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Managing Cash Flow for a Low-Capital Food Hub Start-up

Nick McCann, Savanna Lyons and, Georgeanne Artz (June, 2015)

Summary

It is often assumed that starting a food hub is a capital-intensive process requiring large investments in infrastructure, transportation, logistics and personnel at the outset. While grants or loans can provide start-up funds for a new food hub distributing fresh local produce, in many cases these resources are not available. Grants for a new business can be hard to find, and most financial institutions are not willing to lend to start-up operations, especially those that sell perishable food items. Fortunately, there’s hope. For the Iowa Food Hub, experience has shown that food hubs can be started with very little capital if their managers pay close attention to cash flow. This publication investigates how new food hubs can grow successfully under money constraints if cash flow is managed strategically.