elwood hometown cooperative market
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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 - PowerPoint PPT PresentationTRANSCRIPT
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Elwood Hometown Cooperative Market
A community journey
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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
About Elwood
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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
Timeline
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June 8 – Banking & Finance June 18 – Membership kick-off Oct 1 - “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!
Timeline
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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
Survey
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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
Steering Committee
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Finance/Business Plan Facilities Surveys Incorporation Public Relations/Marketing/Membership
Sub-committees
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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.
Financial/ Business Plan
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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”
Facilities
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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
Incorporation
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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
Cooperative – What is it?
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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
The Offering
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$500 par value One share per member Voting share No dividends paid
Common Stock
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$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
Preferred Stock
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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
Cooperative Governance
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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
Projected Cash Outlay
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Drawing for shareholders who invested by July 6
Logo contest - One share of common or preferred stock, donated by a local business
Incentives with kick-off
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Before…
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Before…
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More than 40 volunteers
Used shareholder’s building down the street for lunch and breaks
Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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Demolition Day
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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
Remodeling
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Remodeling Process & Progress
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Remodeling – Ceiling Paint
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Remodeling – New Windows
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Remodeling – New Floor
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Remodel - Awning
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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
Equipment
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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
Staffing
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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
Hours
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Equipment
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Equipment
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Equipment
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Equipment
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Postcards sent to volunteers, trades, donors, shareholders and members
Cookies and coffee Shopping bags given to attendees Open for business $950 in 2 hours
Shareholder/Member Preview
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Preview
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Preview
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Preview
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Preview
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Preview
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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
First week
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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
Why we were successful
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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…)
What we learned
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Questions?