There are many things that determine whether or not a new cooperative will be successful. However, experience has shown that the following list is a good place to start to make things work.
Successful new co-ops:
- Maintain alignment around a clearly defined mission, purpose, and focus;
- Use committees, advisers, and outside expertise effectively;
- Keep members informed so that they stay involved and supportive;
- Complete a thorough and accurate feasibility study and/or business plan;
- Secure adequate financing and financial commitment from members;
- Conduct business-like meetings by using agendas, parliamentary procedures, and democratic decision-making;
- Hire competent management to run the cooperative’s operations;
- Maintain good board-management relations by clearly defining roles and responsibilities;
- Follow sound accounting practices and present financial reports regularly;
- Identify and minimize business risks;
- Develop clear policies on confidentiality and conflict of interest;
- Develop alliances with other cooperatives.
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.