The Startup Forecast...with Bonnie & Jacqueline

The Startup Forecast...with Bonnie & Jacqueline

• 1.
  The 2019 Startup Weather Report and Forecast
• 2.
  2012 - 2017
• 3.
  Why do startupsfail? We’ve studied our data on the closed startups twice now, in 2012 and 2017, and the reasons were consistent: Poor location. Too small for the market. Inadequate parking. Under-capitalized. Cut corners, underestimated costs. Pushed Timeline. Moved forward too fast with too few owners. Not enough community awareness and buy in. Reliant on Owner Labor. Professional, trained staff are a must to meet customer expectations, competently run the store.
• 4.
  Recent Weather
• 5.
  What are theodds ? 2008 - 2017 76%Of startups that opened were still open. As of 2019 Of startups that opened are still open. 72%
• 6.
  It’s a littleless sunny. And it’s NOT all gloom and doom, but you have to know the odds and factors. Then we’ll get to the sunshine stuff!
• 7.
  Recent Closures Startups thatclosed in the last two years, some key reasons why. Closed Startup #1 Biggest reasons: LOCATION Going First Closed Startup #2 Biggest reasons: LOCATION Going First Board Muscle Owner Connection Closed Startup #3 Biggest reasons: Market Study Marketing Location GM Talent New Model Closed Startup #4 Biggest reasons: LOCATION Location Location
• 8.
  Struggling Recent Opens Startupsthat opened in the last two years that are way under on sales, some key reasons why. Startup #1 Biggest reasons: poor store design Weak Board Very Soft Opening GM talent Startup #2 Biggest reasons: Market Study Execution Board Dysfunction Marketing Owner Connection GM Talent Location Green Top FC Biggest reasons: last minute competition Marketing Soft Opening Visibility Startup #4 Biggest reasons: Market Study Execution Weak Board GM Talent Marketing Weak Board Visibility STRONG, HEALTHY BOARD
• 9.
  New storm frontsto be aware of: Capital Market Studies No Soft Openings Marketing
• 10.
  Capital: Be weather prepared! •Expect to need to raise more from owners – Fredericksburg/$1.8 million, Prairie/$2 million • Court multiple lenders • Grants – you won’t get there without them, period. Go after them earlier, harder, get a fiscal sponsor • Cooperative lenders are lending less to startups across the country • Collateral – a bigger and bigger issue. Understand it. • Costs continue to go up – trade issues driving up prices. Don’t go low on equipment/build out costs!
• 11.
  Market Studies: Be weatherprepared! • Use our Market Study Action Guide process, identify assumptions, know them, adjust if not meeting them • Interview the providers in depth, make sure they truly understand your plan/community, pick for fit • Preliminary market studies are a MUST in stage 1/early 2A, don’t wait, know what you are up against • We cannot currently recommend using any but the “big two” as others have been far more off or are unproven • There’s less room to wiggle, you must meet the assumptions laid out OR prepare for less sales • Market study providers are getting *far* more conservative, it’s going to impact your pro forma • More variability between results from trusted providers
• 12.
  NO Soft Openings: Beweather prepared! • Set the expectation – the GM needs to know coming in that a soft opening is not acceptable and plan for it; share with the the FCI memo • Budget for it – don’t cut opening staff budget, ever. Plan for the time needed to do it right. • Opening Day = Grand Opening – be ready to “kill it” the first day open to the public • We use to do a “soft opening” and the perfect/finish the store until grand opening • New trends – less chances to impress a shopper “1-2 shopping trips” • Consumer expectations are up, willingness to shop down; yes, even core cooperators
• 13.
  Brand/Marketing: Be weather prepared! •Court owners too – bring them along during construction, do targeted marketing to get them excited • Budget for it – don’t cut opening marketing budget, ever. Spend every dollar, strategically. • Retail branding – get professional help making the transition from startup branding to retail store branding, invest in branding the store exterior and interior • Marketing Plan – must have a strong one, invest in it • We used to assume owners would show up without being courted, not true anymore • Weak marketing can be corrected for, but it’s a short window and the lost sales will hurt for years • Brand recognition is WAY UP as a factor with all shoppers and you don’t have it, you need a strong brand at opening!
• 14.
  Wait, where’s theGM stormfront?
• 15.
  Trends! Rainbows! Sparkles! OR“what about delivery, food trucks, on-line ordering?”
• 16.
  The trends reality: On-lineshopping Delivery Meal kits Large, urban-density, established co-ops are starting to see success. Large co-ops with commissary kitchens are working out the kinks of this idea now.
• 17.
  Focus on openingyour cooperative grocery store – it will take all your resources! • If you want a successful retail grocery co-op, focus on opening in the right location, with the right product mix, with the right leadership - that’ll take all you have for at least the first two years, even if things go great. • Your startup will be small to medium volume, you will not have the volume, in the beginning, to support these trends; you could in the future • As established co-ops with resources work out the kinks in these trends you can adopt what’s working, let them do the R&D while you learn to be a solid grocery store for your community!
• 18.
  Yes, it’s gettingtougher to open startup food co-ops than it once was, and not all startups will or should go forward. But many still will get open – and innovate, and lead!
• 19.
  WELCOME ACCESSIBLITY COMMUNITY INNOVATION