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  • FIRST POST
    • Mrs Huggett
    • By Mrs Huggett 15th Jan 20, 3:27 PM
    • 366Posts
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    Mrs Huggett
    The Charity shop that's not a charity shop.
    • #1
    • 15th Jan 20, 3:27 PM
    The Charity shop that's not a charity shop. 15th Jan 20 at 3:27 PM
    Looking for opinions on an idea I had during one of my productive bouts of insomnia! I am very proactive when it comes to community issues and live in an area that has lots of groups who do great work with very little help from grants and funding etc, they range from community gardening to food banks and community kitchens etc etc. We are all supportive of one another and there are local business owners who offer help as and when they can, so all good! It's likely that very soon our council will be helping local start ups with rent free shops etc for a year or so, they did this recently and it was successful. My idea is to open a shop selling donated goods at affordable prices (so in essence a charity shop type set up) but to pay myself and staff a proper living wage, and pay the running costs. the next part is the groovy bit though! Every two months local community groups are invited to put a bid in for the money we have accrued as profit and there would be a forum of local business owners and ordinary Joe's who would have a vote on who would receive the money or monies for that period. Groups or projects affiliated to political parties or religious organizations would not be able to apply, but local registered small charities would if they were running a project. We have people in our area who do wonderful work and get no help from the council or any other body so they would be the priority. Those sitting on the forum would be able to scrutinize yearly accounts. And I am not interested in opening a CIC as I would like to keep control of the management of the business. In case you are wondering, no I don't want to get rich on this, and yes I see it as a really good way to help my wonderful community carry on doing what they do. I can give a couple or three people work when they really really need help and could do this standing on their heads! Do you think it is a good idea? What pitfalls can you see? Thanks for any constructive opinions in advance!
Page 1
    • Mistral001
    • By Mistral001 15th Jan 20, 4:07 PM
    • 4,270 Posts
    • 3,294 Thanks
    Mistral001
    • #2
    • 15th Jan 20, 4:07 PM
    • #2
    • 15th Jan 20, 4:07 PM
    Looking for opinions on an idea I had during one of my productive bouts of insomnia! I am very proactive when it comes to community issues and live in an area that has lots of groups who do great work with very little help from grants and funding etc, they range from community gardening to food banks and community kitchens etc etc. We are all supportive of one another and there are local business owners who offer help as and when they can, so all good! It's likely that very soon our council will be helping local start ups with rent free shops etc for a year or so, they did this recently and it was successful. My idea is to open a shop selling donated goods at affordable prices (so in essence a charity shop type set up) but to pay myself and staff a proper living wage, and pay the running costs. the next part is the groovy bit though! Every two months local community groups are invited to put a bid in for the money we have accrued as profit and there would be a forum of local business owners and ordinary Joe's who would have a vote on who would receive the money or monies for that period. Groups or projects affiliated to political parties or religious organizations would not be able to apply, but local registered small charities would if they were running a project. We have people in our area who do wonderful work and get no help from the council or any other body so they would be the priority. Those sitting on the forum would be able to scrutinize yearly accounts. And I am not interested in opening a CIC as I would like to keep control of the management of the business. In case you are wondering, no I don't want to get rich on this, and yes I see it as a really good way to help my wonderful community carry on doing what they do. I can give a couple or three people work when they really really need help and could do this standing on their heads! Do you think it is a good idea? What pitfalls can you see? Thanks for any constructive opinions in advance!
    Originally posted by Mrs Huggett
    This is just not going to wash with people. You will be acting like a really big charity or government department giving out grants. But you are far from that.
    Last edited by Mistral001; 15-01-2020 at 5:08 PM.
    • Paul_DNAP
    • By Paul_DNAP 15th Jan 20, 4:54 PM
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    Paul_DNAP
    • #3
    • 15th Jan 20, 4:54 PM
    • #3
    • 15th Jan 20, 4:54 PM
    I too think making them come to a panel and beg for the money isn't particularly good optics, and a touch demeaning for them - and absolutely forget the request to scrutinise their accounts, do you want to help or do you want to just add to their administrative burden?


    It would be better if your shop's money went into a pot and then you met with your people and decided amongst yourselves who in your community you'd support with this month's profits and then just wander over and gave them the cheque out of the blue.
    (Although I could be wrong, I often am.)
    • Mrs Huggett
    • By Mrs Huggett 15th Jan 20, 5:53 PM
    • 366 Posts
    • 479 Thanks
    Mrs Huggett
    • #4
    • 15th Jan 20, 5:53 PM
    • #4
    • 15th Jan 20, 5:53 PM
    Thanks for the answers thus far, the community volunteers wouldn't have to come to a panel and beg for money they would just have an informal meeting with me or another shop co worker and tell us what they want to do and how much they need, we would get it down on paper together and then the panel would decide what would be the best use for that period, for instance if our community kitchen would like to do a Children's party and need 150 and the lady that organises litter picking needs new gloves and pickers at a cost of 60 we could pay for both of those and the remaining profit goes into the next period to be used, and gets added to what is available then, maybe another group will ask for picnic benches for their guerrilla garden they've created, and a youth club needs to buy tickets to a play for their members, so that period would see more being spent, a moveable feast if you will! I also would like to clarify that this panel would be able to scrutinize the SHOPS accounts each year to make sure that everything is above board and that any profit after all costs is going to the community groups in our area. NOT the accounts of the community groups ( I know of at least 4 here that don't even have funding from anywhere they just rely on people helping out from their own pockets) Hope that clarifies things a bit!
    • greyteam1959
    • By greyteam1959 15th Jan 20, 6:15 PM
    • 2,796 Posts
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    greyteam1959
    • #5
    • 15th Jan 20, 6:15 PM
    • #5
    • 15th Jan 20, 6:15 PM
    Paragraphs would make your post a whole lot easier to read & therefore respond to.
    • Mrs Huggett
    • By Mrs Huggett 15th Jan 20, 6:20 PM
    • 366 Posts
    • 479 Thanks
    Mrs Huggett
    • #6
    • 15th Jan 20, 6:20 PM
    • #6
    • 15th Jan 20, 6:20 PM
    Thanks greyteam19 Anything else you could advise on?
    • greyteam1959
    • By greyteam1959 15th Jan 20, 6:27 PM
    • 2,796 Posts
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    greyteam1959
    • #7
    • 15th Jan 20, 6:27 PM
    • #7
    • 15th Jan 20, 6:27 PM
    Thanks greyteam19 Anything else you could advise on?
    Originally posted by Mrs Huggett
    Greyteam1959............
    • lincroft1710
    • By lincroft1710 15th Jan 20, 6:35 PM
    • 12,501 Posts
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    lincroft1710
    • #8
    • 15th Jan 20, 6:35 PM
    • #8
    • 15th Jan 20, 6:35 PM
    Even with donated goods how much profit would you make after paying wages, rent, rates, utilities etc?
    • pramsay13
    • By pramsay13 15th Jan 20, 6:36 PM
    • 921 Posts
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    pramsay13
    • #9
    • 15th Jan 20, 6:36 PM
    • #9
    • 15th Jan 20, 6:36 PM
    I think it's a great idea and thought of something similar.

    Your main issue is a shop like this just isn't that profitable and you will be lucky to pay one salary never mind a few, even with low or zero rent from the council.

    Produce a business plan and cost it properly and see just how many donated shirts you will need to sell to pay 1, 2 , 3 staff members.

    Find out what other costs there are, e.g. I imagine waste licence as you will have to dump anything that can't be sold on.

    Will people trust that you will not run off with their money? I think you should consider becoming a charity or CIC again as that would allay people's fears.
    • Mrs Huggett
    • By Mrs Huggett 15th Jan 20, 6:51 PM
    • 366 Posts
    • 479 Thanks
    Mrs Huggett
    Thank you lincroft1710 and pramsay13 there are things to consider aren't there? Greyteam, I'm not sure what your problem is?
    • comeandgo
    • By comeandgo 15th Jan 20, 6:56 PM
    • 2,896 Posts
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    comeandgo
    If you are selling second hand items and expecting a wage yourself, and pay staff and running costs I can't see you selling enough to make any profit. Where will you get the money to start? What do you do if you make losses?
    The bit that really sticks with me is the fact that you would expect a wage, it just seems a bit like jobs for the boys.
    • comeandgo
    • By comeandgo 15th Jan 20, 6:57 PM
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    comeandgo
    Thank you lincroft1710 and pramsay13 there are things to consider aren't there? Greyteam, I'm not sure what your problem is?
    Originally posted by Mrs Huggett
    Your post is difficult to read, if you were able to put in line spacing it is easier on the eye.
    • POPPYOSCAR
    • By POPPYOSCAR 15th Jan 20, 7:02 PM
    • 13,197 Posts
    • 29,742 Thanks
    POPPYOSCAR
    If you are selling second hand items and expecting a wage yourself, and pay staff and running costs I can't see you selling enough to make any profit. Where will you get the money to start? What do you do if you make losses?
    The bit that really sticks with me is the fact that you would expect a wage, it just seems a bit like jobs for the boys.
    Originally posted by comeandgo
    I think you might find that managers of charity shops get paid.


    https://myjobsearch.com/careers/charity-shop-worker.html
    • POPPYOSCAR
    • By POPPYOSCAR 15th Jan 20, 7:22 PM
    • 13,197 Posts
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    POPPYOSCAR
    Our Waitrose has a scheme where 1000 a month is donated to local organisations.

    Customers can take a token and put it in a box with the name of the organisation they choose from three different ones each month.

    The 1000 is then shared out according to the percentage of tokens in each box.

    You could do this with your customers.
    • 00ec25
    • By 00ec25 15th Jan 20, 7:43 PM
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    00ec25
    I think you might find that managers of charity shops get paid.


    https://myjobsearch.com/careers/charity-shop-worker.html
    Originally posted by POPPYOSCAR
    indeed they do, and typically so will a deputy manager, but the shop floor staff are not as you know, given they will be volunteers

    so whilst i think OP's intentions are excellent, the reality may be very different by the time OP has taken a salary for themselves and paid the staff a "proper living wage" of around 17,000 + employer's on costs for 1, 2 ,3 , more staff will make the finances of the project challenging.

    of course charity shops bring a surplus over they cost, that is the idea, but even with careful marketing Op cannot hide the fact this is a money making exercise for himself and the staff and it is only what is left over that will be distributed

    OP wants to retain personal control and has rejected CIC (or full blown registered charity) status. Therefore, the enterprise will have to pay tax on its profits before they can be given away.

    it is a good altruistic idea, but as others have said will need a robust business plan and strong marketing to address where the funding is coming from and what happens when the incentives end.
    If i was a resident in that community I may be warm towards its very local support agenda as an idea, but without charity status i would expect to pay sub charity shop prices for what will be other people's junk. that is because i do not get the satisfaction of the feel good reward for paying a small supplement to "charity" for secondhand goods that sell cheaper in a commercial junk shop (which appears to be OP's business model). For example, near full price for supermarket own label clothing as happens around our way on occasion.

    Continuity of supply of donations for sale depends a huge amount on the name, hence the big charities do so well. It will take a great deal of effort to establish the credibility and name of a shop whose primary motive is to run it for the financial reward of its staff.
    • Savvy_Sue
    • By Savvy_Sue 15th Jan 20, 9:16 PM
    • 40,432 Posts
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    Savvy_Sue
    It's likely that very soon our council will be helping local start ups with rent free shops etc for a year or so, they did this recently and it was successful.
    Originally posted by Mrs Huggett
    And what about after that year, or do you only see it as a short-term venture? Also what about business rates? For a registered charity there are significant discounts, but you're actively wanting to avoid that which might be misguided.

    My idea is to open a shop selling donated goods at affordable prices (so in essence a charity shop type set up) but to pay myself and staff a proper living wage, and pay the running costs.
    Originally posted by Mrs Huggett
    Others have pointed out how many shirts you've got to sell to make this fly. I'd like to ask for a definition of 'a proper living wage'. There is of course a minimum living wage, but it's a per hour rate. Are you assuming everyone will want to work full-time? Will they? And is that even desirable? You're going to need holiday cover, sickness cover and so on. Several part-time workers may offer more flexibility. Which means that while you may be offering a job which helps, it may not be enough by itself.

    There's also the issue of paying yourself: more below.

    And I am not interested in opening a CIC as I would like to keep control of the management of the business.
    Originally posted by Mrs Huggett
    And that's just one are where paying yourself becomes complicated. You can, of course, as a sole trader, employ other people. But unless you have an elastic overdraft, you'd really have to pay the staff before you pay yourself. You could go for a Limited Company model - there would be some advantages, BUT you'd still have the issue that you can't pay yourself if you can't afford to do so.

    I'm not saying these issues would go away with a CIC, but unless you are only thinking of a short-term project, then keeping sole control makes future development difficult. Lots of 'what if' questions crop up, and you've got no immediate support network to work through them with you.

    Even with donated goods how much profit would you make after paying wages, rent, rates, utilities etc?
    Originally posted by lincroft1710
    Wages including holiday pay, SSP, SMP, SPP, and pension contributions. Insurance. Waste disposal (more below).

    Produce a business plan and cost it properly and see just how many donated shirts you will need to sell to pay 1, 2 , 3 staff members.
    Originally posted by pramsay13
    AND work out how many hours of paid staff time you'd need to be open, reliably, for the hours you anticipate being open, to include holiday cover, sickness cover etc.

    Find out what other costs there are, e.g. I imagine waste licence as you will have to dump anything that can't be sold on.
    Originally posted by pramsay13
    Plus you won't be able to dump it yourself at the household facilities. It will be trade waste, to transport it in your car will require a trade licence, and trade disposal. You'll need trade disposal, plus trade disposal for your 'normal' refuse - kitchen waste, empty bags and boxes from donations, paperwork etc.

    Another thought is that depending on what sort of things you are selling, you may need someone who can check and repair for you. If selling electrical goods, you definitely need someone to do PA tests.

    Oh, and banking: you may be able to get free banking, but cash withdrawals and paying in may make that tricky.

    Will people trust that you will not run off with their money? I think you should consider becoming a charity or CIC again as that would allay people's fears.
    Originally posted by pramsay13
    It's not just the trust issue (and note we're not suggesting you WOULD run off with the money! you're obviously committed to your local community), it's also the future planning issue which leads me to prefer Charity or CIC.

    Sorry we are not overwhelmingly enthusiastic, but setting up a shop (of any kind) isn't a trivial undertaking, and there are extra things to consider in this situation.
    Still knitting!
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    • Mrs Huggett
    • By Mrs Huggett 15th Jan 20, 9:32 PM
    • 366 Posts
    • 479 Thanks
    Mrs Huggett
    Thank you for all your replies, some of the things mentioned I had already thought of, I will just shelve the idea for now I think.
    • emilybc
    • By emilybc 16th Jan 20, 9:08 AM
    • 38 Posts
    • 198 Thanks
    emilybc
    Interesting idea
    Unicorn Grocery in Manchester do something similar, granted they are selling new goods rather than donations.

    https://www.unicorn-grocery.coop/
    • swingaloo
    • By swingaloo 16th Jan 20, 9:43 AM
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    swingaloo
    I work in a hospice charity shop. Every member of staff is an unpaid volunteer.

    For the getting rid of donations which are handed in and are not fit to sell (and these outweigh the good donations) we have a company which come in and pay for he bags of clothing and shoes so no going to the tip or having to get rid of it yourself.

    I think the major drawback to your plan is in the costings, our shop is incredibly busy and does very well but we sell stuff at rock bottom prices to ensure a fast turnover. The problem now is that with the likes of Primark etc clothing can be bought so cheaply that you are not going to get much for 2nd hand. I see a lot of charity shops with rails containing t-shirts which are priced more than they were in Primark/Asda/Tesco.

    Even with the turnover we have and the amount of donations we take in we would still not be viable if we had paid members of staff.
    • nmn
    • By nmn 16th Jan 20, 11:00 AM
    • 21 Posts
    • 13 Thanks
    nmn

    of course charity shops bring a surplus over they cost, ..
    Originally posted by 00ec25

    Not always the case. A long time ago I spent some time volunteering in a local Oxfam shop - all in the shop made a loss and actually cost the charity money month-in, month-out (except at xmas where card sales boosted revenue, but not enough to make money over a full year). It's since closed but was in that state for at least the several years I was involved.



    It might have been deemed worthwhile since it helped the brand out and presumably it helps out-of-store cash donations, and one or two supposedly "valuable" items got sent away to sell at auction or in London (and revenue was not properly attributed to the shop) but the point is: you must talk to a charity shop manager in your area and find out what kind of revenues they actually achieve - its probably less than you think.


    You'll have to invest money in shop fitting and other things already mentioned to kick this venture off; its quite possibly only your ego will profit in the end.
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