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Cornerstones. Supporting New Food Co-ops. Accomplishments & Progress since 2005. Challenges & Barriers Lessons Learned. What Have we Accomplished?. 64 new retail food co-ops since 2004 Hundreds of inquiries Over 50 Seed Grants and Sprout Loans 100 Active and engaged startup efforts.

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cornerstones

Cornerstones

Supporting New Food Co-ops

accomplishments progress since 2005
Accomplishments & Progress since 2005

Challenges & Barriers

Lessons Learned

what have we accomplished
What Have we Accomplished?
  • 64 new retail food co-ops since 2004
  • Hundreds of inquiries
  • Over 50 Seed Grants and Sprout Loans
  • 100 Active and engaged startup efforts
building the systems
Building the Systems
  • Documentation & Data
  • Resources
  • Training
  • Networks
  • Experience and Feedback
p6 cooperation among cooperatives
P6: Cooperation among Cooperatives
  • NCGA and the Development Co-op
  • Regional Associations
  • Commitment from co-op boards and managers
  • Co-op loan funds
  • Cooperative Development Centers
community support rises
Community Support rises
  • 500 - 1,000 – 2,000 founding members
  • Million dollar loan and share campaigns
  • USDA support through development centers & other programs
  • Community economic development grants & loans
what works
What Works
  • Co-ops larger than 3,000 sq. ft. retail
  • Co-ops with natural food/local food emphasis
  • Co-ops that organize their community and do excellent business plans
  • Professional support
challenges
challenges
  • The Natural Foods industry matures
  • Outliers
  • Intriguing Ideas
  • Conflicting advice
  • Changing legal and financial regulation
do you miss the 80 s
Do you miss the 80’s?
  • Competition
  • New regulations/increased enforcement
  • Expectations
  • Sophistication
  • Product differentiation
  • Food Co-op perceptions and recognition
still working on
Still working on…
  • How to serve low-income communities?
  • How to organize where co-ops are not understood?
  • When is “volunteer” member labor acceptable?
  • Can/should we invest limited resources in risky and unproven efforts?
  • How do we define “retail food co-op?”
market studies

Market Studies

Determining Sales potential

an essential planning tool
An Essential planning tool
  • Analyze local market
    • Demand
    • Competition
    • Geography
  • Analyze (or help identify) potential sites
    • Desirable characteristics
    • Location
    • Potential weaknesses
  • Project sales volume
    • At opening
    • Through maturity
provides
Provides
  • Assurance to owners & lenders
  • Realistic baseline for financial projections
  • Guidance for planning location and size
  • Overview of competition
  • Recommendations for products and services
how to get a good market study
How to get a good market study
  • Not a do-it-yourself project
  • Use a professional who understands co-ops
  • Provide clear assumptions
  • Follow through with your plans
follow up
Follow up
  • Ask questions!
  • Update study when:
    • Major competitive changes occur
    • Site options change
    • Business plan changes
    • After 2-3 years
site selection

Site Selection

What to Look for (and when)

why good may not be good enough
Why Good may not begood enough
  • The right location
  • Access
    • Cars
    • Mass transit
    • Pedestrian
  • Parking
  • Visibility
  • Appropriate neighbors
  • Size and flexibility
  • The building itself
stage 3 implementation

Stage 3 Implementation

Steps, Timeline, Tools & Benchmarks

overview of stage 3
Overview of Stage 3
  • Stage 3A - Preconstruction can last 3-6 months or longer, and require a budget of $80,000 - $100,000.
  • Stage 3A ends when the contingencies of the lease (or purchase) are removed, the sources & uses budget is fully financed, and the final decision point is reached and crossed over (no turning back).
overview of stage 31
Overview of Stage 3
  • Stage 3B is the construction stage and typically lasts as long as the preconstruction stage (3-6 months).
  • The budget for Stage 3B represents ½ to 2/3 of the total Sources & Uses budget.
  • Stage 3C (one month) is Preparing for Opening and Stage 3D (forever) is Sustaining.

The budget for these stages includes the remaining funds in the Sources & Uses budget.

tools resources
Tools & Resources
  • Sources & Uses Budget
  • Professional Support
    • Attorney for capital instruments
    • Architect
    • Store planner
    • Inspectors
    • Consultants for GM hiring, board training, operations
  • Distributors, Brokers and Suppliers
  • Co-op Community
sand traps
Sand Traps
  • Is the board ready to manage a GM?
  • Have you promoted the co-op store to the market?
  • Do you have your working capital?
opening beyond

Opening & Beyond

What to Expect & How to Be ready

transitions
Transitions
  • The board delegates operations to the manager.
  • Celebrate and keep the momentum!
  • Monitor vigilantly
  • Expect setbacks, staff turnover, equipment breakdowns …
  • What will you do if the cash runs out?
  • Be prepared, and willing, to get help
  • Invest in your future- capital, education, community