Organizing Steps

Starting a cooperative is a complex project. A small group of prospective members discuss a common need and develop an idea of how to fulfill it. Depending on the situation generating the idea, a new cooperative may be welcomed with enthusiasm or may be met with vigorous competitive opposition.

If opposed, leaders, must be prepared to react to various strategies of competitors such as price changes to retain potential cooperative members’ business; better contract terms or canceled contracts; attempts to influence lenders against providing credit; and even publicity, misstatements, and rumors attacking the cooperative business concept. 

Regardless of the business climate for the proposed cooperative, leaders must demonstrate a combination of expertise, enthusiasm, practicality, dedication, and determination to see that the project is completed.

Figure 1 – Sequence of Events Outline

1. Invite leading potential member-users to meet and discuss issues. Identify the economic need a cooperative might fill.

2. Conduct an exploratory meeting with potential member-users. If the group votes to continue, select a steering committee.

3. Survey prospective members to determine the potential use of a cooperative.

4. Discuss survey results at a second general meeting of all potential members and vote on whether to proceed.

5. Conduct a needs or use cost analysis.

6. Discuss results of the cost analysis at a third general meeting. Vote by secret ballot on whether to proceed.

7. Conduct a feasibility analysis and develop a business plan.

8. Present results of the feasibility analysis at the fourth general meeting. If participants agree to proceed, decide whether to keep or change the steering committee members.

9. Prepare legal papers and incorporate.

10. Call a meeting of charter members and all potential members to review and adopt the proposed bylaws. Elect a board of directors.

11. Convene the first meeting of the board and elect officers. Assign responsibilities to implement the business plan.

12. Conduct a membership drive.

13. Acquire capital and develop a loan application package.

14. Hire the manager.

15. Acquire facilities.

16. Begin operations.

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