Guide to Staring a Coop

What is a cooperative?

A co-op is a group of people coming together to meet their needs or solve a problem, in a fair and democratic way. This may be a group of workers looking to set-up a business together or a local community looking to: save a local shop, the pub, library or starting a new community space. 

They can be small, local businesses like our own Preston Digital Foundation, a worker owned tech business of 3 members, or or much larger businesses such as Suma, a food wholesaler which has been trading for over 30 years or of course The Co-op with 3,500 food outlets around the UK.

Co-ops can take a variety of legal forms. Co-ops are a way of running an organisation, following internationally agreed values and principles.

How do I start a co-op?

This short, step by step guide is aimed at new start worker co-ops or community co-ops. If you are looking to convert a larger organisation, for example through an employee buyout, check out this Blog and get in touch directly. Whenever you feel ready, book a chat with our adviser, or send us a message.

Step 1: Identify the need

It sounds obvious, but it’s important to understand why your cooperative should exist in the first place. You may have a clear need or problem and have an obvious solution “save the local community centre” or a vague aspiration “how can I use my skills to earn more money”. Either way the first step is to get clarity on this need, and whether you have a chance of meeting it. 

One approach is to look for “the sweet spot” by asking yourself these three questions:

  • What do you have a passion for? What’s driving you to start this new co-op, will others feel this is equally important or is your motivation just so great you feel you can persuade others, this co-op is needed.
  • What are you good at? A great idea is one thing, but be realistic. Do you have the skills and ability to do it? Remember this is a co-op, the point is to find others, build a team of people with the skills needed.
  • What will people pay for?  So you have a great idea, you think you can do it really well. You’re at the “hobby” stage. To turn something from a hobby into a sustainable enterprise, somebody needs to pay you for it. Who are these people, what’s the market for what you have a passion for and ability to do?

Whether this is a business idea or community issue that you want to solve, these questions still need to be answered. Already at this point you may pivot to do things differently.

Exercise to try:

  • On a piece of paper, with post-its or digitally, write down a load of ideas and elements of this potential enterprise. What does it do?
  • Then try to place them somewhere within the diagram. Be honest, be realistic. The area to focus on is those in the overlapping centre
  • You are probably clearer on the items you have a passion for, but less so on whether you are good at them or others will pay for them, so this is the start of your research and experimentation.
  • If you’re not sure you are good at something or actually enjoy it in practice, try it out on a friend or as a free taster session for someone.

Step 2: Forming a group

A cooperative is made up of a group of people all looking to meet their needs, not someone struggling on their own, it’s our competitive advantage. If you are not already part of a group looking to develop a cooperative then finding a group of passionate individuals who share your vision is your next step. 

How to find other people?

Imagine that you  have one or two minutes to tell someone about your idea. What would you say to convince them to join you? Practise this if the opportunity arises, you are ready. You might: 

  • Start with the issue, the need, the problem you’re trying to solve
  • Then your idea, how will it help solve this problem or meet this need
  • Mention the basics of co-ops “a group of people working together”
  • Share what progress have you already made, the questions you are working on
  • What do they think, are they interested?
  • If they are, be ready with a simple action they can take there and then, whether just giving you their contact details or sign-up to a mailing list.

For community focused co-ops: Go where that community is, if there is already a strong group, raise your idea at one of their events or create an event and invite people to it as a sure way of gauging interest in the idea.

For worker focused co-ops: Setting up a business with others in a similar industry is a much stronger/closer relationship. It’s best to find these people through business relationships, who have you previously worked with or done business with, do they have the skills and track record. Try to find local networking events, online forums or places similar people hang out.

Either way, once you have signed a few people, hold a session whether online or in person, a formal pre-organised event or just meeting up at a local cafe or pub. Bring people together to focus on this new co-op idea. 

When planning this session, make sure to set out a clear agenda so people know what to expect, and try to cover: 

  1. Share and understand each other’s values and motivations. Why did they turn up?
  2. Set out the core idea, and what you have done already
  3. Be clear about your own commitment and expectations, like your own time spent and planning to spend on this. Try to gauge everyone else’s expectations and what they can commit to.
  4. If there’s loads of energy within the group, then, start to plan out tasks for the future.
  5. Crucially for anyone wanting to carry on, get them to set a “next action”, this may be to go away and sign-up more people or find out some information and report back. Getting people right at the start carrying out tasks, and crucially knowing who will do them and who won’t will really help over the long term and where you invest your own energy.
  6. Set a date for a future session.

Step 3: Start writing stuff down

If you haven’t already,  create a shared document that all members can see and add to, such as google docs. Use this to start collecting your thoughts, whether its potential names for the co-op, who the members might be, questions you need to get answered or actions you need to take.

You may want to start constructing a business plan, this cooperative canvas can help you structure your thoughts

Template cooperative business canvas

If you are starting to run meetings, create a shared Notes and Actions document to keep track of what you have discussed, decided and actions to be taken.

Template notes and actions document

Step 4: Review progress

So you have a group of interested people who have started to firm up and write down some ideas. Now is a good opportunity to reflect on what you know and what you don’t. What assumptions you are making and what you can do to find answers or get certainty about those assumptions you’re making? 

So yes this means lots of browsing on the web to do research but also talking to your potential workers, customers and members.

Are you still passionate about it, is it really needed, have you enjoyed the process so far?

Step 5: Contact Preston Co-op Development Network

There are lots more steps, like creating a business plan, running experiments, thinking about legal structures and how you are going to finance all this. 

But that can wait, at this point you have an idea, a group and have put some thought into it. So contact us and we can help you with all the other steps in your co-ops journey.

Further resources

  1. We recommend that you all read the Simply Start-up publication available to download as a PDF. [30 mins]
  2. Download and complete the Skills assessment template.  [15-30 mins]
  3. Download and take a look at the Personal Development plan template [30 mins]
  4. If you have more time available and are keen we also recommend reading Simply Finance, Simply Governance and Simply Legal.