by Paige Wickline, Finance Director
Our Fiscal Year 2024 (FY24) runs from July 3, 2023 through June 30, 2024. Each spring, management prepares an operating and capital budget for the next fiscal year that is presented to the Finance Committee for input and then forwarded to our Board of Directors for final approval.
Operating Budget. Our operating budget is a projection of the sales revenue, cost of wages and benefits, and all other expenditures to run our Co-op. This budget is the blueprint that guides our expenditures and focus for the year.
Total Sales. The FY24 sales projections for our Co-op includes modest sales growth of 2.8% growth over FY23. We anticipate inflation along with a small increase in transactions to drive sales growth. We are projecting 38.7% of our sales to be from our Middleton location, 36.7% from our East location, and 24.6% from our North location.
Gross Income (Margin). Gross income refers to the percent of sales dollars remaining after subtracting the cost of goods sold. Gross income is the money used to pay for our operations. Gross income can also be expressed as a percent of sales. Our gross income expressed as a percent of sales is budgeted at 36.4%, which is a small increase over the previous year. To achieve this we will continue to work on reducing our costs of the products we buy through quantity purchase discounts, continue to monitor our sales mix, and implement targeted pricing changes where necessary.
Personnel. Personnel expenses include wages for worked hours, paid time off, and benefits. These costs are budgeted to be 25.36% of sales, which is an increase of .57% compared to FY23 wages and benefits of 24.79%. This increase is primarily due to a full year of wage increases for staff that went into effect in the spring of 2023.
Other Operating Expenses. Other expenses related to running our Co-op include costs related to occupancy, operations, promotions, depreciation, administration, and governance. The total budget for all of these categories is $7,187,608 in dollars and 11.20% expressed as a percent of sales. The budget also includes operating expenses for our new community and teaching space at 1226 Williamson Street named Aubergine. Other operating expenses are up slightly from the previous year expressed as 11.16% of sales.
Income From Operations. Our income from operations is budgeted at a loss of ($104,441) or -.16% of sales. This is down from the previous fiscal year of $368,322 or .59% of sales. The difference in income from operations is primarily due to increased costs of labor and a small increase in operating expenses.
Budget Focus. Our FY24 budget focus includes ongoing financial sustainability while expanding our commitment to the community with our new teaching and event space. This includes a focus on sales and revenue growth for the Co-op and developing plans on how to increase customer traffic at Willy North, our retail location in the Sherman Plaza. Willy North’s sales revenue does not cover all the costs to operate that location, and our goal is to grow revenue at Willy North at a faster rate than the costs to run that location to ensure North’s long-term success.
Capital Budget. The FY24 capital budget is $1,450,000. These items represent purchases that will be listed on our balance sheet as long-term assets of property and equipment when they are purchased. The budget includes the cost to build out our new community space along with equipment upgrades at each of our locations.
We thank you for your ongoing patronage and support. If you have any questions regarding the FY24 budget, feel free to email me at p.wickline@willystreet.coop.
