Sun 9 Jan 2022 3:58PM

Solidarity and Support in 2022

MJ Martyn Johnston 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 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 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!

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