Stebbing Village Stores Business Plan

Stebbing Village Stores

Business Plan
 
March 2013



               
Contents Page Number
1. Executive Summary 3
2. Stebbing 4
3. Benefits of a Community shop 5
4. Support for a Community Shop 6
5. The Competition 8
6. Proposed scheme 9
i)     Premises 9
ii)     Legal structure 10
iii)     Product offering 12
iv)     Opening Hours 14
v)     Staffing 15
vi)     Marketing Plan 16
vii) Financial data 18
7. Fundraising 20
8. Appendices
i) Current Membership of the Steering group 22
ii) Constitution of the Steering group 23



1) Executive Summary
Stebbing is a small rural village in Essex with a population of around    1200 living in 561 households. The village has been served by a small convenience store in various guises for some years, which ceased to trade in January 2011.
The nearest available stores are some miles away and transport links are poor. A Steering group was formed to investigate the possibility of establishing a community run shop within the village.
There is strong public support for such a scheme which would run as an Industrial and Provident Society, returning any profit generated to the community.
The aim of the project is:
‘To provide a shop run by the community that meets the needs of the community and provides a consistent and reliable service at fair prices’
It is estimated that a minimum of £20,000 will be required to establish the community shop which will be raised by issuing shares and grant applications.
Keeping costs to a minimum is key to the success of the project and it is aimed to staff the store predominently with volunteers.






2) Stebbing
Stebbing is a village situated in rural Essex with a population of approximately 1200 residents living in 561 Households . Around 12% percent of residents are aged over 70, whilst c12% are under 18 years old.
The village is no longer served by a local shop which in the past has offered general convenience items and a post office. The nearest alternative store is three miles away. The nearest supermarket is 4 miles away.  Whilst car ownership in the community is high, transport links for those who do not have their own transport to alternative stores are very poor.
The premises housing the previous village store have now had a change of ownership. The owner has local connections with Stebbing and would like to support the village if possible by allowing the premises to be used as a village store once more.
The Stebbing Village Stores Community Steering Group was formed to investigate the viability of a shop run by the Community for the benefit of the 1200 members of the community.

Benefits of a Community Shop
Maintaining a shop within the community has several key advantages,
• A shop within the community alleviates social isolation for the older or less able members of the community that do not have access to alternative stores. It provides a hub for those caring for relatives and children, to get to know neighbours and provide a sense of belonging.
• Community shops generally use volunteers and for those who work in the shop, this can provide a sense of purpose and allow them to interact with the local community, where otherwise they may have remained at home. This is also likely to increase their physical activity, improving health as a result.
• Community run shops allow a business to survive where commercial enterprises may fail.
• Community shops are run to serve the needs of the community rather than generate a profit to support the proprietor.
• Communities with a local shop are considered more desirable places to live.


3) Support for a Community Shop
As a result of continuing requests for a village shop, a committee was formed to look at the viability of establishing a community shop.
The committee is made up of members of the community with a variety of skills and experience including management, marketing, fund raising, project management, accountancy, procurement and retail experience.
The committee is working in partnership with The Plunkett Foundation. There are around 283 community shops in the UK, with a further 20 planned for 2012. The Plunkett Foundation supports rural communities wanting to set up and run a community owned shop and provides free practical assistance through www.plunkett.co.uk , support via community retail advisers, a directory of community shop case studies, legal advice and various publications.

4) The Competition
 Shopping habits have changed over the last 10 years. Many people now take advantage of the convenience of internet shopping. As a result, local shops have had to adapt to these changes, to continue to create demand.
The nearest supermarket to Stebbing is 4 miles away. However all the major supermarkets are represented in the neighbouring towns of Braintree, Chelmsford and Bishops Stortford. Internet shopping is offered in the locality by Tesco, Morrisons, Sainsburys, Waitrose, Asda, Lidl and Iceland.
Research shows2 in the East of England, there is on average one convenience store for every 1918 people. Convenience stores are located in the neighbouring villages of Felsted, Rayne and Bardfield, as well as a range of more speciality stores such as butchers, delicatessens and bakers. There are also a number of farm shops locally, supplying fresh produce.
To assess the competition to the proposed community store and the opportunities to develop the current business, an assessment of the projects strengths, weaknesses, opportunities and threats was made.











            _______________
2 Survey by the Association of Convenience Shops in September 2012
Strengths Weaknesses
• Project has support of community
• Experience of The Plunkett Foundation to support project
• Opportunity to improve layout of a refurbished store.
• Shareholders in the new venture will be committed to success of scheme.
• Transport links to competitors are weak.
• Local money remains within the local community.
• Committee will support local producers
• Carbon emissions reduced by enabling residents to shop in the village
• Volunteering builds community spirit • Target market is currently shopping elsewhere - need to change habits.
• Future business will require volunteer staffing -this will require coordinating and may not be reliable.
• Relatively small store with limited options to develop range


Opportunities Threats
• Design and deliver a store to meet villagers needs
• Potential to reduce staffing cost by using volunteer support.
• Opportunity to work in partnership with local businesses / societies
• Support suppliers in local area.
• Launch will generate engagement with new and improved store.
• Provide work experience for local people.
• Use skills of the village to set up a sustainable community shop
• Opportunity to offer community services
• Opportunity to offer electronic bill paying services
• Delivery service offered by major supermarkets.
• Supermarket in nearby town.
• Lack of grant funding available as we are in a recession.
• Community apathy




5) Proposed Scheme
The purpose of the Stebbing Village Stores steering group is
‘To provide a shop run by the community that meets the needs of the community and provides a consistent and reliable service at fair prices’

i) Premises
In September 2012 a survey by the Association of Convenience Shops found that:
• 53% are up to 1000 sq feet
• 35% are 1000 to 2000 sq ft
• 12% are 2000 to 3000 sq ft
WHAT SIZE IS OUR SHOP
The proposed community shop will continue to operate from the previous retail premises.
The community shop steering group will lease the premises from the current owner. The initial lease is yet to be agreed but is likely to be for a rolling 12 month period. This will allow the committee to assess the success of the project before committing to a longer term lease.
Community shops operate across the country in variety of forms. Some operate in purpose built premises owned by the local people; some simply operate in a room within a building in the community e.g. the local pub.
By remaining in the current double fronted premises, we retain the benefits of being located in the hub of the village, just opposite the primary school, offering passing trade.
The store layout will be designed using CAD software to optimise the space in the shop. Local skills from the village have already been secured from volunteer tradesmen, to re-fit the shop. Fixtures and fittings will be recycled as much as possible from shopfitters stripping out other premises or alternatively purchased from grant funding and share sales.

ii)     Legal Structure
The legal structure for the proposed Stebbing shop wasconsidered by the steering group and after considerable research and review, it was agreed the preferred structure for the Stebbing Village Stores should be an Industrial Provident oSciety.
Full details of the implications of this structure can be found on the  Plunkett Foundation website (www.plunkett.co.uk).
The benefits of this structure are:
• It allows the committee to raise funds for the project by the issuing of shares.
• Shareholders may influence the management of the shop by electing management committee members and voting on issues at the AGM.
• Profits generated by the project are returned to the community.
• The Plunkett Foundation have prepared a set of model rules for such a structure that are tried and tested by more than half of community owned shops in England and Wales.
• The structure defines the Committees constitutional arrangements.
The current Stebbing Village Stores Steering group has a defined constitution (Appendix Two).
As the purpose of this committee is to launch a community run shop, it is envisaged that on completion of this goal, the steering group will be dissolved and a management committee will take over the continued operation of the store. The management committee will define its own constitution, which will include election of members, distribution of profits and arrangements for an Annual General Meeting.

iii)     Product Offering
A survey2 across the East of England in September 2012 found the following:
• 70% of independent stores provide bill payment services
• 1/6 offer home delivery
• 77% of customers live within 1 mile
• 84% use the shop at least once per week
• 27% of over 65's visit their shop daily
• average spend per visit is £5.63
Questionnaires issued to the villages of Stebbing during September and November 2012 requested information on what the target market required from a village store.
The overriding message was that customers wanted a reliable service from the store and a consistent product offering.
There was demand for good quality fresh produce.
The older members of the community regard the village store as an asset that helps them maintain some independence in being able to shop for themselves without having to rely on the help of others.  Their demand was for a variety of fresh and ambient produce at a reasonable price.
There was also a demand from some members of the community for some luxury lines and convenience foods.
The product offering in the community store will include:
• Bread and bakery lines.
• Fresh milk and dairy products.
• Newspapers and magazines
• Ambient groceries –tinned and packet foods
• Fresh fruit and vegetables
• Frozen foods
• Confectionary
• Luxury  foods
• Toiletries and basic medicine supplies
• Household cleaners
• Wines and beers
As with any business it will be important to continually review the product offering in order to ensure customer feedback is taken on board and weaker selling lines are not continued.
The Stebbing Village Stores steering group will investigate opportunities to work in partnership with local businesses to develop an ordering service for products such as butchery and wines.
The layout of the new store will be designed using CAD software to maximise the space available for stock on sale, whilst allowing for good customer flow and excellent visibility and security. Expertise on the layout and design of the shop has helped shape the new store.

iv)      Opening hours
It is anticipated the shop will be open as follows:
7:00 am to 7:00pm Monday to Friday
7:30am to 6:30pm Saturday.
8:00am to 6:00pm Sunday.      
The original survey of households indicated that the community wishes to see the shop open 8:00am to 6:00pm Monday to Saturday and 8:00am to 12:00pm on Sundays.
Previous owners have reported one of the busiest times for the shop was first thing in the morning, when shoppers were travelling to work and buying breakfast and lunch items.
Footfall will be reviewed frequently when the store is launched to ensure its opening hours meet the demands of the local community, whilst acknowledging the limited resources available to staff the shop with volunteers.

 v)      Staffing
The steering group recognises the need to be competitive and is committed to ensuring we do not price our range out of reach of the target market. The committee will manage costs carefully to keep them to a minimum.
Experience from other community shops illustrates this is a common theme. Many stores operate fully or partly on volunteers, to reduce staffing costs.
Staffing this project purely on volunteers would require a large commitment of time from the volunteers involved and the management committee.
The Stebbing Village Stores steering group will recruit one salaried full- time member of staff (or two part-time staff) to take responsibility for the day to day running of the store. The remaining hours required to fully staff the store will be supplemented by volunteers. A team of around 30 people will be required to commit time on a regular basis, but for short periods of time, of around four hours.
This situation will be continually reviewed and the possibility of increasing salaried staff hours explored as necessary.
Training will be provided for all staff members to provide them with the key skills required to perform their role. This will include H&S training as well as product and till training.

vi)    Marketing Plan
The Steering group has the following objectives prior to opening:
• Raise awareness of the projects aims
• Include the community in the process of starting up a community shop.
• Gain commitment from volunteers
• Gain financial support to raise funds to start up the business.
The steering group is using the internet via Facebook to outline our objectives, view the business plan, express interest in share ownership and link to other relevant sites such as The Plunkett Foundation.
Once the village store has opened, the marketing objectives will revolve around the promotion of the shop and its services. Marketing planned for the shop includes:
• brand image - a brand identity will be developed for the shop which will be used on all promotional material, communications and the website.
• launch event - an event will be arranged within the village to promote the opening of the new project and invite people to come to view the offering.
• website - a website will be developed to include details of opening hours, contact details, product offering and promotions. The website will also allow the opportunity for customers to feedback on what they want to see in store.
• marketing activities – sampling / offers. The store will take part in various marketing activity, e.g. recipe of the week, sampling of selected lines.
• support for local activities – the store may support other groups e.g. donation of raffle prizes in return for publicity in a programme.

vii)    Financial Data
Set up costs
Initial funds will be required in order to begin trading:
• Establishing the business as a legal entity.
• Funding a salaried member of staff for the start up period.
• Funding the lease during the start up period.
• Initial fitting-out and merchandising of the store.
• Initial investment in stock.
• Licence fees.
• Marketing.
• Initial training of staff and volunteers.
The committee has estimated an investment of £30,000 will be required to cover these costs.

Financial Projections
The community shop will be run for the benefit of the community. An agreed maximum surplus will be retained within the Community stores accounts and any profits generated above the agreed surplus cap will either be invested back into the business or donated to a community project voted for by members at the AGM.
The committee has estimated the running costs of the village store and the turnover required to cover these costs. The store aims to cover its running costs by the end of the first year.
 The projection requires the business to generate a turnover of £200,000 per annum, which equates to circa £4,000 per week.
This would require half the households (280) in Stebbing to spend £10 per week in the store (assuming that 23% of shoppers would be from outside the village).

6) Fundraising
As previously outlined financial investment will be required to launch the community shop.
 These funds will be raised in the following ways,
i) Issue of Shares.
Shares will be sold at £10 each.
More than one share may be issued to an individual. Shareholders become members of the Society and have a right to vote at the AGM. Members may vote just once at the AGM, regardless of how many shares they hold.
As this is a community project, dividends will not be paid to members. Instead, any profits will be donated to community projects as voted for by the members. If the Society fails, the share value is non-refundable.
If half the adults in Stebbing supported the project by purchasing just two shares each, the project would raise £10,500 towards set up costs.
ii) Loans.
If any member of the community wishes to make a more substantial contribution to the scheme, they may donate funds in the form of an interest free loan.
The committee can also approach financial institutions for a loan but this would incur interest charges which would drive up overheads.
iii) Grant Funding
The Committee is investigating all routes of funding available from grant schemes.
Schemes currently under investigation are
• The Essex Big Society Fund
• Awards for All
• The Stansted grant
• The landfill grant
• Plunkett??????????







Appendix One
Current Membership of Steering group
Peter Hall (Chair)

Nick Hamilton
Michael Wood
Tim Goodbody
Frances Barnes
(Secretary)











Appendix Two
Stebbing Village Stores Steering Group Constitution
1 Name
The name of the Organisation shall be Stebbing Village Stores Steering Group.
2 Objectives
The objectives of Stebbing Village Stores Steering Group shall be to promote the formation of a retail outlet within the village of Stebbing that meets the need of the Community.
3 Management
(i) Stebbing Village Stores Steering Group shall consist of an Organising Committee, comprising not less than three and not more than seven members.
(ii) Stebbing Village Stores Steering Group shall elect the following key Officers from among its members: Chairman, Secretary, Treasurer.
(iii) Stebbing Village Stores Steering Group shall take all actions, consistent with law, to further the objectives of the Organisation.
(iv)     Stebbing Village Stores Steering Group shall establish a Community Shop Management Committee that will take over all the responsibilities of that Committee upon its formation and thereafter carry out all the stated objectives of the Stebbing Community Shop Steering Group.
(v) Stebbing Village Stores Steering Group shall be dissolved upon the formation of the Community Shop Management Committee.
4 Finance
(i) Stebbing Village Stores Steering Group shall have the authority to raise funds on behalf of the Organisation and apply those funds only to further the objectives of the Organisation.
(ii) Stebbing Village Stores Steering Group shall have the authority to open a bank account and shall authorise members of the Committee to operate the account on its behalf.
(iii) Any funds remaining in the Stebbing Village Stores Steering Group bank account shall, upon dissolution of the Committee, be paid directly into the Community Shop Management Committee bank account.
(iv) If the Stebbing Village Stores Steering Group is dissolved without the community shop being formed, all remaining funds shall be returned to the relevant agencies.

(v) No payment shall be made to a member of the Stebbing Village Stores Management Committee, except to reimburse approved expenses (for which a receipt shall be required) incurred in the work of the Committee.

5 Quorum
The quorum for Committee meetings shall be one third of Committee members.
6         Alterations to the Constitution.                                                                                                                                                  Any changes to this Constitution must be agreed by at least two-thirds of those Committee members present and voting.
7 Dissolution
The  Stebbing Village Stores Steering Group shall be dissolved upon the following grounds:
(a) One third of the membership of the Committee agree to dissolution.
(b) Failure to meet as a Committee for a period of four months.
(c) The Community Shop Management Committee is formed.
This Constitution was adopted by