When co-operatives fail, it is often due to the lack of commitment and unity of members, or the economic environment in which they operate. Around half of newly formed co-operatives do not survive the first five years. Failure can be the result of:
Inability to balance benefits to members with retaining/raising sufficient capital to invest in the business.
Low returns, poor market, or poor product or service.
Idealistic, impractical, poorly stated or conflicting objectives.
Inadequate planning or research.
Inability of members to co-operate or offer sufficient support.
Large users who seek more control.
Lack of communication and co-operative education.
Failure to use and control competent consultants or management.
Hijacking by management or some of the membership.
Directors not comprehending the needs and motivation of members.