Cooperative businesses are built upon the values of self-help, self-responsibility, democracy, equality, equity and solidarity. They are run by and for their members, who can be customers (for consumer-owned co-ops), employees (for worker-owned co-ops), residents (for housing co-ops), or depositors (for credit unions). But in all cases, co-op members have an equal say in certain business matters.
So without a single entrepreneur or investor steering the ship, how do cooperatives even get started? At the South Philly Food Co-op, we’ve learned that growing a co-op from a seedling idea to fully bloomed operations takes time, guidance, patience, and a shared commitment to collaborative learning.
Broadly speaking, a group of people identifying the same need or want should first form a steering committee to guide the following key early steps:
- Crafting mission and vision statements for the cooperative.
- Determining the terms of membership.
- Writing bylaws, drafting articles of incorporation, and registering the co-op as a legal entity.
- Electing, from the membership, the first board of directors or equivalent governing body.
- Conducting feasibility and market studies to ensure the viability of the co-op.
- Developing thorough business and marketing plans, often with the support of cooperative development organizations.
- Launching an equity drive and raise start-up capital for the co-op.
Many food co-ops follow the 4 Cornerstones in 3 Stages model when embarking on these first steps. This model suggests that four attributes – vision, talent, capital, and systems – contribute to the success of a start-up food co-op during each of the three pre-opening developmental stages: organizing, feasibility and planning, and implementation. (The Food Co-op Initiative offers a deeper look at how to follow this model in its guide to starting a food co-op, a critical resource to start-ups across the country.)
At the South Philly Food Co-op, our board maintains a policy manual for how to operate the organization. This document is more “in the weeds” than our broad governing bylaws. For example, our policy manual previously stated that the entire board needed to make decisions about any fiscal expenditures. Since facilities-related matters often require quick decisions (e.g. “Should the landlord install HVAC now or later?”) and our full board meets in person only once per month, we as a board approved an amendment to our policy manual explicitly empowering a Facilities Task Force to make decisions on expenditures up to a certain threshold without full board approval.
Governance practices like these help maintain accountability while also allowing a co-op to move forward quickly in certain areas, as start-up businesses of all kinds will need to do.
Ultimately, co-op members share in both the risk and the reward of starting a business together – so communicating transparently and promoting engagement throughout the start-up process will be critical to a co-op’s success.
South Philly Food Co-op is a start-up food co-op, slated to open at 2031 S. Juniper Street (just northeast of Broad & Snyder) in summer 2019. To join as a ground floor member-owner of the South Philly Food Co-op, visit their website today.