Step-by-Step Guide to Forming Your Own Cooperative: A White Pape


Cooperatives, also known as co-ops, are businesses that are owned and controlled by the people who use their services or goods. These businesses operate on the principle of one member, one vote, meaning that each member has an equal say in how the business is run. Co-ops can be found in many industries, including agriculture, retail, credit unions, and housing. Starting a co-op can be a great way to bring people together to achieve a common goal and create a sustainable business model. This white paper will provide a step-by-step guide on how to form your own co-op.

Step 1: Identify a need

The first step in forming a co-op is to identify a need in your community or industry that is not being met by existing businesses. This could be a need for locally grown produce, affordable housing, or a credit union for low-income individuals. It is important to conduct research to determine if there is a market need for your proposed co-op.

Step 2: Gather a group of interested individuals

Once you have identified a need and conducted market research, gather a group of individuals who are interested in starting a co-op. This group should include people who will be potential members, as well as individuals with relevant skills and experience, such as business management or legal expertise.

Step 3: Develop a business plan

A business plan is a document that outlines the goals, strategies, and financial projections for the basis of forming your cooperative. It should include information on the benefits or services offered by the cooperative, its target market, and the management and governance structure. A well-written business plan will be essential when seeking funding from banks or investors, and communicate the finer details with potential members in the future.

Step 4: Secure funding

Securing funding is an important step in forming a cooperative. This can be done through a variety of methods, including loans from banks, grants from government agencies, or investments from individuals, or fees from members. It's important to have a clear and well-written business plan before seeking funding for forming your cooperative, especially from seeking funding from members.

Step 5: Incorporate and obtain necessary licenses and permits

Incorporating your cooperative involves registering it as a legal entity with your state government. This process may vary depending on your state, so it's important to consult with a lawyer or advisor to ensure that you are following correct steps. Additionally, you may need to obtain licenses and permits from local and federal government agencies in order to operate your co-op.

Step 6: Adopt bylaws and hold an organisational meeting

Bylaws are the rules and regulations that govern the operation of your cooperative. It's important to adopt bylaws that are consistent with the principles of cooperatives and members, and that outline the rights and responsibilities of members, as well as the management and governance structure of the cooperative. Once your bylaws are adopted, you should hold an organizational meeting to elect the board of directors and any other necessary officers.

Step 7: Launch and market your co-op

Once your co-op is officially incorporated, licensed, and has a board of directors in place, you are ready to launch. You should develop a marketing plan to promote your cooperative and attract new members. This could include advertising in local newspapers, magazines or on social media, hosting events, or reaching out to community organizations.


Starting a cooperative can be a challenging but rewarding process. By identifying a need in your community, gathering a group of interested individuals, developing a business plan, securing funding, incorporating, and obtaining necessary licenses and permits, and launching and marketing your cooperative, you can create a sustainable business. It takes time but the collective benefits to members is well worth the effort.