DUNSFOLD COMMUNITY SHOP & POST OFFICE.

Transcription

1 DUNSFOLD COMMUNITY SHOP & POST OFFICE. BUSINESS PLAN 1

2 Contents. Subject Page No. Table of contents 2 Proposals and Objec:ves 3 The Shop Offer 3 The Post Office Offer 4 Background to the Proposal 5 The Plan 6 Actual Results for year to 31 Jan Financial projec:ons for Year 1 7 Cash Flow 10 Further Shop development 10 Legal MaSers 10 Funding 11 2

3 Proposals and Objec0ves. The exis*ng Village Shop and Post Office will be retained as a Community owned facility with the following principal objec*ves: To retain and sustain a Community Shop and Post Office within the Parish To promote new services through the Post Office counter and extend knowledge of these facili*es outside the village. To support local businesses and the rural economy by providing an outlet for local fresh, frozen, and processed produce. To promote, encourage and provide a central mee*ng point in the village. To be a centre for Community informa*on. To provide services such as Point- of- Delivery and Collec*ons. To be a not- for- profit making enterprise owned by the Community for the benefit of the Community. To provide retail goods and services from a convenient loca*on to all residents. To raise funds for Community projects and enhance our village. The Shop Offer. The Shops offer will be primarily designed to meet the needs for convenience shopping (fresh produce, meal- for- tonight, top- up items etc.) The range will include: Staple products and local produce comprising fresh fruit and vegetables. Frozen food and prepared meals. Bread, milk etc. Wines and spirits. Newspapers and Magazines. Cards and Sta*onery. Top up household essen*als 3

4 Confec*onary Following a refurbishment of the premises we would like to be able to extend the offer to include freshly prepared sandwiches, deli items and even freshly brewed coffee. The Post Office Offer. Following transfer of the Post Office licence the intended new Sub Postmistress (Mrs Annie Wace) will maintain and enhance the current range of services, including: Mail services - Postage stamps, Next Day delivery, registered post etc. Full banking facility for Lloyds TSB and Barclays, plus ATM for a range of other banks Parcels and packages postal point. Car Tax, fishing licences Redirec*on service Business and domes*c. NS&I premium bonds, savings, income bonds. Currency foreign, euro s, traveller s cheques, Travel Money Card. Post Office Ltd phone and broadband services. Interna*onal phone cards, mobile top ups. Insurance products car, home life business cover etc. Council Tax payments Pensions and Benefits We will respond to new services and products offered by the Post Office Ltd such as extending ATM to other Banking Groups, and access to Bank accounts, money grams and enhancing the PayPoint to support payment for water, TV, and topping up pre- paid electric meters etc. 4

5 Background to the Proposal. The older residents of the village will be able to look back to a *me when we had four shops, two pubs, and a very ac*ve school. Times have changed and we are in danger of losing our remaining Shop and Post Office. The present owners wish to re*re but in the present economic circumstances have been unable to a_ract a suitable buyer. The Parish Council has taken the ini*a*ve to form a Community Shop commi_ee with the objec*ve of purchasing the exis*ng premises for the village and to maintain and extend the current Retail and Post Office ac*vi*es. Dunsfold is in a be_er posi*on than many villages which have or are planning to open Community Shops. We already have a stable and profitable opera*on, in a good posi*on on the village green. The ini*al Commi_ee comprises: David Hargreaves Tim Bailey Chairman Treasurer Alan Ground Stephen Hayward Natasha Roberts Barrie Pople Ian Jones Annie Wace It is the inten*on of the Commi_ee to purchase the freehold of the shop and the flat above. This will provide a saleable asset should our endeavours not succeed, and provides substan*al security to those individuals willing to par*cipate in the fund raising. Further the Shop Commi_ee and Management will con*nue to benefit from the 29 years of experience and advice of the current owners, as they intend to re*re next door. The Commi_ee has agreed, subject to being able to raise the finances required, a sum of 225,000 to purchase the freehold of the shop and flat, and the assets and goodwill of the business. The Dunsfold village shop enjoys a unique posi*on in the centre of the village, with safe car parking, and has no direct compe*tor within 3 miles. The Commi_ee has scru*nised the accounts for the last four years which, although unaudited, provide clear evidence that the shop is currently profitable, has achieved growth in turnover, and stable profits, albeit suffering some pressure on gross margins. 5

6 Following the forma*on of the Community Shop Commi_ee we took advice from the Plunke_ Founda*on, which is a Charity specialising in the development of Community services, and circulated a Ques*onnaire to all households in Dunsfold and Hascombe, to gain an understanding of the residents views in rela*on to retaining the shop and post office, the range of services provided, and what addi*onal lines/services should be included in the future. The returns (over 40%) have indicated strong support for the maintenance of this key village amenity, and included many sugges*ons for new product lines and services, and also offers to provide voluntary help for running the shop. In summary, there can be li_le doubt that the Dunsfold shop is a viable business, substan*ally asset backed, and our task now is to persuade the community to take advantage of this opportunity to ensure that the village con*nues to benefit from a sound Retail and Post Office opera*on. 6

7 The Plan. We intend to retain the shop s current year end of January 31 st, which is the due date for comple*on. This means that we have no trading figures for the current year, and we have based our forecasts on the year ended 31 st January 2010, together with discussions with the current owners regarding progress in this year. Actual Results for the Year to 31 January 2010: Q1 Feb to April Q2 May to July Q3 Aug to Oct Q4 Nov to Dec Total Income Turnover 60,240 65,260 65,260 60, ,000 Gross Margin 20.4% 12,289 13,313 13,313 12,289 51,204 Post Office contrib.. 7,294 7,294 7,294 7,293 29,175 Expenses Flat Rental 1,482 1,483 1,483 1,482 5,930 Total Income 21,065 22,090, 22,090 21,064 86,309 Wages & NI 9,780 9,780 9,780 9,780 39,120 Premises 419 1,255 1,255 1,255 4,184 Other exp. ( Acct Q2) 2,787 4,437 2,786 2,787 12,797 Deprecia*on ,057 Total Expenses 13,500 15,987 14,335 14,336 58,158 Profit before Tax 7,565 6,103 7,755 6,728 28,151 Note 1. Turnover has risen in each of the last 4years incl. a rise of 9% in the year to 31 Jan Note 2. Note 3. Gross Margin has fallen slowly in the last 4 years from 23.4% to 20.4% but increased sales have maintained profitability. The figures presented above are the best available but it should be noted that they are not audited. All the figures are net of VAT. 7

8 Financial Projec0ons for year 1. There is very li_le seasonal varia*on in turnover, which is reflected in our forecast for 2010 and We have assumed no immediate improvement in gross margin, and infla*on at 2.5% per annum. We have assumed that our refurbishment plans will disrupt the business in April 2011 with a reduc*on in turnover of some 6,000. We have assumed that new product lines will not make addi*onal contribu*on un*l the second half of We have also assumed no rent receivable from the flat, as we will ini*ally use it for staff services, stock room, and office space. It is our inten*on to refurbish the flat and provide rentable accommoda*on in the future. The Plan indicates the recruitment of a full *me manager, who will cost 20,000 pa. We have also indicated a reduc*on in the cost of paid staff through the use of volunteers, but have been cau*ous at this stage in quan*fying its effect. We hope to increase volunteering. Q1 Feb to April Q2 May to July Q3 Aug to Oct Q4 Nov to Jan Total Income Turnover in y/e 31 Jan 2011: up 2.5% Turnover in y/e 31 Jan 2012: up 2.5% Loss of sales due to refurbishment New product increase sales 5% Projected Turnover for 61,746 66,892 66,892 61, ,275 63,290 68,564 68,564 63, ,707 6,000 6,000 3,428 3,164 6,593 57,290 68,564 71,992 66, , /12 year Gross Margin at: 20.4% 11,687 13,987 14,686 13,557 53,917 Post Office contrib.. 7,476 7,476 7,476 7,476 29,904 Flat Rental nil nil nil nil Nil Total Income 19,163 21,463 22,162 21,033 83,821 Expenses: Wages & NI 13,950 13,950 13,950 13,950 55,800 Premises costs 440 1,320 1,320 1,316 4,396 Other Expenses 2,929 4,662 2,929 2,929 13,449 Deprecia*on ,557 Total Expenses 18,208 20,821 19,088 19,085 77,202 Profit before Tax ,074 1,948 6,619 8

9 Note 1. The effect of rela*vely small turnover and margin increases is quite drama*c. For example, a 10% increase in turnover with a 2% margin gain (considered possible with new lines) increases the profit before tax by 11,000 as shown below: Q1 Q2 Q3 Q4 Total Turnover increase 10% 69,619 75,420 75,420 69, ,078 Gross 22.4% 15,595 16,894 16,894 15,595 64,977 Increase in Gross Margin 3,907 2,907 2,208 2,038 11,060 Note 2. Note 3. Note 4. Note 5. Note 6. No figures are available for the part year to 31 Jan Turnover has been assumed to increase by 2.5%, and the present owners confirm a gently rising turnover trend. Assumed no rent receivable from the flat un*l resources available for refurbishment. Payroll costs assume recruitment of a full *me manager at 20,000 pa, an increase of 2,500 for newspaper delivery, and a reduc*on in other staff costs of 20% through the introduc*on of voluntary assistance. Shop refurbishment costs es*mated at 10,000 and assumed to be covered by grants. Post Office assumed retained on exis*ng terms. Note 7. Purchase comple*on assumed to be on or before 31Jan Note 8. Gross margins remain the same in Year 1 of ownership, and increase by 1% in each of the next two years. Based on these assump*ons and projec*ons we are cau*ously predic*ng annual profits of: Year 1 6,600 Year 2 15,000 9

10 Cash Flow. As stated, the business enjoys a very stable weekly turnover and, apart from monthly newspaper accounts, the turnover is essen*ally cash. VAT payments are made quarterly, and in the year to Jan31st 2010 were: May 500 August 1000 November 460 January 200 The August payment falls in the most profitable quarter, and there is no history of bad debts. Because of the stable nature of the turnover, purchases are similarly regular and stable. It would be the aim of the new owners to increase the use of local suppliers on a credit account basis. Given a working capital float of say 3,000 at the start, there is li_le reason to suppose that cash management will present significant problems. Further Shop Development. Following comple*on we will draw up a programme for modernisa*on and refurbishment, including extension of selling space into the store room area at the rear of the shop. This will then allow for reposi*oning of the staple lines newspapers, milk, cigare_es etc allowing us to offer a wider range of fresh vegetables and fruit, some deli products, fresh cakes and confec*onary. A small range of everyday pre- packed hardware will also be introduced. All these new products should be capable of increasing our overall gross margin. Steps will also be taken to improve the external presenta*on of the shop, enhance adver*sing of the services available, and to explore opportuni*es with Waverley BC to improve car parking in the vicinity of the shop. Organisa0onal & Legal MaOers. On behalf of the Community, the ini*al start up Commi_ee have registered an applica*on to the Financial Services Associa*on via the Plunke_ Founda*on, to sponsor the Management Commi_ee s submission to register as a Co- opera*ve and Community Benefit Society 10

11 working to Plunke_ Founda*on Model Rules. The registered name is Dunsfold Community Shop Associa*on Ltd. Funding. A number of grant applica*ons have been made financing the capital purchase of the shop premises, notably; Plunke_ founda*on will contribute 20,000 grant plus a 20,000 loan from the Co- op Bank. Surrey Community Ac*on are reviewing our applica*on for a 20,000 grant. The balance of the finance for capital purchase will come from the proposed Share offer to residents of Dunsfold and Hascombe. There are further grants available for the refurbishment stage of the project from the Leader of SCC, and the Surrey Leader programme, when we are aware of the costs associated with this work. 11