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| Terre Foods Membership Newsletter
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 Exciting News!
We've got some great news--we have begun negotiations on a location! Last night the Steering Committee made a recommendation to the Board of Directors to pursue a location in the Downtown Terre Haute area, and the Board voted unanimously to accept the recommendation. This location received a very favorable review in our Market Analysis, and has a high sales potential. If everything goes well, we should have a property under contract soon. Due to issues surrounding property negotiations, we will keep the specific location under wraps until it is securely under contract and off the market--but with luck that announcement will be soon, too!
I know most of us have gotten used to things going at a nice, slow (perhaps even too slow) pace, but this is about to change. As soon as the purchase agreement is signed, we will have approximately 90 DAYS to secure financing--that is not much time to come up with a lot of money! We are currently working with the Indiana Small Business Development Center to help us secure financing, which will probably come from a number of sources, banks and private.
We will also need your help more than ever. As owners of the cooperative, it is our responsibility to pull together the funds for a downpayment on a property. We will be going to many sources for this money, but the primary source will be from Member Loans. Member loans are not donations, they are low-interest loans to the cooperative with a set payback schedule (typically between five to 10 years in duration). The minimum loan amount is typically $2,000. We know that not everyone can loan large sums of money, so we are aiming for an average loan amount of $3000-4000, and hoping that those who can will make more substantial contributions to help us raise the funds we need. Our current pro forma budget indicates a total overall project price of just under $1 million. This includes everything from building the store and hiring a General Manager to stocking the store and having an operating budget for the first few months after opening. A project of this size will require a sizable downpayment, so we are setting a goal of $250,000 to raise in member loans and other private investments.
The Steering Committee is in the process of finalizing the necessary documents for taking loans, and we'll let you know when we're ready to start taking loans. Remember, member loans are voluntary--they are not a requirement of membership. However, these loans are necessary for securing financing for our store--without a downpayment, we will not be able to secure financing. Please be thinking about what size loan you can make, and thank you so much for supporting the co-op!
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How is our money being used?
When you joined the cooperative, you bought an equity share in the store,
which means that you are an owner of the store. Members are then eligible to make loans to the cooperative in the form of Member Loans. How are these funds being used to further our project?
This equity money has
largely been held in a bank account until now. We've used primarily
fundraising money, plus a portion of the equity, to pay for our Market
Study. The Market Study has formed the basis for our Business Plan. From here on,
equity money will be used to finance the day-to-day needs of our
startup, including things like lawyer's fees, escrow and "good faith"
money for purchasing a location, retaining an architect and contractor,
office needs and printing, and other similar uses.
Member loans
are more substantial amounts of money. Member loans will be used
almost exclusively for financing the buildout of the store. The
primary use for member loans will be as a down payment for our other
bank loans. In addition, member loans will be used to pay for labor
& contractors, materials, shelving & refrigerator/freezer
cases, and other store needs.
Any member can request to see our books
at any time and verify where funds are being used. Remember, this is your store!
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Successful Collaborations with ISU
At the beginning of the semester we began two collaborative projects with student groups at ISU. One was with the Public Relations capstone class, and the other was with the Business Majors capstone class. I am happy to report that both groups have done outstanding work for the cooperative!
The PR class has put together numerous events, many of which we will be holding over the summer, including a 5K run and a Salsa Cook-off. The students planning includes all press releases, timelines, invitations and paperwork, and more. A huge thanks go out to all the team members of our PR Group!
The Business class, through the SyBA company, put together an excellent Business Plan for our cooperative, including detailed pro forma budgets, sources & uses budgets, and more. Much of this material is based on our Market Study, which will become a huge selling point for financing our co-op, as the study was done by an industry leader and came back very favorably on several locations. The Indiana Small Business Development Center (ISBDC) has begun reviewing our Business Plan in preparation for us to take it to various banks and private lenders; they were very impressed by the document, and think that we are starting from a strong position.
We will be continuing to work with the ISBDC in financing our co-op. If things go well, we are on track for opening in Spring of 2010!
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Board Business
Board meetings continue on the third Tuesday of each month at 7:30pm on the ISU campus (location may rotate during the summer).
The Board will be sending two of its members--Robyn Morton and Karla Hansen-Speer--to the Consumer Cooperative Management Association (CCMA) Conference this year in Pittsburgh, June 11-13. We are looking forward to learning a great deal that will benefit our co-op, as well as hunting for a General Manager!
I know it seems like years away, but our first official Board elections are scheduled for November of 2009. We will have three seats available for election. Current Board members may run for re-election, but the seats are open. As fully-vested members, you are eligible to run for the Board, and strongly encouraged to vote. Please let us know if you are interested in running for the Board, and we can fill you in on the requirements and duties. It's a very rewarding experience!
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Thank you for your member-ownership! More great things are in store, so we'll stay in contact.
In Cooperation,
Robyn Morton, President, Board of Directors
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Contact Info
Terre Foods Cooperative Market
PO Box 3043
Terre Haute, IN 47804
info@terrefoods.org
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