Please enjoy this webinar hosted by Margaret M. Bau - a Cooperative Development Specialist
Below, find an outline of Margaret's steps to start a member initiated cooperative business
Below, find an outline of Margaret's steps to start a member initiated cooperative business
How To Start A Member Initated Co-op
A Member Initiated Cooperative is dreamed up and explored by future members
- Idea - Could a group effort address the issue?
- Explore the idea - What is the business concept? Is a co-op structure the best way to meet the need?
- Gather Information
- Learn About Co-op Structure
- Discuss Mission and Values
- Identify Resources
- Define Business Concept
- Ask Key Questions
- Is this a sound business idea?
- Is the co-op model the best structure?
- Is the idea worth the time, resources and energy?
- Is this a sound business idea?
- Hold an Exploratory Meeting
- Present the Concept
- If there is interest, form a Steering Committee of individuals with valuable community skills
- Ask for earnest money to cover organizing expenses – this is a good indicator of commitment
- Decision Point: If proposal is realistic, the co-op is a possible solution, and people have shown interest, proceed to feasibility study. If not – STOP!
- Conduct a Feasibility Study – Is the concept viable?
- Industry analysis
- Market potential
- Technical Aspects
- Capital Requirements
- Financial Projects
- Scenarios
- This should be an independent analysis, conducted by a third party
- Decision Point # 2: If concept seems viable and after thorough review the steering committee wishes to pursue the business, then proceed to conducting a business plan. If not, STOP!
- Conduct a Business Plan Details of your venture, conducted internally using information from feasibility study
- Description of product
- Marketing Plan
- Marketing Plan
- Operations
- Management and organization
- Financial Plan
- Equity and Capitalization
- Decision Point # 3 If market potential is sufficient, member participation is sufficient, and capitalization chances seem reasonable, then proceed to incorporation. If not, STOP!
- Legal and Policy Documents
- Draft bylaws and articles of incorporation and review by a co-op attorney
- Select incorporators – usually from within the steering committee to serve as interim board
- Incorporate with a state
- Develop policies and controls
- Accounting checks and balances
- Personnel policy handbook
- Membership agreements
- Board policies
- Accounting checks and balances
- Organizational Meetings
- Present findings of feasibility study and business plan
- Adopt bylaws
- Elect Board of Directors
- Collect Member Equity
- Funding Your Co-op
- Membership Equity – initial and/or annual
- Transaction Fees – per unit retains (surcharge on units sold) or hourly withholding (worker co-ops)
- Equity Drive
- Assign common stock to members
- Assign preferred stock to member and community investors
- Assign common stock to members
- Subsidized Loans, Grants
- Market Rate Loan
- Business Start-Up
- Receive Tax ID number
- Board and business insurance
- Any required Licenses
- Workers compensation
- Hire a manager, who will hire other employees
- Acquire facilities and equipment
- Begin Operations!
- Ongoing Considerations
- Board training – foster long term thinking
- Model good board behavior and policies
- Strategic plan
- Annual manager review
- Board self-evaluation
- Model good board behavior and policies
- Member Education and Involvement
- Annual Membership Meeting
- Board training – foster long term thinking