April 11 – Meeting Notes

@ Jeanine’s (Moutarde Rustique / Bread / Cheese / Ben & Jerry’s)

- Bad news about Memory Lane Antiques? Jeanine gave Mary a call, she is looking into it & will call back. If not, new realtor.

- Dena talked to Pat Paternaud at Jones Realtors. We are going to start looking for a new place. Towns to look into : Northampton, Florence, Easthampton, Amherst, Hadley & South Deerfield. We will each look into housing and zoning for these towns. There is also a for-rent by owner on Market Street to look into.

- We reached a consensus to purchase Quickbooks 2010. Dena will hold onto the receipt until we figure out finances.

- We realized there were  men’s shoes stuck to the porch ceiling.

- Keep trying contractors?

- We reached a consensus for our formal business name : Valley Hostel Co-operative. YAY!  Jeanine will apply for an EIN.

April 5 meeting, again with Adam

some meeting notes from yesterday. please add to them if you remember anything i forgot to include, especially if you volunteered to do something that i forgot to include.

1. So, we met again with Adam to finish answering and clarifying remaining questions from the sample cooperative bylaws we’ve been working with. I feel like we all seem pretty ok with what’s there. Adam will forward us some language to include about temporary workers who are not on our “membership track.” that’s really the only thing missing, i think. Dena volunteered to edit the document to include the minor changes we’ve been discussing and the part-time language. Then, it will be done.

The next step is to contact VAWC in order to set an appointment to meet with a lawyer to get it signed and submitted. The lawyer that VAWC has worked with is William Adams.

2. In the meanwhile, we talked about getting a tax ID number and opening a bank account. Dena will investigate various accounts at various banks this week. Jeanine will look into registering us for a tax Id number.

3. Other things we are working on this week:

Jeanine is looking into payroll taxes and other taxes our business will be responsible for.

Wendy is looking into what kind of insurance our business will need and may try to set up appointments to talk to some insurance agents.

Dena is plugging away on the business plan, and exploring the possibility of purchasing QuickBooks.

Dena and Rich are both trying to make appointments to speak with contractors about our project.

4. We had a discussion about what sorts of jobs/roles we’d need to fill in the hostel, and what kinds of work we are drawn to. This is sort of how it broke down:

* Finance/bookkeeping/payroll/accounting/taxes/insurance etc – Dena, Wendy, Jeanine

* HR issues/HR policy development/ evaluations/hiring issues/benefits/training and development etc – Jeanine, Dena

*Advertising/publicity/online presence/design issues – Wendy, Dena

* IT/computer systems – Jeanine

*Activities coordination – Rich, everyone

* Maintenance/safety/security – Jeanine, Rich, Wendy

*Area information – Dena

*Office management/scheduling – Rich

with a few exceptions, it turned out that most of us were interested in most things, which I think is good.

DM

March 30th, 2010 – meeting with Gene Talsky

Wendy and I headed to Easthampton this morning to Eastworks to meet with Gene Talsky at the Valley CDC. We got a lot of really useful information from him. Gene has started up four businesses and now is giving advice because he feels like he had a lot to give. The first thing he told us we should do is to write up an informal agreement, which identifies what specific tasks each of us does or is in charge of, what everyone plans on getting out of the project, and he used the words ‘intent’ and ‘exit strategy’, which are pretty self-explanatory. He said that this agreement should just be between us and that no lawyer would be needed. It would just help clarify everyone’s role for the sake of argument/sanity.

As I already wrote, he also suggested that we take a look at a hostel in Hanover, New Hampshire, because the town is a lot like Northampton and the hostel is similarly sized. However, as Dena said, it is true that they have been open for a long time and wouldn’t exactly be the best people to talk to about start-up expenses. I’m still fond of the field trip idea though.

We then went through how to write out the financial projection section of a business plan. He went through some pretty basic stuff but I wrote it down anyway: Revenue is obviously ways that money will come into the business, all categorized, the Cost Of Goods Sold is physical costs related to revenue (material, labor, shipping, NOT including payroll, rent, utilities), then startup costs, then operating costs (Rent, utilities, payroll, computer, legal/tax/insurance expenses etc.). The financial plan should be month-by-month for at least one projected year, and then quarterly for another two years after that, and as an advanced project he recommended that we make three (three year!) financial projections- best-case, worst-case, and expected-case.

He also gave us a handout called Business Plan Guidelines that I’ll copy and pass out at our next meeting. Gene said that it might be different than what Dena is learning about in school, as it’s from his personal experience.

I’m just going to type out this handout called Business Start-Up Checklist: Tactical Logistics. Not only does it have a most awesome name, it’s most useful in a most basic way.

1. IRS.GOV for Employer Identification Number (EID)

2. MASS.GOV for registering new business

3. Local government office planning office for permits/registration

4. Local government and State Health Departments (for food products and services- for the cafe)

5. Commercial insurance agent for liability and business insurance

6. MASS.GOV for Worker’s Compensation Insurance

a. self

b. employees

7. MASS.GOV for sales tax

8. Attorney/legal services for structure (DBA, LLC, INC)

9. Accountant to set up bookkeeping

He also gave us a bunch of places to look into for assistance- most promising looks like it will be the WNEC Law And Business Center For Advancing Entrepreneurship – they give free advice! He gave us the card of Aimee Griffin Munnings, whose email is emunnings@law.wnec.edu.

Also of note is the Women’s Fund of Western Massachusetts, Teri Anderson (though of course we already know her), the Western Massachusetts Enterprise Fund (for a loan, he said if/when we get rejected by a bank they can help), the Pioneer Valley Planning Commission, the Hampshire Hospitality Group, and Angie’s List for contractors. He also gave us the name of a CPA named Jill Kopka (413-575-4200) and suggested that we check out the Northampton Visitor’s Center and ask them about where visitors stay.

He also talked a bit about marketing, social networking, websites, which were also noted but pretty self-explanatory.

I think that’s it! Wendy- have I missed anything?

jeanine

meeting notes – Thursday, March 25

here’s what I remember from our meeting on Thursday:

- we decided that we should make decisions by consensus, although we feel that a formal process is not entirely necessary because there are only four of us.

- we spent a lot of time reading through the model articles of organization and bylaws that Adam sent us. there were a few sections that we had questions about, or didn’t necessarily understand the language. it will be necessary to understand this stuff a little better before we can meet with Adam and Erbin. we have a tentative date to meet with them on April 5. we’ll need to follow up to confirm that date with them. in the mean time, we should ask specific questions over the VAWC listserv.

- i think Rich said he would look into bank accounts? or did Dena agree to this? i can’t remember. I just know we should look into the Freedom Credit Union (suggested by Adam) and the Florence Savings Bank (local bank well respected by area small businesses.) there may be others we should look into as well.

- Dena is still trying to work through the accounting stuff, and is hoping she will be able to generate the start up financial forms herself without actually having to hire someone to help. she is also looking into various accounting software possibilities.

- contractor; Dena’s referral has not responded. Rich had some other ideas and is looking into them.

- we had a pretty decent discussion about staffing issues. i believe we decided that we would be open to hiring part time staff, even if there was no intention for them to become full member/owners. reading through the bylaws sample gave us ample opportunity to read about how these kinds of decisions are written into the bylaws. we agreed that to be eligible for an offer of membership/ownership, an individual has to have worked for us for at least a year, at half-time or more. it is important to monitor an individual’s performance during that time, so that if that individual is not working out, they don’t face a situation where they have put a year into our company, with hopes of being offered membership, only to find out that we are unhappy with their performance and not willing to make them full members. we discussed the need for hashing out a real HR policy.

- we talked about the idea of having a cafe, but didn’t really reach any real decisions on anything. we considered the options of running it ourselves vs. leasing the space to someone else to operate. we talked about whether the cafe would be a totally separate business, with separate financial forms, or if it would be part of the hostel. we discussed naming it the “Babka Cafe,” dena’s strong preference. The cafe will need some kind of draw to distinguish it from other cafe’s, even if that draw turns out not to be babka. we’ve also discussed having some kind of lending library/infoshop in the cafe, and that could be the draw.

-we have agreed that regular meetings are important, and are mostly trying to meet on Sunday nights, and have rotated between Northampton and Pelham. We agreed that taking notes of those meetings is important, especially to document the decisions we have made, and that responsibility for note taking should rotate. For now, we are choosing to post those notes here on our blog.

-next meeting was planned for this Sunday, March 28, presumably in Northampton, as dena won’t be available to attend anyway.

Visit to Friendly Crossways Hostel

I visited the Friendly Crossways Hostel and Conference Center in Harvard, MA on Saturday. http://www.friendlycrossways.com/

I had a great conversation with Mary and Keith Turner, the inkeepers, although I’m not sure I learned too much that will be relevant or helpful for us. Here are some highlights:

*Keith told me that much of their income comes from being a “conference center” rather than being a “hostel.” I think what this means is that groups come to have events and meetings and retreats, and that this is the bulk of their income, rather than individual hostelers who stop by for the night as they are traveling elsewhere. I think that it will be important for us to do outreach to groups as well, even though we won’t be calling ourselves a “conference center” or “retreat” or whatever, I think we can still expect groups.

*He said that their establishment has always operated as an independently owned hostel that affiliated with Hosteling International, but that in the last ten years, independent hostels have received much less support from HI than they have in the past. He wasn’t sure there was really a compelling reason why we should affiliate. He did say, however, that knowing HI would inspect their facilities every year forced them to keep everything up to standard, which is a good thing. And, although they receive less support and promotion than they maybe used to, they still receive some.

*Because their hostel has been in existence for so long (since the ’40′s?) they have not had to deal with the same issues we have around building codes and zoning ordinances, so he didn’t have a whole lot to say about that kind of stuff.

*I asked him how he does outreach to all the groups that stay with them, and he said it was mostly their website. That’s good news, because I think we’ll be able to have a more effective website than the one they currently have. I also think we’ll be able to come up with other promotion strategies.

I’m not sure what else I was supposed to try to find out. Folks I talk to keep asking me “have you talked to other hostel owners?” as if to say “have you done your homework?” But I think every situation is going to be unique, because times change, ordinances change, and nothing is the same from one town to the next…

Meeting with Lyne Kendall of SBA

So, my meeting with Lyne Kendal was not great: basically, it looks to me like we still need to hire an accountant.  which we would have to do anyway to get our taxes done.

Here is the response I got when I emailed the VAWC list to ask for referrals for accountants:

Here’s one referral:

Steve Harrington

Bova, Harrington & Associates

241 King Street Suite 227

Northampton, MA 01060

(413) 585-5815

www.bhacpas.com

I haven’t worked with him, but colleagues of mine have.  They’ve said he’s expensive but very effective.

Here’s another:

Allen Kronick

UMass Small Business Devt Center

One of VAWC’s member co-ops that’s no longer in business used him to help project their cash flow.  I suspect this support would be free.

One referral we got for an accountant that had experience with cooperatives was Deborah Jacobson in Holyoke, MA:

https://dfjacobson.com/

***

I’m thinking we should contact Deborah Jacobson.  I’ll look into Allen Kronick, but I don’t think he’ll be able to do what we need him to do, at least not for free.  If anyone else comes across any other accountant referrals (family members?) feel free to chime in!

DM

Meeting With Adam Trott from VAWC

We met last night with Adam. Here are some of the highlights:
*Adam said that he and Erbin together can help us incorporate as a cooperative. He suggested that there are some cooperatives, even within VAWC that operate as cooperatives, even though their legal structure may be a more standard LLC or S corporation. He suggested we consider that possibility, although his opinion generally seems to be that we are better off incorporating as a cooperative. I tend to agree, based on little knowledge of any of it. If anyone has other thoughts on this, we need to discuss it pretty soon.
*Adam said he will send me/us info to read on incorporating as a cooperative, as well as a sample of bylaws to look at. We’ll need to read through these and discuss a few more issues. Then we will be ready to meet with Adam and Erbin to actually do this. We set a tentative date to meet of Monday evening, April 5. It’s pretty important that we can all be there.

*After they help us write our Articles of Organization and Bylaws, we’ll need to hire an attorney to sign the thing. Although he said there are few lawyers around who really understand incorporation as a cooperative, he said he could at least point us to ones who will sign the thing without giving us too hard a time.
*Issues we need to really discuss and think about are the possibility of hiring other folks (part-timers? student interns?) and the implication for our cooperative. Adam pointed out that if we have two classes of workers, that will put some of us (member/owners) in the position of being managers and supervisors. He suggested we not do that, but I think this will require more discussion. Another issue requiring more discussion that came up is whether we want to formally organize as a collective, and whether all decisions, especially hiring decisions, will be made by consensus.

please feel free to add to the comments or write a separate post if you can think of other things we discussed that i forgot to include!

DM

Meeting With Mary Hoyer

So I met today with Mary Hoyer, who is on staff of the New England Cooperative Fund (http://cooperativefund.org/), and also part of VAWC, the Valley Alliance of Worker Cooperatives.

The meeting went really well, I think! I Here are some of the important things that i got from the meeting:

*The NECF makes loans. The process of applying and being approved is similar to that of applying for a bank loan, and the financial forms required are similar.

*There are many advantages to applying with them over a bank, especially the fact that they will understand our cooperative structure in a way that a regular bank won’t.

*They will not be able to help us crank our our financial forms. I’m meeting later this week with Lynn Kendall of the SBA, and hope she can help with this. If she can’t, then we are back to looking at hiring an accountant, which we’ll eventually need to do anyway, I think.

*it’s my feeling that we have as good a chance, if not better, of being approved for a loan with NECF as we would with a bank. She also said that if they end up turning us down because our numbers don’t look sound, then a bank would turn us down for the same reasons. My feeling, however, is that they have a lot more interest in helping us succeed than a bank would because they want to see cooperatives succeed. So I think they will provide more assistance than a bank would.

* She was able to answer all my questions about financing, especially about how we organize leagally to accept loans from friends and family and ourselves. She is looking into finding more information about this for me.

*If we receive a loan from them, we should assume that we will have seven years to pay it back, at around 7% interest.

*Other loans from family/friends/ourselves will be paid back after that. Typically, those loans will be no collateral and low interest loans.

Next steps:
*Meeting with Adam Trott tomorrow to talk about incorporation. Mary Hoyer also recommended an organization called the Cooperative Development Institute, and I think they might be able to help us with incorporation (writing our Articles of Organization and our Bylaws) if Adam can’t. And these are the folks who will be able to tell us how to do it as a cooperative, and where that might be different from doing it as a regular business.

*Meeting with Lynn Kendal (SBA) to continue working on the financial forms.

*Meeting with Valley CDC. Maybe they can help us figure out the building code issues and how to deal with Louis Hasbrouck and Carolyn Mische?!?!?! Maybe they can help us with our financial and cash flow projections? http://www.valleycdc.com/sbassist.htm

*Need to find a contractor to work with.

DM

Using the blog to record our progress

So, I thought it would be good to use this blog as a way to communicate with each other as well as recording our progress on the Northampton International Hostel project.
Here’s what we’ve got so far:

We’ve agreed to meet regularly, and hopefully weekly on Sunday evenings. Our next meeting will be at Dena’s in Pelham.

Dena has arranged to meet Mary Hoyer of the Valley Alliance of Worker Cooperatives to talk about grant funding.

Jeanine is arranging to meet with Gene Talsky of the Valley CDC to see what kind of support services they can offer us.

A business plan is well underway, and is mostly waiting to get the financial forms worked out.

And, we have identified a potential site to lease in Northampton, and will be visiting on Saturday. We’ve been informed that we will need a contractor to help us work out the building code details.

The Hostel:Northampton Project

Allow us to introduce ourselves: we are Jeanine Dargis, Rich Droser, and Wendy Messerli. We are trying to start a youth hostel in Northampton, Massachusetts. Stay tuned for more updates.

Here is our facebook group: http://www.facebook.com/group.php?gid=270274170122