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Getting Started

We've created this page so that you'll have a variety of information specific to starting a coop. We've broken down the page by topic.

Also, be sure to check out our Academy for courses related to starting a coop.

Phases of Starting a Coop

These are the 4 phases of starting a coop along with the approximate amount of time it will take to execute each phase. We've also included a list if things you'll need for each step.

  • Exploration (typically 3-6 months)
    This is where you'll get everything together to start your coop and do some basic research into how coops work and their history.
  • Business Planning (typically 3-6 months)
    This is when you'll write your corporate documents and come up with all the documentation you'll need to start and run your coop.
  • Cooperative Launch (typically 2-6 months)
    This is the point when you'll actually get your coop up and running.
  • Business Operations
    Congrats! Your coop is up and going. This is the day-to-day operation of your coop.

Self-Assessment Tool

The first place we’d recommend you start is the Self-Assessment Tool. We’ve designed this tool to help you see where you stand now and what areas of starting a coop you might need some more information on.

How to Use the Tool

There are two ways to use this tool:

Using the tool on your own This is probably the best way to use this tool. Download the tool from the Google Docs site and send a copy to each person who will be involved in starting your coop. Once everyone's filled out the tool, compare notes to see where everyone stands on the process and were you will need to get additional information.

Using the tool as a Cooperative Developer, Consultant, Educator, Etc. If you're someone who assists coops in getting off the ground, this tool can be used to see where the people involved with starting the coop are as far as knowledge is concerned.

Downloading the Tool

Below is a link to the tool.

Make sure you download the document to your computer or to your Google Drive.

To download the document to your computer, go to the File menu, select Download as then select the format you'd like to use.

To copy the document to your Google Drive account, go to the File menu, select Move to Folder, then select the folder to put the file in.

You won't be able to edit the document without saving it using one of the steps above.

Discussion Questions

Once you're done using the tool to see where you are now, it's a good idea to have a discussion about the results with your organizers. Here are some questions you may want to discuss. These are designed to get you thinking about your answers in the tool and start you on your way to a better understanding of how your coop is going to work.

  1. What issues does your group seem to have significant understanding?
  2. On what topics does your group have difficulty understanding?
  3. What are your next steps?

Once you've provided some answers to these questions, you'll have a better idea of where you need to be headed.

All About Coops

It's always a good idea to get a solid understanding about coops and their history. Here are some links we think will help you get a better understanding of where coops have been and where they're going.

History

Coop Philosophy

Types of Cooperative

Steps to Starting a Coop

Here are some steps you can use to plan out the process you're going to use to start your coop. Take a look at Reasons to start a cooperative for some good ideas as well.

Step 1: Gather Information

It's important to do as much planning as you can before you start operating your coop. Finding a problem early on in the process is much better than having to do damage control later on.

Let's start with some questions. Here is a list of questions you'll want to ask yourself to make sure everyone involved with starting your coop agrees with what you're setting out to do:

  • What is the need to be met? Why are you all gathered together?
  • How could you meet this need through cooperation?
  • What are your organizational options? Is a co-op the best model?
  • Who are the interested parties? (sometimes called stakeholders)
  • Who are potential collaborators? (not likely to join, but still helpful or interested)
  • What is the business environment? Is this co-op likely to succeed in it?

You may also want to check out Creating a shared vision.

Startup Documents

Legal Structure

From a legal standpoint, cooperatives are corporations. You'll need to have some ideas about how to incorporate a business. Here are some resources that will help you get a better idea about the process of incorporation.

We'd also highly recommend you talk to a professional about the process before you actually incorporate. There are some pitfalls that may make things difficult in the future and it's best to do a little homework now rather than run into issues later on.

Governance

Operations

Step 2: Get Organized

Once you've gathered some basic information about your coop, you'll have to come up with some solid plans to make your coop work. Some questions you may want to discuss at this point are:

  • How are decisions made and communicated?
  • Who makes what sorts of decisions?
  • What committees and coordinators will you need?
  • What responsibilities and decisions will be delegated, and to whom?
  • What legal form should your cooperative take?

Step 3: Research Feasibility

Now that you have some solid plans in place and you have a good idea of where you're going, it's time to make sure your coop will thrive. Start by discussing these questions:

  • What are the demographics for the area?
  • What competition will you face?
  • How much will it cost to open the business?
  • What sort of cash flow is projected?
  • What sites are available and suitable, at what cost?

We'd also recommend you do what's called a S.W.O.T. analysis, which is a structured feasibility study you can do that's not too hard but is still thorough. For some more information about feasibility studies, check out Feasibility analysis.

Step 4: Review Findings

Now that you've done a bunch of research into whether or not it's a good idea for you to go ahead and start your coop.

This is also a good place for you to ask some more questions before you start setting up the legal entity for your coop.[1]

Building Shared Vision, Mission, Values and Strategy

  • Who are the members of this cooperative? What needs of theirs is the cooperative designed to meet?
  • List the assumptions you hold.
  • Identify the blocks for moving forward.
  • List the core values/principles that guide the cooperative.
  • How do you want the world to be different because the cooperative exists?
  • What is the vision you hold for this cooperative?
  • What do you want the cooperative to accomplish? What is its mission?
  • Who will serve as the start-up board of directors, overseeing the development activities?

Membership

  • Who is eligible for membership?
  • What equity will members contribute?
  • Will members each have one vote? Or will there be weighed voting?
  • Are there financial obligations for voting?
  • Are all members treated the same? Or are there classes of members?
  • How can a member terminate his/her membership? How can the coop terminate a member’s membership?

Board

  • Who is eligible to serve on the board?
  • What are their duties?
  • How many seats should there be?
  • Will you have board member from outside the organization?
  • How long will a board member serve?
  • How are board members elected? Removed?
  • Are they paid? Are expenses reimbursed?
  • How will vacancies be filled?
  • How often will the board meet? What quorum is required? What meeting notice is required?
  • Will there be standing committees of the board? If yes, what are they and what are the functions?
  • Will there be officers? If yes, what offices, terms, duties, selection process?

Capital Structure

  • What will your capital structure be? (Will you issue shares of stock? Membership/Common? Preferred? How many? At what value?)
  • What are the rights and responsibilities of each stockholder?
  • Will shares earn dividends?
  • What will the redemption procedure be?

Patronage Dividends

  • What is the basis for distributing patronage dividends to members?

Membership Meetings

  • How often will members meet? Who can call a special meeting? What notice is required? What quorum is required?
  • What issues will members decide?
  • How can members vote? By proxy, by mail, electronically?
  • How will the by-laws be amended?

Membership Agreements =

  • What will members receive?
  • What will members agree to give?
  • How will money change hands?
  • How will quality be evaluated?
  • How will the agreement be enforced?
  • How will the agreement be terminated/renewed?

Step 5: Membership Drive

Now that you have your coop all mapped out and some key people in place, it's time to get some more members. Take a look at these links for some more information about how to market to tun potential members into new members.

Step 6: Planning and Financing

Now that you have your plans all set and a group of brand new members, it's time to look at your financial situation. Here are some links we think you'll find helpful. Also, use your business plan as a guide to see if there might be anything you're missing. You'll also need to keep in mind if you're going to be lending money to other organizations since that will change the way you file some of your paperwork.

Step 7: Begin Operations

It's finally happened, your coop is up and running. This is the step where you'll move from the planning stage to the operations stage. Congratulations!

Additional Information

References

Portions of this article are adapted from the [Northwest Cooperative Development Center].
  1. "How to Start a Co-op" packet. http://www.cdi.coop/CDIcompletestart-uppkt2010.pdf