CGIN

Every co-op starts with an idea. One or two people see a need and envision a way to meet that need. Whether that need is for members to receive better prices, to gain access to new products, or to obtain specific services, the need must be clear.

Starting a co-op is just as complex and time consuming as starting any business. To be done properly, it can’t be rushed. Most experts estimate that starting a co-op typically takes at least two years. As with any new business, starting a co-op will involve thorough and careful business planning.

Responsibility for starting a co-op and seeing it through rests mostly with a leadership group. That group will serve as the spark to keep the new co-op going and to help guide it to success. Careful planning, thorough work, and patience will provide the co-op with a strong foundation and increase the likelihood of success. All new co-ops will need to take the following steps, although the order may vary slightly, especially when the co-op decides to incorporate and begin recruiting members. And keep in mind that some of the work identified in these steps, such as member recruitment, is ongoing.

Steps in Organizing a Food Co-op

1. Gather background: get information, identify needs, convene a core group of interested individuals.
2. Organize: Hold a meeting of potential members to discuss needs and options. Select a steering committee to coordinate the group.
3. Research feasibility: Survey potential members and conduct market research. Prepare a feasibility study.
4. Review findings and incorporate: Prepare and approve articles of incorporation and bylaws. Report on the results of the feasibility study. Elect a board of directors. Begin initial member fund-raising.
5. Recruit members: Hold meetings and prepare materials describing the co-op. Establish member investment options and conduct a member equity drive.
6. Planning and financing: Prepare a detailed business plan and research financing options. Identify possible locations and negotiate lease arrangements.
7. Secure financing: Finalize outside financing sources and terms.
8. Begin operations: Hire a manager, locate store fixtures and equipment, finalize layout, establish accounts with suppliers, and set up the store.
9. Open the doors!

For more information

Overview of the Steps to Start a Co-op
A summary of the steps outlined in a book called How to Organize a Cooperative.

How to Organize a Cooperative (pdf)
A general overview of how to organize a cooperative. Developed for all co-ops, but with primary applicability to agricultural cooperatives; written by the U.S. Department of Agriculture.

How to Organize a Cooperative
The University of Wisconsin Center for Cooperatives and Cooperative Development Services created this detailed resource covering all aspects of starting a new co-op.