Features & Sacco Leadership

How to budget in a co-operative

How to Budget in a Co-operative

Budgeting is crucial for the success of any co-operative. It helps boards and staff plan for the future, allows members to provide input, attracts potential funders, and supports the development of a financial strategy.

Be Inclusive

While budgeting is often managed by the board with the help of a treasurer or staff, involving members in the process can be very beneficial. Creating finance and audit committees made up of members can offer fresh perspectives and increase engagement. Since the budget affects everyone, including members in the planning process helps ensure their views are considered and fosters a sense of ownership.

Give Back to Members and the Community

Co-operatives are known for their strong ties to their members and communities. You can enhance these connections by distributing dividends to members and making community donations. This doesn’t have to involve large sums; small gestures like sponsoring local events or organizing community activities can strengthen support for the co-op. Giving dividends also helps members feel more invested in the co-op’s success.

When Not to Give Back

While rewarding members is important, co-operatives must also retain some of their surplus for future needs. Keeping a portion of profits for investment and reserves ensures the co-op can handle downturns and support future growth. This might mean delaying or reducing immediate payouts, which can be unpopular. Involving members in budgeting discussions can help manage their expectations and explain the need for retained earnings.

Invest in the Co-op’s Future

A good budget plan includes strategies for future growth and stability. Set aside funds in a reserve for unexpected challenges and invest in the co-op’s development. This can include upgrading equipment, training staff, or expanding operations. By focusing on enhancing assets and reducing liabilities, co-operatives can improve their financial health and prepare for long-term success.

 

Andrew Walyaula
Author: Andrew Walyaula

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Andrew Walyaula

About Author

Andrew Walyaula is a seasoned multimedia journalist. waliaulaandrew0@gmail.com

Leave a Reply

You may also like

Factors to consider before taking a loan in Kenya: The risks of being a guarantor: what you need to know: SACCO Loan Requirements
Features & Sacco Leadership

Factors to consider before taking a loan in Kenya

The surge in borrowing activities across Kenya highlights a growing inclination towards loans among its populace. With an array of
What is the importance of credit policy in Saccos: Benefits of Sacco membership for small business owners: How to increase Sacco membership: Why Sacco loans are cheaper: Factors contributing to member exits from SACCOs: How to exit from a SACCO
Features & Sacco Leadership

Why Sacco loans are cheaper and more accessible

Kenyan individuals and households are increasingly turning to Saving and Credit Cooperative Organisations (Saccos) and microfinance banks for loans, rather
error: Content is protected !!
×