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Great Ryburgh Community Shop
From Norfolk RCC
In Oct 2006, Great Ryburgh Parish Council approached NorfolkRCC as their village shop had given notice that their lease was expiring at the end of 2008 and they were planning to retire. It was the desire of the Council to retain both shop and post office.
NorfolkRCC has been involved right through the process, covering all areas from community consultation, legal structures, business planning, shop design, stocking, sourcing equipment, funding etc etc and continues to give support to help strengthen the business and its role in the local economy
On 2 March 2009 Norman Lamb, MP for North Norfolk, formally opened a new shop and Post Office in Great Ryburgh. The shop has been created by the village, is owned by the village and is run by the village for the benefit of the village. The premises are owned freehold and contain the shop, post office, coffee shop, internet cafe and art gallery. They supply locally grown organic vegetables, organic free-range eggs laid in the village, local bakery and cakes and beer brewed locally from the malt produced at the malting plant in the village.
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BUSINESS STRUCTURE
An early decision was to form a Community Interest Company as the legal structure for the business. The company was incorporated on 11 April 2008 and the structure has proved to be exactly right for this co-operative venture. As a CIC they are, by definition, a not-for profit organisation, which has been essential to obtain grants from organisations that will not provide funds to full commercial ventures. However, as a CIC they have been able to issue shares to raise capital. The Company has 123 shareholders who, between them have invested over £26,000. In accordance with the articles of association every shareholder is a resident of the village and each shareholder has only one vote at a general meeting regardless of the size of their investment.
As a CIC the Company is an asset locked body. Therefore, if the business fails the Directors must pass the assets to another asset locked body such as a charity. The charity nominated to received any assets from Ryburgh Community Enterprise CIC is The Memorial Hall (1914-18) (1939-45) Great Ryburgh, Charity No 303960, which owns the village hall. Thus even if the business fails then the village will continue to own the premises in which they can set up another shop or let to someone else to do so.
The Community Interest Company Regulator, Sara Burgess, attended the opening of the new shop. She was delighted that the CIC framework had been used and described the issue of voting and non voting shares as an innovative way of maintaining community control equally across the villagers and the overall project as exactly what the CIC structure was intended for.
PREMISES
The purchase of the premises was paid for by grants from the Co-Operative Fund and The Emily Fairburn Foundation.
Most of the project costs were kept to the budget, the conversion costs were much higher than anticipated. This was principally caused by Building Regulations. Omissions from the budget were the costs of the property transaction (local searches etc), engaging an architectural technician to produce building regulations drawings and the costs of the Building Regulations applications and inspections.
The impact that Building Control would have on the time scale and the requirements had not been anticipated and planned costs escalated threefold from £20,000.The impact on time delays were also dramatic and the day before opening over 50 volunteers were on hand to get everything into place.
FINANCE
Start-Up Costs. The start-up costs are broken down as follows:
| Item | Budget | Spent |
| Purchase of premises | £35,000 | £35,000 |
| Property purchase costs (searches, Land Registry Fees etc) | | £574 |
| Conversion | £20,000 | £58,916 |
| Installation of Post Office | £12,000 | £11,211 |
| Purchase of previous shop stock and fittings | £8,000 | £5,309 |
| Purchase of furniture fittings and equipment | £4,000 | £4,240 |
| Purchase of initial stock | £10,000 | £5,000 |
| Insurance, rates etc | £3,000 | £2,258 |
| Rent | | £3,110 |
| Advertising | £1,000 | £1,692 |
| Training | | £271 |
| Misc | | £4,102 |
| Working Capital | £5,000 | |
| Totals | £98,000 | £131,683 |
Start-Up Funds
| Item | Secured | Projected |
| Seamless Support Bursary | £500 | |
| Village Core Grant | £20,000 | |
| Co-Operative and Community Finance Loan | £20,000 | |
| Ordinary Shares | £1210 | |
| Preference Shares | £24,600 | |
| The Co-Operative Fund Grant | £31,500 | £3,500 |
| North Norfolk Community foundation | £5,000 | |
| Norfolk County Council – Business Link | £2,000 | |
| East of England Development Agency | £1,500 | |
| Private Loan | £21,870 | |
| Totals | £126,680 | £5,000 |
The funding of the project was distorted by the need to take over the existing shop and keep it open while the new shop was being prepared. Running the existing shop was not in the budget and the need for new premises was driven by the business plan that showed that the existing shop was too small to be viable. This lack of viability was exacerbated by the loss of the post office.
If they had let the shop close many people might have lost confidence in the project and make it harder to raise shareholder funds, but they would lose money keeping the shop open. Generating sufficient profit to pay the wages and the rent out of a turnover of £900 per week was not feasible. So effort and funds were diverted into building up the stock levels to increase the turnover. By the time they moved out of the old premises the weekly turnover was up to £1800.
Keeping the old shop open was not all negative. Many lessons were learned and relationships were built up with suppliers. New lines were tried, some successful and others discarded. However, much more important was the fact that the village could see that changes were being made. The shop was the focal point for keeping the village informed about the plans for the new shop. Overall some of the early trading losses were recouped and the management board are agreed that keeping the shop open was the right decision.
The original business plan for the new shop premises aimed to reach £7500 takings per month by month 12, £9000 by month 24 and £10,000 by month 36, by which time they would be making a profit. In the first week in the new shop the takings were £3234, which equates to a monthly turnover of over £14,000. However, they appear to have settled back since then to around £2750 per week, (£11,900 per month). As a result of this increase in business they now employ 4 staff, all from the village.
POST OFFICE
The RCC lobbied Post Office Limited at the highest level to ensure that this was not lost during the ‘network change’ programme in 2008
When the old post office was running it only conducted an average of 175 transactions per week. The latest data shows that the new Post Office is conducting over 43% more transactions than the previously. Unfortunately Post Office ltd reduced their finance by by over 25% basing funding on the basis of the old figures. Negotiations are now taking place with the Post Office to increase their payments given the massive increase in performance.
SUMMARY
The immediate project aims have all been achieved; Great Ryburgh now has a new shop and a post office that are exceeding expectations. The new shop, the post office and the project that has delivered them have provided a great community boost in the village. The project has run over budget but additional funds have been loaned to cover these costs. Everyone involved in the project has learned and gained in confidence from the experience. A sound foundation has been created from which to deliver the long term aim – the hard work is just beginning!