Business Plan

Patchwork's primary revenue streams are from member dues, Resident Organizations' rent, artist studio rent, band practice space, and the grocery co-op.

Secondary revenue streams include grants / sponsorships, events & programs, non-member space rental, also in order of projected revenue.

For a further breakdown, reach out to us.

1420 N Street

1420 N Street is a 1,820 SF Lower Level Office Condo on the 1400 block of N St NW

We are talking to a lender about a Small Business Administration Loan, which allows us to put down 10%, making our downpayment $26,500. We will be using the next two months to be raising capital to decrease the loan and annual payment.

These are the numbers assumed in our budget spreadsheet. Of course, the more we raise for the downpayment, the better off we will be. The main thing to flag about this property is the high condo fee and the special assessment that was implemented to raise capital reserves for future sustainability of the property. Financial assessment of capital reserves of the property available upon request.

Major Revenue Stream Goals and Justifications

Member Dues

Member dues most closely align our mission with where the revenue comes from, it also has the most capacity for revenue growth, as it doesn't face the square-footage limitations that most other revenue streams do.

• Goal: $3,000/mo in total member dues (54 members)
• Assumptions: We project that we can achieve 54 dues-paying members by month 14 of Patchwork. 24% at a $10/mo rate, 25% at a $25/mo rate, 22% at a $60/mo rate, and 27% at a $120/mo rate.

Justification:

• Cooperator Networks: The cooperators of Patchwork have extensive organizing experience and have organized educational summer camps, were on the board of the DC Tool Library, helped started the Greens and Beans grocery co-operative, and have run numerous successful membership and fundraising drives for Ward 2 Mutual Aid and have extensive relationships across D.C.'s organizing scene.
• Resident Organization Networks: Patchwork is partnering with organizations like the Ward 2 Mutual Aid, the Greens and Beans Grocery Co-operative, and Kiazii. We are looking for others to become Resident Organizations who have their own membership bases as lead-generation for Patchwork's memberships.
• Sliding Scale and Valuable: Member benefits such as discounted event access, screen printer access, tool library access, commons access and resources, community meeting space, and more will essentially pay for themselves by a community member purchasing a membership.
• Conservative Estimates: The specific breakdown of membership rates is untested and the total number of 300 are both goals that we think are conservative compared to the potential of the space.

Resident Organization Rent

Resident Organizations help make the whole project possible. By coming together with Patchwork and the other Resident Organizations, we make possible something no one organization could achieve on its own.

• Goal: $2,400/mo in total Resident Organization rent (2 organizations)
• Assumptions: Our market research has shown us that a going rate in D.C. for small offices in co-working spaces is roughly $30/square foot, which for an 80 square foot office, translates to $2400/mo. Patchwork plans to charge a rate of $1200/mo total for an 250 square foot office which includes all the many benefits of a managed coworking space for a niche type of organization as listed below. Which is a much lower rate than sq foot.

Justification:

• Substantial Benefits: Member organizations get a medium-sized office, co-locate with other organizing focused organizations, access meeting rooms, large event space, get 24/7 access, risograph printing and other creative design support, commons access, cultural activation and programming by Patchwork, and have built-in cross-pollination and member-recruitment funnels for their own organizations by being a part of Patchwork. All of these are substantial differentiators from co-working spaces like WeWork for the right organization.
• Co-operators of Patchwork are actively working on developing a grocery co-operative and a band practice space. They already have a committed customer base and are limited by the current space available.
• We have interest from at least two small not for profits / unions in office space.

Artist Studio Rent

D.C. lacks affordable artist studios for young, poor, working-class, and emerging artists. Patchwork helps fill this gap.

• Goal: $1,000/mo in total artist studio rent (1 artist studio)
• Assumptions: Going rates for artist studios in D.C. are significantly higher than our planned $1000/mo. Equivalent spaces like the O Street Studios are much smaller for the same price point. This allows us to cater to select working-class artists and provide them with the space and resources to do their work.

Justification:

• We have a screen printing studio and an artist collective willing to commit to moving into the space.

Music Practice Space

The choice of practice space for local—especially working class— musicians is very limited. In D.C. proper the only practice studio is 7DrumCity, located a mile from Patchwork.

• Goal: $1,200/mo in total income from practice space rental.
• Assumptions: Going rates for practice spaces in D.C. are around $38/hour. Our $30/hour is competitive with this and allows us to cater to local musicians and provide them with the space and resources to do practice their art. To respect our neighbors, we aim to only offer practice times during the afternoon and early evening.
• Risks: if it's not possible to turn one of the smaller offices into a music practice space because of limitations in sound proofing (for which we have budgeted $30,000), we will lease the space to another Resident Organization.

Justification:

• We have a number of bands who have expressed interest in using a local affordable practice studio.

Risks

• The building's condo fee is high because of a reserve study that deemed their reserve funds to be relatively low for where they need to be. The building seems to be taking corrective action, but we need more information. Condo fees don't tend to go down either, but our budgeted expenses and revenue streams account for a buffer here.
• Managing seven different service lines (studio, practice space, co-op, tool library, etc.) from Day 1 is a lot of work. However, our worker members have a lot of experience through their organizing with space management and co-ordinating across several groups.
• Music practice space in a condo building is a potential conflict. Even with limited hours, soundproofing will be expensive and may never be sufficient. Likewise, providing up to a hundred community and grocery members access to the space could cause potential conflict with the building management. We hope to alleviate this by doing outreach to the building residents and inviting them to become active participants in the space.
• Raising $411k, in a combination of donations, loans, and other funding sources, for a startup is a large task. The 10% down payment and commercial loan are expensive. The more we can chip away at this from community funding, loans, and donations, the better.