustainability of a mobile market, such as procurement and merchandising, in later modules.
Stories from the Road - Senior Living Circuit
Every Friday is “Senior Living Circuit” Day. This involves setting up in 3 senior living communities across one area. In total, we have 4 different routes that we travel over the 12 weeks of the growing season. When our mobile market shows up for the first time, we build a customer base and sign seniors up for the Farmers Market Nutrition Program (FMNP). Then, by the time the applications are processed, we return a month later when we are able to redeem the checks customers have in hand. We also have a matching program similar to the double-up bucks for Supplemental Nutrition Assistance Program (SNAP), so on the third visit the seniors can pay with their matching voucher, doubling the amount of produce they are able to purchase with any other certified grower. Servicing seniors in this way is a strategic approach to meeting both your social and financial goals – and with a large, aging demographic resulting in the creation of more senior centers it’s also a smart approach.
Activity: Create Your Operations Calendar
To help you get started thinking about the locations and marketing strategies that can help you break break-even or turn a profit.
Before creating your operations calendar, here are some things to consider and address —
- How many market vehicles does your organization have?
- What is your staffing situation?
- How does your procurement process work?
- Will you need to process and prepare produce for your market?
- What is the weekly marketing or bundles that need to be made?
- Have you allowed any space in your schedule for breakdowns and scheduled maintenance of vehicles?
When considering your calendar, 2-hour markets are an optimal approach. Ensure you allocate appropriate operation time on the front end, back end, and travel that will impact your market schedule. Always be careful about over-committing. Remember, if you fail to show up, trust will be broken with your customers – and future customers too, if the word spreads.
Use the following examples to guide you in creating a draft operations calendar for your mobile market:
Foodlink Curbside Market Schedule
Activity: Test Your Assumptions (Break-Even Analysis)
Once you have created a draft operations calendar for your mobile market, you’ll want to put your assumptions to the test. You can use the following break-even analysis to conduct a high-level test of what is needed (infrastructure, funding, procurement, marketing, staff, locations, etc…) in order for your venture to break even.
We invite you to use this break-even analysis to inform your existing financial models.
Instructions:
- Insert your numbers to see what you need to do to be sustainable
- If you aren’t breaking-even, consider some alternate strategies. Do you need to:
- Add additional routes?
- Incorporate selling some of your food if you were planning on only donating?
- Develop corporate sponsorship/ongoing fundraising strategies?