Business Proposal for Establishing a Community Shop in Otterton
1. Mission Statement:
To cater for the needs of Otterton Villagers through the provision of a community convenience shop run sustainably and profitably and located in the former snooker room in Otterton Village Hall.
2. Summary of business idea:
To operate a community shop in Otterton offering a broad assortment of goods for Villages on a “not for profit” basis producing a surplus which will be ploughed back into the shop and other community projects.
A survey to establish the need for a Village Shop was undertaken in early 2012. 32% of the forms which were distributed were returned. Of the 113 forms returned only one was against the establishment of a Village Shop. A total of 55 Villagers offered to help in the Shop while 80 offered to buy £50 bonds, some people offered to purchase several bonds. 28 Villagers offered to provide specialist help. In February 2014 at the Otterton Village Hall AGM the Hall Committee very kindly offered the snooker room as a location for the Community Shop and preparations are under way to open a Village Shop there in 2014.
3. Strategy, expected outcomes and needs to be met:
a) Expected Outcomes:
- To develop and sustain a Community Shop within the Parish of Otterton.
- To be a “not for profit” enterprise owned by the Community for the benefit of the Community.
- To provide retail goods and services from a convenient location to all residents and other customers.
- To provide a financial surplus to be invested in the Shop and Community.
- To support local businesses and the rural economy by providing an outlet for local fresh and processed produce and other local products.
b) Needs being met:
- Convenience Shop products and services available for purchase within Otterton for Villagers and others at a competitive price.
- Local producers will supply the Shop.
- Part of any financial surplus will be ploughed back into local Community organisations such as the Community Hub, the Church, the Village Hall and Village Clubs.
- See business idea at 2 above for the survey assessing the need for a shop in Otterton.
4. Choices: what other options for action have been considered and why have they been rejected:
The Village Shop and Post Office closed some 8 years ago and since then Villagers have had to rely on shopping in the local villages of East Budleigh and Colaton Raleigh or the large towns of Sidmouth, Budleigh Salterton and Exmouth.
Discussions have taken place with the owners of Otterton Mill to see if they would extend the offer in its shop, which is a tourist destination, or provide a site for a community shop. The owners declined. The possibility of buying a temporary container shop, from East Budleigh Parish Council and locating it in the car park of the Kings Arms Hotel has been considered. After much discussion this proposal was rejected due to the expense of siting the shop in the car park and the temporary nature of the shop – it is likely that only temporary planning permission (3 years) would be granted by the EDDC Planning Services Department.
The owner of the Kings Arms Hotel, which is tenanted, has offered the use of the car park as a location for a community shop however initial discussions with the landlord have indicated that permission would not be given for such use.
Discussions have also taken place with the Otterton Village Hall Committee to see if there was a suitable location for the Shop within the Village Hall. After considering locations within the Hall and its curtilage in 2012 it was decided not to site the Shop in the Hall as there was no satisfactory location. Shortly after taking this decision the Village Shop Committee was approached by Reverend Anne Charlton, Vicar of St Michaels and All Angels Church, Otterton. St Michael’s PCC was considering re-ordering the Church to provide a community hub and Reverend Charlton suggested to the Shop Committee that it might wish to consider locating the Shop within the re-ordered Church or community hub. After discussions with the PCC the Shop Committee agreed to this suggestion and identified a suitable location for the Community Shop within the re-ordered Church.
Several members of the Village Shop Committee joined St Michael’s PCC to form a steering group to direct the re-ordering of the Church employing an architect to produce outline plans and designs for the re-ordered Church/community hub. After an 18 month period and several meetings with the Diocesan Advisory Committee, the plans were agreed in principle. In the meantime the quinquennial review of the Church indicated that major repairs were needed to its roof, gutters and downpipes to prevent the ingress of water. Until this remedial work is completed it is unviable to locate a community shop in the Church due to damp. As a total of around £800,000 is required to carry out the roof repairs and re-order the Church, the Village Shop Committee decided to approach the Village Hall Committee once again to discuss the possibility of locating the Community Shop there.
5. Focus: what are the assumptions being made and the constraints that are accepted? Were the size, scale and complexity within limits?
- The Village Shop Committee has assumed that Otterton Villagers will use a Community Shop (see 2 above).
- It is assumed that it will be successful by catering for Villagers needs and those customers passing through the Village (passing trade).
- It is assumed that the turnover will be approximately £80,000 in year 1 of trading rising to approximately £100,000 by the end of the third year of trading. The Village Shop Committee has visited and studied the operation of several local community shops, attended seminars and is receiving professional advice from a retail consultant employed by the Plunkett Foundation.
- The Shop will be located in the former snooker room of Otterton Village Hall occupying approximately 40m2. It is anticipated that fitting out the Shop to a good standard will cost between £10,000-£15,000. The Shop space will be rented or leased under licence from Village Hall Committee.
- It is anticipated that the funds to undertake this project will be raised from the Community, from grants and possibly from bank loans.
- The amount of stock required to start trading, assessed from other similar enterprises amount to between £8,000 -£10,000.
- The size, scale and complexity of the Community Shop project are easily within the capabilities and limits considered by the Shop Committee and the Community in Otterton. Although it will be run independently the Shop will be located within the curtilage of the Village Hall.
Requirements for employed personnel are one part-time manager and approximately 40 volunteers plus the support and time of the Shop Committee.
Agencies and organisations needed to support the proposal for a Community Shop in Otterton are;
- The Villagers, already significant support has been shown via the survey (2 above).
- The Village Hall Committee.
- The Parish Council.
- Devon County Council, including the elected member.
- East Devon District Council, including the elected member.
- DCC Highways Department.
- Plunkett Foundation.
- Community Council of Devon.
- Clinton Devon Estates (CDE leases the land on which the Village Hall is located to the Village Hall Committee and has to agree to the location of the Community Shop within the Hall).
7. Area of work: Pestle and SWOT Analysis:
To be completed later.
8. Risk Analysis:
- No suitable location – low risk.
- Insufficient funding – low risk
- Insufficient number of volunteers to run Shop – low risk
- No suitable manager – low risk
- No insurance for Shop – low risk
- No agreed legal structure for the Shop – low risk
- Insufficient number of customers – low risk
9. Marketing Strategy:
Limited market research and analysis has been undertaken at present. The Village Shop survey carried out in early 2012 clearly demonstrated a need and support for a shop by Otterton Villagers – see 2 above. The Village Shop Committee has undertaken research investigating a number of other community shops operating in Devon and elsewhere in the South West and has concluded that those specific factors which make community shops successful, such as those in East Budleigh and Ide, can be replicate in an Otterton Community Shop.
The Shop Committee is also aware of two other community shops located in their local churches and contact has been made with them. Further research and analysis is being undertaken along with on-going surveys and focus groups to establish what specific merchandise and services will be offered. Advice is also being sort from the Plunkett Foundation and the Community Council of Devon.
a) Existing and future workload: it is considered that there are sufficient offers of help from Villagers to cope with the future workload of a Community Shop. 55 Villagers have offered to help. On the basis that each of them will contribute 2 hours each week this gives a capacity of 110 hours/week which should be more than adequate to run the Shop under the supervision of a part-time manager.
b) Timetable and milestones: now that a suitable location in the Village Hall has been identified for the Village Shop the Committee intends to drive forward the project with the aim of opening the Shop in the fourth quarter of 2014. A consultant is being employed to draw up plans to apply to EDDC Planning Services Department for a change of use of the snooker room. Village Shop Committee members have been delegated different responsibilities to ensure all aspects of the project are covered to meet a late 2014 opening.
11. Social returns from operating the Otterton Community Village Shop:
- Creation of one part-time job.
- Creation of a new local business.
- Enhancement of the local rural community by the purchase of local products for sale in the Shop.
- Training opportunities for a minimum of 55 people.
- Positive impact on the environment by reducing vehicle journeys to local villages and towns for products and services that are offered by the Community Shop.
- Increased visitor and tourist spend in the community.
- Shop may well be a meeting place and information point for Villagers – particularly older Villagers and those with young children.
- Production of a financial surplus to support other organisations in the Village, such as the Community Hub, the Church, the Village Hall and Village Clubs.
- Improved purchasing opportunities for those not able to drive.
The resources needed to get the Shop under way are;
- Refurbishing the snooker room in the Village Hall to achieve a suitable standard for fitting out as a Community Shop.
- Funding for all aspects of establishing and running the Shop.
- Personnel including a part-time manager.
- Training for volunteers.
- Legal structure to establish the Shop as a community facility.
- Attractive product and services offer.
Resource flows, particularly financial, will be at their tightest immediately before opening the Shop when it is fully stocked and no sales have taken place and all the volunteers have been trained i.e. lots of outgoings and no income.
14. Return on investment:
Research into other rural community shops serving similar sized villages to Otterton suggests that the gross profit on sales should be around 20%; turnover in the first full year of trading will be approximately £80,000 rising to £100,000 in year 3. The amount of stock held by the Shop will be valued at between £8,000 and £10,000 and the surplus generated in the first 3 years will vary between £3,000 and £7,000 per annum.
The two attachments at Appendix 2 and 3 show expenditure in the first year setting up the Community Shop and sales and retained profit for the first three years of its operation. Return on invested capital works out at 10.6%, if the stock required to run the Shop is included, 8.2%.