A cooperative ("coop") or co-operative ("co-op") is an autonomous association of persons who voluntarily cooperate for their mutual social, economic, and cultural benefit. Cooperatives include non-profit community organizations and businesses that are owned and managed by the people who use its services (a consumer cooperative) or by the people who work there (a worker cooperative) or by the people who live there (a housing cooperative), hybrids such as worker cooperatives that are also consumer cooperatives or credit unions, multi-stakeholder cooperatives such as those that bring together civil society and local actors to deliver community needs, and second and third tier cooperatives whose members are other cooperatives.
A Co-operative Wholesale Society, or CWS, is a form of Co-operative Federation (that is, a Co-operative in which all the members are Co-operatives), in this case, the members are usually Consumers' Co-operatives. According to Co-operative economist Charles Gide, the aim of a Co-operative Wholesale Society is to arrange “bulk purchases, and, if possible, organise production.” In other words, a Co-operative Wholesale Society is a form of Federal Co-operative through which Consumers' Co-operatives can collectively purchase goods at wholesale prices, and in some cases collectively own factories or farms.
In 2005 there were 30,000 U.S. cooperatives operating 73,000 places of business, accounting for approximately $654 billion in annual revenue and more than two million jobs paying approximately $75 billion in wages and benefits, according to a study by the National Cooperative Business Association and the University of Wisconsin Center for Cooperatives. If you are thinking of opening a store, the co-op business model can be an economical, moderate-risk way to create your enterprise.
Co-op Basics
Co-ops operate in many different industries including commercial sales and marketing of food, crafts, gasoline and other retail products; social services such as medical and elder care; financial services such as bank and insurance; and utilities such as electric power co-ops. The basic cooperative store is organized around four key qualities: a mission; intent to operate as a cooperative effort serving both vendor-members and consumer-members; legal incorporation that may include nonprofit status; and a flat management structure.
Legal Structure
The legal structure for a co-op store varies from state to state, but it is common for a co-op to be incorporated and to possibly qualify, depending on its function, for federal nonprofit status. Consult with an accountant or tax attorney to determine whether your co-op qualifies for nonprofit status. One requirement would be to provide member benefits instead of profits to investors, with residual earnings passed through to members. A co-op store is otherwise just like any other business. You will need a business license and you must comply with health department and zoning laws. Other important elements are insurance, legal contracts, facilities, sources of goods and services.
Mission
.jpg "Co-operative Store")
A co-op store can be owned by member-producers and member-consumers. The co-op business model is based upon the philosophy of equality, equity and mutual self help. For example, a group of artists form a co-op to produce and sell their art, sharing the costs of materials and work space as well as retail space. It is owned and operated by the people who use its products or services -- its members. It has both an economic and quality of life purpose because it provides its members with the benefits of higher quality goods at lower prices, a place to sell their products, the opportunity to control the character of their place of employment and, often, a philosophical approach to business.
Operations
The key to starting a successful co-op store is gathering together a group of committed members who are willing to devote their time and effort to managing and operating the store in return for salaries or other benefits. Some members will be employees such as managers and staff or inventory buyers; some will produce products and others will be consumers who pay a fee to join as members to take advantage of prices and selection. Your first task is setting forth a plan, agreed to by a vote of the members, detailing the salaried management and staff positions, unpaid work memberships and paid memberships. Include a description of responsibilities, rights and privileges, since the theory behind cooperatives is equality of members. Without a firm foundation, your store may dissolve into chaos and conflict. Set up a budget and procedures for inventory selection and purchase. You will also need to set up a way to accept debit and credit card payments, so establish a merchant-card relationship with a local bank that might also be a source of financing for the business. You can also raise start-up money by selling consumer memberships.
References (7)
- The Ecologist: How to Set Up Your Own Local Food Co-op
- Cooperative Grocers' Information Network: How to Start a Food Co-op
- International Co-operative Alliance: What is a Co-operative?
- Avon CDA: Worker Co-operatives
- National Cooperative Business Association: Start a Co-op
- University of Wisconsin Center for Cooperatives: Research on the Economic Impact of Cooperatives
- How to Set up a Co-operative Store
About the Author
- Victoria Duff specializes in entrepreneurial subjects, drawing on her experience as an acclaimed start-up facilitator, venture catalyst and investor relations manager. Since 1995 she has written many articles for e-zines and was a regular columnist for "Digital Coast Reporter" and "Developments Magazine." She holds a Bachelor of Arts in public administration from the University of California at Berkeley.
No comments:
Post a Comment
Please don't spam. Spam comments are not approved