Preparing & Marketing Financing Proposals: A Guide for Worker Co-ops

The purpose of this Guide is to help you navigate the financial planning and marketing process for your co-op.

There is really no distinction between what your business plan and/or financing proposals need in order to get approved by financiers and what your co-op needs in order to succeed. As a general rule: whatever is of priority to potential financiers is also important for your co-op’s business success.

Introduction

The Business of Planning

Excited about a great business idea, you may be tempted to treat a business plan like one huge pesky form that needs to be filled out in order to get financing for your co-op. So that you can just, well, get going already. Because you know it’s a great idea, and everyone you ask agrees it’s a wonderful idea, and it’s just so obvious it’s going to be a huge success. So how about that loan? Is there a problem here?

The problem is that great ideas are a dime a dozen. And it’s easy for people to admire something when it doesn’t involve handing over cash. Ask the folks who agree it’s a wonderful idea if they would like to buy shares in your business concept and see what happens. We asked experienced financiers. They tell us there’s no shortage of enthusiastic people and great business ideas coming through their office doors.
Yet close to 50% of new businesses are dead in five years and 8 out of 10 are gone in a decade. A good business idea is crucial. But it isn’t enough.

Experienced financiers say that more often than any other factor, poor management marks the downfall
of a promising business idea. Hence they will be especially interested in the quality of business management in your co-op. The main reason your business plan, and particularly the marketing and financing sections, will get close attention by financiers is because they tell most of the story on your management team’s business sense and financial aptitude.

…Continued in attachment.

WorkerCo-opCapitalGuideFNL-2012-1