The Challenge
Leadership at Housing Works needed a re-evaluation of the different lines of services, especially on an arm that struggled to remain profitable.
The Outcome
Identified opportunities to simplify and streamline the business, which reduce overhead.
The Full Story
Housing Works operates enterprise businesses including Housing Works Thrift Shops and the Housing Works Bookstore Cafe. Housing Works is well-known in New York City for its chain of upscale thrift shops. The Housing Works Bookstore Cafe is a New York downtown institution and a tourist destination. The Housing Works Bookstore Cafe is also a unique event space that is available for rental. Proceeds of these social enterprises support the parent organization’s mission of ending the dual crises of homelessness and AIDS.
The Housing Works Bookstore Cafe is a second-hand bookstore, with a fully stocked cafe. Its convenient Soho location and historic charm have attracted New Yorkers and tourists alike to read, relax, and shop. Over the past decade, the Housing Works Bookstore Cafe has also established itself to be a quintessential New York venue for special events. Therefore, besides revenue from book sales, the Bookstore Cafe also generated significant revenue from space rental. There were two ways to produce special events: 1) Partner with available catering service companies, or 2) Vertically integrate with a catering business.
The Works Catering was the exclusive caterer of the Housing Works Bookstore Cafe. Founded in 1997, The Works Catering served high-end seasonal, farm-to-table cuisine for special events at Housing Works Bookstore Cafe and other venues around New York City. However, catering is a low margin business with high overhead. Unlike the other Housing Works enterprise businesses that operated with relatively low overhead, supported largely by community donations and volunteer staffs.
The team conducted a deep dive analysis on the financial sustainability of The Works Catering, in the competitive New York market. For a low margin business to be successful, it needed to be scaled. However, there would require significant investment. While the team completed a thorough financial analysis of the business, I provided perspective by surveying the target market and establishing clear competitive benchmarks. Armed with a better understanding of the marketplace, I had to raise the difficult questions that begged to be asked – was there an easier way to generate cash in support of Housing Works’ mission?