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Success Factors

Successful new cooperatives share certain common characteristics that are often cited as requirements for effective operations.

Successful new co-ops:

  • Use committees, advisers and outside expertise effectively.
  • Keep members informed so that they stay involved and supportive.
  • Conduct businesslike meetings by using agendas, parliamentary procedures and democratic decision-making.
  • Maintain good board-management relations by clearly defining roles and responsibilities.
  • Follow sound accounting practices, and present financial reports regularly.
  • Develop alliances with other cooperatives.
  • Develop clear policies on confidentiality and conflict of interest.

Potential risks to a new co-op include:

  • Lack of a clearly defined mission, purpose and focus.
  • Lack of member leadership.
  • Inadequate feasibility study and/or business plan.
  • Failure to use experienced advisors and consultants.
  • Lack of financial commitment from members.
  • Lack of competent management to run the cooperative's operations.
  • Failure to identify and minimize business risks.
  • Lack of adequate financing.
  • Inadequate communications.