How to Start a Co-Operative

The idea of the co-operative form of enterprise has been around for a very long time and in a variety of guises. There has, however, been a tremendous growth of interest in recent years as people have looked for new ways of developing their working environment or simply for ways of creating new jobs where old ones have disappeared as conventionally structured companies take unilateral decisions based on their own need to survive.

Some co-operatives have been formed from companies which were in danger of disappearing or were already in liquid­ation. Though some successful co-operatives have emerged from these situations, it is far from the best starting point for a viable business. But choice is not always in the hands of those who set up a co-operative.

Co Operative

An unfortunate by-product of this type of situation is that such operations tend to attract publicity and their problems are regularly raked over in public. When they fail, the attitude of outside observers is often one of ‘I told you so, co-operatives just don’t work’. Because of the publicity attached to the fail­ures of co-operatives – especially when they have been backed by government funds – there is a tendency in the public mind to associate the co-operative form of enterprise with failure. This is an unfair and unrealistic attitude and one which will probably only slowly be changed by greater public awareness of the fact that there are many, and a growing number of, success­ful and viable co-operatives around the country.

There can also, however, be a tendency among those who establish co-operatives to believe that it is an easier way to run a business because there is no ‘boss’. But the existence of a co­operative does not necessarily mean that everyone co-operates. As George Jones, director of the Co-operative Development Agency, has said, the co-operative form of organisation is not an easy form of enterprise but it is a better one than those to which people are accustomed. It is actually more demanding on the people who are part of it than conventional forms of business organisation and demands a far higher degree of com­mitment.

It should also be remembered that co-operatives are operat­ing in an economic system which, if not actually hostile to them, will make no concessions and will compete with the utmost vigour. The co-operative, therefore, has both to be com­petitive and to retain its soul, its reason for existence.

Most co-operatives tend to produce goods or services of high quality, but are usually weaker in marketing those products and in general management. With a proper recognition of the requirements of management and training in marketing skills there is no reason why a co-operative enterprise cannot be successful, though it probably has to work twice as hard to achieve it.

Co-operatives should strive to be profitable in order to develop, but profit is not the be-all and end-all of their exis­tence. It is an objective which is harnessed to the wider interests of the co-operative itself and the community in which it exists.

Co Operative

Co-operatives enable individuals to counter general economic problems. The development of neighbourhood or community co-operatives, employing a relatively small number of people to provide services within a limited area, is an example of this. These co-operatives provide a variety of services, such as improving the general environment by removing graffiti from walls, window cleaning, gardening and small repairs.

This, of course, is only one form of co-operative and co-oper­ation is a kind of organisation for activity which can take a wide variety of forms. There are even competing organisations pro­claiming that their particular form of organisation is the best, often not recognising that all probably have an application, a role to play, depending on the requirements of the particular situation.

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About the Author: Marie Mayle is a contributor to the MegaHowTo team, writer, and entrepreneur based in California USA. She holds a degree in Business Administration. She loves to write about business and finance issues and how to tackle them.

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