Transcript Slide 1

Co-op Training Module III
Developing
a Co-operative
Co-op Training
Module III In
Newfoundland & Labrador
Training Modules Overview
Module #1:
• Introductory module covering the basics of the co-operative business
model: the co-operative business structure; an introduction to cooperative development; an overview of co-op legislation and
regulations; etc.
• Target Audiences:
• Community groups, individuals, government agencies
with no, or limited, knowledge of co-operative
enterprise.
Training Modules Overview
Module #2:
• Deals with the role of co-ops in the CED process; how co-ops are
developed and financed; role of the Regional Co-op Developer’s
Network; how co-op development can be included in regional planning
processes.
• Target Audiences:
• Zone boards, community business development centres, municipal
organizations and board &
staff of other CED agencies.
Training Modules Overview
Module #3:
• Is a “hands on” participatory activity where participants learn how to
identify co-operative opportunities; the stages in the co-operative
development, process; and the process of taking potential co-operative
from “idea to operation”.
• Target Audiences:
• Existing and newly developing co-operatives
and/or groups considering opportunities that
may result in the establishment of new
co-operative enterprises
Review of Co-op Basics
What is a Co-operative?
A legally incorporated business, owned by its members who use its
services. Like other businesses a co-op:
– Requires start up capital/equity
– Generates revenue to cover its costs
– Must provide quality services
– Can distribute profits back to its owners
– Can retain profits for future needs
– Goal is financial self sufficiency
– Provides limited liability for member owners
– Can borrow money/sign contracts
– Pays business taxes
Review of Co-op Basics
Who are Co-op Members?
• They are:
– Individuals who access retail, financial, housing & health care
services
– Business operators who benefit from bulk purchasing, sharing
facilities & joint marketing activities
– CED and other nonprofit groups that share
equipment, office space, etc. to reduce operating
costs
Review of Co-op Basics
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Member Benefits & Obligations
Benefits
Access to quality services at reasonable cost
Control of a business that places priority on their needs
Sharing of surplus profits that remain in the community
Stable service delivery & and longer business life
Priority on local employment
Obligations
Use their co-op’s services
Buy shares & maintain their equity investment
Attend AGMs and other membership meetings
Be informed and engage in the decision making
process
Review of Co-op Basics
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Co-operative Principles & Values
Voluntary and open membership
Democratic member control
Member economic participation
Autonomy and independence
Education, training, and information
Co-operation among co-operatives
Concern for community
Review of Co-op Basics
• Opportunity Identification: Key Questions
• Would the recipients of the services (potential co-op members) be
better served by owning and having direct control of the enterprise?
• Will the services provided by the co-op enterprise provide a clear and
direct benefit for the member–owners that would justify their
investment in the enterprise?
• Are there available sources of technical, advisory and
financial support to help with the co-op enterprise development
process?
Co-op Development: A Unique Process
• A Legislated Operational Framework
• Co-ops are legal corporate entities under provincial & federal
legislation
• The “Co-operatives Act” protects the unique aspects of the co-op
business structure and operations & the rights of member/owners
• Co-op legislation provides more safeguards to protect the interests
of members and those who conduct business
with a co-op than private sector legislation
Co-op Development: A Unique Process
Co-ops are Different From Private Enterprise
• Owners benefit from use of the co-op’s services
– Not seeking a financial return on their investment
• Decision making is democratic – one member/vote
– Not based on number of shares held
• Profits are allocated based use of the co-op’s services
– Not based on number of shares held
• A co-op’s business assets are owned collectively by local members
– Cannot be used for private gain
• Co-ops have stated social as well as economic goals
– Profit is not the only concern
Co-op Development: A Unique Process
Different Purpose
• Private Sector: seeks to maximize profitability for investors
• Co-operatives: seeks to provide members with needed services at the
lowest possible cost
Different Control Structure
• Private Sector: amount of invested capital dictates the level of
voting control
• Co-operatives: each member has one vote, irrespective of
amount of capital invested
Co-op Development: A Unique Process
Allocation of Profits
• Private Sector: profits distributed as dividends on invested capital,
regardless of use of products or services
• Co-operatives: profits allocated to members as rebates on proportional
use of products and services, not on the amount of capital invested
Co-op Development: A Unique Process
Essential Conditions for Success
• A co-op must:
– Meet the needs of its members
– Be economically viable with secure financing
– Have strong member patronage & participation
– Deliver top quality services at reasonable cost
– Make board/staff/member education a priority
– Hire competent & committed management/staff
– Have strong leadership and a succession plan.
– Have a positive relationship with the community
– Buy & hire local as much as possible
– Be adaptable to changing business environments
Co-op Development: A Unique Process
• Co-ops Generate Profits for the Community
• Co-ops distribute profits based on the members use of services, not on
the amount of capital invested
• Co-ops often use part of their profits to support other community
development projects
• Historically, profits generate by large private sector operations (i.e.
fisheries, retail, etc) are not retained in the local economy/province
• Co-operative maximize retention of profits to the benefit of its
members and the local economy
• Some co-ops (i.e. Fogo Co-op) direct funds from profitable
activities to less profitable ones to maximize community
employment opportunities
Co-op Development Process
Initiating the Developing Process
Initial meetings of co-op proponents
Formation of a Steering Committee
Proposed business services /products are identified
Development of a co-op concept paper and initial business viability
assessment
• Enlist the support and participation of the NLFC & other key
development stakeholders
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The Co-op Development Process
• Building the Co-op’s Structure
• Steering Committee (& RDN Member):
– Identify/recruit potential members
– Identify potential funding sources
– Develop the co-op’s By-Laws
– Draft operational Policy & Procedures Manual
– Initiate the development of a Business Plan
The Co-op Development Process
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Developing the Business Plan
Steering Committee must be actively engaged in the process
Seek advice on selecting the appropriate consultant
Set clear targets for equity investments by members
Consult with potential funding partners on their information needs
Make sure plan is realistic and demonstrates that the enterprise can
be self-sustaining
The Co-op Development Process
• Incorporating & Launching the Co-operative
• Early engagement & consultation with the Registrar of Co-operatives
• Advice & guidance of NLFC and RDN member will help ensure
approval of incorporation
• Once incorporated, steering committee evolves into the co-ops
Provisional Board
• Board ensure “doors” are ready to be opened (re: operations,
administration, physical plant and equipment , etc)
• Board organizes the Co-op’s first annual meeting during the
first year of operations
The Co-op Development Process
• Ongoing Operations
• “New” Board is elected & meets regularly to address ongoing
operational & administrative requirements
• Training needs of Board, Management & Staff are identified and
addressed
• Board establishes committees to share workload (i.e. Executive,
Finance, Member Relations, etc)
• Communications with members, partners and the local community
becomes a priority
• Operational/Financial success requires full member
participation and support
7 Phases of the Co-op Development Process
• Phase 1: Opportunity Identification
– Marketing & Promotion of the Co-op Model
– Informed Response to Public Inquiries
– Introductory Presentations/Workshops
• Phase 2: Development of the Business Idea
– Initial Concept & Market Assessment
– Initial Agreement re Co-op Model & Objectives
– Development of Concept Paper
– Initial Assessment - Project Financing and Feasibility
– Development of Initial Budget Estimates
7 Phases of the Co-op Development Process
• Phase 3: Building the Co-op Group
– Confirmation of Co-op Structure & Membership
– Establishment of Steering Committee
– Agreement on Tasks & Time Lines
• Phase 4: Confirming Business Feasibility
– Group Consensus - Potential Feasibility
– Development of Business Plan*
– Recruitment of Members Initiated
– Agreement on Member Equity Contributions
– Potential Financing Sources Confirm
7 Phases of the Co-op Development Process
• Phase 5: Co-op Incorporation
– Draft By-laws and Business Plan Completed
– Provisional Board of Directors Confirmed
– Articles of Incorporation Completed
– Documents and Fee Submitted
– Registrar Confirms Incorporation
• Phase 6: Business Start Up
– Banking/Accounting Procedures in Place
– Member Equity and Business Financing in Place
– Staff Hired (if required)
– Operational Policies/Procedures Developed
– Opening Ceremonies - First AGM Held
7 Phases of the Co-op Development Process
• Phase 7: Ongoing Co-op Operations
– Policies and Procedures Manual
– Monitoring of Operations
– Regular Board Meetings
– Ongoing Policy Development
– Development of Business/Community Networks
– Membership in Provincial/Regional Centrals
Forming the Steering Committee
• Steering Committee Functions
• Oversees the research and other activities required to assess the
merits of establishing the co-operative
• Establishes Sub-Committees, assigns specific tasks & activities, sets
deadlines and monitors committee progress
• Decide strategies and develops recommendations related to the
proposed Co-op
• Ensures effective coordination and communication among the
community stakeholders and partners
• Supervises the implementation of strategies and actions
required to ensure the successful incorporation and start-up
of the co-operative
Forming the Steering Committee
Name of Sponsoring Agency
Place of Meeting
Date & Time of Meeting
AGENDA
Welcome and introductions
Opening remarks and overview of issues to be addressed
Presentation on results of initial research and recommendations
Presentation by NLFC on the “Co-operative Option”
General discussion on merits of the proposal
Establish a Steering Committee and setting the Terms of
Reference
• Other Business
• Next meeting
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Forming the Steering Committee
• Notice of Public Meeting
• Monday, January 31, 2011
• At 7:00 P.M. at the Community Centre
• Public Discussion: Formation of a Community-Based Co-operative
Enterprise
First Steering Committee Meeting
• Steering Committee Functions
• Oversees the research and other activities required to assess the
merits of establishing the co-operative
• Establishes Sub-Committees, assigns specific tasks & activities, sets
deadlines and monitors committee progress
• Decide strategies and develops recommendations related to the
proposed Co-op
• Ensures effective coordination and communication among the
community stakeholders and partners
• Supervises the implementation of strategies and actions
required to ensure the successful incorporation and
start-up of the co-operative
Concept Paper Outline
• Introduction
• Describe the Industry circumstances and rationale as to why it makes
sense to move forward with the formation of this co-operative at this
time.
• Co-operative Services
• What direct services will the co-operative provide for potential
members from a short term and long term perspective?
• Co-operative Benefits
• What will economic or social benefits will be provided for
co-operative members, the industry sector and/or the
community?
Concept Paper Outline
• Co-operative Members
• Who are the individuals, enterprises or other agencies that are
proposing the formation of the new co-operatives? Who else is being
encouraged to consider joining and benefiting from the services to be
provided?
• Operational Structure
• What is the proposed organizational and operational structure for the
co-op in the early start-up phase and what would be the long term
objectives in this regard.
• Co-op Compared to Other Business Structures
• What makes this co-operative different from industry associations
and/or non-profit agencies that may be operating in the
business or social sector in which the co-op will be operating?
Concept Paper Outline
Existing and Potential Development Partners
• What agencies have assisted with the early stages of the development
of the co-operative up to now and what other agencies may be
approached to potentially assist with future development activities.
Facilities and Location
• What facilities (buildings, processing equipment etc.) will the cooperative require for business start-up in the short term and what will
be the longer term requirements? Where will the facilities be
located?
Operational Costs
• What is the general estimate of short term costs relating to
business startup and what are the projections for the longer term
Concept Paper Outline
Member Shares and Financing
• What will be the value of member shares and how many are required
to be purchased to address the co-ops initial financial requirements?
How much additional business financing will be required and what
potential sources for this financing are being considered?
Timelines
• What are the projected time lines for incorporation of the co-operative
and start-up of business operations?
Key Issues to be Resolved
• Are there key membership and/or industry issues that need to be
resolved prior to proceeding with incorporation of the co-op or
subsequent to business start-up? Is there a plan to have these issues
addressed?
Sub-Committee Functions/Activities
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Primary Committees
Member Recruitment
Marketing & Promotion
Incorporation & Other Legal Require
Business Plan/Feasibility Assessment
Sub-Committee Functions/Activities
Member Recruitment
• Identify potential members in the community/region who share
common goals, needs and challenges
• Develop an information paper (concept) identifying and clarifying all
the issues and concerns that potential members may have
• Contact various support agencies who may be able to assist with
reaching out to potential members (i.e. NLFC; Regional Developers
Network; local REDBs; community groups, etc)
• Develop a communications outreach strategy (i.e. media contacts;
community/public meetings);
• Contact local service groups (i.e. fishermen’s’ committees;
agricultural associations, etc) who may be willing to partner
with you to develop your ideas
Sub-Committee Functions/Activities
Marketing & Promotion
• Identify the market area in which the co-op intends to produce, sell,
and market its goods, services and products
• Identify potential partners ( Co-op Atlantic; local co-operatives, etc)
who may assist the co-op in the distribution and retailing of your
services and products
• Identify funding agency support (i.e. ACOA, INTRD, etc) to hire
business consultants to develop a marketing & promotional plan
• Liaise with the NLFC and Regional Developers Network to
identify best practices in develop a marketing and
promotional strategy
Sub-Committee Functions/Activities
Incorporation & Other Legal Requirements
• Request the assistance of the NLFC and the Regional Developers
Network to help develop appropriate Co-operative By-Laws and in
completing the Incorporating documents and other Co-operative
Legislative requirements
• Liaise with the Registrar of Co-operatives at various stages of
developing the Co-op By-Laws
• Research (internet, etc) other similar co-ops in the province and
other jurisdictions on various approaches to developing By-Laws
• Liaise with federal and provincial regulatory agencies on the
various licences and permits required for the co-op facilities
and other operational activities
Sub-Committee Functions/Activities
Business Plan/Feasibility Assessment
• Develop a preliminary outline/plan of the co-operative’s short,
medium and long term needs, activities and requirements
• Prepare rough estimates of this outline
• Contact relevant support agencies (NLFC, RDN, IBRD, etc) to review
your plan and provide advice on whether it is realistic, achievable,
and feasible.
• Identify funding agency support to hire business consultants to
develop a formal business plan
• Ensure that you are fully engaged with the consultants on the
development of the business plan through its various phases
and that you have a thorough understanding of the final
report and that it address your needs
Co-op Business Plan Template
Elements
• THE CONCEPT: VISION, MISSION, PURPOSE AND VALUES
• MEASURABLE OBJECTIVES
• SITUATIONAL ANALYSIS
• MARKETING PLAN
• PRODUCTION
• ORGANIZATION AND PEOPLE
• FINANCES
• OWNERSHIP
Second Public Meeting
Public Meeting to Review the Reports Of the XYZ Co-operative Steering
Committee
• Community Centre
• August 10, 2011
• AGENDA
• Welcome and introduction of special guests
• Review and discussion of the minutes of the 1st Public Meeting
• Steering Committee Reports
• General Discussion on report findings and merits of the Co-op Option
• Comments from key stakeholders (NLFC, REDB, Municipality, etc.
• Conclusions and Recommendations
• “Where to from here” – Next Steps
• Next meeting
Second Public Meeting
Notice of 2nd Public Meeting
Monday, January 31, 2012
At 7:00 P.M. at the Community Centre
Public Discussion: Report on the Merits of
Establishing a Community-Based
Development Co-operative
Co-op Launch & Start-Up
• Phase 5: Co-op Incorporation
– Draft By-laws and Business Plan Completed
– Provisional Board of Directors Confirmed
– Articles of Incorporation Completed
– Documents and Fee Submitted
– Registrar Confirms Incorporation
• Phase 6: Business Start Up
– Banking/Accounting Procedures in Place
– Member Equity and Business Financing in Place
– Staff Hired (if required)
– Operational Policies/Procedures Developed
– Opening Ceremonies - First AGM Held
Co-op Launch & Start-Up
• Phase 7: Ongoing Co-op Operations
– Policies and Procedures Manual
– Monitoring of Operations
– Regular Board Meetings
– Ongoing Policy Development
– Development of Business/Community Networks
– Membership in Provincial/Regional Centrals
Co-op Launch & Start-Up
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Developing the Business Plan
Steering Committee must be actively engaged in the process
Seek advice on selecting the appropriate consultant
Set clear targets for equity investments by members
Consult with potential funding partners on their information needs
Make sure plan is realistic and demonstrates that the enterprise can
be self-sustaining
Co-op Launch & Start-Up
• Incorporating & Launching the Co-operative
• Early engagement & consultation with the Registrar of Co-operatives
• Advice & guidance of NLFC and RDN member will help ensure
approval of incorporation
• Once incorporated, steering committee evolves into the co-ops
Provisional Board
• Board ensure “doors” are ready to be opened (re: operations,
administration, physical plant and equipment , etc)
• Board organizes the Co-op’s first annual meeting during the
first year of operations
Co-op Launch & Start-Up
• Ongoing Operations
• “New” Board is elected & meets regularly to address ongoing
operational & administrative requirements
• Training needs of Board, Management & Staff are identified and
addressed
• Board establishes committees to share workload (i.e. Executive,
Finance, Member Relations, etc)
• Communications with members, partners and the local community
becomes a priority
• Operational/Financial success requires full member
participation and support
Workshop Evaluation & Feedback
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Comments, suggestions, feedback?
Ideas on how to improve the workshop?
Were your expectations met?
Where to from here?