Budget planning and approval
The current Willy Street Co-op bylaw 8.2 requires that the membership approves the operating and capital budgets for the organization—this month is the beginning of the budget planning process for the drafting of the next fiscal year budget to begin July 2nd, 2007 (FY2008). The proposed operating budget uses a number of different sources of information including actual income and expenditures for the first two quarters for FY07, projected income and expenditures for the second two quarters for FY07, and past performance from previous years to make our best estimates of what our future performance will be in FY08.
The job of budgeting for future years is complicated—more so now than ever. The recent changes in the grocery market (Trader Joe’s) along with known future redevelopment (Whole Foods Market) makes the crystal ball murkier. Additionally, our current site is beginning to show stresses and strains of over-utilization. It is a matter of pride that we can report that our sales per square foot is amongst the highest in the region, yet that high sales per square foot makes it more and more difficult to provide you with the high quality of service you have come to expect.
In FY2001, annual sales were $7.78 million—in this fiscal year we should effectively double that amount to over $15 million in annual sales. This will have been done without increasing the size of our back room or parking lot—the pressure is on. Sales growth has flattened to some extent—prior to 2005, our annual sales growth at 1221 averaged over 12 percent. This year we can expect a seven to eight percent sales growth. Obviously, as the sales base increases the percent of increase will naturally decrease—but double-digit sales growth at the current site is not on the horizon. Our initial estimates for our next fiscal year are for our sales increase to be in the five percent range, leading to projected $16 million in annual sales. Once we reach the $16 million sales level that translates to $1,684 sales per square foot—that is something to be proud of and worried about at the same time!
The process at this point is to seek input from department managers on the respective budgets—operations and capital. Management will prepare a preliminary draft of the budgets for the Finance Committee to review. Once the Finance Committee agrees with a draft, a recommendation budget is presented to the Board for approval. If the Board accepts the Committee’s recommendation, that document is presented to the membership for final approval. As we grow and as the business we operate becomes more complex, another approach would be to have the Board approve our budget and that the membership could approve the actions of the Board through the election process. BUT, this change in process could only take through a bylaw change that may be presented in the near future—stay tuned.
The Regent Market Co-op board, staff, and membership met January 23rd for their annual membership meeting. There was not a board election, but acknowledgement that seven board members—not twelve—now constitute the board. Cooperatives are the product of many people’s contributions. I would like to thank those board members that chose not to run for another term for their contributions to the continued success of the cooperative model in Madison. For more up to date information about RMC contact Jim Huberty, general manager, at: email@example.com.