Like Minded Angel Investors

An opportunity to create a local resource has arose and I'm hoping for guidance on angel investors or formation of co-ops, or other ideas that may help?

Background: Small rural town of just under 400. One gas station four miles north at a Hwy junction. No other stores for twenty miles in any direction. We HAD a store/cafe/gas/cabin rental but the owner slowly let it fail and didn't keep books so couldn't manage a sale when it became necessary. If was frustrating having a resource so close and yet neglected to the point of no use to the people here. Now the place is up for real estate auction.  There is a LOT of potential. We NEED somewhere to grab milk, to fill our tank before heading to town without backtracking, to get some ice cream when it's 105f out, to make a quick propane exchange...the building is around 2500 sq ft and there are three cabins and full hookups for RVs on the back side. Fuel tanks are aboe ground and in good shape.

The goal is a kind of general store. Picture a small convenience store/gas station with a drive through coffee window (none for an hour one way, a half hour the other!). A corner with bulk dry goods and a cooler containing dairy ingredients for emergencies. Some animal feed. Fencing repair materials out back. A seasonal ice cream counter. A limited menu cafe in the near future. Picnic area for a rest stop (none along this six hour long state hwy).

The equipment inside needs help, the building needs a face lift. There are at least four of us willing to dedicate time and talent for free for awhile to get this going. Between us we have facility maintenance, management and business administration skills, along with lots of retail and customer service to run the place. Depending on the co-op situation can quite possibly find more. In the three years we've lived here our town has grown ten percent and every house sells fast. All incoming are young families, many are active.  

It's hard to know where to start and with little funding. ANY ideas welcome.

I am not an investor.

Have you talked to the owner of the building?  To me that is my first question.  How much rent do they want or are they willing to go into this venture with you.

Who will your customers be?

Are there things you can do to get the public interested in buying from you.

If you do get this business set up start with a small inventory and build up from that with the profits.

If there is a nearby campground sell firewood, hot dog, buns, etc.... Do you get my drift?
Bread, milk, diaper and sort drink comes to mind.

Sound like an opportunity that it would be a pity to miss, to re create the local convenience store that you all want.

My first suggestion is to come up with a business plan. It doesn't have to be super detailed but you do need to make sure that you can cover wages, unless you rely entirely on volunteers, and that can work of course. I run a little rural store (not as big as the one you plan) and holidays are a distant dream.
You may already have thought of all this if so I apologise, but even a charitable investor will want to make sure that the money is going to a good place.
As well as the purchase price, you will have equipment and refurbishment costs, maybe advertising and internet site costs.
Initial stock can be quite significant. Ours is roughly 10% of our annual turnover. A little high because the 'get you out of trouble' category can be slow (but is really appreciated when people need it today!)
Don't forget working capital. This is where most small businesses fail. Ours is about 5% of turnover, but runs pretty short out of season!
Once you have a ball park figure to work with, you will have more idea as to how feasible the whole thing may be. In the UK there is funding available for local food, community shops. Have a look at the Plunkett Foundation. There may be similar organisations in the US, maybe there is something on grants.gov

As well as figures pictures will help - can you visualise how the store will look, lots of photos of happy families shopping, maybe some quotes as to how great the store will be. Stories help a lot if you go for a crowd funding route.
Good luck!

Anne Miller wrote:I am not an investor.

Have you talked to the owner of the building?  To me that is my first question.  How much rent do they want or are they willing to go into this venture with you.

Who will your customers be?

Are there things you can do to get the public interested in buying from you.

If you do get this business set up start with a small inventory and build up from that with the profits.

If there is a nearby campground sell firewood, hot dog, buns, etc.... Do you get my drift?
Bread, milk, diaper and sort drink comes to mind.

Yes. Numerous neighbors, as well as ourselves, looked into purchasing the business over the past few years. The lack of books made traditional funding impossible without extreme amount of liquid assets. He lead many of us on with the promise of books being sorted...I spent dozens of hours that he wasted inspecting, discussing, planning and looking at funding. None of us really understood his motive to drive such a resource into the ground before giving up. NOW the building is just that, real estate, because his business has shuttered and is insolvable. It is up for auction via third party in mid April. There are no further details regarding auction on the company site yet but sign only went up two days ago.

Public interest is there. It's been discussed openly in many forums. I am one of few that have the time/energy? to get this going.

Baby steps would be necessary simply because of low start up costs. I don't have money but I do have TIME and some useful skills Gas and coffee and basics first, that would be a HUGE benefit to many of our commuters. Scaling up isn't always ideal in a small community anyways. We need useful.

I forgot to mention the property sits on a state hwy. It's not major but supports neighboring towns/commutes for many small communities and farms. To the West is a population of 10k where many work. To the East the closest "city" is 100 miles. As said, along this route we are lacking amenities. The closest grocer is 20 minutes one way and an hour the other and it's tiny. The fuel station up the road is far smaller and only offers convenience items inside. A traffic study done ten years ago showed over 4k vehicles pass by this place daily. Since then they have widened a local road to provide access to a factory in a town up north. This station sits where the semis CAN turn but often have to go 8 miles out of their way to fuel up first. I've had many farmers grumble as they pass up closed diesel pumps. There are hunters, fisherman and seasonal workers who rely on the cabins when available, as well as families visiting. We would create a more campground like atmosphere in the cabin area to double as picnic (and possibly farmers market) grounds.

There are hundreds if not thousands of times I would have purchased goods there over the years, if they were available. Instead we drive four to twenty miles to get what we need.  

Nancy Reading wrote:Sound like an opportunity that it would be a pity to miss, to re create the local convenience store that you all want.

My first suggestion is to come up with a business plan. It doesn't have to be super detailed but you do need to make sure that you can cover wages, unless you rely entirely on volunteers, and that can work of course. I run a little rural store (not as big as the one you plan) and holidays are a distant dream.
You may already have thought of all this if so I apologise, but even a charitable investor will want to make sure that the money is going to a good place.
As well as the purchase price, you will have equipment and refurbishment costs, maybe advertising and internet site costs.
Initial stock can be quite significant. Ours is roughly 10% of our annual turnover. A little high because the 'get you out of trouble' category can be slow (but is really appreciated when people need it today!)
Don't forget working capital. This is where most small businesses fail. Ours is about 5% of turnover, but runs pretty short out of season!
Once you have a ball park figure to work with, you will have more idea as to how feasible the whole thing may be. In the UK there is funding available for local food, community shops. Have a look at the Plunkett Foundation. There may be similar organisations in the US, maybe there is something on grants.gov

As well as figures pictures will help - can you visualise how the store will look, lots of photos of happy families shopping, maybe some quotes as to how great the store will be. Stories help a lot if you go for a crowd funding route.
Good luck!

I have a fairly good business draft so far and have crunched some numbers. No details on min bid or what yet so it's all playing atm but want to be ready if I can. From the numbers based on what he was originally asking (the number he last minuted tried getting in cash from a neighbor, LMAO) many think it's doable. Especially if we can do most of the labor ourselves. Are you running a co-op model or general retail?

I would expect any kind of investor to want some sort of return, that isn't surprising. Oooh, pictures are right up my ally. That's a great idea!

There are dedicated crowdfunding platforms for real estate and community development projects, such as https://www.smallchange.co but they generally demand pretty high 'due diligence' and legal structuring to qualify. It sounds like you may be better off looking toward traditional mortgage financing, with maybe an intermediary step of private loan to complete the purchase and any necessary upgrades first, to qualify for bank loan. If the latter, you can check your regional Craigslist real estate services section for example, there's often private aka "hard money" lenders advertising there you can discuss your needs. It's a bit tricky getting money in hand for purchase at auction, but you may be able to swing it with the right combo of local interested parties/benefactors and a clear financial plan post acquisition.

You may also want to look into a Small Business Loan.  They have loans that are structured to favor females and minorities who are wanting to start a business.
Go to their website download the paperwork and rules and regulations and see if you qualify. If nothing else it will be practice for later.

I would also make sure they locals who would welcome the store back are aware of your plans IF the place can be bought at a fair price. Make sure you know the rules of the auction.  Some auctions will have a minimum bid others won't. IF they have to accept the highest bid with no minimum some odd things can happen. Like the developer who was buying up properties for  $1 from our local city... that came to light when a church bid against him for an abandoned school and their offer was reasonable.  The whole $1 thing came to light when he pitched a fit...  He was going to destroy the building and build townhouses.  The church had all kinds of volunteer groups from around the US come and help with repairs and asbestos remediation.  (in same places if any asbestos is totally encased in xyz paint it is considered safe, in other situations it needs remediated by licensed people)  BE SURE to investigate that as if the building has been around since the 60s to 90s there will be asbestos in it.

See if a local fundraiser is possible just a jar on a counter can sometimes bring in a fair amount of funds.  Something like help bring back the store.   WITH a designated charity to receive the funds if you can't buy the property.

Will be looking at a piece of property in Wahalla ND end of the month, what town are you in?

Robert Ray wrote:Will be looking at a piece of property in Wahalla ND end of the month, what town are you in?

I'll message you :)