– Strong memberships
– Well balanced social and commercial objectives
– Great customer service
– Excellent location
– Unique product or service
Target markets
Describe the target markets for your product or service. Who are your customers? If you already know who they are, list the major clients if they agree to this information being made available to external parties. If you don’t have major clients, or there are potentially many of them, you should define the markets you will be selling to.
How have you identified your target markets? What are the characteristics of the target markets? Are your customers a certain age or gender, do they live in a particular location, have a certain type of job, ethnicity or income level? Are they members of the co-operative? What are their needs and preferences? How big is your target market? How often will they buy from you? Why and how will they buy your product or service? Are they end-users?
Consider if there are different segments to your target market. For example, would both students and professionals buy your products? Each segment may have different needs, and may be willing to pay different prices. If you understand the needs of each segment, you can adapt your marketing mix to provide what each segment wants.
Product pricing and terms
In determining the prices of your products or services, consider the costs to produce, or to deliver services, your customers’ sensitivity to the price and to price changes, and what the price reveals about the product’s value or quality. Will you offer quantity discounts, or discounts for repeat sales? Will co-operative members receive a discount or rebate?
Describe the expected payment terms for customers, e.g. direct customers pay cash while distributors and members pay within 30 days from invoice date.
Product sales, margins and distribution
If your co-operative is new, estimate the number of products or services to be sold in the first year, and consider using a table to show your estimates. If the co-operative is already established, use both past and projected performance levels. You may wish to break the table down into weeks or months. The table can form the basis of sales volume records and pricing over time, and identify changes to help you to plan future sales targets and purchases of raw materials.
Describe how your products will be distributed – whether through direct sales, online marketing, direct mail, agents, wholesalers, representatives, retailers or consignments. Describe commissions or other fees involved.
Estimate the cost of other expenses such as shipping, warranties, contracts and liabilities.
Strategic alliances
List strategic partnerships the co-operative has, or plans to form, with other co-operatives or businesses.
These may be to work together in major ventures, or on market access, supplies or other resources. Provide information about the arrangements.
List key suppliers, and describe their history and reliability, location, what and how much they can supply, credit policy and delivery details, and the cost and availability of materials.
Marketing plan
Explain your marketing objectives – what you aim to achieve and what you will do to achieve them. Ensure they can be measured and evaluated. An example might be “to obtain 20% of market share by the end of the first year”, or “to ensure 50% of our target market recognise our brand, and 10% buy our products”. Then determine what marketing activities will help you achieve your aim.
Determine your marketing strategies and activities for each month of the first year to create awareness and sales. This is your marketing mix, and relates to product, place, price, promotion, people and process.
Product strategy : consider the products’ qualities, consistency, features, adaptability, packaging and design, how the customers will perceive the products’ features, and how you will market them.
Place strategy : consider distribution channels, location of retail outlets, the geographic area your products will be available in.
Price strategy : consider the selling price to various customers and markets, including discounts for quantity and early payment.
Promotion strategy : consider what advertising, selling, sales promotion, trade shows, website, media and public relations activities you will undertake to differentiate your product and make consumers aware of your product or service.
People strategy : consider who will sell the product and delivery it. People may include staff, strategic partners and agents.
Process strategy : this is the strategy where you plan, target, cost, develop, implement, document and review the systems to attain the other aspects of the marketing plan. You’ll plan to have the right product, in the right place, at the right price, in the right quantity, at the right time for the right customers.
The finances
Often the last part in the business plan, the finance section is important as it demonstrates the likely financial viability of the co-operative, and is vital information for anyone considering investing in the co-operative.
It shows what financial resources are needed to set up and operate the co-operative, forecasts of the co-operative’s performance based on expected sales levels, and it details the timing and the amount of investment needed from external sources.
Commencement capital – new co-operatives
List the amount of capital that has been raised and will be raised from members, and funding confirmed from other sources.
List the costs to start the co-operative (below) in a table, and show the month when the costs are expected to be paid.
Subtract the set-up costs from the confirmed capital raised; the balance is the amount of borrowings you will require.
Financial objectives
List the co-operative’s financial objectives and how long you expect to take to achieve them. These may be profit targets, investment levels, returns to members and debt repayment.
Assumptions
Explain the key assumptions made in developing your financial forecasts:
If the co-operative has already been trading, describe its financial history, including equity, debt and profit levels.
Include at least four key financial ratios:
Monthly cash flow forecasts
The cash flow forecast demonstrates how and when cash comes into and goes out of the co-operative. Hopefully it also shows that income from sales will pay for bank loan repayments and other expenses. It will show you when you need an injection of cash to cover monthly bills, and when you need to conserve cash to pay for upcoming bills.
For the first year of trading, present monthly cash flow forecasts. After the first year, show yearly forecasts for at least two years.
Monthly income and expenditure forecasts
Also called profit and loss forecasts, and forecasts of financial performance, income and expenditure forecasts show the co-operative’s projected income less expenditure, resulting in a profit (or loss) over a specific period of time. For the first year of trading, provide monthly or quarterly forecasts, and annually for the following two years.
Just a few quick tips for the financially challenged – income is usually from sales, and expenditure is usually the costs to run the co-operative and interest payments. Loans (liabilities), purchased equipment and inventory (assets), capital injections from members (equity) are all items for the balance sheet.
When you receive an invoice it is an expense, even if you haven’t paid it yet; so it is shown in the month the expense was incurred. Show all items as GST exclusive (i.e. without GST).
Balance sheet forecasts
The balance sheet, also known as the statement of financial position, shows the co-operative’s net worth at a particular point in time – usually the last day of the financial year. Assets are usually objects and cash the business owns, liabilities are usually debts owed, and equity is the capital contribution and accrued profits. Assets minus liabilities equals equity.
Provide balance sheet forecasts for three years.
Financial plan
Describe your plans for the co-operative’s financial viability. What is the total investment required for start-up? What are your short and medium-term investment plans? Where will funds come from? Have they been confirmed? How much comes from each source, and what conditions do funds come under (e.g. interest rates, repayment terms)? What security is offered?
When is the co-operative expected to make a profit? What level of sales is required to make a profit? When will members see a return? How much are profits expected to grow each year? How will costs be kept down? If non-distributing, will you retain surpluses, and where do you plan to donate excess surpluses?
Do you have an exit strategy?
A note on financial management
This note on financial management is not meant for inclusion in the business plan, but nevertheless is very important. (A summary of the financial management systems used could be included in the financial plan.)
Members (and investors) need to know how the co-operative is performing and need to receive regular accurate reports. Systems must correctly identify, measure and communicate financial information.
You need to understand and abide by accounting principles.
Complete, accurate, and up-to-date financial records must be kept. These may be handwritten, or on computer spreadsheets, but we recommend that unless the co-operative is very small, you should use financial software. Such software doesn’t replace an accountant, but usually knows what to debit and credit, and has a useful help function.
Develop strong systems for handling cash. Provide numbered and dated receipts for money received. Provide numbered and dated invoices (tax invoices if the co-operative is GST registered) for purchases and to others who owe you money.
Every month, reconcile your expenses paid and income received with the bank statement. Produce a balance sheet and profit and loss statement to help you keep an eye on finances and to allow you to plan and control the co-operative. Watch your creditor and debtor levels; ensure you collect money owing and pay expenses when due.
The strategic plan
A strategic plan is usually a long-term plan for the next three to five years. It explains the goals and objectives to be reached, and the path to achieve them. It’s a bit like a GPS for a very long journey, if you zoom out and ignore the minor roads.
Focus on a small number of key priorities. Too many priorities will mean you lose focus on the major objectives.
Make the priorities easy to translate into action plans, and have clear timelines to achieve outcomes.
Information that might distract from the business plan’s flow should be included as appendices. Provide a summary of the information within the business plan, and more detail in the appendices. It’s also a good place to include information that is not part of the business plan. Start a new page for each appendix.
Appendices might include the following:
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How to start a co-operative: a step-by-step guide.
Starting a co-op? This article provides a step by step guide on how to start a co-operative. There’s a lot to do, and a lot to learn — but we have tons of supports, resources, and tools are available. This article provides a map to many of them.
Starting a business is exciting and rewarding, but it can also be frustrating.
At Co-operatives First, our job is to de-mystify the process of starting a co-operative business . That’s why we built this site. The Co-op Creator provides a variety of guides, tips, templates, and links. We’ve also developed an online course full of helpful videos to help you learn about this process — you can take that for free here .
For the DIYers out there, this is ideal. But sometimes folks need more hands-on support. If that’s you, our knowledgeable staff is a phone call or email away .
Okay, let’s get started.
What do you want to do.
Agree on the purpose of the business. Maybe your community doesn’t have enough daycare options. Maybe you’re a professional with your own firm who wants to share the cost of office space and administration. Perhaps you’re a producer who needs help packaging, marketing, and distributing your vegetables. Whatever the case, everyone needs to agree to and buy into the purpose of the co-op. A good place to start is by asking the question: what problem are you trying to solve and how does working as a group help solve that problem? This resource can help you focus ideas and engage potential members and markets in the process .
A co-op is a business run by a group of people who share its benefits. You might already have a group that wants to work together. That’s great! You might also have an idea and need to get more people on board. To get the word out, you could organize a meeting to discuss how a co-op could work and see who wants to get involved.
If you’re thinking about starting a co-op, consider these two questions: What is the purpose of the business and who should benefit from it? If the answer is ‘provide a service for those who benefit from it,’ then a co-op is probably a good choice. The model works best when member interests are aligned and working as a group brings value beyond what can be achieved alone.
To learn more, here’s how co-ops compare to other business models . Or try our questionnaire .
Decided a co-op is the way to go? Time to organize your co-op’s structure, plan of action, and finances.
Co-ops need people to start and support them. So, if you haven’t already, find like-minded people to join you. But make sure these people have a personal interest in starting the co-op.
Also, keep in mind BC, Alberta, and Manitoba require three people to incorporate a co-op — in Saskatchewan you need six.
Sit down with your committee. Come up with a plan for starting your co-op. Decide what needs to get done, and who is going to do each task. Write it down and hold people accountable.
To assess the external factors that could impact your new business, try completing a PESTLE analysis . Also consider doing a business model canvas to better understand how the business will work.
How much money do you need to start the co-op? Where will it come from? Get a clear financial picture of your start-up before getting too far into it.
Who will make the decisions in your co-op? Figure out who’s in charge, and how the decision-making process will work in your business.
Now you’re ready to incorporate your co-op, which means you’ll file documents with the government that legally create your business. You probably do this with your provincial government — but if your co-op will operate in more than one province, you can incorporate with the federal government.
We’ve created work plans that you can follow to incorporate your co-op in:
Incorporating your business will include the following tasks:
The next step in starting your co-op is to pick a name — here are some tips on choosing a name for your co-op . You can find more specific information about registering a name in your province’s work plan (above). Or try our guide to naming your co-op .
Your Articles of Incorporation (also known as “Memorandum of Association” if you’re in BC) are the documents you submit to the government to start your co-op. Once you’ve filed these and they’ve been accepted, your co-op will be a legal entity . This means it has rights, and can do things like open a bank account, take out loans, etc.
You’ll find more detailed info about incorporation both in the above work plans, and here:
We know you’re busy. We can incorporate your co-op for you. Curious why you should incorporate? Check out this video .
Bylaws (known as “Rules of Association” if you’re in BC) are the rules you write for your co-op. The government requires that you include certain things in bylaws, while other rules are up to you. Requirements change depending on whether you’re in BC , Alberta , Saskatchewan , Manitoba , or are incorporating federally .
Attract and admit new members.
Once you’ve started a co-op, it needs members! You’ll need to identify who your members should be , get the word out to them about joining your co-op, and create a process for them to join .
To better manage members’ data, co-operatives keep membership registries . These registries are just places where you store information. For co-ops with more complex interactions with members, you might want an accounting software to track member accounts, issue dividends, and generate reports. For smaller and/or newer co-ops, you could just use an Excel spreadsheet.
Every year, your co-op will have to hold an AGM . At this first one, you’ll elect your first board of directors . Often, the steering committee that’s been working to start the co-op becomes the first board, but you may also need to recruit members .
Write a business plan.
A business plan is a great tool not only to guide you as you build the business, but to attract investors, show lenders that your business idea is sound enough to deserve a loan, or get new members to join. You should do this as a group.
We’ve created this handy Business Plan Creator to lead you through the process. You can also apply to Co-operatives First to have a professional consultant create a plan for you.
Figure out how you’re going to get the money to start the co-op: from loans? Members? Selling shares? Fundraising? Usually it’s a combination of these. Write a financial plan , a budget , and think about how to finance the business going forward .
Train your board.
It’s important for all board members to understand their role and what’s expected of them. Co-operatives First can provide training to get your board started on the right foot.
New boards have a lot to do to guide the co-op. Here are some just a few things a new board will do in the first year:
If starting a co-op is your goal, Co-operatives First can be there every step of the way. Contact us to get started.
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Monthly newsletter.
Starting a cooperative and developing a business plan: phase 2.
Questions about this information? Contact us . June 04, 2015
Updated from an original article written by Mark Thomas, Michigan State University Extension.
Having enough interest in starting a cooperative is just the first step, developing a viable business plan, when implemented, that meets the identified needs is the second.
In my first article on starting a cooperative I noted that the purpose of starting a cooperative was recognition of the need to solve problems or meet needs of the marketplace with goods or services. A steering committee should be formed to determine if there is data to support the feasibility of the cooperative. This committee should present its findings to potential members and let them make the decision to move forward with the development of a cooperative. The development of a business plan is then critical, as it will map out the necessary steps for a successful enterprise.
The feasibility study will lay the foundation for the business plan. It contains market information about the potential members’ usage and how a cooperative would differentiate itself from existing competition (if any). Additionally, financial viability and management expertise will be spelled out, as well as facilities needed and potential locations. Having this study prepared in an expert manner will insure the business plan is on solid footing s moving forward.
The business plan is a road map to launching a cooperative and will allow the Board of Directors to know where they want to be and how to get there. Having a professional who is familiar with cooperatives to assist with the preparation of the business plan is a good idea and can avoid and voids problems in the future. It should include the preparation of three years’ projections (pro-forma) of cash flow, operating statements and beginning and year-end balance sheets. These will be used to paint the picture of the capital needs and potential sources of funds to meet the asset needed. Additionally financial planning should include funding the operating until profitable.
The steering committee should study the legal aspects of cooperatives and have an understanding of the duties necessary. At this point employment of legal counsel to develop the articles of incorporation, specific to the State should be undertaken. They can also assist with bylaw development and they should be in sync with the purpose and scope of how the cooperative will operate.
The steering committee should now be ready to hold a fourth member exploratory meeting. It is essential to have a large turnout of the identified potential members. Direct contact, newspaper articles, web postings and any other method of “spreading the word” about the meeting should not be overlooked. The meeting is conducted to present the business plan to potential members. The business plan will tell the story of the potential cooperative. Why the steering committee supports the development and how it will benefit the community of interest at large should be spelled out. Financial details regarding membership investment requirements should leave no doubt in the minds of the potential members that their assets will be at risk.
With full disclosure of the information regarding the risks and possible returns of the cooperative, the potential members conduct a vote to continue or not. If the vote is in the affirmative, the cooperative can hold its first meeting at which two items of business need to be conducted:
Michigan State University Extension educators working with the MSU Product Center’s Michigan Cooperative Development Center can provide assistance with helping guide groups of potential cooperatives through this process.
This article was published by Michigan State University Extension . For more information, visit https://extension.msu.edu . To have a digest of information delivered straight to your email inbox, visit https://extension.msu.edu/newsletters . To contact an expert in your area, visit https://extension.msu.edu/experts , or call 888-MSUE4MI (888-678-3464).
Mindful educators part 2 lunch & learn 9.16, fiscally ready communities: from fundamentals to best practices.
new - method size: 3 - Random key: 0, method: tagSpecific - key: 0
Published on February 23, 2023
Haccp overview for employees in meat and poultry establishments.
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Business Planning for Co-oPerativesAll co-operatives, regardless of thei. size or type need a business plan. A business plan helps clarify the activities for the co-operative and identifies the logistics, resources and fina. ces needed for it to be successful.All co-operatives should be able to prepare forecast financial statements that ...
Step 5: Prepare a Business Plan. Feasibility study acts as the foundation of this plan. The Business Plan provides a plan of action and specifics on how the cooperative business will operate. Go over plan in detail, adjust, and finalize. Step 6: Employ Legal Council for Legal Papers.
APPENDIX B. The co-operative model business plan. This appendix provides a model business plan outline. Make the plan your own. Your cooperative is unique in many ways so you don't want the business plan to look just like everyone else's; you want it to be an expression of your co-operative's unique structure, products, plans, principles, values, environment and people.
This business plan covers five years and provides detailed explanations of actions proposed to accomplish the primary functions of the Savings and Credit Cooperative Society (SACCO) to fulfill its members' economic and social needs. In preparing this business plan, the Board considered the strategic directions of the Society services and has ...
Starting a Co-operative: Business Plan Template. The following document serves as a guide document only. It is an example of the questions and thought process that the Irish Co-operative Organisation Society (ICOS) expects prospective co-operatives to discuss prior to submitting an application for registration of a new co-operative.
Orcas Food Co-op 2019-2024 Strategic Plan - FINAL ADOPTED 2-28-19 3 Our Plan 1. THRIVING COOPERATIVE ENTERPRISE Long Range Goal: A successful business that demonstrates the cooperative model and furthers the co-op movement. Opportunity: As a co-op, our success is measured by the value that we invest back into our community.
INTRODUCTION. A business plan is a vital document for any successful co-op. Ideas are simply that until they can. be effectively communicated and implemented in a systematic manner. A comprehensive, written document that expresses ideas and assigns specific responsibility to individuals and\or.
ceed, the next step is to prepare a business plan and draft legal documents. Prepare a Business Plan Every business should have a business plan. The steering committee should arrange for completion of an in-depth busi-ness plan prepared by a professional famil-iar with cooperative organization. The plan is developed from the foundation provided
Starting a cooperative is like setting up any business, but what makes a cooperative different from other business models is that it is shaped through collective effort and group decision-making as well as a set of cooperative principles that help to guide the business. The Start.COOP modules will walk you through the process of starting and ...
PREFACE This guide outlines the process of organizing a cooperative business and pro-vides information on the potential steps involved and some important aspects of cooperative development. A cooperative business is briefly described, including its structure and basic principles. Twelve steps involved in most cooperative development projects
Summary of short and long term goals. c. Market-driven reason this business will succeed. E. Governance, Management, and Human Resources. a. Key experiences and skills. i. Experiences and key skills of steering committee. ii. Experiences and key skills of directors and/or manager(s)
COOPERATIVE. The Modules. Decision Tree and the Start.COOP Modules. The Training Guide Format. Signs and their Meaning.
A business plan should be reviewed and updated regularly to reflect changes in the business environment and status of the cooperative. In this session, you will familiarize yourselves with the structure of the business plan. Activity 1A: Structure of a basic business plan The following are the different sections of the business plan:
Here are some just a few things a new board will do in the first year: Create a strategic plan. Write a Human Resources policy. Write a Conflict of Interest policy. Recruit members. Evaluate itself. If starting a co-op is your goal, Co-operatives First can be there every step of the way. Contact us to get started.
1. The expected readiness of the cooperative to successfully create and implement a strategic business plan. 2. The willingness and ability of the participating cooperatives to have an open mind and share and receive development points from each other for an effective learning experience. SBP is partly a creative process.
Hints for success are provided throughout. KeywoMs: strategic, planning, cooperatives, handbook. Cooperative Information Report 48 Issued October 1994 Reviewed and approved for reprinting July 1997 Price: Domestic-$4.50;foreign-$5. "If you don't know where you are going, any road will get you there."-Wizard of Oz.
P.O. Box 166140. Chicago, IL 60616 USA. (773) 404-2667. [email protected]. This resource includes several templates for cooperative business plans from actual housing cooperatives in North America. Other references provided are a blueprint for the development process, of which the business plan is a part, and a cooperative business plan ...
Starting a Co-operative: Business Plan Template. The following document serves as a guide document only. It is an example of the questions and thought process that the Irish Co-operative Organisation Society (ICOS) expects prospective co-operatives to discuss prior to submitting an application for registration of a new co-operative.
Cooperatives help secure livelihoods. A cooperative is "an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.". ILO Recommendation 193 on the Promotion of Cooperatives (2002) Cooperative enterprises ...
This committee should present its findings to potential members and let them make the decision to move forward with the development of a cooperative. The development of a business plan is then critical, as it will map out the necessary steps for a successful enterprise. The feasibility study will lay the foundation for the business plan.