Hello everyone,

Since there has been a fair amount of traffic on this blog, I thought I’d give an update.  I’m now traveling the country as CEO of my therapy company, Northern Therapeutic Services, Inc.  We left Michigan in August and headed to Pennsylvania.  In a couple days, I will be traveling to Denton Texas where I’ll be until March or so.  From there, I’m hoping to get up to either Seattle, WA or Missoula, MT.  It’s been a lot of fun.  Business has been very good, and everything is pointing to even better days.  I’m now looking to expand our services to include more speech therapists, physical therapists and assistants, and occupational therapists and assistants. 

As far as Habitat for Humanity goes, I’ve been fielding questions about ReStores and such.  This is something I enjoy doing, as the mission of Habitat is engrained in my soul.  I’ve helped dozens of organizations build successful businesses, as well as my own.  If you have any questions or concerns about your nonprofit or for profit organization, don’t hesitate to ask.  Habitat ReStores are a particular passion of mine, so I might even be able to stop in for a one on one if I happen to be in the area (or passing by). 

So, I’m still kicking and still interested in helping out.  I hope business is going well for all of you. 

Take care!

Mike

Hello everyone,

I have decided to resign as executive director of Otsego County Habitat for Humanity to pursue a variety of business interests.  While this is my personal blog, I will no longer have the time to finish my latest series of ReStore articles.  I will, however, still be available if you need assistance.  Simply e-mail me at nts_inc@yahoo.com and I’ll be more than happy to give any advice I can.  Thank you all for your kinds words of encouragement and support.

Thank you,

Mike

This next article is a continuation of a series of articles where I will outline the details of our successful ReStore business system.  For a frame of reference, our 4000sf ReStore has grossed about $190,000.00 over the past two years in a county population of about 23,000 people (this is our service area).  If you have a ReStore and are reading this, simply ask yourself if your store is grossing about $200,000.00 for every 4000sf of floor space, or per 25,000 people in your service area.  My intention with this series of articles is to hit on all the major areas which contribute to the business system we’ve built to include: 

The Business Philosophy

 Supply/Demand and Demographics

 Location and the Building

 Quality Staff and Continuing Education

 Management Style

 Advertising, Product Acquisition and Sales

My take on why many ReStores fail to maximize their potential

Supply, Demand, Demographics, and Competition

Like any other business, you have to understand the supply and demand elements of your industry.  For smaller communities, you must have a solid handle on this with regard to your ReStore.  Further, you must understand simple demographics of your community.  You need to know if the town in which you’re looking at opening a ReStore can support the store.  None of this is complex, but I do know of ReStores that have suffered by operating in communities which can’t support the store.  Finally, like any other business, you have to know who your competition is and determine if your venture offers a better product and/or service than the competition.

The basic premise of ReStores is to take donated items and resell them to the public.  The questions you must ask are:

Does the community have a sufficient population to support the supply and demand equation?

Is the community, in which you intend to open a ReStore, a primary shopping center of your service area? 

What about competition?

With regard to supply and demand in a rural community, our store is primarily supplied with donations made by middle class folks.  Upper class folks and businesses are secondary contributors, although the quality of these donations tends to much higher.  What we’ve seen here in Otsego County Michigan over the last year is the middle class dwindle as the result of a poor economy.  As a result, our donations have gone down and our sales leveled off.  So, the question is does your community have a relatively vibrant middle class to supply your ReStore?

Now, we look at the demand part of the equation.  Lower income people make up the bulk of our shoppers.  Unfortunately, this class of people can be found in just about every community, so demand is a given.  Whether times are good or bad, demand for ReStores will be in demand. 

Perhaps one of the most important elements you need to look at is the type of town you’re looking at opening a ReStore.  In our case, Gaylord is the shopping center of Otego County.  While there are very small towns scattered around the county, Gaylord is the hub.  While there are only two major roads, Gaylord has businesses such as a Super Walmart, Lowes, Home Depot, Tractor Supply, etc.  I’ve seen other ReStores open in non-shopping hub towns and suffer as a result.  In fact, some affiliates servicing rural counties don’t even have a major shopping hub.  I would be very wary of opening a fully operating ReStore in town which is not a major shopping center.  Does that mean you can’t open a relatively successful ReStore in a very, very small town?  I don’t know, but my ReStore model is not designed for that demographic.

Finally, you have to know what your competition is and whether you can wiggle onto the scene.  When our ReStore opened, we were accused of running a local resale shop out of business.  I didn’t lose any sleep over the matter because I offered a better product/service than they did.  Further, I get paid to look after my business, not theirs.  Anyway, most resale stores specialize in clothing and household items, such as dishes, and knickknacks.  80% of our sales come from furniture and appliances, and we don’t deal with clothing at all.  As a response to those resale shops who did/do take furniture, we offered a service which they don’t – free pickup service. 

The product our truck picks up constitutes about 70% of the all the items sold in our store.  That’s about $133,000.00 last year!  So, when I hear people say that they can’t afford a truck, I say that you can’t afford not to have a truck.  I spent $2500.00 on our first box truck (a 1986 rusted out box truck with a hydraulic lift gate), which was 50% of the total money I had to open the ReStore.  We used that truck for two years, then we bought (financed) a brand new box truck and had a new lift put on it.  That truck cost us about $25,000.00 (about $600/month).  Of course, we have it all nicely lettered too, making it quite the billboard.  Ask yourself, if Mike’s ReStore truck brought in $133,000.00 last year, how much did the truck actually cost?  The answer is nothing.   Get a truck.

Just because there’s competition, that doesn’t mean that you are out of luck.  Simply make sure your product/service is better than the competition.  Our prices also tend to be lower than everyone else’s, including most of the surrounding ReStores (which I’ll get into another article).  Also, don’t forget who you are.  You are Habitat for Humanity, one of the most respected and well known organizations in the world.  Habitat ReStores are also building a brand of their own, which has become quite valuable on its own.  There are about 600 ReStores in the U.S. and Canada, so that’s a lot of brand building going on.  That name recognition is worth a fortune, so take it for a spin!

The next series of articles will outline the details of our successful ReStore business system.  For a frame of reference, our 4000sf ReStore has grossed about $190,000.00 over the past two years in a county population of about 23,000 people (this is our service area).  If you have a ReStore and are reading this, simply ask yourself if your store is grossing about $200,000.00 for every 4000sf of floor space, or per 25,000 people in your service area.  My intention with this series of articles is to hit on all the major areas which contribute to the business system we’ve built to include: 

The Business Philosophy

 Supply/Demand and Demographics

 Location and the Building

 Quality Staff and Continuing Education

 Management Style

 Advertising, Product Acquisition and Sales

My take on why many ReStores fail to maximize their potential

The Business Philosophy

Let’s get started.  I treat our ReStore as a genuine for-profit business venture (yes, I know we’re a nonprofit).  I have put aside all notions relative to the nonprofit world with regard to our ReStore.  In other words, we don’t necessarily do things on the cheap, although we did start our ReStore with a mere $5000.00, which was about a third of our total liquid assets at the time.  I believe that to make money, you have to continue to invest in your business.  You have to invest in location, staff, advertising, etc…  The building should look and feel like a genuine retail operation and represent Habitat for Humanity well.  Customer service should be important, but no more so than any other mom and pop type store in which you would shop.  I simply won’t allow our bottom line to be damaged by a nonprofit mentality.

As the executive director, I play the role of a passive-income business owner.  This means that I should be able to leave my office for weeks at a time, and the ReStore will continue to make money for the affiliate.  My philosophy is simply to allow the ReStore to run like any other retail operation and whatever profit it spins off is used towards our mission.  This doesn’t mean that I don’t play a role, but my role is not critical to the day to day operations of the store.  Further, while there was a ReStore committee formed to get the ReStore started, this committee was disbanded very soon after we opened.  There aren’t too many small retail operations run by a committee of very part-time volunteers, right?  No, a manager who lives and breathes the venture every day must be empowered to run the store and not be micromanaged by the executive director, a subcommittee, or the board of directors. 

Finally, my management style allows me to learn, to move, and to flow as needed; and it allows for my staff to do the same.  We had to write the book on how to build a successful ReStore in a very rural, northern climate community.  There was no detailed manual available for us and no other ReStores like ours to steal ideas from.  I had no illusions that the road was going to be easy.  I knew that we were going to have a learning curve which would be vertical for the foreseeable future.  I knew that neither I nor my staff would have the answers to every situation that would arise.  Mistakes were (and are) an acceptable part of the process.  An example of this fluid style of management can be demonstrated in our search for the best hours of operation, the number of employees needed and the hours they worked, and appliance testing.  We fumbled around with a lot of things until we found what worked.  I am a firm believer that we learn far more from our mistakes than from our successes.  I believe this style of management encourages creative thinking and allows for a much less stressful environment than is found in many corporations, and our results speak for themselves. 

Habitat ReStore can transform a Habitat affiliate in many ways.  From increasing the number of people being serving, to entering into the green/recycling arena, a ReStore can become the cornerstone of a Habitat for Humanity affiliate.  The following will describe the impact a ReStore can have on an affiliate and on your community.

One of the great debates, particularly with some old school Habitat folks (of which I’m a part), is: are we in the business of building homes or resale?    First, the mission of ReStores is synonymous with Habitat for Humanity, for the two entities are one in the same.  If you read the mission statement, mission principles, and the official purposes (click here) of Habitat for Humanity International, you will see that ReStores fit right in with many of those principles.  In my plain spoken way, sitting here on the front lines, I say that, as an affiliate, we raise money and spend that money building affordable homes for people in need.  The principle mission of a ReStore is to raise money for the Habitat mission.  While there are other benefits bestowed by ReStores on their respective communities, which I’ll get into, the bottom line is that these stores raise vast amounts of unrestricted income for Habitat for Humanity affiliates. 

In addition to simply making money for affiliates, ReStores open the doors of our mission to far more people than an affiliate can do without a store.  Before we opened the ReStore in 2004, I was working out of a very small office in the local United Way building, and while there, I might have interacted with a couple dozen people per week.  The ReStore changed all of that by introducing hundreds of people to Habitat for Humanity every week.  People were leaving with a smile on their face because either they were able to get rid of items they otherwise would’ve had to pay to rid of, or they were buying stuff at a great discount.  The face of Habitat became the ReStore, and it happened virtually instantly. 

ReStores have always been associated with recycling and, in the days of green thinking, this has made ReStores very popular.  Simply put, most of the donated items, and even some new items from businesses, which ReStores accept are items which would otherwise find their way to landfills.  This recycling effect is having a major impact on the environment.  The more we can stretch our natural resources, the better.  While I am not sure how (or when), the Canadians developed a formula designed to estimate the amount of waste being diverted from landfills by ReStores.  The formula is to multiply a ReStore’s gross sales by 1.3lbs and then convert to tons.  My little 4000sf store, serving a population of only 24,000 people, has diverted 357tons since we opened in July 2004. 

The other major impact ReStores are having is the number of people who are benefiting from all the things these stores offer.  First and foremost, ReStores provide an outlet for relatively inexpensive items to get into the hands of people who may not be able to buy those items new.  ReStores also employ people to work in the stores, thus contributing to the workforce in a community.  They offer an opportunity for volunteers to help Habitat who can’t jump up on the roof of a Habitat home.  According Independent Sector research, a volunteer hour was worth $18.77 in 2006!   ReStores give people the ability to donate to the mission visa vie used furniture, appliances, building materials, and other household items.  Many of these people would not be supporting Habitat for Humanity if they couldn’t do so by donating to ReStores.  Finally, ReStores are considered a program for a Habitat affiliate.  Just like the housing program, all expenses associated with ReStores are considered “program expenses”.  This is very important because, for nonprofits, expenses are divided into three categories:  Program, general/administrative, and fundraising.  Major donors and the IRS especially, want to see general/administrative expenses kept as low as possible (less than 25%).  Accountants can get creative in allocating expenses when an affiliate has a ReStore to make an affiliate look a little better on paper.  This isn’t a major point, but it rarely gets talked about in ReStore discussions.

When people call me about opening a ReStore I always bring up these points.  Think about the number of people/families who would be left out of Habitat for Humanity if ReStores were suddenly gone.  The number of families being served, and thus the community at large, by an affiliate with a ReStores is dramatically more so than an affiliate without a ReStore. 

 Mike Wood

At the September 2007 Affiliates in Motion Conference (AIM), put on by Habitat for Humanity of Michigan (HFHM), ReStores from all over the state met for their third year to elect three members from each of three regions within Michigan to sit on the Michigan ReStore Committee (MRC).  At this time, the MRC was still an informal committee of HFHM, which had previously been known as MARS (Michigan Association of ReStores).  This grass roots committee was formed in 2004 with the mission to maximize the potential of Habitat ReStores throughout the state.   Anyway, at this meeting, the committee elected a chair, yours truly, and we began to put together an agenda to carry us through the next year – until the 2008 AIM conference.  Among the items on that agenda was the creation of the first regional warehouse.

The concept of having regional warehouses is something that I had been advocating in the ReStore arena for a couple years. It was my sense that ReStores were becoming a huge entity which wasn’t (isn’t) being fully maximized.  I felt that there were donors out there waiting to be tapped who could provide donations on a scale so big that no single store could effectively deal with them.  The answer:  have regional warehouses at the ready to say “yes” to major donations and equitably distribute those items to affiliates/ReStores throughout the country.  This is what the Michigan ReStore Committee set off to do.

In a matter of a couple months, the Battle Creek affiliate had found a fantastic building in Battle Creek, which was part of a local land bank.  The purchase price of the building was a mere $20,000.00.  However, once the land bank learned what our intent was, they dropped the price to a whopping $1.00.  Here comes the first of a few minor glitches encountered during this process.  At this time, the committee was not a formal committee of HFHM.  We didn’t have any money or any means to buy property.  Herein lays the beauty of what you see in Michigan Habitat affiliates.  Art Pierce, the executive director of Battle Creek Habitat for Humanity, made the call for his affiliate to buy the building with the sole intent for it to be used as the warehouse.  While we did try to get Habitat for Humanity of Michigan to buy the building, it was far too cumbersome of a process to make it happen in the time we had.  Art realized that this venture was a no lose situation:  if the warehouse concept works, then all is well; if not, he’s sitting on quite an asset.  Let me further say that Art is a big picture Habitat guy.  He’s in it for the overall mission, not just for his affiliate.  His work on the ReStore committee, and his willingness to offer his affiliate resources towards this venture, were critical in making it happen.

So, in less than three months from when we set out on this idea, we had a building, and we had Battle Creek Habitat willing and able to run it in the interim.  Now, equitably distributing product to the 37 ReStores spread all over this big state was thought at the time to be a very difficult thing to accomplish.  Battle Creek is in the south western part of Lower Michigan, far from being centrally located.  So, the initial intent was to make this warehouse a pilot program.  I knew that my northern affiliate would probably find that shipping costs would make our use of the warehouse unprofitable, but that didn’t concern me.  We wanted to see if we could make it work, then later get other warehouses strategically placed across the state up and running.  We received our first shipment of product in January 2008, and it quickly became apparent that not everyone in the state felt as I did.  So, we had to build a distribution system that would make getting the product fair for everyone. 

When we started down this path, we had a budget and a business plan.  Of course, there wasn’t anything like this, as far as we knew, so we had to build it from scratch.  When the warehouse first opened, we had determined that a 10% handling charge would be assessed to cover the MRW’s costs associated with storing, handling, etc.   When we were faced with the challenge of equal distribution costs, we turned to Lynn Schmoll of Parkshore Associates, a consultant specializing in nonprofits and governments.  Lynn developed several different formulas to address this issue, and we ended up with a 20% fee on all outgoing product.  This 20% fee covers all the costs associated with the warehouse and all transportation costs to any ReStore in the state.  Whether you are Battle Creek HFH, located just down the street, or Marquette HFH located 10hrs north, you pay the same.  It’s like the auto industry:  people living in Detroit pay the same as those living in Missouri. 

It should also be noted, that while I have used phrases such as “all the ReStores in the state”, the committee made it a point to not limit the use of this warehouse to Michigan affiliates.  All Habitat for Humanity affiliates can, and will, benefit from the MRW!  Further, while it was the ReStore committee that made this happen, we all recognized that this warehouse was to serve the Habitat for Humanity mission and, thus, would not be limited to use by ReStores only.  The home building programs of affiliates will also enjoy having this warehouse to draw from.  It’s all about building homes!

With that, in May 2008, the Habitat for Humanity of Michigan board of directors formally recognized and adopted the Michigan Regional Warehouse and our committee.   Bruce Woerner (formally from Battle Creek HFH) was hired by Habitat Michigan to operate the warehouse.  Bruce served on the committee and was immensely important in getting the warehouse up and running.

Where do we go from here?  Anyone who knows me understands that I don’t ask “how” first.  I say, “let’s get stuff, sell stuff, and build homes”.  That’s just how I roll… allowing vision to pave the way and process to catch up!  Are all the i’s dotted and t’s crossed with this warehouse?  Probably not.  Is a 20% fee too much or too little?  I don’t know.  If it’s too much, and we have an unnecessary surplus in our account, then we’ll cut a check to those affiliates who have used the warehouse (proportional to yadda, yadda, yadda…).  I personally don’t have a problem going into a venture like this without knowing the “how” of every little detail.  Our committee has demonstrated what a group of talented, inspired, and hardworking folks can accomplish.  We’ve crashed through many roadblocks and some negativity, but, so far, have persevered.  What I see on the horizon, is the MRW funneling hundreds of thousands of dollars (perhaps millions) to affiliates across our state and region; building hundreds of new Habitat homes which otherwise would not be built.  Maybe someday, the MRW will warehouse container loads of purchased goods, which can be had for a better per unit price.  Being able to say “yes” when opportunity knocks is where we should be focused.

To date, more than $350,000.00 in donated goods has come in and out of the warehouse.  We went from idea to open doors in three months, using a volunteer committee meeting monthly in Lansing.  I’d like to thank these folks for all their hard work on the Michigan ReStore Committee:

Ken Bensen – President, Habitat for Humanity of Michigan

Anna Beningo – Former Executive Director, Habitat for Humanity of Michigan

Sandy Pearson – Executive Director, Habitat for Humanity of Michigan

Tom Williams – Director of Coalitions & Capacity Building, Habitat for Humanity of Michigan

Lynn Schmoll – Parkshore Associates http://bcparkshore.net/

Art Pierce – Battle Creek HFH

Bruce Woerner – Formally from Battle Creek HFH, now MRW director

Ron Stafford – Blue Water HFH

Bob Bystrom – Northwestern Michigan HFH

Tom Hyde – Kent County HFH

Joe Rios – Lakeshore HFH

Joe Madden – Kalamazoo Valley HFH

Jeff Kato – Genesee County HFH

Donna Stephansky – Monroe County HFH

Andy Anderson – Detroit HFH

Mike Shimon – Marquette County HFH

Debbie Wykes – Monroe County HFH

Thanks for reading!

 Mike

The next major milestone for our ReStore was moving from our dead-end location to a great building located across from Home Depot on Main St.  What was critical in this decision was that we knew that we had a winning idea, but needed to foster that idea into something great.

Check out the pics of our store:

 The building is only 5000SF total, of which 4000SF is the ReStore and the rest is offices.  As you can see from the sign pics, our location is very nice.  I threw in the truck pic because I love our truck, which we bought new a couple years ago.

 In September, the This-N-That Resale shop was enjoying moderate success in this location but had decided to close its doors.  They approached us, and we entered into negotiations regarding buying out their inventory.  After some discussion, board approval, and about $6000, we bought out This-N-That and moved in October 2004 (a mere 3-1/2 months after we opened).  The rent increased by $500 per month, but the building was insulated, had great offices, and the location was awesome by comparison.  As a result, traffic increased and everything got even better… location, location, location!

Over the next three years, our ReStore sales continued to grow, and despite a declining local and state economy, our affiliate grew while other local nonprofits were declining.  But the hardest part was trying to project future sales, because we still had no other comparable ReStores upon which to emulate.  I knew that at some point, the sales were going to plateau, but when?  Fortunately, I projected accurately with the plateau occurring the fourth year.  The second year, we saw about a 49% increase in sales; about 16% increase our third year; and we should see about a 1.5% increase after this fourth year (ending June 30, 2008).  As I’ve learned from other more seasoned ReStores, this fourth year plateau is about right but it is certainly not a sure thing.  I am of the opinion that if the economy was better and the local middle class had not collapsed, we would not have seen the sharp decline in donations this year.  The demand is there, but not the supply! 

I’m going to wrap up this article, The History of our Habitat ReStore, by saying that if you’re looking for a successful, small scale, ReStore model then I think we’ve built it pretty well.  Dozens of ReStores have used our model throughout Michigan and the country, and those that have followed it have done very well.  I hope this narration has helped you get an idea of the context shaping our ReStore.  I’ll be updating this blog daily with more articles on how we’ve built a great ReStore and why it’s the cornerstone of our affiliate.

Mike

 When I developed the budget for the ReStore, I had very little to base my projections upon.  In early 2004, I wasn’t aware of any small scale, northern climate, rural ReStores to rob information from.  One of the best things about Habitat for Humanity is that there is always someone who has come first.  Reinventing the wheel can be a nightmare, particularly if you’re affiliate consists of one employee … me.

I knew that I had two different gross sales scenarios to choose from: 

-  The ReStore would take off right away, then decline a bit in the winter and rebound again in the Spring, or

                -  The ReStore would start off slowly and steadily gain for a while

I chose the latter scenario and projected $1000.00 in gross sales for our opening month of July.  I chose wrong.  We did over $1800.00 our first day and over $11,300.00 by the end of July!  After the first week, I re-wrote the budget to show a gross sales curve of higher gross sales in the summer and lower sales in the winter, and that’s precisely what we did.  This has been the same trend over the past four years, but the numbers are bigger nowadays.

As far as management of the ReStore is concerned, I came at this venture with a simple concept in mind:  run it like a genuine business and whatever profit is made will be used by the affiliate.  [Of course, there is no difference between our ReStore and the affiliate; it’s all one legal entity, and all the money basically goes into one pot, and expenses come out of the same pot.]  Anyway, we had a ReStore committee, who was tasked to get the ReStore up and running, but it quickly became apparent that there was friction between this committee and the ReStore manager once the store opened.  Members of the committee had taken ownership of the venture, and were reluctant to let it go once the store opened.  I quickly stepped in and said the committee role should be that of support, not management.  I ensured that the manager was to report to me and, through me, to the board.  I had seen far too much micromanaging from the board in the past and didn’t want that to occur with the ReStore.  It didn’t take long and the ReStore committee basically disbanded and stopped functioning, which had no negative impact on the store at all. 

As the Executive Director, I stayed out of the day to day affairs regarding the ReStore.  I didn’t deal with pricing, which donations to accept, scheduling of employees, etc.  I did/do, however, stay on top of the daily sales numbers, and I also dealt with the marketing of the ReStore.  The success of our ReStore was so important to the affiliate that I did have an important role, but not in the management of the store.  My view is that I should be able to leave the store for weeks or even months, and it will still be a success, and that’s precisely the way it is set up.  All too often, I see directors or boards get into the management of their stores and they fail because those people don’t live it every day.  In my opinion, you can’t manage something you don’t live.

About three weeks after we opened, we went through a minor crisis.  I had to fire our first ReStore manager.  I won’t get into why, but it was best for the store and the affiliate.  I hired a temporary manager; and then hired a permanent manager, Donna, who has done a wonderful job since.  This situation was a clear demonstration as to why I didn’t want the ReStore run by committee.  I took immediate action without talking to anyone – just as it should be.

As far as employees go, we went through a learning curve.  We started out with a full time manager, a full time driver/stock person, and two part timers.  We played with the numbers of employees for a long time until we found what worked for us.  The same can be said about our store hours.  We started with a Tuesday-Saturday schedule, then we stopped on Saturdays, then we added Mondays, then we added Saturdays again.  This was a big learning curve, until we settled on Monday-Friday 9-5pm and Saturday 10-4pm, which is working well. 

As the months went by, I noticed that the complexity of the organization grew significantly in terms of the bookkeeping.  So, I hired a bookkeeper, which helped a lot.  Unfortunately, while she was doing a great job, she didn’t last very long.  She was replaced with another bookkeeper who didn’t do such a great job, and I didn’t have the accounting background to catch it.  Anyway, I got rid of that person, and now we have a fulltime bookkeeper who seems to be doing pretty good.

To be continued…

The opening of our Habitat for Humanity ReStore in July 2004 marked the beginning of an amazing turn around for our small Habitat affiliate.  It was a bold move, which some would call a gamble, and which literally saved the affiliate from utter collapse as a result of years of mismanagement (which I won’t get into here).  We shared our highly successful ReStore model with affiliates across northern Michigan, and I continue to share what we’ve learned with affiliates across the country.  It is extremely rewarding to know that we have made a huge impact on dozens of affiliates across the country and the mission of Habitat for Humanity as a whole.  This article is designed to help those affiliates who are looking to start their own ReStore without having to reinvent the wheel.  I hope rural affiliates or those looking to start a smaller scale store on a limited budget find this article useful.

In the winter of 2004, our Habitat for Humanity affiliate was really on the ropes financially.  When the idea of starting our own Habitat ReStore was first proposed, there was a lot of skepticism.  At that time, there were only 12 ReStores in Michigan and all of them were located in large cities, at least compared to us in Gaylord (Otsego County).  There were no ReStores in northern Lower Michigan.  The only northern ReStore at that time was in Marquette, MI, but Marquette is a very large city by comparison to Gaylord.  So, without a model to follow and little ReStore support from Habitat for Humanity International at the time, we were left to develop our own model.

Our timeline was critical because our affiliate was deficit spending every month and our line of credit was nearly maxed out.  There simply was not enough money coming in from traditional fundraising campaigns and contributions to make the affiliate fiscally viable.  At the June board meeting, where we asked for the funds to start the ReStore, there was plenty of skepticism.  In fact, the board refused to vote on the venture in May.  Anyway, it was made clear that if this venture didn’t work, I would likely be out of a job.  Of course, the affiliate was virtually dead anyway, so that was inevitable.  We had nothing to lose.  Nonetheless, the ReStore was approved.  We went from beginning our research to opening the doors in two months. 

The business plan was pretty simple: 

-          Get board approval

-          Secure a location

-          Hire a manager

-          Buy a box truck

-          Get stuff to sell

-          Open the store

-          Sell stuff

-          Pray

Believe it or not, it was just that simple (and it’s not much more complex now).  We took exactly $5000.00 from the affiliate checking account, about 40% of our total cash available at that time to get the store up and running.  From that $5000.00, we spent the following:

-          $2500.00 on a 1986 Ford box truck with a lift gate

-          $1500.00 on first month rent

-          $500.00 on two weeks manager’s salary

-          $500.00 on a cash register

In the two weeks prior to opening, the ReStore committee worked feverishly to get the building ready (an old warehouse on a dead end street, two blocks off Main Street).  We were out with the truck picking up used furniture, building materials, and whatever else we thought would sell.  This was done during the community spring clean up, so almost everything we stocked our store with was stuff that people considered junk and were going to throw away.

To be continued…

Mike Wood

Habitat for Humanity’s ministry is based on the conviction that to follow the teachings of Jesus Christ, we must reflect Christ’s love in our own lives by loving and caring for one another. Our love must not be words only – it must be true love, which shows itself in action. Habitat provides an opportunity for people to put their faith and love into action, bringing diverse groups of people together to build affordable housing and better communities for everyone.

Habitat for Humanity is a partnership founded on common ground – bridging theological differences by putting love into action. Everyone can use a hammer as an instrument to manifest God’s love. Habitat for Humanity founder and former president, Millard Fuller, calls this concept “the theology of the hammer,”.  As Fuller explains, “we may disagree on all sorts of other things… but we can agree on the idea of building homes with God’s people in need, and in doing so using biblical economics: no profit and no interest.”

Habitat for Humanity welcomes all people to build with us in partnership. “The Bible teaches that God is the God of the whole crowd,” explains Fuller. “God’s love leaves nobody out, and my love should not either. This understanding drives ‘the theology of the hammer’ around the world, steadily building more and more houses in more and more countries.”

Once you’re hooked… you’re hooked for life.

Mike