How to start a Co-Operative

Starting a co-operative can be both exciting and challenging.
1. Decide if a Co-Op is Right for You
- 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.
- 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.
- 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
- 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.
- Develop an Action Plan: Work with your committee to outline tasks, assign responsibilities, and create a timeline. Document everything to keep track of progress.
- 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.
- Prepare a Preliminary Budget: Estimate the start-up costs and figure out where the money will come from.
- Establish a Governance Structure: Decide who will make decisions and how the decision-making process will work.
3. Incorporate Your Co-Op
- 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.
- 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.
- 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
- 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.
- Track Membership: Keep an organized record of your members. For larger co-ops, consider using accounting software; smaller ones might use a simple spreadsheet.
- 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
- 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.
- 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
- Train Your Board: Ensure that board members understand their roles and responsibilities. Co-operatives First offers training to help get your board started.
- 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.