Business Plan for: Burley Gate Community Shop

Business plan contents

Executive Summary…………………………………………………………………………………………………………….3

1 Introduction.................................................................................................................................................................3

2 Business details............................................................................................................................................................4

3 Key personnel...............................................................................................................................................................5

Vision...........................................................................................................................................................................6

4 The business idea.........................................................................................................................................................6

5 Business goals..............................................................................................................................................................6

6 What makes the business different..............................................................................................................................7

7 Legal requirements.......................................................................................................................................................7

Marketing...................................................................................................................................................................8

8 Market research and opportunities..............................................................................................................................8

9 Target customers..........................................................................................................................................................8

10 Managing market risks...............................................................................................................................................9

11 Promotion and advertising.......................................................................................................................................10

Running the business..........................................................................................................................................11

12 Staff..........................................................................................................................................................................14

13 Premises...................................................................................................................................................................14

14 Start up costs................................................................................................................Error! Bookmark not defined.

Finance..........................................................................................................................Error! Bookmark not defined.

15 Profit and loss forecast.............................................................................................................................................16

16 Sourcing finance.......................................................................................................................................................18

17 Managing financial risks...........................................................................................................................................18

18 Cash flow forecast....................................................................................................................................................19

1. Introduction

This Business Plan details how we intend to establish a new Community Shop and Post Office in Burley Gate.

Burley Gate is in rural north-east Herefordshire whose location is now superbly indicated by an innovative weather-vane feature on the roundabout at the junction of the A465 and the A417 roads. There is a village hall and a primary school in the western part. It is at the centre of the several parishes: Ullingswick and Felton lie to the north; Moreton Jeffries, Little Cowarne and Stoke Lacy to the north-east; Ocle Pychard to the south-west; Preston Wynne to the west and Much Cowarne to the south east (hereafter known as the community). These parishes with a combined population of over 1000 form the immediate catchment area of the proposed Community Shop and Post Office. The nearest towns are Bromyard (6 miles), Ledbury (10 miles), and Leominster (10 miles) with nearest city being Hereford (8 miles).

Burley Gate is divided between the two Group Parish Councils of Ocle Pychard and Much Cowarne. Bromyard rural district (5 parishes) is home to 6,100 people. As with other rural area in Herefordshire, it has an older age profile than Hereford city and the other market towns, with a relatively small population of young working age adults and a relatively large proportion of older working age people. The map below shows Burley Gate Community Shop will be at the centre of the catchment area although it is anticipated that its position on a main road and adjacent to a school serving seven parishes will greatly increase customer demand. Burley Gate also has the only main road Post Office facility in the 15 miles between Bromyard and Hereford.

Burley Gate catchment area residents are amongst the most likely in the county to find it difficult to access a number of services including a bank or cash point, and a regular transport facility. These are seen as important and in need of improvement by residents of “rural and

dispersed areas” such as those in the rural area around Bromyard and particularly those in the Burley Gate catchment area. Because of these factors it is imperative that a replacement should be found when the current shop and Post Office closes in July 2015.

In order to continue and extend the services provided by the current shop a group of local residents has come together to establish a Community Benefit Society. Initial surveys show a strong interest amongst the catchment population to have a Shop and Post Office retained in Burley Gate. In order to attract investment and plan for the creation and management of this shop, this Business Plan sets out in detail how this will be achieved.

2. Business detailsBusiness name: Burley Gate Community Shop

Address:Burley Gate Village Hall, Burley Gate, Hereford, HR1 3QR

Legal status: Community Benefit Society

The business purpose is to : Acquire, refit and operate a portable building as a community shop and Post Office stores located within the Village Hall car park with frontage onto the main A465. The hall is adjacent to Burley Gate Primary School and Pre-School.

In July 2015 the only shop and Post office in the locality will close. This would leave the community without any access to retail or Post Office facilities. The Community Benefit Society aims to raise sufficient capital from a mixed portfolio of community shares, loans, donations and grants. This capital will secure the goodwill and some fixtures and fittings from the existing shop and to refit a portable building and install a new Post Office ‘fortress’.

The new shop will stock an increased range of locally sourced produce and aim to increase the levels of turnover compared to the current shop, which has been diminishing as a natural process of winding down the business pre-retirement. The new shop will also capitalise on the potential business from passing trade and the primary and pre-school traffic.

An initial survey distributed through the community newsletter showed overwhelming support for having a local shop and post office which was endorsed at a well attended public meeting - see the table of results below

3. Key personnelDetails of Management Committee3.1) Martin Hoskins - Co Chair

Martin has been in business and management since leaving university. He is the chairman of Much Cowarne Group Parish Council and Burley Gate Village Hall Management committee. Currently employed part time as an engineer project manager.

Key skills brought to the business: Business skills; practical skills and local knowledge. Used to employing staff.Business experience and any training undertaken: I have been in business since 1971 as a first generation farmer; I also diversified forming a successful grounds maintenance business. I have First Aid and Risk Assessment training as well as various practical certificates.

Martin has a BSc Agriculture (Hons). London University.

3.2) Audrey Nunn - Co Chair

Audrey is a former secondary school teacher who headed a large department. She is highly active in the local community organising exchange trips to Slovakia. She assists at the Conquest Theatre (Bromyard), edits newsletters, is a member of the Burley gate Village Hall committee, and a former member of the Much Cowarne PCC. In addition she has been a consultant to Oxfam and worked on and visited projects in the Developing World conducting Anthropological research and fieldwork.

Audrey has BA (Hons), Cert Ed., D. Phil.

3.3) Julia Hoskins - Secretary

Julia moved to Moreton Jeffries 37 years ago and helped build a farming business with her husband. During this time she has been Director and Secretary of two family farming businesses; managing payroll, VAT, accounts etc and all office administration.

In addition she has been extensively involved in the local community, holding many posts at various times of Chair, Secretary and Treasurer of local Playgroup, Church, Village Hall, Ploughing Society etc. She is also a long standing Governor of Burley Gate School.

She has a Degree in Horticulture and graduate Secretarial Qualifications in Business Organisation.

3.4) Leon Dodd - Treasurer

Leon is a qualified accountant with over 40 years experience in industry and commerce including retail businesses. Resident in Much Cowarne for 18 years he is a former member of the Much Cowarne Group Parish Council.In particular, he spent over 25 years in the engineering industry and established his own accountancy business some 15 years ago. Currently he is a self employed accountant offering business consultancy, business planning, accountancy and payroll services.Academic/professional qualifications: ACMA CGMA - Associate Member of the Chartered Institute of Management Accountants and Chartered Global Management Accountants

3.5) Giles Blackmore

Giles has developed a versatile and wide range of personal, technical and business skills based in the defence and security industry. His work has required interaction with staff at all levels up to and including CEO level (FTSE250). Key roles have included: Business and Data Analyst (£120M+ turnover), hands on Project Manager of security and IT infrastructure improvement projects; business process re-engineering; and projects to improve staff engagement.

In addition, Giles is the Deputy Chair of Ocle Pychard Group Parish Council, and Deputy chair of the Burley Gate Village Hall committee.

He has a BSC (Hons) Environmental Science and a Post Graduate Diploma in Business Administration.

3.6) Jennie Hermolle

Jennie is an experienced Marketing Professional with full Post Graduate Diploma in Marketing qualifications from the Chartered Institute of Marketing. She has 15 years experience of brand management and general marketing experience with a range of companies from blue chip to SMEs.

The majority of her marketing experience has been in the food and drink industry. She is passionate about promoting quality, local food and drink.

Her skills include full mix marketing activity (encompassing advertising, sales promotions, events, sponsorship, social media, websites, market research, packaging, new product development, commercial analysis etc), managing large budgets, project management, and developing engaging consumer brands.

Her most recent role is Marketing Manager at Wye Valley Brewery Ltd but she is currently setting up a marketing consultancy business for artisan food and drink producers.

3.7) Ruth Jones

For the last 12 years Ruth has been a head hunter for the legal profession and owner of Matley Legal - an independently owned boutique executive search service specialising in placing quality teams, Partners and Senior Associates into major Law firms within the UK and outside.

She came to live in Ocle Pychard 19 years ago with a son who has attended local schools, and clubs which has led her to develop a wide network of contacts and friends in the community. As such she is keen to give something back and help try to keep the heart in our community by lending what services she can to making sure we do not lose the last local amenity we have – our village shop and post office.

Ruth has a Law Degree, an HNC in Business Studies and is a member of the International Compliance Association (post graduate qualification in anti-money laundering).

3.8) Barry Lawrence

Barry has been a Burley Gate resident for the past 19 years and a daily user of the current Shop and Post Office. He took early retirement in 1996, and moved from Berkshire to Herefordshire where he set up and ran a self-catering holiday cottage (Holly Lodge) for nine years.

His previous career of 38 years was as a Chartered Librarian working at locations in the Home Counties and in Central London. This involved day-to-day interface with the public and dealing with their demands – good training for a village shop.

Founder member and Vice-chairman of the Much Cowarne History Group and co-author of three books on parish history. Former Chairman of the Bromyard & District Local History Society and on Much Cowarne Group Parish Council for 13 years with ten as Vice – Chairman where I was involved in the compilation and publication of the joint Parish Plan in 2007. Currently Minutes Secretary of the Burley Gate Community Shop Steering Group.

4. MISSION - The business idea

Our Mission is to safeguard a vital social asset of our rural community by providing a shop and post office run for the benefit of the local community.

Burley Gate Community Shop and Post Office aims to provide full facilities following the planned closure of the existing village shop and Post Office in July 2015. The Society intends to acquire, refit and refurbish a portable building on the Village Hall car park which will have a new ‘fortress’ installed to increase the security to meet Post Office standards.

The shop will provide : Every day groceries – both fresh, store-cupboard, household and frozen; Locally produced foods and drinks - including alcoholic drinks; Full Post office services; Newspapers and magazines; A differentiated range of seasonal and added value items to boost footfall and income; A friendly community focal point where neighbours can meet, friendships can form and

be maintained, local information can be exchanged, all to protect and enhance our sense of community.

The community shop will be operated by a combination of paid staff supported by volunteers and will stock a greatly enhanced range of products including a significant uplift in the number of locally sourced products compared to the existing shop. It will provide a range of Post Office facilities so that local residents are able to access services within the village, reducing the number of unnecessary journeys by car and reducing the reliance on very limited public transport in the area.

The community shop intends to operate the following trading hours : Monday to Friday - 8am to 5.30 pm Saturday - 8am - 12.30 Sunday - 8am - Midday

We expect to achieve £97,000 turnover including the post office services within the first year of operation and an operating margin in the region of 40% on non post office sales.

The shop and post office would serve the residents and local businesses in the local community. Passing trade will also be targeted to boost income and thus support the viability of the enterprise.

The Society intends to raise the capital for the business start up, in the region of £48,000 through a combination of community shares (50%), commercial and community loans (25%), grants and donations (25%).

All surpluses from the trading activities of the Society will be used for a Community Benefit with the minimum interest being payable on loans and shares to secure the required capital for the business.

5 Business goals

1. In our first year our targets are :

To raise £48,000 from community shares, loans and grant by early May 2015 To identify any shortfall in community shares issue financing and identify willing lenders

by May 2015 To purchase, relocate and refit a portable building to the Burley Gate Village Hall car

park by June 2015 To train and employ a sufficient number of staff and volunteers to operate the village

shop and Post Office by June 2015 To open a new community shop and Post Office in the building by July 2015 To achieve a first year trading turnover of £97,000

2. In 3-5 years our targets are :

Successfully trading at £120,000 - £150,000 per annum. Employing 4 staff (with provision for apprentices if appropriate) plus volunteers. The mix

of paid staff to volunteers will be subject to change over time as the business develops. Increasing Society membership to include as many of the local community as possible. Considering options for a new build relocated community shop and Post Office in the

village

6. What makes the business different ?

It will stock a wide range of local produce It will offer a community hub and social contact for residents It will be run by local volunteers and engage with the community It will reduce the number of unnecessary journeys outside the local community to

other retail shops in local towns thereby increasing the local multiplier effect in the local economy

7. Legal requirements

As a shop we have to abide by HSE, Consumer, and planning laws. The full list and key risks we face are detailed in the attached Risk Register. (See appendix)

Marketing

8. Market research and opportunitiesA further survey of the local community revealed more support for the Community Shop with more than 80% of respondents saying they would use the shop/post office at least once a week and over 50% would use it over 3 times per week. (See Chart 1: How often would you use the Community Shop ? in the Appendix)

Other results of the survey show that :

More local people will buy products in the new shop - across ALL product categories.

Crucially, in all categories* more local people will buy regularly*except 'Beer, Cider, Wine' which is equal.

The most significant opportunity to increase sales are in o 'Fresh Fruit and Vegetables' (+109% woud buy these

regulary in the new shop)o 'Milk, Eggs, Butter/Spreads' (+72% would buy these

regularly in the new shop) o 'Cheese and cooked meats' (+156% would buy these

regularly)o 'Fresh Bakery Bread' (+34% would buy them regularly)

(See Chart 2: Change in Shopping Habits, in the Appendix)

In addition significant opportunities for incremental revenue exist in the following NEW product categories:

'Food from local producers' - nearly half local residents would buy in this category, 24% would do so regularly

A café - 36% of local residents would use this 'Sliced, bagged bread', which 21% would buy regularly (and this is incremental since

fresh bakery bread would actually increase in sales)

One of the important categories which of course we have not been able to survey is the passing trade. We do know that other community shops in similar main road positions have up to 50% of their business from passing trade.

9. Target Customer Groups

The following are our target customer groups:

1. Local residents2. Families with children attending pre-school and primary school3. Local older people at risk of social exclusion due to rurality4. People without access to their own transport5. Passing trade

10. Managing project risks

The Management Committee have identified a range of risks to this project and maintain a Risk Register that will be reviewed at regular intervals in our meetings. The current Risk Register is attached and covers:

Identified Risks; Likelihood of the Risk occurring; Impact of the Risk; Actions to Mitigate the Risk; Comments/Progress.

Obviously this is subject to change as the project progresses

11. Promotion and advertisingThis will be a continuous and important element and will include advertising in:

Local community, church and school newsletters; Hoardings and banner signs at junctions; Local radio; Press Releases to the Hereford Times; Local magazines (eg Bromyard’s Off The Record Newspaper) Social Media; Word of mouth; Leaflets distribution; Events and promotions; Website.

Running the business

12. StaffThe intention is to employ a shop manager who will be assisted by volunteers. Staffing levels will be adjusted according to the development of the business and its requirements.

13. Premises

The shop will start in a portable building in the village hall car park with a view to moving to a more permanent location in the future.

14. Start-up costsThe table below shows the key elements of cost which will be needed to set up the Community Shop and Post Office. More detailed analysis is available in the attached spreadsheets.

£Telephones and broadband 200

Equipment 3,000

Stock 3,000

Professional fees 1,400

Portakabin 13,500

Advertising pre start-up 600

Consumables 380

Licences 500

Training 100

Security/health and safety equipment 1,250

Post Office purchase and relocation 21,300

Working Capital 2,770

TOTAL £ 48,000

15. Profit and loss forecast

You can also download the profit and loss forecast table shown above in Microsoft Excel format (XLS, 52K).

Year 1 (£)

Year 2 (£)

Year 3 (£)

Total expected sales 97,638 115,278 118,657Less variable costs 48,419 58,103 59,846Gross profit (sales less variable costs) = 49,219 57,175 58,811

Calculate your gross profit margin % (gross profit divided by total sales x 100) (A)

50.0% 50.0% 50.0%

Salaries/wages (survival income + any staff 15,960 16,359 20,960

Premises (including rent, rates, utilities) 1,500 1,555 1,610Telephone and broadband 216 300 325Printing, post and stationery 240 275 300Advertising and promotion 850 900 1,000Bank charges 300 360 372Professional fees 360 360 360Insurances 600 600 600Bank/HP/Interest (payable to your bank) 660 660 660

Consumables 360 425 500Equipment and vehicle leasing 300 315 320Depreciation 9,700 7,525 5,894 Total fixed costs 31,046 29,634 32,901

Net profit (gross profit less fixed cost) 18,173 27,541 25,910

Calculate your net profit margin (net profit divided by total sales x 100) 9.4% 24 22

16. Sourcing finance

Total borrowing requirement for the business

17. Managing financial risks (such as, sales are less than forecasted or start-up finance takes three months longer to obtain)

Key risks are listed in the Risk Register, including risks to start up funding costs, and cash flow. Start up risks and ongoing risks will be monitored by monthly (or more regularly if necessary) review by the Shop Management Committee of the Risk Register. With access to a qualified accountant the committee can review possible financial risks

Staff, especially the paid manager, will be advised of the Risk Register and encouraged to feedback on changes, progress on mitigating actions, or any new risks they identify in the day to day running of the shop.

18. Cash flow Forecast and Profit and Loss - see Appendix

19 Managing operational risks

Ongoing operations and risks will be managed by the Management Committee using a Risk Register maintainned by the Shop Manager which will be subject to regular review on a monthly basis.

See Risk Register in the Appendix

Appendix

How often products from different categories are currently purchased versus how often they would be bought in the new shop