The birth of a new co-op

Melina Morrison:

Kicking off a co-op needs a lot of support, if the demand for bras is any indication, there is support for co-op in the New South Wales town of Cootamundra. Hello, I’m Melina Morrison, I’m CEO of the Business Council of Co-operatives and Mutuals, and we’re looking at some new regional co-ops forming across Australia.

Melina Morrison:

When the department store chain, Target closed its operation in the town and arguing that there were similar stores not far away in Wagga Wagga and Young, it left the people of Coota without a large retail operation. So instead of choosing to jump in the car and shop in their other towns, some of the citizens have decided to set up a department store. The process for such a move is underway with the assistance of the Business Council of Co-operatives and Mutuals. Our roving reporter, Michael Cavanagh, while not in need of a bra, although maybe some boxers decided to find out more about the process. Hi, Michael.

Michael Cavanagh:

Hi, Melina, it’s the process that is the interesting part because you have the people of Cootamundra and Wagga Wagga and Young, larger towns. They’re not that far away and so people would go to the department stores in those two towns. And that was causing concern for the locals, particularly the smaller business operations because you know yourself, if you’re going to drive an hour to go to a town to do some shopping, why then drive back to another town and get out of the car and go to the smaller stores? So it’s going to be that leakage of money out of Cootamundra into those larger towns and in fact, create that tumble on effect where those towns would get larger and small operations in places like Cootamundra would drift away.

Melina Morrison:

This sounds so inspiring, can you tell me more?

Michael Cavanagh:

Well, it’s interesting in the fact that there are people of all walks of life getting involved in this. People that have got substantial business operations in the town, there are people that no longer live in Cootamundra, but they wanted to give back because they had happy childhood and some of them still come back on holiday. And it’s those sort of things that got Leigh Bowden ending up as the chair of the Cootamundra District Co-op.

Leigh Bowden:

Well, the idea of a co-op resulted from the closure of Target, which was announced last year, 2020, early 2020 and due to close in April 21, and business people included were lamenting if people go out of town to buy the basics, then they’ll buy everything out of town and the businesses in town will suffer. And I was at a gig with them and they were saying, you know, can we attract other stores like Big W or Best&Less or something like that to town? And it was unlikely that other stores like that would come to town because we’re 40 minutes from Young and are now 15 from Wagga. And I just, you know, said off the cuff, well, look, why don’t we start a co-op? And they said, well, yeah, that sounds interesting. And so I followed that up with the Business Council of Co-operatives and Mutuals. I rang at 8:30 in the morning. Somebody answered the phone. I was expecting to leave a message and I just asked, do you have people that come down and speak to people about what it means to do a co-op? And they said, we sure have. And so then they put me on to Anthony Taylor and I spoke to an Anthony and he said we could do a Zoom session or I could come down. But you know, if I come down, that would cost you. So I said, no, no, like Cootamundra, it’s an older population. It’s a fairly low-tech population. We’re not up to doing a Zoom, so we’d like you to come down. So that’s how it started and Anthony came down and did a public meeting on the 27th of August 2020 and explained to us how a co-op operated.

Michael Cavanagh:

Leigh, what was it that Anthony and BCCM mapped out for you that made you think that a co-op run along the lines of a department store such as Target would work with the Cootamundra community?

Leigh Bowden:

I think it was that a co-op is member owned and controlled. It wasn’t that it would work along the lines of a department store, and there are very few co-operative department stores, mainly agricultural enterprises, dairy or fishing or agricultural equipment. So I don’t think there is another co-op along the lines of a Target department store. But what appealed was that yes, we as a community could do this. It would be our store, so we wouldn’t be subject to the whims of big companies that decided, oh, you know, our brand Target is not profitable, you know, across the board. Therefore, we will close all the stores. We would have a store that we owned and controlled. So from that meeting with Anthony, people met the following day again with Anthony and that that became a steering group to investigate, you know, what the possibility was of a department store like Target being profitable?

Michael Cavanagh:

Were you also encouraged by the irony is that Target is not getting out of Cootamundra because of profitability. It makes a quid. Did that give you and also BCCM the confidence to go ahead with it?

Leigh Bowden:

I think so, like we’ve heard that the turnover for target was $35000 a week. Now, admittedly, they had Target stock and, you know, the Target brand, but it was certainly well utilised. So we thought, yes, like, you know, let’s give it a go. And we’ve approached the community, the community, you know, in surveys; we did a survey we got over 200 responses to that survey. Admittedly, the population of the town is 6,700 but that was still a good return and people saying, yes, like, we’re interested to do it and this is the stock we want. And basically, it was the same stock that Target had, like, you know, undies, nightwear, kids clothes, shoes, Manchester, good quality at an affordable price.

Michael Cavanagh:

So you had about 80 people turn up to that initial meeting, they saw the presentation.

Leigh Bowden:

Yes, under COVID restrictions, so it was a full house.

Michael Cavanagh:

And with Anthony mapping out how co-ops work because a lot of people don’t realise that there’s a huge number of people that are actually members of co-ops, but they’re unaware of that at the time. What sort of structure then did Anthony map out that you then knew that would apply and work for Cootamundra?

Leigh Bowden:

Well, basically it was the structure. Okay, there’s the membership and the membership elect the board and the board employs a manager, a general manager and the manager employs the staff, so it was that the members have control. It was also that all members have a vote regardless of the number of shares that they have, and our shares are very affordable. It’s $10 a share to be a member and to invest in the Coota District Co-op. We recently had a fellow, the owner of our local, one of our local retirement villages, invest $150,000. He has one vote, the same as a member who has invested $10. So that was good that people had not only like, you know, an equal vote, but in electing the board, but some input into what would be stocked in the store. The way Anthony explained it and continues to work with us, thankfully is keep the membership informed. If the board makes any kind of change to what was in the disclosure statement, it’s got to go back to the members and is voted on. And so it’s very much a relationship of mutuality with the board and the members, and that’s what we love.

Michael Cavanagh:

So a share is $10, you’ve got one person who reached into their back pocket and pulled out $150,000, those shares and having that one vote, regardless of how many shares you buy, why is it an advantage for someone who’s a successful business operator to go and buy a surplus of shares when they don’t increase their vote accordingly?

Leigh Bowden:

It’s to do with social dividend. It’s not, in this case about the money. We’ve worked out that people will get a return of 10 cents on a $10 share. So for people that are investing more, it’s forgoing some level of financial dividend or return on their money and willingly accepting that investing in a store like this in a co-op is of benefit to the community like they’re investing in a community project, and it will help the sustainability and the viability of the centre of Cootamundra. So they’re seeing beyond, you know, financial returns, you know, they believe in Cootamundra. And what’s interesting about the people who have become members and are investing that it’s way beyond the town of Cootamundra. There are people who have lived in Cootamundra and left Cootamundra, but who still love Cootamundra and wanted to thrive, people to whom Cootamundra has been good and they’re investing. And in our original disclosure statement, we had this rule that people had to spend $100 in the store every year to maintain the membership. We’ve deleted that. We’ve taken that out because, you know, a large percentage of our membership did not live in Cootamundra. Some families have invested like the grandparents were here and the kids and grandchildren have moved away and they come back every summer and they could spend. But there are people, who are interstate in Melbourne or Queensland who will rarely come back, have no family connections anymore, but still love the town and want to support it so that’s very exciting.

Michael Cavanagh:

So they can buy a share, they even if they are not a resident of Coota and the surrounding area,

Leigh Bowden:

They can buy one share or 15,000 because the owner of Wattle Grove lives in Sydney.

Michael Cavanagh:

The money that you’re raising at the moment, what sort of target do you have that you know that you can go in set up an alternative department store to what was Target and it will be a viable operation from day one?

Leigh Bowden:

We’ve got 750,000, it is the target that we’ve set. It’s an adequate store like 1.5 million was the amount that we originally spoke of, but 750,000 allows us to buy stock, which we think would be about 400,000 rent building, employ staff, pay insurances. So that’s what we would like as a minimum to get started. At this stage, it’s the fund raising is going slowly. We gave ourselves 26 weeks. We said, okay, let’s see how we go in six months, 750,000 in six months, we figure that 750 people investing $1000 each that seems like an easy, you know, some an easy equation we could get there. The reality is that many people have invested $1,000. Several people have invested $5,000. We’ve had investment of up to like $20,000 $10,000. But there are a lot of people who have bought their one member share or put in like $50 or $100. We’ve even got pensioners who are saying I will have a direct debit taken out of my account every fortnight when my pension comes in. So it’s the people that are going to be using the store that are investing. So our challenge is to find the people with bigger money to invest that will take us to that amount that we need. We’re into Week 16, so we’ve got 10 weeks to go at the end of that time, the board will go to the members and say, okay, what do you want to do? Do you want to give ourselves more time? We’ll just extend the time to reach the 750,000. Do you want to start smaller? And that will be something that, you know, we have to work out the costs and whether it’s worth doing that, knowing that the turnover will be reduced or do you want to call it quits and just say we tried and it didn’t work. And then the members will get back their invested shares. They won’t get back their membership necessarily because that’s been what we’ve used for expenses. So that will be a decision that the membership made but the board will work out options, Plans B and C that we can take to them.

Michael Cavanagh:

What’s the policy for employment?

Leigh Bowden:

The policy for employment is that the people, well, will be local, the general manager was saying, not necessarily local, but definitely a member of the co-op. And then the general manager will employ the staff, who will be members of the co-op and, if possible, local like, yes, local. We want to employ local people. We’ve also got in our prospectus or our business plan that each year we would like to employ a school leaver and train that person in retail so that we’re an employer of choice and people will come to the Coota district co-op looking for employment. We also, at Cootamundra, are part of a disability industry. We have Elouera Industries, Elouera Special School. We’ve talked about providing an opportunity for someone with disability to be employed by the Coota District co-op, so that’s exciting as well.

Michael Cavanagh:

The issue of Target having buying power, big department store operations, they’ve got buying power. You are going to be one outlet in Cootamundra, what are you going to do about supply of product itself?

Leigh Bowden:

This changes like, not daily, but weekly. When we began, we found Frontline, which is a middle supplier in Melbourne that, you know, has contacts with a lot of suppliers and can provide the co-op with product. A number of the retailers in Cootamundra also get part of their supply from Frontline, and this has made other retailers anxious that we would have the same lines and compete with them. But in recent days, we’ve spoken to other retailers in Cootamundra who said, now look, you can get the supplies directly from the manufacturer. Now bras are a big problem in Cootamundra. There’s nobody that stocks bras at the moment.

Michael Cavanagh:

So there’s a need for a lot of support.

Leigh Bowden:

We could put in bras, but you know, you’d be selling the bras for $90 and people in Cootamundra can’t afford that. So one of the members of our board said, you know, that’s ridiculous. There are companies that have budget lines so she’s got onto Burley and Triumph and they’ve said, yes, you know, we can supply you directly. And not only do they have bras, but you know, they have nightwear and underwear and so that’s going to be discussed at the next meeting. One of our other principles that we’d like to follow is, where possible, buy Australian-owned. And I remember my mum who, you know, died like ten years ago. She had a couturier business in Double Bay, and one of her clients was the wife of the founder of Hestia. And they were an Austrian Jewish family, you know, that had come to Sydney and set up Hestia, named after a Greek goddess. So I was thinking, yes, I think Hestia is still Australian-owned; maybe we need to look at Hestia and looking online at Hestia products. They seem to have a budget range. So we’re still, you know, maybe it’s some with Frontline, maybe it’s some, you know, direct with suppliers, with the criticism that’s coming to us, you know where we’ve said we want the product to be affordable and good quality. People are saying if it’s going to be Australian made, it’s not going to be affordable, which, you know, there’s some truth in that because with Australian made things, you pay just wages. So there’s a lot of research going to be done. But other stall holders in Cootamundra have been liaising with companies in China and in Asia, and have found companies that pay just wages with the conditions that the workers are working in are not sweatshop. So, you know, there’s a combination of all these things, people said at that initial meeting, we don’t want sweatshop labour so that’s very clear. So all these things, we have to consider, Michael.

Michael Cavanagh:

When a major department store chain decided to close its doors in Coota, the people of the town decided that wasn’t good enough. So a group has banded together and they’re looking to set up a co-operative department store. The BCCM’s Michael Cavanagh is speaking with Leigh Bowden, chair of the Cootamundra District Co-op.

Michael Cavanagh:

People buy their shares for the co-op and they go and shop there and they get a discount. What will happen to the profits of the co-op?

Leigh Bowden:

Okay, the surplus, it’s called surplus in co-op speak, the majority, like 55% will go back into the business. So that’s, you know, that’s understood, we have to keep the business going. We’re imagining that 25% will have to go into tax, 15% we are hoping will go back to the shareholders in the form of dividend and 5% will go into the community, into community projects. So the more we make, the more the community and the shareholders will benefit.

Michael Cavanagh:

So that 5% that would go back into the community, that would be things like maybe financing a choir, some football fields, anything that the community uses, how would you decide on that?

Leigh Bowden:

Anything the community uses, one of the things here is we have a community-owned nursing home. It’s not a co-op but it’s not private. It’s owned by the community. It’s always struggling for money so that’s a big one in Cootamundra. The other one is Can Assist. Cootamundra, unfortunately, seems to be a cancer hub, and so there’s, you know, Can Assist helps people living with cancer that’s one of our main charities. But we also, there’s Cootamundra Country Education Foundation, which provides scholarships for kids in Cootamundra going on to tertiary education, be it in trades or university. So that Coota  District Co-op could offer a scholarship in the Country Education Foundation. So I imagine it would be a little bit like council in terms of people would make application to the Coota District Co-op board and membership saying, you know, from the amount allowed for community investment, you know, could we make application but we haven’t got this far yet, but I presume we will say okay, applications are now open from people who would like money from the Coota District Co-op, and there’d be some kind of assessing scale, don’t know but all part of the conversation, Michael.

Michael Cavanagh:

You also mentioned there the surplus and that therefore there’d be a dividend that would go back into the members. A person buys a share at the moment and the setting up of it at $10 a share, 20 years down the track, that person feels that they no longer want to be a shareholder. Would that go back into the pool? Can they sell at a profit? How does the disposal of shares work?

Leigh Bowden:

No, it’s apparently, it remains the same. It’s $10 a share, so they will get back their original investment, so it doesn’t increase in value; the shares remain at $10.

Michael Cavanagh:

You’ve got the business plan, you’re getting the assistance from BCCM and that’s ongoing.

Leigh Bowden:

Absolutely, we love it. We are so grateful.

Michael Cavanagh:

What sort of things are they doing now apart from when Anthony laid out how a co-op operated and looked at what you were hoping for in Cootamundra. What sort of things are you expecting from them that would help?

Leigh Bowden:

We’re not expecting anything, actually, we’re just ever so grateful that, you know, Anthony in particular, gives us the time. What he’s done in the past is done online introductions to various other co-operatives, for example, Sea Lake who set up a hardware store when their hardware store in the town of, Sea Lake was going to close. Then they set up another co-operative to buy the pub, and we’ve had Zoom meetings with them recently. One of the members of our community said, you know, you’re missing part of the target audience. You’re not getting to, you know, the high end to the farmers and investors. Let me give you money to find someone that can help you there and BCCM helped us find somebody that we could contract to give us that input and guidance, which was, you know, immeasurable so that helped. Now, Anthony is suggesting that we get in touch with the Barossa retail co-operative; we haven’t done that as yet. We’ve been updating the disclosure statement. The disclosure statement from the time it’s approved is valid for six months and a lot actually changes in six months. So we’ve been going back to the disclosure statement and updating that and working at sending out share certificates, which is something that we have to do. But when things calm down a little bit, we will get on to the Barossa co-op. They have a clothing store amongst their shops in that retail outlet and we’ll talk to them. And this is one of the wonderful things about co-operatives. You know, one of the rules is you help each other, so you ask another co-operative for help and they say yes, and it’s wonderful. So you’re part of a, you know, the co-op family, which is really good. You’re not doing it alone, even though we feel like that, you know, out here in Cootamundra, there are other co-ops around that will help.

Michael Cavanagh:

So do you think some of the co-ops you’ve spoken to, you suddenly thought, goodness me, we’re going to scrap that idea of ours because it could go pear shaped that assistance is practical from the co-ops, as well as just in lining up suppliers, those sorts of things as well.

Leigh Bowden:

Yes, absolutely, all of it, all of it. I’ve got a daughter at the moment who’s trying to set up, you know, a little start-up business in like jewelry making. And she’s, you know, on online forums. And she said everyone is very closed and secretive about their suppliers and what they’re doing. Reluctant to share information, it’s the antithesis of a co-op where everybody shares information. This works for us. This didn’t work. One of the things we learnt from Sea Lake is that your manager is so important.

Michael Cavanagh:

You’ve got now the support from the other retailers in Cootamundra after a bit of hesitation. If though you are doing particularly well in a line, which is also available by one of the privately owned operations in Coota, and they come to you voicing concern, how would you as a co-op yet also need to be a viable business handle that?

Leigh Bowden:

So we’ve said all along in our business plan that we want to work with the other retailers and we’re talking at the moment of having a roundtable meeting with a glass of something to talk about, like, we’re all in this together. It’s about keeping Cootamundra viable. We do not want to take business away from you. We will not stock the same lines that the other stores in Cootamundra stock. We’ve said this so that we don’t foresee that as being a problem. At the moment there’s still no one carrying, as I say, bras or children’s budget children’s wear. There’s a store that does gorgeous kids clothes, fancy kids clothes, but no one’s doing that, Terry-Towelling jumpsuits. No one’s doing nighties. No one’s doing dressing outs. No one’s doing slippers. We’ve got two aged care villages in Cootamundra. No one’s catering to those people. So, you know, like we see our niche as different. So we’re not going to be trying to carry the same things as the other retailers. The other retailers, there’s one that’s a high end, gorgeous store that people from Melbourne come to shop in because, you know, it’s unique kind of clothing and it is high-end clothing. There’s another one that’s a bit on the zany side and different clothes. There’s another one that caters for the young, hip and now people, the youth. So we’re looking for, you know, the older demographic, conservative and the babies, you know, like clothes when babies crawl through the knees, you can throw it out. So there’s not anyone catering for that market. So it will be a unique market. But what we want to do is to work with the other retailers, clothing retailers in Cootamundra, and it’s proving a little bit of a stumbling block at the moment. When we had the first meeting, people that were employed by Target were there wanting it to go ahead. Target closed in April this year. The longer the gap has gone, the more the retail has taken up the lines that Target used to stock, the less enthusiasm there is from the other retailers to support the co-op that’s not to say all of them don’t support it. A number of them do, but it is a matter of saying to them, it’s okay, you know and people will come. They came from other towns to shop at Target because Target was affordable and good quality that’s what we need to get to so that people will come from other towns too. And isn’t it shocking saying that, you know, we want to keep all our money here in Cootamundra and then encouraging people to come. But I think I think a co-op that is working a community owned co-op will attract people that will be a tourist attraction. Look at this; Cootamundra has claimed its own store. It’s, you know, acting out of sovereignty here. So, you know, hopefully that will be an attraction. But the working with the other clothing retailers is still in progress, and hopefully this meeting will go ahead and everyone will be on the same page and working together.

Michael Cavanagh:

You have yet to decide on the premises. And you’re also raising money through shareholders. Are you able to go elsewhere for finance, more for infrastructure rather than the day-to-day running of getting product in? If a premises turned up that suited you down to the ground and whether it be a long-term lease or even purchase, are you able to go outside of the shareholder to finance any part of the operation?

Leigh Bowden:

Absolutely and the co-op that Coota District Co-op decided right at the beginning we were not going to invest in the building. We were always going to lease the building. The old Target building was owned by a couple of brothers who got to the point where, like they were getting on, they wanted to sell it. They didn’t want to lease it, they wanted to sell it. So, you know, we thought, right, you know, let’s look at buying this building, but not with the investment for the Coota District Co-op. So what’s happened is that a group of people has come together in Cootamundra, and we pulled the trigger for this just last week and have set up a unit trust, 10 people, to buy a building. Unfortunately, the Target building was sold just before we got to the point of, you know, having the unit trust, you know, come together. And that was fair enough because the brothers had said, look, we’ll give you six months and that time, you know, it was up that was from before that co-op was actually registered. So it had been on the cards for a long time. However, we’ve got 15 empty shops in the main street of Cootamundra, so we are looking, the unit trust is looking at a couple of buildings and doing building inspections. But what’s happened with the unit trust and these are all local people, we’re hearing because of lockdown that people, you know, running businesses that weren’t essential services and couldn’t stay open like hairdressers and, you know, like clothing retailers, are behind in the rent. And what’s happening is that the owners of the building, the landlords who live in Sydney or Melbourne, are not being generous with, you know, allowing these businesses to take time to pay back the rent. So people are getting excited. This unit trust is saying, okay, well, this might be unit trust one, and we’ll buy a building for the co-op, but we can get together. You know, more people, more investors and have the buildings that are vacant in Cootamundra now owned by people in Cootamundra, with the view of helping start-ups, young people that want to start a business to get ahead. So it’s not a five by five lease, it might be a three by three or two by two. So this is something that’s just become, you know, in the discussion in the last week that people are noticing now that businesses are in trouble because the business owners are from the big cities and don’t understand the nature of life in a country town and also the rents. Some of the rents are huge, just prohibitive. There’s one store, a cafe in the main street, paying $800 a week rent. Like, it’s just not viable in Cootamundra, so that’s been an offshoot of the co-op, which is very exciting.

Michael Cavanagh:

So the co-op would be therefore possibly not just indirectly, but through the unit trust and otherwise possibly setting up partnerships with other businesses dependent upon what the shareholders think.

Leigh Bowden:

Absolutely and we’ve said, okay, the first business is, you know, like a store selling good quality, inexpensive basic clothes. But it might be, you know that as we get on, we have money that we can buy another business like a white goods business. You know there’s one in town at the moment, but the owner is becoming elderly. You know, hopefully someone will come in and buy it so that we keep having white goods. But there has never been, well, there has been, but there hasn’t for recent times, been a shoe shop in Cootamundra, solely shoes. Actually, three of the stores sell, you know, some shoes, one riding boots, one sneakers and one, you know, the terribly glamorous, you know, cocktail party end. But you know, nobody sells school shoes, so nobody sells, you know, work boots. So, you know, there’s potential there. We’ve got to, you know like a 20-year plan that, you know, when we’re doing really well, yes, we want to branch out, but that will be a decision of the members. Yes, this is, you know, I can see a niche for this. Another thing that people keep asking because it’s a co-operative, are you going to stock local Coota produce? Not yet that’s not part of the brief at the moment, but there’s nothing to say that further down the track, we won’t do that, that we can stock Coota produce both like agricultural produce and craft produce. There are a lot of artisans around. So we’ll say it’s, all the possibilities are there.

Michael Cavanagh:

If you are to branch out, whether it be to assist other businesses to start up or to expand the operation itself and that requires extra funding, would you then go and try to bring in more shareholders or depend on the profits you’re making, subsequent financing of the operation? How would that occur?

Leigh Bowden:

At the moment, the limit is 750,000. So the board would make it a decision to release more shares that would be a board decision, but nothing says we have to stop at the 750. Like a lot of people are saying now, we’ll see how it goes. You know, we won’t invest yet. We’ll see how it goes, which, of course, means it’s not going that quickly. But when it’s up and running and people say, okay, you know, like, now I’ll invest because it’s up and running, then we’ll certainly, you know, have another, you know, 200,000 shares available, you know, so that we can increase the income and do more. So, yes, that’s absolutely possible.

Michael Cavanagh:

As you mentioned, some of the other retailers in town are nervous. They’re watching what’s going on, you also mentioned, for example, the town of Sea Lake and increasingly co-ops in regional towns that are doing well. I can think of co-ops that started off as dairy and now they own and operate petrol stations. You mentioned how Sea Lake has gone and bought the pub back into the community. How would you handle that given the initial nervousness of other retailers in the town, would you look at possible expansion?

Leigh Bowden:

It would absolutely depend on the members. I mean, you know, the other retailers, once we’re up and running, you know, can see and hopefully before that, see the benefit of it, you know, to the town. There’s nothing to stop businesses becoming members of the co-op. You know, the businesses can be part of the co-op. So, you know, and then they have a voice in the way you know, the co-op is run. So I can’t say that there would be any conflict because it’s member based. You know, the board makes the decisions based on the input of members that community engagement and this is, you know, why I’m part of it because my background is in community development and community engagement is so, so important. Unlike other companies, you know where the shareholders get the vote, according to the number of shares and you know have monopolies and the people who are shopping there, you know, don’t get the say. So everything will come back to the board. The board will take it to the members and we’ll take it from there. I can’t predict.

Michael Cavanagh:

Coota got a bit of a co-op mentality already with not just the proposal you’ve got. There are a couple of other co-ops and there’s also the Southwest Credit union. And would you go with them as well if you needed other finance? Would there be the proviso that you’d have to go through other co-op businesses initially for whether be more product or more financing?

Leigh Bowden:

We haven’t got that written down as a policy. Again, it would be a board decision. We would discuss that when we were originally raising money. We had a monster garage sale in March this year to raise the money to pay for the legals and pay for the registration of the co-op with the Department of Fair Trading. At that stage, we were banking with the credit union. But when we became registered, we moved to Westpac because that’s a bank that’s handy in town, but we’ve still got money with the Southwest Credit Union because the money, which was 7,500 that we raised with the monster garage sale, was for those set up expenses. And what we didn’t use was earmarked to go to one of the charities in Cootamundra. So there’s, you know, 2,000 still sitting in the credit union to go there. Frontline is actually a co-operative, we have learnt. So thinking about using Frontline, then we’re supporting a co-operative, but we’ve got Australian-owned, ethical, those are the two things that we’ve written down for our suppliers that’s the preference. But the buyer would actually be the general manager, but the policy comes from the board, so it would be a board decision, but we haven’t discussed that yet, Michael.

Michael Cavanagh:

Going in as the Cootamundra co-op and then dealing with private enterprise such as Westpac, does it take a lot more convincing of those sort of operations that this community-owned operation in Cootamundra could be viable?

Leigh Bowden:

No, not at all, Westpac during lockdown have had our information sheets and our membership application and additional share forms in the bank and because the banks have stayed open during lockdown, the women at the bank have been helping investors fill in the forms, so they’re really supportive, love it. I went and spoke to a local businessman on Thursday, and he was very excited about it. He wants Cootamundra to thrive. He’s got two businesses in Cootamundra. He actually lives in Wagga, and I gave him the business plan, you know, in the prospectus. And he said, you know, the money like; I’m not interested in the return. I understand the social dividend. My concern is how it’s going to be run. But the future boards will be elected by the members, from the members and as more people join, of course, there are greater skills, which is good.

Michael Cavanagh:

Do you feel that there’s a sense of obligation? You’ve gone to Westpac to see about finance, but you’ve talked about the profits that get ploughed back into the business over the years. Is there a sense of obligation, though, that if you are investing any of the money made by the co-op that that should either go to a mutual or into other sort of co-ops that can return a dividend?

Leigh Bowden:

We haven’t discussed it. We haven’t discussed it, Michael. I would imagine that most of the money or all of the money will go back into the co-op. You’re talking about, you know, making money and having money there so that we can do more in terms of buying new businesses. I don’t know. I don’t know. It will be a board decision and we’ll discuss it. There is, we have no policy on that yet, right now, our aim is to get the Coota District Co-op to the 750,000 so we can open our doors, but it’s certainly a question to take to the board.

Michael Cavanagh:

You’ve got the co-ops in the district and wider helping you. You’ve also got BCCM providing assistance and some of the other businesses around town and elsewhere that have been successful, providing support. Going to council and you are a councilor yourself, how important to get a co-op up when you have to jump through hoops, Fair Trading, all these sorts of things, do you need the support of council even more so than, let’s say, a private enterprise setting up?

Leigh Bowden:

Absolutely and we have it. I moved a resolution at council that the council support in principle and in kind the development of the Cootamundra District Co-op and that was passed unanimously. And so our council, being an unhappily merged council and like most merged councils, is looking at a deficit. So the council is not in a position to support in money way financially at all. But the council have been wonderful in, you know, printing of membership forms, printing of posters to advertise the monster garage sale, doing that kind of thing, allowing, you know, me to speak or other members of the board to speak at meetings. They’re very much aware of it and I would say a third, yes, it is a third, a third of the councilors have become members and invested. So yes, it’s good, it’s being supported.

Michael Cavanagh:

You’re setting up what is actually a commercial operation that is community-owned and community-run. And you’ve got to go through all the different departments to get the okay. When you go in as a proposed co-op, is there a little bit more wiggle room for a co-op than there is, say, a privately run organisation? Or do you find that the hoops that you’ve got to jump through are even more?

Leigh Bowden:

Not having set up a private business, I don’t know, but we have on our board a fella that runs his own business and he’s the chair of our Finance Audit Risk Subcommittee, and his mind is that we have to be bloody in being a co-op. We have to be so tight because we are accountable to the members. So like, no, I would say I don’t feel there’s anything more imposed, you know, from the outside. Like, we put our disclosure statement in three times to the Department of Fair Trading, and it was sent back for amendments and changes, which we did, which was very rigorous and really good. But we want to be absolutely up to the mark. You know, we have to be the best business we can possibly be because we are owned by the community and we owe it to the community to be right up to speed with everything.

Michael Cavanagh:

How do you juggle like demand of the community because you’ve got a board and they make decisions, but there is always going to be this underlying current that you are community-owned. You’ve got to please the shareholders. You’ve got to make a quid and you’ve got the board. How are you going to juggle making those sort of decisions?

Leigh Bowden:

The board will take direction from the members. I mean, issues that come up will be voted on, as it is in any, you know, business. I mean, it is a community-owned business and the difference is business. But there are a whole lot of community organisations where, you know, things like any incorporated body has to follow the rules set up by that incorporated body. So I don’t see that there’s any conflict like things are. I mean, it would be good. And as the board, we work on this at the moment, consensus, basically, you know, we’ll talk things through until we get consensus about something. And then, you know, the minutes will say it was resolved that such and such happened. There have been no dissenting voices yet. I think all the people who have become members and who have invested know what we’re on about. So I don’t think there’ll be any, you know, dissension amongst the ranks. I mean, I was thinking maybe there could be a problem with quality over, you know, cheaper that could be something where there might be dissension, you know, you get if you go to sweatshop labour, you probably get a cheaper product. But I think the members have said, no, we don’t want sweatshop labour. We want it to be ethical. So I think those problems, if they arise, can be resolved. Again, part of my background is facilitation of groups. So, you know, it’s having everybody be able to have their say, have nobody feel that they haven’t been heard and then you reach a decision that everybody can own.

Michael Cavanagh:

So would you be seeking ideas and advice on a regular basis or have a box inside the door suggestions? Or would it come up at the AGM or people go to the board? If people feel that there is something that is really required for possibly change or just something different in the co-op store itself? How do you handle that sort of thing?

Leigh Bowden:

We would invite feedback from the community. I think a suggestion box in the store is an excellent idea.

Michael Cavanagh:

They could stuff their bras.

Leigh Bowden:

They could, they could with all their suggestions and ideas. But they already like because it is a community store, it will give us more room to cater to the needs of our specific community. Target originally put in stock for the, you know, the town or the region it was in, it got to the point where all Target’s stores stock the same items. So, you know, Cootamundra was, you know, having the same stuff as Coffs Harbour, which, you know, didn’t work, you know, coastal further north, you know, inland, further south. So what we can do is actually, you know, ask people what they want. So for example, I know one old fella in town who doesn’t think that the co-op will be a goer, given newspaper articles about how start-ups fail, (co-ops fail less than other start ups). He said, you know, I was talking to him, so David, what do you have in the way of underwear? He said, well, I like Y-fronts, navy blue and singlets. I said, also navy blue. He said yes. I said right, the co-op can stock those for you, David. Now that I know, I don’t think I should know this much about you, but this is good. We can stock this. Another example was that there was a woman who shops for her mother-in-law, who’s in her 90s and this woman, I was speaking to her on Thursday night and she said, you know, I’ve had to go out of town for bras, for the MIL. But I said, what kind of bras does she like? And she said, well those, you know, crop top kinds without any underwire. She wears Bonds cottontails. She wears, you know, Bonds singlets. And right now, she’s in the market for old ladies summer sandals. So it’s knowing your clientele and you know, things like that, we would certainly seek, you know, input from the community. What do you need, what would you like stocked? It could even get to the point where, you know, like, okay, there are a number of people that are XXL that wear this and that’s been something else that the larger women in town have said. I hope you’re going to cater for us big girls. Absolutely, big girls are part of the market in town. But I’ve mentioned before the disability industry there are a number of people in wheelchairs and I’ve been looking up like just Googling, there are clothes that, you know, look like regular clothes, but that have back openings, especially for people in wheelchairs. Like I haven’t done any costings or anything about them, but they could be lines that we carry because people move to Cootamundra because of Elouera, the Elouera School and the Elouera Industries. We could cater for people if we, you know, know there’s a market there and it would be helpful. So absolutely open to any suggestions, but women have said, you know, I could go into Target and the girls at Target knew what kind of knickers you know I wanted and went straight to them that’s the kind of service we want to provide.

Michael Cavanagh:

Leigh, you’ve got a target when it comes to money. You’ve got the deadline. How difficult getting close is that deadline will it be, do you think, to either go yes or no?

Leigh Bowden:

As I said, Michael, it won’t be yes or no. It’ll be going to the membership saying, okay, the target was 750,000. We’re up to 400,000, we can say, we’ll increase the deadline and we can keep getting investment to reach the 750 target. Or we can say to them, we can start smaller on a smaller scale, have a more limited range of products that we’re supplying. Or we can say, this is not going to work, you know, it’s too hard and you can have your money back. What do you want to do? It’s up to the members to let the board know what they want to do. And we are of the mind like, you know, we’re at seven board members and two steering committee members that we aren’t prepared to let go because we love them and they’ve got skills that we need. We’re all volunteers. We’ve been meeting every week, about like three weeks over Christmas since August last year, that’s now coming up for 14 months. We’re all a tad tired. One of the risks we identified was, you know, board burnout. We’re not burnt out and investments like Wattle Grove, you know, encourages and keep us going. But there will be no shame if we say it didn’t happen. We’ve done everything that we can. I guess apart from going face-to-face to people, and that’s been difficult because of COVID and also, you know, speaking to people muffled through a mask. And we still have to we’ve got eight weeks before the deadline ends to do that to go to people. But, you know, we’ve given it our all. If it doesn’t go ahead, then we say, okay, then the community of Cootamundra didn’t want it, didn’t want it badly enough, 450 people did but the other, but my Math is not great here. Take that away from 6,500 and you’ve got the well, you know, the 6,080 people didn’t so yes, that includes children though, so I guess that really doesn’t count.

Michael Cavanagh:

Leigh Bowden, chair of the Cootamundra District Co-op with BCCM’s, Michael Cavanagh, we’re heading over to South Australia. Michael, is that right?

Michael Cavanagh:

Certainly are, we’re going to the Fleurieu Peninsula in the next podcast, an area that’s got a long history in sheep, pork and also beef. And in the sheep, it’s wool and meat. And in this case, we’re taking a look at the meat aspect and how a group of farmers have banded together to buy back the district’s abattoir. But it’s a little bit different, it’s not just the farmers that are banding together, but it’s cafe owners, it’s hauliers and meat processors and even an advertising guru.

Melina Morrison:

So that’s the next podcast Paddock to Plate on Meet the Co-op Farmers. I hope you enjoyed this latest episode of Meet the Co-op Farmers. If you’d like to know anything about setting up or running a successful agricultural co-operative, you can find out everything you need to know at the Co-op Farming website that’s www.coopfarming.coop that’s right, co-op for co-operative. Please share this with your mates. If you enjoyed this story, we really do want to get the great stories of farming co-operation out there and remember in a troubled world with all of the challenges, but also the opportunities we have, we really are better together. I’m Melina Morrison and I look forward to seeing you on the next episode of Meet the Co-op Farmers.

• Listen to all podcasts
• Find out more about the Cootamundra District Co-op
• Read our story on the Cootamundra District Co-op
• Find out more about co-op farming
• Subscribe to our monthly Co-operative Farming e-newsletter
• Contact the Meet the Co-op Farmers podcast team
• If you or your community want to know more about setting up and running a co-op, contact the Business Council of Co-operatives and Mutuals