Growth Policy

The Board of Directors and management of Mississippi Market believe that growth is important to the cooperative. Growth could take the form of opening more stores, extending our business in some complimentary fashion, or pursuing other as yet un-thought of ideas. While we don’t know exactly what form it will take—we do know that the co-op needs to be preparing itself for future growth. (Click here to read the latest updates on how Mississippi Market is working toward growth.)

While opening additional stores is only one of the possible avenues of growth, it is one that involves significant investment by the cooperative. The board of directors and management have established guidelines meant to guide us should we be faced with a possible project of opening a new store. These guidelines, with some modifications, could also be used in pursuing other significant developments.


GM’s Role: Any new store development or major new project development will be implemented by the GM consistent with the limitations stated in the GM Limitation Growth Policy, L9. Key decisions in implementing this policy are subject to the approval of the Board as specifically noted.

Board’s Role: The Board’s role with respect to the Growth Policy will include:
1. Facilitate communication with MM members to: solicit members’ ideas, provide information on growth decisions and progress, and build member commitment to the project;

2. As necessary, approve, in advance, key decisions recommended by the GM as identified in these guidelines. Specifically the Board will approve:

a. site
b. the project sources and uses budget
c. all real estate contracts
d. all contracts in excess of $50,000
e. any financing package—any mortgage or other encumbrance of co-op property associated with the project
f. the terms and conditions of the member financing package
g. expenditures in excess of the approved sources and uses funds

The GM will seek the advice of appropriate advisors in the development of a new project and will include in the plan:

1. Site location studies including a current market analysis specific to the proposed plan
2. Pro forma financial statements for 3-5 year time frames
3. Sources and Uses
4. Cash Flow projections for each store
5. Capital Expenditures budget
6. Key decision points
7. Communication plan
8. Technology plan
9. Human resources plan and timelines for hiring and training
10. Timeline, which will be updated quarterly

The GM will provide monthly reports that include status report: upcoming decision points; potential red flags to achieving the next milestones.

1. Selection of a site for a new location or business opportunity is subject to Board approval.

2. Professional Analysis. The GM will obtain qualified professional planning, analysis and research to (1) identify general search areas for a new location, and (2) to select a specific site or sites. In any given fiscal year the GM is authorized to prudently invest up to $15,000 researching sites. (Note: this could be added to our Executive Limitations: L5 Budget Guidelines and Planning Policy)

3. At a minimum the GM will take the following factors into consideration in identifying areas and sites for a new retail location:

a. Help the Co-op achieve our Board-stated Ends.
b. Residence of current MM members and shoppers.
c. Community interest in having MM locate in the area or at the site.
d. Potential for increasing MM membership in the project area.
e. Potential for the new store to foster a sense of community in its area.
f. Adequate parking and accessibility for a variety of transportation options, including walking, cycling, and public transportation.

1. The GM will ensure that all contracts are in writing, with appropriately licensed and bonded companies, and shall endeavor to use local businesses that are woman and/or minority owned and have equal employment opportunity practices compatible with Mississippi Market’s.

2. The GM will notify the Board of all contracts worth more than $25,000.

3. The GM will obtain Board approval before entering contracts worth more than $50,000.

1. During the development process the GM will maintain the quality of the current stores.

2. During the development process the GM will maintain the co-op’s economic viability.

3. Operating profit (earnings before depreciation, amortization, patronage distributions and other income/expense, and taxes) for the current stores will not fall below 1.75%.

4. Debt Coverage Ratio. Net positive cash flow from operations (that is, net income plus interest, plus depreciation and other non-cash charges) divided by fixed principal plus interest payments, will not be less than 1.2 by the end of the first full year of operations.

5. Unrestricted cash will not fall below 21 days in cash during the expansion.

6. The GM will prepare pro forma budgets for the overall operation of the co-op (including the project) that extend five years past the date of commencement of operation of the project and that show operating profitability of at least 1% of total sales after one year of operation, 1.5% of sales after two years, and 2.5% after three years.

7. The GM will obtain Board approval for any borrowing in excess of that approved in the Financial Plan.

8. Owner Financing. Member equity and member loans shall account for at least 10% (lease option) or 8% (purchase option) of the total estimated project cost.

9. Current Ratio. Current assets divided by current liabilities, shall not be less than 1.25.

10. Debt to Net worth Ratio. Total debt divided by total net worth, shall be not more than 3.50 in the first year of an expanded operation, 3.25 in the second year, and 3.00 in the third.

1. The size of the project will be within the range as stated in the Board-approved sources and uses plan.

2. If a new store is involved, the GM will periodically advise the Board on the planning and development of the store design, which shall take into account member-owner preferences for products and services to be offered and the ambience of the store.

3. Any project will use environmentally friendly and energy efficient design, materials, and technologies to meet LEED Gold standards, irrespective of certification. (L9.1)

1. The GM will report regularly to the board.
a. Reports to the Board will include general monthly updates, quarterly updates of time lines, projections, actual costs to budget, and monitoring reports of performance to the Growth Policy.

2. GM will provide emergency updates to the Executive Committee as proves necessary.

3. GM will use the newsletter, social media, store displays and other methods to keep member-owners and shoppers informed about the progress of the project.

4. The GM will ensure open communication with the staff, and will encourage participation of MM staff in the planning and implementation of the project.

5. The GM will ensure an effective communication plan is in place to inform and involve the community in which the project is located and to keep the general public informed.

Key decisions - growth website