Small co-op expands in a big hurry
In the fall of 2007, an envelope landed on my desk at Common Ground Food Co-op (Champaign-Urbana, Ill.). Inside was a letter saying that our landlord of 33 years would be selling the building the co-op was housed in and would not renew our lease, which was up very soon. We could stay on month to month until a buyer was found, however long that was.
I did what any reasonable general manager of a tiny co-op (900 square feet of retail, $750,000 in annual sales, and no savings to speak of) would do after receiving such a letter—I put my head down and started pounding the desktop with my fists.
But all was not as bad as my initial response indicated. Two years earlier, the co-op’s board of directors and staff had led a visioning process with the co-op owners. While many different ideas and dreams arose, there was one central theme. Our co-op would need to move out of the basement where we had started over three decades before, to expand and come into the light of our greater community.
At that time, we did not have a management structure and were still led by coordinators, some of them unpaid volunteers. To get us ready for relocation and expansion, the board began a general manager search and formalized other positions such as grocery manager, produce manager, and front-end manager.
The board also sought outside advice and found that the board itself would need to modernize by learning and adopting policy governance. They embraced the task with gusto and, in August of 2006, finally found their general manager.
In late 2007, when told we would not be allowed to renew our lease, we had been planning an expansion for 2009. We were not ready, but we had to be. We took the bull by the horns and got to work with a plan to expand and relocate by June 2008. On Aug. 22, 2008, we opened the doors of a beautiful new store in the heart of our community, with more than double our original retail space. Since opening, it has been a runaway success.
Small co-ops, take heart!
I could write a novel about the amazing story of Common Ground’s metamorphosis. But what I really want to do here is reach out to other small co-ops that have struggled to modernize, that are having a hard time imagining how they would ever pull off an expansion. Tiny co-ops can feel very isolated in the food co-op world, where they are too small to take advantage of some of the programs and assistance that are available to larger co-ops.
What I’d like to say to tiny co-ops that want to make the move to a bigger store and more modern operations is: You can do it! There are co-op resources that will help the little stores. You just have to get out there and ask for it.
Here are some of the key choices and actions that made our expansion project a success:
1. Invest in consulting. We invested in working with Bill Gessner of Cooperative Development Services—Gessner’s involvement and mentoring throughout the project were amazing. Never worked with a consultant before? Just can’t afford it? Neither could we. But if we hadn’t, we might not have made it at all. It was a gamble that paid Common Ground back in spades.
2. Seek advice from other co-ops. We had no interest in reinventing the wheel. We reached out to General Manager Jan Rasikas at Viroqua Food Co-op (Wis.) and Francis Murphy, general manager of Neighborhood Co-op Grocery (Carbondale, Ill.). These two and others in the co-op field went above and beyond to help Common Ground and were gracious about our frequent panicked phone calls and emails. We’ve continued these mentoring relationships and have found them to be an amazing resource. Call other co-ops in your region and introduce yourself to the general manager. Let them know what you are working on—there are many ways they can help you.
3. Leave no funding source unturned. Gessner encouraged us to go after every opportunity, and we did. We dreamed big for our member loan program and exceeded our goals. We reached out to members who had given up on the co-op years ago but still believed in its vision, as well as to those who shopped at our store every week and filled volunteer shifts. We sought out grants, city/county/state loans, conventional lenders, and cooperative lenders. In the end, the biggest investors in the project where those who already believed in the cooperative vision, but all of the avenues explored yielded some financing. Gessner taught us the value of never giving up the fight until you’d actually gotten a firm “No” from a lender…and maybe not even then.
4. Keep the owners engaged. We didn’t know it at the time, but a key to our success was our very communicative style with our co-op owners. I wrote to our owner e-list at least twice a week with updates on the project. They knew when the store design plans arrived in the mail, the day the business plan was completed, what new staff we were bringing on board, who the consultants were on the project, all of it. During our member loan program, they got weekly updates, but as we got within two weeks of our deadline they got daily updates on our loan total. The excitement was contagious. We also held open meetings with the board and owners on many relocation issues and conducted a survey of the owners to learn what they wanted in a new store. The owners have since told us that they felt like it was really their store. Engaged owners are committed owners, and they make more loans, bigger loans, and shop more in their new store because of it.
5. Take your identity and build on it. What do you do best? What is your co-op known for? We have other locally owned competition, as well as big box stores that are starting to carry organics at low prices. We needed to share what was special about the co-op, and we needed to make a feature of it in the new store space. For Common Ground, it was our amazing Produce Department (still 20 percent of store sales) and our long relationships with local farmers. People trusted us when it came to local because we know all the farmers and have worked with most of them for years, long before local was hip. This became the basis of our identity when we started reaching out to the greater community to get them interested in Common Ground. We built a larger-than-average Produce Department for a co-op our size, a section that delights your senses with an explosion of color when you first walk in the door, making our local and organic produce section the largest in central Illinois.
This is just the tip of the iceberg of all we learned during our expansion process and our successful first year after the move. Carefully planning an expansion and taking years to get organizationally prepared is best. But if you are like us, and circumstances force your hand, it can still be done with a ton of hard work, perseverance, and great support from other co-ops and consultants. The sharing of time and knowledge from other co-ops was a huge component of our survival, and now we are thrilled to have some knowledge to share when other co-ops call us.
We’re already starting plans for our next expansion in two to four years. Gessner, Murphy, and Rasikas had better be ready for their phones to start ringing off the hook again!