Please follow this link to Coops Canada for information on CDI: http://www.coopscanada.coop/en/coopdev/CDI
Contact developers & organizations who can help:
Helpful Sites on Co-op Development |
Resources by Development Phase- Pre-Development (23)- Building the group, establishing the co-op form (10) - Planning and organizing the business (16) - Incorporation (25) - Implementation and Launch (5) |
PHASE I - DEVELOP THE CO-OPERATIVE BUSINESS IDEA
Step 1: Assemble a group of interested people
* Identify the needs to be met:
- unavailability or instability of work,
- unavailability of certain products and services,
- poor quality of certain products and services,
- products and services that are overpriced,
- market development.
* Identify professional assistance needed to launch the business:
- legal consultant,
- co-operative developer,
- feasibility study, business plan and financial consultant,
- accounting consultant,
- others
Step 2: Conduct a pre-feasibility study
* Conduct a preliminary market review
* Identify available technical and financial assistance
* Assess receptiveness to the co-operative business in the local community
* Evaluate if the co-operative is the best legal framework to use or if the kind of co-operative selected is the most suitable
* Define the intended benefits of the co-operative for members, (eg. quality, price) and characteristics:
- products and services offered (consumers' co-operative)
- or products and services marketed (producers' co-operative)
- or salaries and working conditions (workers' co-operative)
* Evaluate the project's potential to attract the minimum number of members required.
If this study is not conclusive, the group should re-evaluate its business idea. If this study shows that the planned co-operative is feasible, the group can proceed to the second phase.
PHASE II - CO-ORDINATE THE PRE CO-OPERATIVE'S ACTIVITIES
Step 3: Hold an organizing meeting
* Choose the corporate name of the co-operative and the location of its head office
* Define the co-operative's mission (objectives, purpose)
* Elect a temporary board of directors and secretary to the board
* Officially submit an application for incorporation as a co-operative from the provincial ministry responsible for co-operatives or from Industry Canada, if you are incorporating federally
Step 4: Conduct a viability study
* Obtain financing for the viability study from such sources as:
- internal financing by the members
- special grant
- and/or negotiate a technical assistance or business start-up agreement with a specialized organization.
* Define the strategic objectives
* Evaluate the various strategic scenarios, production costs, and human, material and financial resources necessary
* Evaluate the various start-up financing scenarios
* Do a preliminary projection of budgeted statements and of a cash budget (revenues and expenditures, investments by members in share capital, partners, credit union or bank loans, grants).
If this study concludes that, although the planned co-operative looks feasible it would not be financially viable, the group should consider terminating the project. If the study shows that the new co-operative will be financially viable, the group can proceed to the third phase.
PHASE III - ORGANIZE AND START UP THE CO-OPERATIVE
Set up ad hoc committees to distribute the workload among the members of the temporary board of directors. For example:
* planning committee
* training committee
* committee to draft by-laws
Step 5: Organize the association
* Decide on the association's structure and define the various categories of members, if necessary (consumers, suppliers, workers)
* Determine the roles and responsibilities of the various democratic bodies (general meeting, board of directors, committees)
* Establish the articles and by-laws
* Recruit members
* Organize and offer a program to train members in the administration and management of a co-operative, the chairing and running of annual meetings (eg. "parliamentary procedure"), the operation of a committee or board.
Step 6: Organize the enterprise
Step 6.A: Plan the operation of the enterprise
* Draw up an organization chart of the enterprise
* Do the operational planning for the first year of activities
* Negotiate contracts for the supply of necessary products and services (inputs) and, as required, sales or marketing contracts (depending on the kind of co-operative and the nature of the enterprise)
* Devise and implement an accounting system
* Define the duties and responsibilities of each position
* Develop a salary policy
* Select and recruit the person to occupy the position of chief executive officer/general manager
Step 6.B: Plan and organize the enterprise's start-up financing
* Determine the value of the membership share to become a member
* Determine the value of the share capital on start-up and during the first three years of operation (in terms of the expected growth in the number of members)
* Prepare the preferred share by-laws (if applicable)
* Prepare the loan by-laws (if applicable)
* Draw up the overall financing plan for the first three years of operation
* Draw up the business plan
* Negotiate the capital contribution of external financial partners (if necessary); venture capital corporations, private funds or credit union investment programs
* Apply for a government start-up grant (if they are available and if required)
* Negotiate medium term credit union or bank loans and a line of credit
Step 6.C: Recruit and train the enterprise's staff
* Select and recruit employees (responsibility of chief executive officer, except in the case of a worker co-operative where recruitment decisions are usually made collectively)
* Organize and offer a staff training program
* Organize and offer a co-operative training program
Step 6.D: Ensure the legality of the enterprise's operations
Take care of the legal formalities and obtain the legal authorization necessary to start up the enterprise's activities:
* federal: employer numbers for government discounts, for GST/HST) for, Canada Revenue Agency
* provincial: numbers for the provincial revenue department, for provincial tax
* co-operatives may also have to register with, or be licenced by, other legislation or federal or provincial departments
* municipal: municipal permit, employer number, etc.
Step 7: Hold the initial general meeting
* Adopt the by-laws
* Adopt the business plan
* Approve the co-operative's membership in a sectoral federation or an intersectoral interco-operative organization
* Appoint an external auditor
* Elect the members of the board of directors, and of any other committees (if the general meeting has the power to do this)
The Canadian Co-operative Association (CCA) and the Conseil Canadien de la coopération et de la mutualité (CCCM) are very pleased to announce the renewal of a 4 year partnership agreement, the Co-operative Development Initiative (CDI), with the federal government’s Co-operatives Secretariat. One major part of the CDI is the “Innovative Co-operative Projects” component. Through a selection process, we will support individuals or communities as they test new ways of using the co‑operative model, including creating co‑operatives to respond to identified needs.
The next deadline for proposals will be December 31, 2009 and an application form and full details are posted on the CCA and CCCM websites.
The maximum amount will be $75,000 per year per project.
- The major policy priorities are:
- Agriculture including farmer-driven projects for value added agriculture and biofuels
- Rural/northern community development
- Innovative goods and services, including innovative uses of technology
- Capacity building and sustainability
Please visit: http://www.coopscanada.coop/en/coopdev/CDI
The main objective of the Advisory Services component is to support co-operative development in federal priority areas by providing technical advice and assistance to individuals, groups and communities wishing to develop new co-operatives and/or strengthen existing ones.
This objective will be achieved by:
1. Strengthening the capacity of national, regional and sectoral co-operative organizations to promote and develop co-operatives; and
2. Establishing broad-based partnerships between co-operatives and other community based organizations in order to increase use of the co-operative model as a community development tool.
The Advisory Services component wishes to strengthen the quality of technical services provided by co-operative organizations provided to individuals wishing to develop new co-operatives and/or strengthen existing one. The Canadian Co-operative Association and the Conseil Canadien de la Coopération wish to achieve the following results by 2010.
* An established and efficient national network of local, provincial/regional and sectoral specific co-operative developers providing assistance to people interested in developing co-operatives.
* Broad based partnerships with key organizations both within and outside of the co-operative sector.
* Greater community access to co-operative development materials and tools in both official languages.
* Increase use of co-operatives in different sectors and all across the country.
For more information, see the web site of the Canadian Co-operative Association:
To enhance the quality of life in Canada by promoting and supporting the growth and development of co-operatives
The Canadian Co-operative Association and the Conseil Canadien de la Coopération are convinced that by using the co-operative model, Canadian citizens can rectify economic challenges without having to sacrifice the needs of their community and the social aspects that follow.
Several key policy areas have been identified where emerging government priorities correspond to the specialized strengths and the capabilities of the co-operative movement:
* Community economic development and community capacity building
* Knowledge-based economy
* Service delivery for hard-to-reach Canadians
* Rural development
* Development for First Nations and northern Canada
* Agriculture
* Health care
* Environment
* Immigration
* Skill development and employment opportunities for youth
CDI Advisory Services is delivered in partnership with the following organizations. They represent the co-operative sector across the country, in both official languages. To apply for CDI AS assistance please contact these organizations directly.
* Newfoundland-Labrador Federation of Co-operatives
* Conseil de développement coopératif de l'Île-du-Prince-Édouard
* Conseil Coopératif Acadien de la Nouvelle-Écosse
* Coopérative de développement régional - Acadie Limitée (New Brunswick)
* Conseil de la Coopération du Québec
* Fédération des coopératives de développement régional du Québec
* Conseil de la Coopération de l'Ontario
* Ontario Co-operative Association
* Conseil de développement économique des municipalités bilingues du Manitoba
* Manitoba Co-operative Association
* Conseil de la coopération de la Saskatchewan
* Saskatchewan Co-operative Association
* Chambre économique de l'Alberta
* Alberta Community and Co-operative Association
* British Columbia Co-operative Association
* Canadian Worker Co-operative Federation
* Arctic Co-operatives Ltd.
For more information on the services available to emerging or existing co-operatives, you can also communicate directly with:
Caroline Albert
Advisory Services Manager
Canadian Co-operative Association and Conseil Canadien de la Coopération
450 Rideau Street Suite 201
Ottawa, Ontario
K1N 5Z4
2006 CDI Advistory Services Spring Newsletter
2006 CDI Advisory Services Summer Newletter
2006 CDI Advisory Services Fall Newsletter
2005-06 Summary of CDI Advisory Services Activities
2005-06 CDI Advisory Services Annual Report
2003-06 CDI Advisory Services Incorporation Results
Co-operatives that have been assisted by the CDI Delivery Partners
Please follow this link to Coops Canada for information on CDI: http://www.coopscanada.coop/en/coopdev/CDI
Please follow this link to Coops Canada: Featured resources from the Ag-CDI program
For online magazine and network links, please follow this link: Online magazines and networks
Please follow this link for Opportunities in value-added agriculture.
Please follow this link for Tools for the development of value-added agricultural co-ops.
Please follow this link for Tools for bio-energy co-ops.
For information on Business Succession in Rural Communities, please follow this link to Coops Canada: Business Succession In Rural Communities.
Carrying out an effective co-op development process is crucial for the success of new co-operatives. It requires a broad set of skills, knowledge and experience. For most new co-operative entrepreneurs, although they have the vision of what they want their new co-op to accomplish, they often lack some of the required knowledge and experience to move the project forward. Filling this knowledge and experience gap is how an experienced Co-op Developer can be of great assistance.
Choosing the right developer is very important for your group. As with any professional service arrangement you must satisfy yourself that the developer has the knowledge and skills you are seeking. Beyond assessing their skills you also must be comfortable on a personal level with the developer, as you will be working very closely with the developer. In choosing a developer it is always good to ask them for references so that you can talk with others who have worked with them.
Lastly be sure to spend time up front with the developer to identify what needs you have, the approach the developer will use to assist you, the timeline for the work and of course what it will cost.
Securing financing for your co-op is a key step. Of course members are a key source of capital, however rarely do members have all the financial resources required. This means that securing additional capital from others is usually a necessary part of all co-op start-ups.
There are many different types and sources of financing and each source will require specific information about your co-op to determine whether or not they will provide the co-op any money. The co-op will also have to agree to specific requirements and conditions to receive the money. The following are some key resources that provide financing to co-operatives:
Most Co-operative Shares are Eligible Investments in RRSPs
Most types of shares in co-operatives are eligible investments in an RRSP. These qualified investments include common, membership, preferred or investment shares. Qualified investments also include any type of these shares purchased using patronage allocations. One exception to this eligibility is the membership shares of consumer co-operatives, i.e. shares required for membership in a co-operative that one can reasonably expect to pay a patronage allocation in respect to consumer goods or services. These types of shares are not eligible. However the other types of shares noted above are eligible investments for consumer co-operatives.
What does this allow?
This means that members can place their existing co-operative shares into a Self-Directed RRSP, can purchase and place new shares into a Self – Directed RRSP or transfer funds from an existing RRSP into a Self-Directed RRSP which then uses the funds to purchase shares in the member’s co-operative.
It also allows non-members who have preferred shares or investment shares in the co-operative to place them in a Self-Directed RRSP using the same approaches noted in the above paragraph.
How Can this Help My Co-op?
Because the RRSP defers the payment of income tax, it directly benefits the members by reducing their current year’s income tax, which allows before-tax dollars to be invested by the member into the co-op. It also means that the large pool of capital which members and non-members have already placed in RRSPs becomes a potential source of capital for the co-op.
Who Can Help?
The Canadian Worker Cooperative Federation has a RRSP Plan, which is accessible to any co-op. In order to access the Plan, the co-op must be or become a member of the CWCF. This includes both Regular Members i.e. worker co-operatives, as well as any other co-operative (non-worker co-op) that becomes an Associate Member of the CWCF For more information, see the document on the CoopZone Financing page called “CWCF RRSP PLAN QA fnl8-09.doc”.