How to Start a Cooperative Business
If you want to start a cooperative business, you will need to meet with the local community to identify a need. When all members agree to form a cooperative, you should conduct feasibility analysis and create a comprehensive business plan.
When all members agree, you can proceed with incorporation and settle all legal requirements.
A cooperative business is not that hard to organize. The formation can be pursued by community leaders due to a desire to provide service or to fulfill economic needs. If such leaders can find other people with the same interests, it will be easier. The leaders of a cooperative can be citizens, artisans, growers, and manufacturers. Before you decide to start this type of business, you should know what you’re entering into. The power is vested on the people that are using the services of the cooperative. They also provide for the finances to enjoy mutual benefit. The operations of the business are also controlled by such individuals.
Starting Your Own Cooperative Business
The primary purpose of the cooperative business is to benefit the members by enhancing the way of life and increasing income. In a local community where there are several cooperatives, the overall market situation will also be improved. Supplies or resources that were previously unavailable can now be accessed with ease by the members. You should be prepared for the organization phase because this can tough. At times, a new cooperative business can undergo rigorous opposition although some owners are welcomed with fervor.
You have to invite potential members in a meeting where you can discuss certain issues. It is important that you identify the community’s economic need. A steering committee should be selected and conduct a survey to identify the use of such cooperative business. On the second meeting, members should now decide whether to proceed or not. Cost analysis should be conducted and this should be clearly discussed on the third meeting. You will also need to have a feasibility analysis and a business plan. On another meeting, you have to present these documents and when all members agree, you can proceed with incorporation and prepare the legal papers.
You have to elect the cooperative board of directors and each one should have responsibilities. Hire the manager and acquire the needed facilities. You can begin with the operations when all aspects of the organization have been addressed. Perhaps you’re wondering about the capitalization to start the cooperative. You will need to choose between a stock and non-stock capital structure. Other options include capital investment from members, and borrowed money. Starting a cooperative business is quite easy but you should follow the procedures carefully. This is very important since you will be looking forward to the best interests of all members. Take your time in starting this business so that all areas can be addressed with ease.
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