Monadnock Food Co-op Case Study

Bonnie Hudspeth & Michael Faber NFCA Start-up Day May 7, 2016

Overview

•  Intro •  MFC Basic Profile •  MFC’s Development Timeline •  Organizing Phase: 3 Solid Decisions •  Board: Learning to Delegate •  Lessons Learns: Pre & Post Opening •  Questions?

How We Started a Co-op

in Our Community 1.  Gather Information

2.  Assess Community Interest 3.  Formally Set up the Co-op 4.  Organize 5.  Research Feasibility 6.  Review Findings 7.  Recruit Members 8.  Create a Business Plan 9.  Secure Financing 10.  Site Selection 11.  Prepare for Opening

*Steps from “How to Start a Food Co-op” Manual

Monadnock Food Co-op Basic Profile

First Meetings: 2007

Incorporated: April 19, 2010 Opened: April 3rd, 2013

Retail Square Feet: 7,800 Total Square Feet: 13,000 Projected Sales: $7 Million 1st Year Sales (Actual): $6.4 Million 2nd Year Sales: $8.5 Million

3rd Year Projection: $9.7 Million

Timeline: 2006 - 2008 COMMUNITY ORGANIZING: surveys, committee formed

Timeline: 2008 - 2009 Vision & Mission, Forum, Fundraising, Feasibility Study

Timeline: 2010 Incorporation, Bylaws, Membership Drive, Site Selected, PM Hired

Timeline: 2010 - 2011 Fundraiser Event, 500 Membership Party, Member Loan Campaign

Total Sources Funding Received:

Member Loans $1,034,000 Member Equity $230,000 CDBG Equipment Grant $472,000 MEDC Equipment Loan $430,000 RBEG Equipment Grant $44,000 TOTAL Funding $2,210,000

Total Uses

Equipment: CDBG $470,000 RBEG $44,000 MEDC $430,000 Co-op Capital $150,000 Total Equipment $1,094,000

Inventory Est. $230,000

Architect Fees $57,000 Pre-Opening Staffing $190,000 All Other Pre-Opening Exp $183,000 JLF Deposit $100,000 Total (Excluding Building Cost) $1,854,000

Timeline: 2011 - 2012 Interim PM, First Annual Meeting, General Manager hired, Groundbreaking Ceremony

Timeline: 2012 - 2013 Name change & New Logo, 1000 Member-Owners, Construction, 2nd AGM and then….MONADNOCK FOOD CO-OP OPENS!

Organizing Phase: 3 Solid Decisions

1.  Clearly Defined Organizational Structure (reporting & accountability)

2.  Hire A Project Manager

3.  Find & Embrace Co-op Expertise (Consultants & Neighboring Food Co-ops)

1. Clearly Defined Organizational Structure

Member-Owners

Finance & Facilities Marketing

Volunteer Education &

Outreach

Board GM Search Committee

Project Manager

Board’s Role •  Democratically elected to represent the legal owners

•  Determine & set up governance structure

•  Set board policies in alignment with bylaws to create clarity and transparency

•  Legal and fiduciary responsibility for the co-op

•  Oversee the mission being carried out (ENDS)

•  Oversee Start-up Staff, then GM

•  Delegate authority (to Committees/Project Manager/General Manager)

2. Hire a Project Manager •  Manage risk •  See the big picture •  What needs to be done? •  Oversee Committees & Volunteers •  Report to the Board •  Plan & analyze •  Membership Campaign •  Communications: Voice of the Co-op •  Manage Site Work/Lease Negotiations •  Capital Campaign Oversight •  Meeting with Lenders

Two Different Projects

1.  Organize the structure for a democratic association 2. Set up a grocery store

3. Find & Embrace Co-op Expertise

Hire Co-op Consultants:

•  Market Study

•  Legal Structure

•  Organizational Development

NFCA: Peer Support & Connections

NFCA creates structure to:

•  Connect start-ups to each other, and to experts

•  Set up mentorship with neighboring established food co-ops

Connect to Nearby Co-ops:

•  Peer Support •  Learning •  Shared Consulting

Board: Learning to Delegate •  Figure out Governance Structure early

•  Get training for your Board

•  Learn to Delegate Authority

Impact of a New Food Co-op

•  Monadnock Food Co-op carries products from over 175 local farms and producers located within 100 miles

•  Recently awarded “Local Food Champion” by Cheshire County Conservation District.

•  Employ 75 staff and paid out over $2 million in wages and benefits in the last fiscal year.

•  Adopted livable wage $12 for all FT staff after 1 year

•  Doubled the efficiency of our building during construction, recently hired a sustainability coordinator – installing solar on our roof

Key Factors in Pre-Opening Success

•  Get the Right People on the Bus •  Clearly Defined Organizational

Structure •  Hire A Project Manager •  Find & Embrace Co-op Expertise •  Avoid Costly Distractions •  Set Yourself Up to Attract a Good GM •  Have FUN!

Key Factors in Pre-Opening Success

•  Having a timeline and goals for the entire development process: part of the culture = reporting & accountability

•  Partnering with a non-profit developer who helped utilize various sources of available capital and manage the construction project

•  Reaching out to other co-ops for support the whole way through

•  Successful Negotiations (Architect & Developer)

Key Factors in Post-Opening Success

•  Large public community events •  NCG Membership: UNFI Contract & Co-op Deals flyer

inserts •  Competitive pricing: how initially judged •  Management Experience •  Attractive: easy to shop store (floor design consultant and

interior décor resources) •  Transparency: Pricing, Union Drive •  Adequate Working Capital

Lessons Learned: Next Time!

•  Push back harder on architects design plans (e.g. no exit door separating service deli)

•  5 Years is a long time: use resources & learn from others!

•  Negotiate for more parking

•  More future expansion options

Questions?

Bonnie Hudspeth Neighboring Food Co-op Association

bonnie@nfca.coop

www.nfca.coop

I Y Our Co-ops!The Neighboring Food Co-op Association // www.nfca.coop

Michael Faber Monadnock Food Co-op gm@monadnockfood.coop www.monadnockfood.coop