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Understanding the Cooperative Business Model

Updated on April 11, 2011

workers cooperatives

When times are tough and the jobs are scarce many people consider setting up their own business, not because they want to operate their own business but because they see little other choice. The options for finding a job have run out and the money is disappearing; only the bills remain.


Some start a multi-level-market enterprise, others try blogging, and some wash windows, shovel snow or whatever they can do to earn extra money to keep the food on the table and a roof over head.


Few of these efforts have much chance of success. Yes, you can make money blogging; there are a number of hubs that will help you with that endeavor.


However, for those who do not want to take the blogging route or are looking to generate more income, I suggest taking a closer look at the cooperative business model.


A cooperative is not a business unto itself but a business model, the cooperative may sell food, clothing or furniture for example. It is a structure not a product.


The cooperative structure I am referring to is the workers cooperative, there are other models. Cooperatives are democratic as all members of a co-op are equal decision makers in the enterprise and employ the one-member, one vote, process of making decisions. Each worker owns a share in the cooperative and the enterprise is owned and controlled by the workers.


People may want to run their own business but feel they do not have all the skills necessary, for example, they may not know bookkeeping or marketing and both are important to an enterprise’s success.


When you join with others you increase your resource base and thus, your ability to operate a business.


To get started bring together people you know who are seeking to an opportunity, make it clear to them, that this meeting is not a pitch for the latest MLM opportunity but a meeting to explain and explore the possibilities that a workers cooperative has to offer.


Who you work with is important and be choosy, do not just grab someone to fill the numbers but take time to get to know each other. Once all the potential members are clear about what a workers cooperative is, it is time to consider the nature of the business, what we you sell, make or offer and to whom for what price. This is the time for the business plan and it can also be a time to bring in someone with expertise to guide the members through the process.


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There are people who are experienced in developing workers coops and, at the very least, make contact and gather as much information as you can. Consider this planning stage as laying the foundation for your future enterprise.


A strong foundation can keep the business standing, through tough times, while a weak one may allow it to collapse.

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  • Bob Ewing profile image
    Author

    Bob Ewing 2 years ago from New Brunswick

    thanks

  • Joyette  Fabien profile image

    Joyette Fabien 2 years ago from Dominica

    Great! This is an excellent model for developing countries and small island economies.

  • Bob Ewing profile image
    Author

    Bob Ewing 5 years ago from New Brunswick

    Tim, all the best and thanks for commenting.

  • profile image

    Tim 5 years ago

    This is a good idea. I have a lot of knowledge and skill but I am not a business man. I will look into this.

  • Bob Ewing profile image
    Author

    Bob Ewing 5 years ago from New Brunswick

    Cooperatives can empower people, thanks norma, for commenting.

  • profile image

    norma 5 years ago

    it is great and bridge the gap between poor and rich people

  • Bob Ewing profile image
    Author

    Bob Ewing 6 years ago from New Brunswick

    Cooperation makes sense. Thanks for dropping by.

  • profile image

    Matt  6 years ago

    I think you explain the reasons cooperatives are back in fashion really well, frankly capitalism is failing more people. Worker Ownered Cooperative memeber report a greater feeling of pride and dignity from working in a democratic workplace where they have shared ownership. Seems a non brainer to me that this is a better way of doing things.

  • Bob Ewing profile image
    Author

    Bob Ewing 7 years ago from New Brunswick

    All the best, sj.

  • profile image

    sj  7 years ago

    Great info thanks. I found this hub because I am currently researching the idea, we just started, there are 2 of us.

  • Bob Ewing profile image
    Author

    Bob Ewing 7 years ago from New Brunswick

    Thanks

  • Neil Ashworth profile image

    George Poe 7 years ago from United Kingdom

    Good piece of writing.

  • Bob Ewing profile image
    Author

    Bob Ewing 7 years ago from New Brunswick

    To each his or her own, thanks for dropping by.

  • thaninja profile image

    thaninja 7 years ago from America

    I just can't handle the coop business idea - I guess I am too much of a capitalist.

  • Bob Ewing profile image
    Author

    Bob Ewing 8 years ago from New Brunswick

    Shared values are important, thanks for dropping by.

  • Shalini Kagal profile image

    Shalini Kagal 8 years ago from India

    As long as there is a common goal and shared values, co-ops are such a great way to go. What's admirable is the pride that every yard of success brings to all who are a part of it. If India is the largest milk producer in the world today, it has been thanks entirely to the co-op movement that was started a few decades ago.

    Thanks for a great hub!

  • Bob Ewing profile image
    Author

    Bob Ewing 8 years ago from New Brunswick

    You are welcome, and thanks for dropping by.

  • tonymac04 profile image

    Tony McGregor 8 years ago from South Africa

    Great Hub and great ideas. Thanks for this great Hub.

    Love and peace

    Tony

  • Bob Ewing profile image
    Author

    Bob Ewing 8 years ago from New Brunswick

    Agreed and thanks for dropping by.

  • myawn profile image

    myawn 8 years ago from Florida

    I agree sometimes one person can't do it all or know it all and help to make the business a success is always welcome. Everyone working together towards a goal does works. Nice informative hub Thanks!