On average, it takes 5 – 7 years to open a new food co-op. That time frame is dependent on many factors: how quickly we build our ownership, secure a permanent location and financing, and hire a talented General Manager. All of these key pieces must be in place to open the co-op and, as you can imagine, we encounter both triumphs and challenges along the way which affect the overall timing of the project.
Since the beginning of our organizing efforts in mid 2012, we’ve taken advantage of the vast resources available to help new co-ops get off the ground successfully. As the saying goes, “Why re-invent the wheel?” The “wheel” is a development model based on best practices in establishing a new co-op. In 2015, PFC received a scholarship to consult with Cooperative Development Services (CDS) to help guide us and keep us focused as we navigate through this multi-faceted, complex process of opening a member-owned, full-service grocery store in an increasingly competitive marketplace.
We have close working relationships with established co-ops such as Common Ground Food Co-op and consult with other start-up co-op groups around the country for peer support and advice. Prairie Food Co-op is also a founding member of the Chicagoland Food Co-op Coalition whose mission is to support existing and start-up retail food cooperatives in Chicagoland through outreach, education and shared resources. Once again - we are not reinventing the wheel but rather following practices that have proven successful in opening cooperative grocery stores across the country.
What has been accomplished so far?
- October 2013 - Initial Owner Drive Launched. Over 100 people became Owners in just 4 weeks!
- October 1st, 2014 - Initial Owner goal of 250 achieved.
- January 2015 - Market Study Completed. The Board hired Debbie Suassuna of G2G Research to conduct a comprehensive Market Study to evaluate several potential store locations in Lombard, create a sales forecast for each site, and make general recommendations based on our communities’ demographics. The Market Study came back with positive results, projecting over $4 million in year one sales (higher-than-average projections for a start-up). The report demonstrates that the Lombard area has sufficient demand for a natural foods grocery store cooperative.
- Spring 2015 - Grant Award. Prairie Food Co-op awarded a competitive $10K grant from Food Co-op Initiative based on the strength of our organization, strong leadership, prospect for success, and the positive impact that our store will have on the community.
- Fall 2015 - Initial Financial Feasibility Study completed. The Board hired Bill Gessner of Cooperative Development Services to complete a comprehensive financial study of the expenses and revenues associated with opening and operating Prairie Food Co-op. The study makes it clear that opening our grocery store is a major financial undertaking, but one that we can achieve. Read more about financial projections here.
- Spring 2016 - Lease Negotiations. The Board began working with a local experienced commercial real estate agent to identify potential store locations and negotiate on our behalf. Site selected by Board - this site had the highest sales projections in our market study with many characteristics that are essential for the successful operation of our food co-op. Initial lease negotiations are very encouraging. 800 Owners needed to sign a lease for this site.
- 800 Owners - Secure our Location. Assuming a preferred site is available, the Board can sign a lease once we reach 800 Owners. 800 Owners demonstrates sufficient support and provides the necessary capital to move forward with confidence.
- 900 Owners - Launch GM Search. The Board will begin a national search for a General Manager. The General Manager will be involved in key operational decisions and oversee store operations.
- 1000 Owners - Capital Campaign. The Capital Campaign will raise the funds necessary to convert our site into a full service grocery store. We will rely on a mix of bank loans, non-traditional financing, and Owner loans to fully fund start-up expenses. The most significant chunk of our revenue will be Owner loans, at about 40%. Owner loans are a fundamental method of funding for modern food co-ops. Traditional lenders require 50% Owner funding before making their loan available.
Evolution of the Prairie Food Co-op Grocery Store
Below is a graphic laying out the process and milestones to achieve along the way: