How To Choose The Right Co-op

Selecting the right type of co-operative is a crucial step in establishing a successful co-op. Different co-op models offer various benefits and cater to different needs. Understand the different types of co-operatives and how to choose the best one for your situation.
Types of Co-operatives
- Producer/Marketing Co-operatives
- What They Are: These co-ops are formed by individuals who produce similar goods or share market interests. Common among farmers, artists, and other producers, they help members reduce costs and increase product value through collective efforts.
- Benefits: Lower business costs, access to new markets, and shared resources. Examples include Ocean Spray and the Ashern Cattlemen’s Association.
- Consumer Co-operatives
- What They Are: In these co-ops, the users of the co-op’s services are also the members and shareholders. This model is popular in retail and financial services, such as credit unions and grocery stores.
- Benefits: Members have a direct say in how the co-op operates and often receive better services or prices. Examples include Mountain Equipment Co-op (MEC) and Servus Credit Union.
- Worker Co-operatives
- What They Are: Owned and run by the employees, worker co-ops allow workers to manage and benefit from the business. Some employees may not be owners but can still work for the co-op.
- Benefits: Workers have a stake in the business’s success and often enjoy better working conditions. Examples include London Brewing Co-op and ALIF Partners.
- Investment Co-operatives
- What They Are: These co-ops offer investment opportunities, often focused on local projects or alternative investments like solar energy.
- Benefits: Members can invest in local ventures and may use their RRSP or TFSA for investments. Examples include the Alberta Solar Co-op and the Creston and District Community Investment Co-op.
- Multi-Stakeholder Co-operatives
- What They Are: Formed to include various interest groups, these co-ops can have complex governance due to differing member interests.
- Benefits: Includes diverse perspectives and benefits multiple groups. Examples include Stocksy United and Weaver Street Market.
- New Generation Co-operatives
- What They Are: Agriculture-focused co-ops combining cooperative and investor-owned features, designed for value-added processing.
- Benefits: Provides stability and additional value for agricultural products. Examples include Westlock Terminals and the Alberta Egg Producers Co-operative.
- Housing Co-operatives
- What They Are: Designed to provide housing, these co-ops can be for-profit or non-profit, with costs shared among members.
- Benefits: Often used for affordable housing and can be a route to home ownership. Examples include the Co-operative Housing Federation of Canada (CHF).
- Community Service Co-operatives
- What They Are: Typically non-profit, these co-ops focus on social functions like community halls or recreation centers and often rely on volunteers.
- Benefits: Serves community needs and engages members in governance. Examples include Crocus Co-operative and Access Communications.
How to Choose the Right Co-op Type
To select the best co-op model for your needs, consider the following questions:
- What service will the co-op provide? Determine the primary purpose of the co-op.
- Who will benefit from the co-op? Identify the target group or community.
- Who should pay for the services? Decide how costs will be shared among members.
- Who should share the profits? Consider how benefits and profits will be distributed.
- Who should make decisions? Plan who will be on the board of directors and how decisions will be made.