Features & Sacco Leadership

How to start a Co-Operative

Importance of referral program in SACCOs Advantages of cooperative society: How to Become a Board Member in a Cooperative Society: How to Start a Co-Operative: How to Transition a Business to a Co-operative

Starting a co-operative can be both exciting and challenging.

 1. Decide if a Co-Op is Right for You

  1. Define Your Purpose: What problem are you trying to solve? Whether it’s a lack of local daycare, sharing office space, or helping farmers with marketing and distribution, everyone involved needs to agree on the co-op’s purpose. Ask yourself how working together can solve this problem.
  2. Find Your Team: A co-op is run by a group of people who share its benefits. If you don’t have a team yet, organize a meeting to discuss the idea and find interested people.
  3. Evaluate if a Co-Op Fits: Consider if your business idea is best served by a co-op. A co-op works well when member interests align and working together offers more benefits than working alone. Learn how co-ops compare to other business models to help make your decision.

 2. Get Organized

  1. Create a Steering Committee: Form a group of dedicated individuals to help launch the co-op. Different provinces have different requirements for the number of people needed to start a co-op.
  2. Develop an Action Plan: Work with your committee to outline tasks, assign responsibilities, and create a timeline. Document everything to keep track of progress.
  3. Conduct a PESTLE Analysis: Analyze external factors that could impact your co-op. Consider using a business model canvas to understand how your business will operate.
  4. Prepare a Preliminary Budget: Estimate the start-up costs and figure out where the money will come from.
  5. Establish a Governance Structure: Decide who will make decisions and how the decision-making process will work.

3. Incorporate Your Co-Op

  1. Choose and Reserve a Name: Pick a unique name for your co-op and reserve it with the appropriate government body. Check the specific requirements for your province.
  2. Complete and Submit Articles of Incorporation: File the necessary documents with the government to legally create your co-op. This will enable you to open a bank account, take out loans, and more.
  3. Write Your Bylaws: Draft the rules that will govern your co-op. Ensure you include all required elements, which vary by province.

 4. Build Your Membership

  1. Recruit New Members: Identify and attract people who will benefit from and contribute to the co-op. Set up a process for them to join.
  2. Track Membership: Keep an organized record of your members. For larger co-ops, consider using accounting software; smaller ones might use a simple spreadsheet.
  3. Hold an Annual General Meeting (AGM): At your first AGM, elect the board of directors. The steering committee often becomes the first board, but you might need to recruit additional members.

 5. Formalize and Expand Your Plans

  1. Write a Business Plan: Create a detailed business plan to guide your co-op, attract investors, and secure loans. Use our Business Plan Creator or consult with a professional.
  2. Finance Your Co-Op: Determine how you will raise funds, whether through loans, member contributions, or other means. Develop a financial plan and budget.

6. Govern Your Co-Op

  1. Train Your Board: Ensure that board members understand their roles and responsibilities. Co-operatives First offers training to help get your board started.
  2. Develop Policies: In your first year, create a strategic plan and key policies, including Human Resources and Conflict of Interest policies. Also, focus on recruiting members and evaluating board performance.

 

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

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