The process of forming a co-op is not very different from that of any other form of business venture. There is the planning process and the technical details of setting up the structure. The development of a fully operating business from an initial idea requires strong organizational and communication skills and a comprehensive business plan. SeeAppendix 1 for a complete checklist of the planning process.
The following steps outline the order of events that are typical in the formation of a co-operative.
Initial Idea and Key Organizers — An idea for the co-op is usually formed by a key group of individuals who see a business opportunity or a solution to a problem.
Selection of a Steering Committee — Select a steering committee from the initial group and from those willing to fund the feasibility study.
Conduct a Feasibility Study — Plan the scope of a feasibility study, including areas of study and the amount of budget required. Evaluate the feasibility of the business idea carefully before proceeding. The feasibility study determines the most efficient plant size, which determines the amount of product the plant can accept. Funding for the feasibility study can be raised by the organizers and potential members or possibly through an economic development agency.
Such a study not only determines the economical viability of the venture but also outlines the market advantages of a member-owned processing co-operative if any. If the feasibility study is positive this builds enthusiasm among the steering committee for the project the organizers can proceed to the next step.
Selecting an Interim Board — If the feasibility study is positive and the decision made to proceed with forming a co-operative, dissolve the steering committee and set up an interim board. Elect a chairman and explore funding sources to complete the business plan. The interim board can decide if it is appropriate to recruit a chief executive officer.
Incorporating the Co-operative — The timing...