STEPS OF COOPERATIVE DEVELOPMENT
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- Frederick Bates
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1 STEPS OF COOPERATIVE DEVELOPMENT The cooperative development process can be described as a series of logical steps. Each step in the process may be assisted by a cooperative development practitioner familiar with the development process. With training and experience, the practitioner will become proficient in providing technical assistance through the full range of activities necessary to help a group form a fully operational cooperative. Technical assistance provided to newly developing cooperatives varies greatly depending on a number of factors, including the complexity of the business activity being considered, the skills and abilities of the organizing group, the availability of other assistance providers, and the experience and abilities of the technical assistance provider. The activities that are usually part of the cooperative development effort have been arranged in a series of Activity Clusters. While the activities within a cluster may occur simultaneously or in differing orders, the activities should be completed before moving to the next group of activities. At the completion of the activities within a cluster the group and practitioner should evaluate the potential for successful continuation of the development process and make a conscious decision to either continue or stop. If progress is being made, continue; if not, reevaluate some elements of the proposed cooperative activity or discontinue the effort. The suggested activities and resources are not intended to be all-inclusive. Each practitioner will develop a set of skills and tools that are regularly used in providing valuable technical assistance. Also, resources used or recommended to developing cooperatives will depend on the array of available state and local resources, assistance providers, and program partners. This set of steps represents a tool that may be used in planning any cooperative development initiative. It helps describe the development process to a developing cooperative group and may help gain assistance in the cooperative s development among partner agencies. Adapt and use it as you see fit USDA Rural Development, CooperationWorks and its network of cooperative development centers, NCBA, and the Land Grant University System are valuable resources in cooperative development program delivery.. steps may occur simultaneously, the order in which tasks are completed may vary, and some tasks may be repeated until an acceptable solution is developed. Progress must be evaluated at key points and a conscious decision made to proceed with development of the cooperative or to discontinue the effort.
2 Steps in New Activity Cluster #1 Needs Assessment 1. Identify Economic Need Facilitate discussions 2. Clarify, Review & Evaluate Proposed Business Activity Co-op vs. other business structure Group decision-making process 3. Evaluate / Identify Appropriate Organizational Structure(s) Meeting facilitation 4. Define Objective in Mission Statement If need is identified, the proposal realistic, and a co-op is possible solution, proceed to Activity Cluster #2. If not, review activity, or STOP Decision is made by vote of the group and by Be objective Centers Internet co-op resource list steps may occur simultaneously, the order in which tasks are completed may vary, and some tasks may be repeated until an acceptable solution is developed. Progress must be evaluated at key points and a conscious decision made to proceed with development of the cooperative or to discontinue the effort.
3 Steps in New Activity Cluster # 2 Leadership & Work Plan 5. Establish Steering Committee of Potential Members 6. Establish Advisory Team Facilitate discussions Work with other advisors to obtain information & coordinate activity Conduct co-op education program 7. Educate Committee & Team on Co-op & Development Process Co-op vs. other business structure 8. Develop Plan of Work and Time Line 9. Assign Tasks and Target Dates for Action If the group takes responsibility for action, proceed to Activity Cluster # 3. If not, STOP Decision is made by vote of the group, advisors and / or Cooperative Development Be objective and realistic Centers
4 Steps in New Activity Cluster # 3 Market & Membership Analysis 10. Evaluate Market for Proposed Product / Service 11. Quantify and Characterize Potential Market Facilitate discussions and objective evaluation of potential co-op business Co-op vs. other business structure 12. Evaluate Interest of Potential Members Be objective and realistic 13. Quantify Potential Level of Participation and Commitment If market potential and member participation are sufficient to conduct proposed activity, proceed to Activity Cluster # 4. If not, reconsider Activity Clusters # 2 & 3, or STOP Decision is made by vote of the group, advisors and / or by Cooperative Development Centers
5 Steps in New Activity Cluster # 4 Feasibility Analysis 14. Conduct Feasibility Analysis Identify potential sources of feasibility analysis / or conduct analysis 15 Identify Factors Necessary for Success of Cooperative Facilitate discussions and objective evaluation of feasibility analysis 16. Define Risks and Benefits to Potential Members Factors for cooperative success Be objective and realistic Consider best and worst cases If feasibility analysis is affirmative and potential members recognize benefit, proceed to Activity Cluster # 5. If not, reconsider Activity Clusters # 3 & 4, or STOP Decision is made by vote of the group. Centers Small Business Development Centers
6 Steps in New Activity Cluster # 5 Business & Organizational Plan 17. Develop Business Plan Facilitate discussions and objective evaluation of co-op business plan 18. Obtain Legal and Accounting Counsel 19. Finalize Capitalization Plan and Draft Legal Documents Maintain focus on cooperative principles and practices Provide cooperative information to meetings of potential members 20. Establish Bank Relationship 21. Conduct Member Equity Drive If equity drive successful, proceed to Activity Cluster # 6. If not, reconsider Activity Clusters # 4 & 5, or STOP Decision is made by vote of the group. Possible sources of competent co-op legal & accounting services, especially state & local economic development funding RD Co-op Program Publications & staff Centers Small Business Development Centers Small Business Development Centers
7 Steps in New Activity Cluster # 6 Incorporation & Start - Up 22. Incorporate / Elect Board Conduct member, board and manager cooperative education 23. Establish Accounting & Control Functions 24. Identify Management KSA s, Conduct Search, Hire Manager 25. Complete Capitalization Possible sources of competent business start-up advice, especially state & local economic development funding 26. Acquire Land, Buildings & Equipment 27. Develop Operating Policies RD Co-op Program Publications & staff Centers 28. Begin Operations C E L E B R A T E
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