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Elwood Hometown Cooperative Market. A community journey. About Elwood. Population 710, 2010 census Non-consolidated grade school and high school 3 churches Convenience store 2 banks Gosper County seat Gas station Restaurant New library - $350,000 DED grant

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about elwood
About Elwood
  • Population 710, 2010 census
  • Non-consolidated grade school and high school
  • 3 churches
  • Convenience store
  • 2 banks
  • Gosper County seat
  • Gas station
  • Restaurant
  • New library - $350,000 DED grant
  • Downtown Revitalization Grant - $350,000 awarded in 2012
  • Market study - $1M in grocery sales available in Elwood, addition $800,000 at Johnson Lake & surrounding area
timeline
Timeline
  • January 15, 2012 – Elwood Market closes
  • Last week January– Survey distributed door-to-door.
  • February 6 – First community meeting
    • Results of survey shared
    • Options discussed
    • Jim Crandall presentation on Cooperative model
    • Steering committee formed
  • March 18 – Second community meeting
  • May 4 - Incorporation
timeline1
Timeline
  • June 8 – Banking & Finance
  • June 18 – Membership kick-off
  • Oct1 - “Go” financial threshold reached
  • Oct. 5 – Building purchase completed
  • Oct. 6 – Community demolition day
  • January 14 – February 3 – Stocking and inventory load
  • February 3 – Shareholder, donor & volunteer preview
  • February 4 – Open for business!
survey
Survey
  • 88 responses
  • 73% shopped at the store weekly in 2009
  • 54% would like to purchase more than 50% of their groceries at a store in Elwood
  • 67% said a convenience of a store in Elwood was Very Important
  • 79% said price was Moderately to Very Important
  • 22% would like to purchase 76 to 90% of their groceries in Elwood
steering committee
Steering Committee
  • Ed Houlden – Security First Insurance, Village Board Member
  • LeahAnn Brell – Brell Realty & Chamber President
  • Steve Lofquist – Lofquist Welding, Inc.
  • Dustin Lofquist – Lofquist Welding, Inc.
  • Sindy Fiene – Mary Kay Consultant
  • Phyllis Dunlop – Member of Chamber, volunteer at Gosper County Senior Center and church
  • Joe Welch – Paulsen Construction
  • Sharlette Schwenninger – small business owner, Chamber Executive Director, Village Board Member
  • Lyanne Weissert – FSA, husband owns construction business
  • Nancy Schutz – The Home Agency, accountant
sub committees
Sub-committees
  • Finance/Business Plan
  • Facilities
  • Surveys
  • Incorporation
  • Public Relations/Marketing/Membership
financial business plan
Financial/ Business Plan
  • Analyzed and evaluated past businesses
  • Talked to past business owners and Brenda Johnson from Bertrand about seasonal trends
  • Developed a financial plan including all start-up costs, wages and one years income and expenses –created 2 year proforma later
  • Determined that it was feasible to re-open and operate as a member owned cooperative, contingent on a successful membership drive.
facilities
Facilities
  • Toured the building and evaluated flooring, shelving, electrical and other needs
  • Compared remodeling costs with new construction
  • Provided estimates to the Financial/Business Plan committee
  • Determined and prioritized “what we have”, “what we need”, and “what would be nice in the future”
incorporation
Incorporation
  • Explored options for incorporation
    • Limited Liability Corporation
    • Cooperative
    • Limited Cooperative Association
  • Found resources to advise us
  • Recommended to the Steering Committee that a Cooperative is the best option for Elwood
  • Contacted an attorney who specials in Cooperative Law
  • Incorporated May 4, 2012
  • Banking and Securities approval June 8, 2012
cooperative what is it
Cooperative – What is it?
  • Members are owners and are users
  • Members benefit
  • Members govern through Board of Directors
  • One person, one vote
  • Member investment is for access to services, not for return on investment
  • Store open to non-members
the offering
The Offering
  • Authorized capital stock - $500,000
    • 500 shares of common stock at $500 per share
    • 500 shares of preferred stock at $500 per share
    • $25 membership fee
common stock
Common Stock
  • $500 par value
  • One share per member
  • Voting share
  • No dividends paid
preferred stock
Preferred Stock
  • $500 per share
  • No voting rights
  • Individual or entity can purchase as many shares of preferred stock as they wish, until the $275,000 offering is filled
  • At the discretion of the Board of Directors, a dividend may be paid.
  • If Cooperative is dissolved, priority for redemption at par value over common stockholder
cooperative governance
Cooperative Governance
  • Owners of common stock will meet within 12 months from May 4, 2012 to elect Board of Directors
  • Seven board members with staggered terms will be elected to replace the acting Board
  • Board of Directors will supervise the Store Manager
  • Store Manager will manage the store and employees
  • Suggestions come to Board, not to Store Manager
projected cash outlay
Projected Cash Outlay
  • Beginning inventory $70,000
  • Working capital 41,700
  • Building and signage purchase 42,500
  • Cost of remodeling 55,500
  • Purchase of fixed assets 80,000
  • Pre-opening training and labor 1,600
  • Legal and accounting costs 6,000
  • Advertising and Grand Opening 2,400
  • Supplies, insurance & other 7,800
  • Total $307,500
incentives with kick off
Incentives with kick-off
  • Drawing for shareholders who invested by July 6
  • Logo contest - One share of common or preferred stock, donated by a local business
demolition day
Demolition Day
  • More than 40 volunteers
  • Used shareholder’s building down the street for lunch and breaks
remodeling
Remodeling
  • Demolition of existing office and storeroom area
  • All new wiring
  • Floor strengthened with plywood overlay, new VCT tile
  • Tin ceiling spray painted and faux metallic highlighted
  • New bathroom & storeroom
  • New receiving doors
  • New windows – Downtown Revitalization Grant
  • Insulation – Downtown Revitalization Grant
  • Lighted awning – Downtown Revitalization Grant
  • Repair brickwork
  • New lighting
equipment
Equipment
  • 10 new cooler doors
  • 15 used freezer doors
  • 2 used drink coolers
  • Used shelves
  • Used meat case
  • Used produce case
  • Used checkout stand
  • Scanning system – The General Store
staffing
Staffing
  • Ads in local paper and around town
  • Manager – Mike Burkink, 40 years on grocery business
  • Assistant Manager – Julie Poggendorf, previously worked at Elwood Market and other grocery store experience
  • Clerk – Ann Neville, grocery store and convenience store experience
hours
Hours
  • Budgeted for 60 hours
    • 9 a.m. – 6 p.m. Monday - Saturday, 10 a.m. to 2 p.m. - Sunday
      • 1 Full time manager, 1 28 hour assistant manager and 20 hour clerk
  • Changed hours to:
    • 8 a.m. to 7 p.m. – Monday through Saturday
    • 10 a.m. to 2 p.m. – Sunday
      • Taking assistant manager to 40 hours
      • Taking clerk to 28 – 30 hours
      • Will be hiring another part-time if needed
shareholder member preview
Shareholder/Member Preview
  • Postcards sent to volunteers, trades, donors, shareholders and members
  • Cookies and coffee
  • Shopping bags given to attendees
  • Open for business
  • $950 in 2 hours
first week
First week
  • NTV news spot featuring first customer
  • Article in Kearney Hub and Lexington Clipper
  • Approximately $3500 in sales first day
  • Sold out of bread in one day
  • Manager cut meat every day – sometimes twice
  • Positive comments from everyone
  • New shareholders
  • Increased employees hours and will be hiring more part-time help
why we were successful
Why we were successful
  • Had the right mix of experience on steering committee
  • Steering committee members met weekly
  • Used the local and regional newspapers and radio to promote
  • Kept the community informed of our progress
  • Met one-on-one with prospective shareholders
  • Went door-to-door with information when needed
what we learned
What we learned
  • Set deadlines or nothing gets done
  • Be flexible with our budget and planning – there will be curveballs
  • At community meetings, answer as many questions as possible in the presentation
  • Finish all construction before receiving new equipment and inventory, if possible (we cleaned several times…)