Semley Village Stores and Cafe Business plan Version History [to be noted as successive drafts are discussed and approved] Version Considered by management committee Approved 1.0 13 June 2011 yes 2.0 3.0 yes Contact: Anne Everall Semley Village Stores and Cafe Semley SP7 9AU Anne@hatts.eclipse.co.uk EXECUTIVE SUMMARY Semley has been without a shop for nearly ten years. In the past three years, surrounding villages have successfully established community village shops and early in 2011, the old Semley Stores premises came on the market. It was bought by a benefactor and a committee was established in April to lead the development of our own community shop. A survey circulated with the parish magazine showed strong support, with most of the respondents (representing 52 households) saying they would use the shop 2 – 3 times a week. Semley is a parish of scattered settlements of about 600 residents. There is a pub, a church, and a successful primary school with a roll of 150. The shop, which is opposite the school, will provide competitively priced convenience goods, fresh local produce and it will be an outlet for local suppliers and makers. There will be a small cafe selling hot drinks, sandwiches and cakes. The head teacher, an enthusiastic supporter, hopes her pupils and staff will benefit from a local supply of wholesome food and snacks. As importantly, it will be an informal focal point for young mothers, the elderly and everyone who lives and works in and around the village. The start‐up committee includes a parish councillor who is also an architect, as well as people with retail expertise, and others with City, planning, building and PR backgrounds. The shop will be rented on a rolling lease. Semley Village Stores is registered with the FSA as an Industrial and Provident Society for the benefit of the community. We estimate we need £65,000 to start trading. Loans, donations and share purchases amount to £30,000 and we anticipate raising a further £10,000 locally. We have been invited to apply to the Plunkett Foundation for a grant and loan of at least £20,000. We are applying for a £5000 grant from the S W Wiltshire Area Board’s Community Grants Scheme and we will apply for other grants to support further development. The experience of the other local community shops is very encouraging. Hindon, Motcombe and East Knoyle (all in a 7‐mile radius), all of which set up in the past four years, turn over between £240,000 and £275,000 a year. Two of the three employ a manager and another part time worker as well as volunteers. Basing our forecasts on their experience, we anticipate a minimum of 150 transactions worth £4 a day, six days a week, generating a starting turnover of £149,760 a year. We plan to employ a full time (or two part time) manager/s supported by volunteer staff. The building works are out to tender: work is expected to begin by late August. We are advertising for staff to start in September, and our current target date for opening is at the end of the autumn half term, on November 1st. As a not‐for‐profit organisation, we are presenting our information in terms of cash flow rather than profit and loss. Full details are laid out on page 8. SUMMARY
Balancing figure
[= A - (B+C)]
Year 1
Year 2
Year 3
Year 4
Year 5
£(1,595.20)
£23,903.20
£24,650.18
£25,418.06
£26,222.93
2 INTRODUCTION Background: Semley Village Stores and Cafe [The Stores] has taken over the premises occupied by World Wines 4 U until the end of 2010. This site is part of an earlier Semley shop location. The enterprise’s prime objective is to provide a shop, a cafe and an informal meeting place within the parish as a community co‐operative, formally registered as Semley Shop Ltd. Semley is a small village with a strong sense of identity. The initial meeting to discuss the shop was attended, at short notice, by more than 50 people who all endorsed the idea of re‐opening the old village stores, and it was followed up in June by the first fund‐raising meeting. So far £30,000 has been pledged in shares, donations and loans. There will be at least two new jobs and a host of flexible volunteering opportunities, and an outlet for the burgeoning small businesses in the parish, notably Juliet Stallwood’s cakes & biscuits, and Pythouse Walled Garden’s kitchen. Legal Structure: The Stores has been registered with the FSA as an Industrial and Provident Society, defined as a “cooperative for the benefit of the community”. Any profits will be re‐invested in the stores; there is scope to pay interest to shareholders; and finally to contribute to community projects like the successful holiday activities scheme for Semley school children. Board of Management and Officers: Overall direction of the enterprise is the responsibility of the Board of Management, whose membership will be elected at the Annual General Meeting . All members of the current committee will formally stand down at the first AGM. Future committees will be governed by the Rules (available on request). At present there is a steering committee whose membership is as follows: Anne Everall (writer and broadcaster) Chair Mark Butler (army officer, secretary PCC ) Secretary Alex Allfrey (ex‐City) Treasurer (These officers together with the legal adviser Marcus Thorpe signed the application for registration as an Industrial and Provident Society with the FSA on 13 May 2011). There are two sub‐committees: Planning: Anne Everall Alex Allfrey Marcus Thorpe lawyer Matthew Faulkner lawyer and teacher Henry Egerton land agent Robin Moors architect, parish councillor Mark Butler Development: Pene Cairns owner, wine bar Juliet Stallwood Juliet Stallwood cakes Jane McCarthy teacher, journalist Annie Meston teacher, former school governor, church warden Mitch Earl manager , Pythouse Walled Garden Julie Cox driving instructor 3 MARKET RESEARCH AND COMMUNITY SUPPORT Customer Base: The shop and cafe will serve three distinct groups of customers: the village population of about 580: the 150 children together with their parents and the staff of Semley Primary School (situated opposite the shop); and passing trade from holiday makers, commuters, walkers and cyclists. The former shop closed nearly ten years ago. It had been a very successful general stores and gift shop which offered a highly personal service including deliveries to weekenders and to older people who could not easily travel, and whose owners were popular with the whole village for their cheerful and welcoming manner. This is the kind of business the village would like to see restored. Approaching retirement they put the shop on the market and – because it was so successful – sold it, sooner than they expected, to a young and less experienced couple. They struggled to make it work and the business ran down. There is very good retail space, very centrally located, and an upstairs room which will be let in the short term. Market Segmentation: Semley parish covers a wide geographical area, from the A350 in the west, to Wardourin the east and the Donheads to the south. It includes the old Semley Dairy site where there are several small businesses, the Kingsettle housing estate, Sem Hill and Chaldicotts, a redeveloped farm yard with retail units. Although the village itself is fairly small, there is a strong sense of identity within it, and with the outlying hamlets of Huggler’s Hole, Gutch Common, Barker’s Hill, Hart Hill and Hatts Hill as well as Sedgehill which forms the other part of the parish. Four fifths of the population of the parish is below retirement age while a fifth is under 15 (above the county average). Three quarters of homes are owner‐occupied. Officially, there is no unemployment. The parish has a higher than average number of self‐employed people and economically‐active pensioners. Typically of a rural village, car ownership is high. However, 12 households have no car at all, and with neither a GP’s surgery (the nearest is 3 miles away) nor a village shop, the parish is classified as significantly disadvantaged in the government’s rural deprivation indices. We anticipate most business coming from people in the village, or passing through it on their way to or from work. Workers in the retail units at Chaldicotts and the Old Dairy have expressed interest in a place to have lunch. Parents and teachers at the school are enthusiastic about having a place for a cup of tea or coffee when collecting or dropping off children. These factors, combined with the historical success of the previous shop on the site, support the business case for the new stores. Competition: There is a pub but no shop in Semley. There are community shops in the neighbouring villages of East Knoyle, Motcombe and Hindon, all of which are between 3 and 6 miles away. There is a cafe and delicatessen at Pythouse, a mile away outside the village towards Tisbury. Shaftesbury, with a Tesco and a Co‐op, as well as a range of other shops and cafes, is three miles away. None of these can realistically be reached without a car and although the distances are relatively short the roads are slow and rural. Community support: A village meeting was held on 8 April 2011. It attracted more than 50 people who all supported the proposal for a shop. A single donor has generously bought the premises to enable a community shop to be opened. It was followed up with the first fund‐raising meeting on 4 June 17th which drew more than 60 people. So far £30,000 has been raised in donations, shares and loans. PRODUCTS AND SERVICES Services: The new store plans to include a Post Point where parcels and letters can be stamped and left for collection. Several people have offered to help run a grocery delivery service for less mobile parishioners. There will be collection facilities for dry‐cleaning. The small cafe will provide an informal centre that is open and accessible all day. It will have close ties with the school and may, for example, exhibit children’s art work as well as providing the opportunity for young people to do some volunteering or gain work experience. Unique Selling Point: The stores will sell locally‐produced food from Pythouse Walled Garden, surpluses from local gardens, and bread from bakeries in Shaftesbury and Gillingham as well as being the main outlet for very popular artisan bread made in the village. It will offer competitively‐priced staples, and provide an outlet for other local produce such as stationery, postcards and speciality cakes from a new and fast‐growing village enterprise, Juliet Stallwood’s cakes and biscuits which is renting space above the shop. It will offer healthy locally‐
produced packed lunches for the school and for the passing trade. It will also be a ‘destination’ for visitors staying in holiday cottages in the parish. It will offer a delivery service to villagers who find it hard to get to the shops, and to weekend residents. It will also provide a unique learning experience for older children at the school who could incorporate time in the shop with lessons in maths, geography and communication skills. OPERATING PHILOSOPHY The primary purpose is to provide the community and visitors to it with a useful service while promoting a sense of common ownership and collective effort for the community as a whole. The enterprise will offer the products and services that are most useful to the community at a competitive price, provide a market for local producers, and promote a viable and sustainable local business. COMMUNITY BENEFITS 







Creation of two part‐time jobs or one whole‐time job, as well as providing a community activity for local people to volunteer. Creation of one new local business – (community co‐operative) and opportunity for a second – Juliet Stallwood Cakes and Biscuits – to expand. Training and learning opportunities for new employees and volunteers. Potential learning environment for primary children. Positive environmental impact through reduction in short vehicle journeys Enhanced rural economy through support of local businesses. We plan to source at least 50% of products and services from the immediate vicinity, including two bakers and a cake maker within the village itself. Increased visitor and tourist spend in the community Social benefit and inclusion through: − An information centre − An informal meeting place − The employment of a number of volunteers, most of whom are likely to be among the older members of the community. 5 −
Integrating the school, its supporters, and the village FINANCIAL INFORMATION at 1 AUGUST 2011 Current Funding Amount Amount Secured Anticipated Start Up costs Community Fundraising: AONB grant £475 Parish council grant £200 £20,000 £10,000 £10,000 £10,000 Community Grants Scheme £5,000 Sowing Seeds £5,000 Landfill community grant Bank Loans £15,000 Village Core Programme loan £10,000 £30,675 £55,000 £85,675 Donations and individual Loans Sale of shares External grants: Village Core Programme ¹ Totals Breakdown of Start‐up costs Refurbishing the stores ‐
‐
‐
‐
‐
‐
External work ‐
‐
‐
‐
Fitting out ‐
‐
‐
‐
Replace shop front Make good ceiling and walls Open stair case Fire doors and window escapes on first floor Electrical work Plumbing work Canopy and awnings Lock‐up storage and display Waste enclosures Outdoor seating and surfaces flooring Shelving and display units Chillers and freezers Air conditioning 6 £30,000 £1000 £1000 £15,000 £1,500 £10,000 £6500 ‐
‐
‐
‐
Epos and post point facilities Kitchen fridges Coffee machine Dishwashers Employing manager 1 month before start up £4000 £1000 ) £1000 ) £1,500 £8,000 £5,500 £85,500 Including cost of advertising etc Stock for shop opening (includes £650 for first annual fee to postpoint ) Contingency fund Total start up costs (anticipated) CASH FLOW FORECAST ‐ SUMMARY Cash Flow for first
5 years - Summary
STORES INCOME
RENTAL INCOME
CAFÉ
A – TOTAL INCOME
B – TOTAL COST OF
SALE
C – TOTAL EXPENSES
Balancing figure
[= A - (B+C)]
Y1 [13
weeks]
Y2
Y3
Y4
Y5
(Nov 2011 –
Jan 2012)
Feb 2012 –
Jan 2013
2013 - 14
2014 - 15
2015-16
£37,440.00
£360.00
£7,098.00
£44,898.00
£149,760.00
£1,440.00
£28,392.00
£179,592.00
£154,252.80
£1,483.20
£29,243.76
£184,979.76
£158,880.38
£1,527.70
£30,121.07
£190,529.15
£163,646.80
£1,573.53
£31,024.70
£196,245.03
£(42,923.20)
£(3,570.00)
£(139,692.80)
£(15,996.00)
£(143,883.58)
£(16,446.00)
£(148,200.09)
£(16,911.00)
£(152,646.09)
£(17,376.00)
£(1,595.20)
£23,903.20
£24,650.18
£25,418.06
£26,222.93
7 CASH FLOW FORECAST IN DETAIL Year 1
31.10 11 to 1
Jan 12
(13 weeks)
Y2
Y3
Y4
Y5
£37,440.00
£7,098.00
£360.00
£44,898.00
£149,760.00
£28,392.00
£1,440.00
£179,592.00
£154,252.80
£29,243.76
£1,483.20
£184,979.76
£158,880.38
£30,121.07
£1,527.70
£190,529.15
£163,646.80
£31,024.70
£1,573.53
£196,245.03
£(8,000.00)
£(29,203.20)
£(5,720.00)
£(116,812.80)
£(22,880.00)
£(120,317.18)
£(23,566.40)
£(123,926.70)
£(24,273.39)
£(127,644.50)
£(25,001.59)
£(42,923.20)
22%
£(139,692.80)
22%
£(143,883.58)
22%
£(148,200.09)
22%
£(152,646.09)
22%
Water & Rates⁶
£(50.00)
£(110.00)
£(113.00)
£(117.00)
£(120.00)
Light & Heat⁷
Telephone &
£(787.00)
£(3,150.00)
£(3,308.00)
£(3,473.00)
£(3,647.00)
£(99.00)
£(120.00)
£(396.00)
£(480.00)
£(408.00)
£(494.00)
£(419.00)
£(509.00)
£(432.00)
£(505.00)
£(257.00)
£(1,030.00)
£(1,000.00)
£(400.00)
£(400.00)
£(1,061.00)
£(1,030.00)
£(412.00)
£(412.00)
£(1,093.00)
£(1,061.00)
£(424.00)
£(424.00)
£(1,126.00)
£(1,093.00)
£(437.00)
£(437.00)
£(452.00)
£(1,030.00)
£(375.00)
£(400.00)
£(1,810.00)
£(4,120.00)
£(1,500.00)
£(1,600.00)
£(1,864.00)
£(4,244.00)
£(1,500.00)
£(1,600.00)
£(1,920.00)
£(4,371.00)
£(1,500.00)
£(1,600.00)
£(1,977.00)
£(4,502.00)
£(1,500.00)
£(1,600.00)
£(3,570.00)
£(46,493.20)
£(1,595.20)
£(15,996.00)
£(155,688.80)
£23,903.20
£(16,446.00)
£(160,329.58)
£24,650.18
£(16,911.00)
£(165,111.09)
£25,418.06
£(17,376.00)
£(170,022.09)
£26,222.93
Cash flow in detail
INCOME
Shop Income¹
Café Income2
Rental Income3
A: TOTAL
COSTS OF SALE:
Starting stock
Stock
Staff⁴
B: TOTAL
GROSS MARGIN
FIXED EXPENSES:
Broadband⁸
Stationery & postage
Licences & insurance
Repairs & renewals
Computer & IT⁹
Cash discrepancies
Accountancy
Contingency
Loan repayment¹⁰
C :TOTAL EXPENSES
B+C
A – (B + C)
1
Calculated on 120 transactions/day @ £4.00 each = 2880/week, rising @3% per year Based on approx £91 per day in coffee and pastries, rising @£3% per year 3
To Juliet Stallwood Cakes and Biscuits, at £120 month and assuming annual inflation of 3% 4
Two part‐time employees, or one full‐time. 6
Rates are discounted by 50% for rural business and may attract further 50% discount from council 7
Reflecting the evidence from other shops of high electricity bills. 5% inflation assumed 8
BT business plan, free line installation, 24 month contract unlimited broadband, @£23/month plus calls estimated at £10/month 9
Not in Y1, we hope 10
This would be approx pa, and is contingent on being offered and accepting Core Village funding 2
8 BUSINESS NARRATIVE These figures reflect the experience of other local community shops. Hindon and Motcombe, both in their second year of trading, are each generating well over £250,000 and Hindon expects to reach £300,000 this year. However, both took over from existing shops. In East Knoyle, turnover is currently £240,000. We expect to increase our turnover beyond the rate of inflation as we become more familiar with the local market. The figures are also realistic about running expenses, reflecting the cost in particular of electricity (which will continue to rise faster than the rate of inflation). The cost of accountancy is also very high, but that reflects other shops’ experience. We will explore ways of reducing the cost, but the requirements and charges for FSA registration are very steep. We are negotiating a lease with Juliet Stallwood Cakes and Biscuits who will use part of the upstairs space as a kitchen. An application for planning permission for change of use for the first floor from residential to A1, and approval of the proposed new shop front, was registered on 2nd August 2011 with Wiltshire council. A response is expected before the end of September. An off‐license application is being prepared. Staff, including volunteers, will be provided with appropriate training in food handling, stock control and till operation. FINANCIAL CONTROLS Semley Shop Ltd (SSL) is regulated by the Financial Services Authority. Day to day, the Shop Manager will have immediate responsibility for the cash flowing within the shop. She or he will carry this out in accordance with financial processes and records established by Treasurer. Cashing up will be conducted daily by the duty manager and a committee member. The Epos till system will provide detailed records of every transaction. These financial controls will be reviewed at regular intervals by the SSL Board of Management and independently reviewed annually in accordance with FSA requirements 9 NOTES Village Support A questionnaire circulated within Semley elicited responses from 52 households totalling 140 people, more than a quarter of the village. These are the main findings: How often would you use a shop: 52 respondents said at least weekly, with most saying 2‐3 times a week. What products would you be most likely to buy: local produce and dairy products were equal first (39); fresh fruit and vegetables, home‐made bread, newspapers and magazines were close behind (34 – 28) with greetings cards, bakery items, Juliet Stallwood’s cakes and the cafe (24 – 20) also popular. How likely are you to use a post point where your parcels and letters can be weighed and correctly stamped: strong support for this, with 45 in the range likely/extremely likely. Other facilities: dry cleaning and shoe repairs very popular, along with a notice board and the sale of tickets for local events. Altogether 55 said they would use a cafe within the shop for coffee, tea or light lunches. There is also considerable interest from the school for nutritious snacks and light lunches as well as coffee and tea in the morning and afternoon at school run time. Location The Stores will be located at the site of part of a former Semley shop. We have vacant possession. The location is ideally situated opposite the school and in the centre of the village, on a road that is fairly busy with local commuters in the morning and evening. The bus service is infrequent and a car is necessary to shop, so the Stores will be particularly valuable for older residents and people with pre‐school children. Planning A planning application for A1 use – retail and sandwich bar – has been submitted. Opening Hours The Stores and cafe will open at times reflecting the stated needs of its customers and shareholders, but we anticipate opening from 8am to 6.30pm Mon – Fri, 8.30 am – 12.30pm on Saturday and 8.30am to midday on a Sunday. 10 Pricing Policy and Mark‐up Products within the shop will be priced in line with other small rural enterprises. Because ‘profits’ will not be the stores’ primary objective it is expected that prices will be competitive with the costs found in the major supermarket chains for those items which are typically available there (e.g. flour, sugar, coffee, soft drinks etc). Our goal is to sell as many local fresh products as possible and we believe these can be priced in line with the other goods, but with lower costs. We expect the average mark up in the Stores to be around 20% and a target gross margin (after cost of sales and wastage) of 16‐18%. We expect variable levels of mark up with the highest on fresh produce, local speciality goods and stationery products such as cards, and the lowest on staples. The Cafe mark up has been calculated at 66%. IMPLEMENTATION PROJECT TIMETABLE AND WORKS for opening 1st NOVEMBER 2011 ACTION AUGUST SEPTEMBER OCTOBER APPLY FOR GRANTS RAISE MONEY LOCALLY PLANNING PERMISSION BUILDING WORKS SHOP FITTING APPOINT STAFF SOURCE STOCK BUY STOCK 11 APPENDIX 1 – HOW OTHER LOCAL SHOPS DO The figures in our forecasts are based on the lower end of the averages. We are estimating 120 transactions of £4.00 per day. Shop Turnover/week (approximate figures) Transactions/day Opening hours Motcombe Kay 852225 £7 ‐ 900/day £4,570/week £19,800/month £237,640/year 190@£4.00 Sunday 9:00 12:00
Monday – Friday
: 7:00 - 6:00
Saturday: 8:00 6:00 Hindon Caroline 820366 Approx £8‐900/day (£320 on Sunday) Ca £5,500 a week Monthly £23,000 £273,242 (actual for 10‐11) (Monday) 172 @ 4.33 average Sunday: 9:00 12:00
Monday – Friday
8:00 - 7:00
Saturday: 9:00 5:00
E Knoyle Janine 830928 Approx £4000 ‐ £4500 90 – 100/day @£4 week About £20,000 a month Ca £240,000 Sunday 9 – 12 Mon – Sat 8 ‐ 6 Freshford, Nr Bath Gitte Dawson 01225 722511 Weekly turnover £5,500 Annual turnover £286,000 200/day @£4.75 Monday – Friday 8am ‐ 6pm Saturday 8.30am ‐ 12.30pm Sunday 9am ‐ 12 AVERAGES Annual Turnover 259,220 Transactions 164 @ £4.26 12