Phoenix Earth Food Co-op
Meeting of the Board of Directors

Held on the first Thursday
November 13, 2008
beginning at 6:30 PM and
ending at 8:47 PM.

Directors & Officers in attendance:
Yvonne Goodwin, President                                         William Watkins
Robert Bower, VP                                                        Will Mellon
Lisa Blake, Treasurer                                                   Halasz Sandor
Nancy Pickens                                                             Karl Richarson

Also in attendance:
David Finet, Interim GM
Carol Collins, NCGA
Tammy Brandner


Dave Began the meeting with a Progress Report and Update

Current activities mentioned are:
reorganizing and cleaning the store;
working one-on-one with staff and buyers;

At the time of meeting, $14-15000 of $45,000 capital raised through equity.

The current challenge is
Attracting a qualified person to GM a sinking ship.

It was noted that there was a
Decrease in sales 20% since August.

Correction, approximately 270 members (not 500 as previously thought)

Dave continued with a Review of Phoenix Finances
An immediate concern of $8,300 money that is owed.

Committed equity set aside in (escrow) account is $7000
which has to be used for store cap items

Dave noted that
Assets have dropped by $15,000

Also suggested investing in new equipment and
where to find Funding for the investment?

NO CASH available in equity.
correction: NCGA DUES not EOUITY

$8000+ in current liabilities
Liabilities and equity need to match.

How Phoenix Earth got into the situation.
There was a total sales of $450k through the end of October 08

$305 cost of goods — Formula
gross product/sales − cost of purchase/service

$0.305 on every dollar is needed to pay other expenses

The next biggest expense in labor
$145k - gross profit
$169k - all other expenses

gross profit (30%) has to become
higher than expenses (36.8%)

Increase in sales is what the co-op has least control over.

Controllable factors are:
purchasing,
waste,
loss,
and gross margin.

Recommend cutting staff hours.

Also, educate staff on
product costs/quality, and
compare and contrast to other markets places.

Zero incentive to become a member of the Co-op.
Need more incentive—Why should I become a member?
No perceived value for membership.

Carol
Who do we serve? At what cost?
Sales must increase!
Need new traffic!

Lisa raised concern over the inability to efficiently inform members of store information.

A recommendation was made to hire a GM
under the condition that income will increase
incrementally with store performance.

Though it was made clear that a strong GM it is essential.

An inquiry was made about the store's ability to run with 3 full-time staff, a general manager, and working members.

Lisa asked if the $200 members had invested in the co-op would be refunded if the store dosed.

Conclusion was that it would not be refunded,
funds would go to pay liabilities.

Carol recommended that we make a clear target
regarding when it is necessary to close the store.

She advised that the only thing that the board can do to stop the daily lose of money is to cut staff.

Robert informed the board of the possibility of the Collingwood Art Center's desire for an organic and natural food shop/store.

Carol advises more frequent financial reports.
And in regard of moving, that there be an exclusive project manager.

Dave recommended Abby as the best choice as a GM.

William nominated Tammy Brandner for the board of directors, Yvonne seconded and the board unanimously approved.

Dave's recommendations and observations
Major predicament: no assets to cover liability.

Tasks:
1) Choose a GM;
2) Cut staffing;
3) build up a working member base;
4) communicate with owners (members?);
5) declare a Point-of-No-Return

Need for a hiring committee was raise.

Concern over cutting staff regarding opening the store with one person as an unsafe procedure. Working members was suggested as a possible solution.

Yvonne nominated William as Vice President, Will seconded and the board unanimously approved.

Yvonne nominated Will as Secretary, William seconded and the board unanimously approved.

$20,800 initial suggestion for GM salary, with incremental increases.

Will suggested the GM's new yearly earnings not be decreased as a result of promotion.

Eventual salary range discussed was $17,000-20000

Hiring Committee for Abby:
Tammy, Yvonne, Karl, and William, with Dave as an advisor.

Robert motions for approval of committee, Will seconded and board unanimously approved.

Robert and Karl agreed, schedule permitting, to participate in staff meeting the next day.

847: meeting adjourned.