You will need to build relationships with potential members, suppliers and customers of the proposed co-operative. Whoever you are talking with, you need to be clear in explaining what the co-operative will be offering and be able to manage expectations.
Customers and suppliers
Your community will include customers or suppliers, who may or may not be potential members.
Even if the customers are not part of the organisation, you will need to engage with them and explain what the co-operative will be offering, as the co-operative will need a sufficient number of customers willing to pay for the product or service for the co-operative to be able to break even.
Your community will also need suppliers to provide the input for the product or service the cooperative is going to offer. It is important to know who the suppliers will be, and if they can offer inputs at a competitive price and provide reasonable credit terms.
This is an important stage of starting the co-operative, as the members will own the cooperative and probably provide finance for start-up and operational costs. This is virtually a public offer of investment, and has issues of risk and accountability. Be very clear to prospective members about what the risks are and their likely returns.
In your early meetings you’ll need to identify and agree on the needs to be met and how the business will operate. You’ll need to also clearly explain the co-operative values and principles and the importance of active membership, and decide on whether the co-operative is to be a distributing or non-distributing co-operative.
Talk about the professional help you might need to launch the co-operative. If your members do not have the necessary skills, you should consider whether you need a legal consultant, co-operative developer, accounting and financial advisor, or a consultant skilled in developing feasibility studies and business plans for co-operatives.
Maintain communication with prospective members so that everyone knows what is happening, what is about to happen, and how they can be a part of the process. Effective communication and democracy in the early stages will build a culture which can be carried into the operational co-operative, making it a more effective and sustainable organisation.
Plan ahead. Make sure there is plenty of time for discussion so that everyone can present their views and ask questions. Ensure everyone is clear on what the process is, what the needs to be met are, what direction is being taken and that there is a common goal to be achieved.
It may take a few meetings to make the decision on whether or not to proceed with the cooperative. Thoroughly explore the motivations and expectations of the proposed members to ensure there is a common purpose.
If the decision is to proceed, establish a steering committee, determining who should be in it, what it should do and when it will report its progress to another meeting. Among other duties, a steering committee should survey and consider potential members, and develop an application form for membership. It is a good idea to include in the application form that once a person is a member, they will abide by the co-operative’s rules.
Decide the name of the co-operative, where it will be located, and the co-operative’s objectives and purpose.
The co-operative must have a registered office where it publicly and conspicuously displays a notice stating the name of the co-operative and identifying the premises as its registered office.
The co-operative’s name may consist of words, numbers or a combination of both. The name must include the word “Co-operative” or “Cooperative” or “Co-op” or “Coop”. The word “Limited” or “Ltd” must be the last word in the name, unless the Registrar approves the omission and the co-operative’s rules prohibit it from making distributions to members and paying fees to its directors, and require the directors to approve all other payments the cooperative makes to its directors.
The name must appear in legible characters on each seal of the co-operative, in all notices, advertisements and other official publications, and in all of the co-operative’s documents. However it is not essential that a co-operative have a seal.
Early consideration should be given to who will be on the first board of directors, bearing in mind the importance of the role.
The co-operative’s rules will need to be decided upon. They guide the activities and governance of the co-operative (see Making the Rules).
Proposed distributing co-operatives must have a formation disclosure statement. Proposed non-distributing co-operatives only require one if requested by the Registrar.
The rules and formation disclosure statement, along with a written notice of intention to apply for registration as a co-operative, must be sent to the Registrar and once approved, a formation meeting can be held. Each state and territory has a statutory officer of Registrar of Cooperatives created under the legislation.