Sun 9 Jan 2022 3:58PM

Solidarity and Support in 2022

MJS Martyn Johnston (Chapel St) Public Seen by 149

Hello everyone, I’m writing to you with regards to our current position, as we enter the new year we are experiencing a worrying cash flow situation, and kindly ask for support to help safeguard the future of our cooperative...

Without support of grants from government and other social enterprise support funds, we would not be here and continue to operate in a budget deficit. Furthermore, as a startup community business formed in 2018, we do not have sufficient reserves to operate in deficit for long without continued and reliable sources of income, and currently find ourselves in a precarious position once more having not received any grant income or significant agency commissions in the last quarter of 2021.

We are confident that our cash flow position will turn around, as it has done before, and we are hopeful to receive further grant support through the Additional Restrictions Grant administered by the local authority of between £10,000 - £25,000. We are also confident that both our creative agency Chapel Street Studio and Bread + Roses have the momentum they need to survive and achieve the sales targets to ensure we emerge from the pandemic more sustainable than ever before.

With up to date financial information we are in a position to create an accurate budget and cash flow projection for 2022 based on operating costs and sales income from 2021. We expect to have this ready and available to share with those interested w/c 17th January, and we have P&L with budget vs actuals from the first three quarters of 2021.

We've requested a repayment holiday from our landlord and a continuation of the 50% rent agreement into 2022. We remain in a repayment holiday for our Government-backed bounce back loan, which we used to refinance the expensive startup loans, and we have also contacted our bank to request a short term extension to our overdraft should we require it.

Over the past 18 months we have restructured and built a team of much more experienced people, improved our board and governance, and indeed our financial policies and procedures, and we have found optimism in the momentum and team cohesion of rebuilding our two cooperative businesses over the past year. And yet, the uncertainty of our precarious cash flow position looms large over this newly formed and confident team.

Our jobs, our livelihoods, and the future of our organisation hangs in the balance. In the context of another uncertain year and our current cash flow situation, I'm wondering if any other cooperative from the network may be able to support us by way of contracting creative services from our cooperative creative agency in the first quarter of this year to help us achieve our sales targets and improve our cash flow position in the immediate future?

Happy to meet to discuss our position or the services we can provide further with anyone interested.

Also hope this is a helpful thread to kick off in the new year, for others in the same position, and for us to call on the strength and support of our cooperative network in times of need.

Solidarity from Bradford, West Yorkshire.


Graham Sun 9 Jan 2022 5:05PM

Assuming this is a temporary situation - your projections once ready will help to indicate when and how you move into profit - you should be able to raise some additional loan finance to get you through the cash-flow squeeze from https://coopfinance.coop. I might have a bit of work coming up on some front end web devt. Send me an email and we can explore that further. Happy also to lend my 30 years of marketing/sales experience if helpful, in an advisory capacity.


Nathan Brown (Co-op Culture) Mon 10 Jan 2022 11:40AM

Societies also have the ability to make a public loanstock offer or community share offer as a means to raise cashflowing finance.


Martyn Johnston (Chapel St) Tue 11 Jan 2022 1:15PM

Thanks Nathan for that suggestion, that is an interesting idea although it is probably not the best time or reason to raise public investment, especially as we have aspirations to purchase the building we occupy through community shares sometime in 2023...if we make it that far! But perhaps this is a consideration for when we do, as an opportunity raise cash reserves as well as finance the purchase of a building.


Nathan Brown (Co-op Culture) Wed 12 Jan 2022 11:00AM

I would defintely include cashflowing requirement in your business plan and then your target investment for the community share offer can be £building purchase + £workingcapital


Simon Ball (Blake House) Mon 10 Jan 2022 3:59PM

Hi Martyn, I'm sorry you're going through this - we're in a very similar situation, so sending our solidarity and if anything comes up workwise I'll get in touch.


Martyn Johnston (Chapel St) Tue 11 Jan 2022 1:17PM

Thanks Simon, I'm confident things will turn around, its just never easy is it. Despite all the years of progress, do you ever get the feeling you're still a startup?


Simon Ball (Blake House) Tue 11 Jan 2022 1:29PM

my thinking has taken me to thinking that the only way out of the infinite infernal startup circularity is to cut dependency on clients providing income and working out how to generate revenue without banking on the email inbox pinging you in some new work....but it's easier said than done, and a bit of a gamble..but yolo init

for what it's worth, knowing you i believe that you'll figure it out, and you're just sailing through a bit of a rough patch before discovering the new world 👍


Nathan Brown (Co-op Culture) Wed 12 Jan 2022 11:04AM

It's part of the nature of being a service provider. Unless you can bag a client who will have lots of repeat work (perhaps these should be your target customers), everyone else in your sector will be in the same boat. Relying on the email inbox ping shouts to me "need a marketing strategy" - a plan to generate next year's work and beyond.


Simon Ball (Blake House) Wed 12 Jan 2022 1:05PM

yeah it's not really a good deal at the end of the day though is it, as you can find yourself operating a bit like a factory/mill producing identical items and driving yourself insane by telling yourself that this is a normal and acceptable way to live a life. it seems then that when you step off the conveyor belt 5 years worth of emails disappear as the only loyalty that existed in the customer's mind was that to the service rather than to the provider. so you're left with the choice to humiliate yourself by trying to jump back on the conveyor belt, or find a better way forward - and you can only truly answer that dilemma in one way (unless you're into humiliation).


Nathan Brown (Co-op Culture) Thu 13 Jan 2022 10:26AM

I know we've gone off at a bit of a tangent but perhaps the problem lies in capacity? You need someone in the co-op who is dedicated to marketing, bringing the work in, while the rest of you are busy at the conveyor belt earning the income. Something to consider perhaps - are you below the capacity required to be viable and do you need to plan for growth? how much working capital do you need to create that role before it starts generating income? is your pricing right to support a larger worker team? and a host of other questions. Are you actually at the growth rather than start-up stage, having proved the product/service and the market? If your intention was to create another job(s) then you might be able to apply for some funded support. Anyway, if the way your co-op is working is driving you insane then a strategy session is probably well overdue. even a half day out of "the mill" to objectively review whats going well and what's not in a SWOT analysis can reveal opportunities. Worker co-ops should meet their members needs rather than the other way round :-) Good luck!


Simon Ball (Blake House) Thu 13 Jan 2022 1:51PM

ye I'm probably at the 'disillusionment' or 'bemused bystander' stage at this moment in time 😆 but i suppose marketing only works if you know the audience that you're trying to inveigle - so perhaps the hurly-burly i'm experiencing at the moment is due to not wanting to attract unambitious/pusillanimous consumers who waste your time!


Graham Thu 13 Jan 2022 1:59PM

inveigle - "Persuade (someone) to do something by means of deception or flattery.". I'm thinking you may have an unhealthy perception of what marketing is all about. If you understand the service you want to provide, and the type of client you want to work for, marketing is simply the process by which you bring the two together. No deception or flattery is required. In my experience marketing works, but you have to do it.


Simon Ball (Blake House) Thu 13 Jan 2022 2:11PM

yes I know the meaning. I suppose I can only choose words based on my experiences and indeed marketing works in two directions, as the client markets to the cooperative that they are the type of organisation a cooperative should want to work for. So for clarity the choice of word is the perception that we engaged in flattery while our clientele engaged in a form of deception. Maybe one for the pub/temperance society hey.


Martyn Johnston (Chapel St) Tue 11 Jan 2022 1:10PM

Thank you Graham. We are pursuing that option and have engaged with Kevin the new Investment Manager at CCF. I don't know when but I may take you up on that offer of support when we have something specific for you to advise on!


Kayleigh Walsh Outlandish Tue 11 Jan 2022 3:54PM

Hey @Martyn Johnston (Chapel St) I am joining all of the people who have already expressed solidarity with you. I know what it's like when you're struggling to get work and finances become an issue, it's happened to us too and I know how stressful it is. In response to your start up question – from what I understand, (unfortunately) it's normal for small businesses to experience peaks and troughs so I think it's part of what running a small business entails. It doesn't mean it's easy though.

I have a few suggestions (that you didn't ask for) but have helped us in the past, so I thought I'd share them:

  • We've contacted previous clients with a few suggestions about what we could do to update/fix/progress work previously done

  • Tweeted/publicised that we're available for work

  • Got in touch with the networks that we're part of: CoTech/Tech4Good/Agencies for Good to ask if they need support delivering work

  • When it's got really close to the line, we (the workers) have reduced our day rate which in effect is lending money to the business to keep it afloat. It meant that some/all of us (I can't make assumptions) needed to make changes to our lifestyle for the time being, because we were taking on the financial risk by reducing our salaries, but it did help keep us going as a business. It wasn't obligatory.

  • More generally, we sell support to people which is a bucket of hours paid upfront and can be worked on adhoc. It means you secure the income straight away.

Much love and I hope you're all alright. I really need to say that I don't think any of this is easy, and I really hope it doesn't come across as condescending. I thought it might be useful to let you know that we've been there quite a few times, and share what's helped.

In solidarity



matt wilson Wed 12 Jan 2022 11:01AM

Really sorry to hear about your struggles. My own coop is also in a precarious place due to the pandemic, and there's little I can offer (through the coop or personally) to help I'm afraid - but one thought was that if you could write a separate text of your request to contract work from you then myself and others could send it around as an email, re-post, etc.

In solidarity.