Cedar Hollow Mercantile

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Executive Summary

Cedar Hollow Mercantile is the general store in a small rural town, selling groceries, hardware and farm supplies, which will add a cafe and upgrade the building. Our town has no full grocery store and no place to sit down for a meal. This grant will help us renovate part of the building into a small kitchen and cafe, make the entrance and restroom accessible and add a modern checkout.

With this grant we will build a small commercial kitchen and cafe, make the entrance and restroom accessible, buy cafe and checkout equipment and hire and train new staff.

We expect sales of $439,500 in Year 1, growing to $804,700 by Year 5. We expect losses of about $23,800 in Year 1 and $5,000 in Year 2, then a profit from Year 3 (about $24,600), growing to about $56,000 by Year 5. Today the store employs 3 people. It will employ 5 in Year 1 and 6 by Year 3, and 7 by Year 5.

We are asking the Prairie Wind Rural Fund for $50,000 for a cafe kitchen, cafe and checkout equipment and an accessible entrance. We are also putting in our own savings and a loan, so the grant is only part of the money in the project.

I am June Peterson, the owner and store manager. The numbers in this proposal are estimates based on the assumptions listed at the end, not promises.

Company Description

Cedar Hollow Mercantile is a family-owned limited liability company (LLC) in Nebraska. Cedar Hollow Mercantile is located in a town with a population below the Prairie Wind Rural Fund's limit, in a county the fund treats as rural. June Peterson owns the business, which has fewer than 10 employees. We will provide proof of our location and ownership, and anything else the fund asks for.

Our mission. To keep a store, a hot meal and a gathering place in our town for the people who live and work here.

Where we are today. The store sells groceries, hardware, feed and supplies, and is the only place in town to buy them. Our sales last year were about $330,000. Many customers drive a long way to a larger town for a full grocery trip or a meal out. With the cafe and an updated building, we expect about $440,000 in sales in Year 1.

What we do:
- Groceries, household goods, hardware and farm and feed supplies.
- A small cafe serving breakfast, lunch and coffee, with seating for about 24 people.
- Special orders for items customers cannot find in town.
- A community table and bulletin board for local groups.

How we are run. June manages the store and the books with an outside accountant's help. A cook runs the cafe kitchen, and part-time clerks cover the store and cafe. We follow the health and food rules that apply to our county and state.

Problem & Opportunity

Why this project is needed.

In many small rural towns, the local store is one of the last places people can buy basics, meet neighbors and find work. Our store has an old kitchen area that is not equipped for a cafe, an entrance that is hard for older customers and people using wheelchairs, and an old cash register that slows down the line. Renovating takes more money than a small store can set aside, and banks are cautious about lending in a very small town.

The gaps we see:
1. Distance. The nearest large grocery store is a long drive away, which is hard for people without a car.
2. No place to eat. There is nowhere in town for a meal, a cup of coffee or a lunch meeting.
3. Access. Our entrance and restroom are not easy for older customers and people with disabilities.
4. Money. A small town store has trouble getting a loan large enough for a kitchen.

What we have seen ourselves. Customers often ask whether we could serve coffee and lunch, and several drive to the next town each week for groceries and a meal.

Who benefits first. People who live and work in our town and the farms around it, older neighbors, school and church groups, and travelers passing through.

Products & Services

What the grant will pay for and what we will do.

1. Build the kitchen. Install a hood, sinks, a grease trap and floors so the kitchen meets health rules.
2. Equip the cafe. A range, refrigeration, seating and small equipment for the cafe.
3. Make the building accessible. A step-free entrance and an accessible restroom.
4. Upgrade checkout and internet. A point-of-sale system, a scale and faster internet so we can take card payments and order stock more easily.
5. Hire and train. A cook and part-time store and cafe clerks, trained in food safety and customer service.

How we will measure results. We will count customers each day, cafe meals served, store sales and the number of local suppliers, and compare them with our goals every month. We will also ask customers twice a year what we could carry or do better.

Market Analysis

Who benefits and how.

- Jobs. The store employs 3 people today, will employ 5 in Year 1 and 7 by Year 4, with about $124,000 in wages in Year 1.
- Local spending. We will pay rent and taxes locally, and we will buy from local farms and bakers where we can.
- A place to gather. A warm, accessible place for meals and meetings in a town without one.

How many we will reach. In Year 1 we expect about 15,500 store purchases and 12,000 cafe meals and coffees, growing to about 22,500 store purchases and 26,000 cafe orders by Year 5.

Competitive Landscape

Other choices people have, and how we fit.

- Large grocery stores in the next town. They have more choices, but they are a long drive away.
- Gas station snacks. They are close, but offer little fresh food.
- Our own homes. Many people cook at home because there is no choice.

What makes us different: The only full-service store in town, with a place to eat, an accessible building and a staff that knows our neighbors by name.

Marketing & Sales Strategy

How we will reach customers in our town and the surrounding farms.

- Posters and an announcement at the school, churches and the town hall.
- A weekly special and a simple menu on a sign out front.
- A free Google business listing and a simple Facebook page with hours and specials.
- A "town table" for local groups, and catered lunches for meetings and events.

Marketing budget. About $2,400 a year in Year 1, growing about 6% a year.

Operations Plan

How the project will be carried out.

Timeline:
- Months 1 to 2: Finalize quotes, apply for any permits and plan the kitchen layout
- Months 3 to 5: Build the kitchen and accessible entrance and restroom
- Month 6: Install cafe and checkout equipment; train staff; health inspection
- Month 7: Open the cafe and new checkout
- Months 8 to 12: Build up cafe business, adjust the menu and review results

Space and suppliers. We will use about 600 square feet of the existing building for the kitchen and cafe. Local contractors will do the construction and a restaurant equipment dealer will supply and service the cafe equipment.

Equipment. About $22,000 in all: Cafe equipment: range, refrigeration and seating ($17,000); Point-of-sale system, scale and internet upgrade ($5,000). After that we set aside about $2,500 to $3,000 a year to repair and replace equipment as we grow.

Permits and safety. A building permit, a food service license, and health and fire inspections, as our county and state require. We will confirm the requirements with the county before construction starts.

Records and reporting. We will keep records of purchases, sales and hours. Grant money is tracked separately, and we will send the funder a report after the project is finished, with photos and receipts.

Management & Organization

Who leads the business.

June Peterson, Owner and Store Manager. June runs the store, orders stock, hires and trains staff and manages the money. Planned salary: $40,000 a year.

Our team. A cafe cook ($30,000 a year) and part-time store and cafe clerks (about $18,000 a year each), growing from 3 to 5 clerks.

Advisors and help. A free mentor from SCORE or the Small Business Development Center (SBDC), our accountant, the county health department and our local bank.

Money management. Grant money is tracked separately from store money, and our accountant reviews the records each quarter.

Milestones Narrative

Our goals and how we will measure them.
- Year 1: Build the kitchen and open the cafe, about 15,500 store purchases and 12,000 cafe meals and coffees, $439,500 in sales and a loss of about $23,800; 5 people employed.
- Year 2: Grow cafe business and keep the store stocked, about 17,500 store purchases and 16,500 cafe meals and coffees, $539,700 in sales and a loss of about $5,000; 6 people employed.
- Year 3: Reach a steady profit and add catering for local groups, about 19,500 store purchases and 20,500 cafe meals and coffees, $639,950 in sales and a profit of about $24,600; 6 people employed.
- Year 4: Add part-time help for busy seasons, about 21,000 store purchases and 23,500 cafe meals and coffees, $723,200 in sales and a profit of about $33,800; 7 people employed.
- Year 5: Serve more of the farms and families around us, about 22,500 store purchases and 26,000 cafe meals and coffees, $804,700 in sales and a profit of about $56,000; 7 people employed.

How we will check our results. Store sales, cafe meals, customer counts and complaints are recorded every week. Each quarter we compare them with our goals and review them with our accountant.

Funding Request

What we are asking for, and how the money will be used. Our request: $50,000 from the Prairie Wind Rural Fund for a cafe kitchen, cafe and checkout equipment and an accessible entrance, for January through December 2027.

The request is spread across these budget lines:
- Construction: Kitchen build-out: hood, sinks, grease trap and floors, $20,000 (we add $6,000 of our own).
- Equipment: Cafe equipment: range, refrigeration and seating, $17,000.
- Equipment: Point-of-sale system, scale and internet upgrade, $5,000.
- Construction: Accessible entrance and restroom update, $8,000.

Other money in the project. We put in $6,000 toward the kitchen, and our own savings and a loan pay for opening cafe stock and added store inventory ($7,500), permits and inspections ($1,500) and a new sign and website ($3,500). A $60,000 loan and $20,000 of our own savings also keep the store stocked and the payroll paid while the cafe builds up.

What the numbers show. Sales of $439,500 in Year 1 growing to $804,700 by Year 5, with losses of about $23,800 in Year 1 and $5,000 in Year 2, then a profit from Year 3 (about $24,600), growing to about $56,000 by Year 5. With this funding and our own money, the business has money in the bank at the end of every year, and the lowest year-end balance is about $69,200.

The loan. We plan a $60,000 small business loan at 10.5% over 10 years, with payments of about $810 a month (about $9,715 a year). These payments are already included in our cash flow. We chose 10.5% as a cautious planning rate. Ask the lender for the real rate, which may be lower or higher.

After the grant. The renovation and equipment are bought once. From Year 1 on, store and cafe sales pay for stock, wages, utilities and insurance. We expect to lose some money in the first two years while the cafe builds up and then to earn a profit.

Risks and how we will handle them:
- The cafe builds up slowly. We will start with a short menu, adjust to what sells and keep costs low.
- Construction costs rise. We will get fixed-price quotes, keep a small cushion and finish the accessibility work first.
- Staffing a small town. We will train local people, offer flexible hours and cross-train the team.

If we are just starting. A new rural business can begin with a simple pop-up, such as a weekly lunch in a church hall or a market stand, to show demand before building out a kitchen. Written customer counts and local letters of support make a rural grant request stronger.

Appendix Notes

Documents to attach with this proposal:

- Your LLC papers and proof of ownership.
- Proof that your town and county meet the funder's rural rules.
- Quotes from contractors and equipment dealers.
- Last year's sales records.
- Letters of support from the town, school or local groups.
- Your building lease or deed and insurance.
If you don't have any of this yet, no worries - let's continue.

The assumptions behind our numbers (change them in the Financials section to match your own):
- Grocery, Hardware and Feed Sales: about $21.00 per unit in Year 1, rising to $23.40; direct cost about $16.40 per unit, rising to $18.40; about 15,500 store purchases in Year 1, growing to 22,500.
- Cafe Meals and Coffee: about $9.50 per unit in Year 1, rising to $10.70; direct cost about $4.20 per unit, rising to $4.60; about 12,000 cafe meals and coffees in Year 1, growing to 26,000.
- Pay (a full year, per person): Owner / Store Manager $40,000, Cafe Cook $30,000, Store and Cafe Clerk (part-time) $18,000.
- Other yearly costs in Year 1: Utilities and Propane $9,600, Insurance $5,400, Property Taxes and Licenses $3,600, Marketing and Local Ads $2,400, Repairs and Supplies $3,000. These grow between 3% and 6% a year.
- Customers pay about 4 days after we bill them. Income tax at 21%.
- Every dollar amount is an estimate. Replace them with your own quotes and real budget.

Startup Costs