This week is Co-op Week here in Canada. Aiming to draw attention to the contributions of co-operatives both at home and abroad, this year’s theme, Experience the Co-operative Difference, celebrates the advantages of the co-operative business model. As a business model, a co-operative may be a unique and attractive alternative for an entrepreneurial endeavour like yours.

Recently, Jennifer Heneberry from the Ontario Co-operative Association (On Co-op) came to MaRS to meet with some of our social innovation clients to discuss the possibility of utilizing the co-operative model in structuring their organization. We had several different types of groups — from educational programs, to community funds, to member-based organizations. Despite their disparate purposes, services and clients, Jennifer articulated that the co-op model lends itself to any number of types of ventures.

A co-op is based on the idea that a group of people are willing to come together to meet a common need.  Whether it’s access to financial services such as a credit union or local food through community-supported agriculture (CSA), the provision of products through organizations such as Mountain Equipment Coop (MEC) or Gay Lee Foods, co-operatives bring people together to meet an economic, social or cultural need. It’s done through shared ownership that can function differently in the specifics but that adheres to the philosophy: one member, one vote.

According to On Co-op, co-ops depend on the “collective entrepreneurship” of members. As a model, these organizations are “inherently ethical in [their] treatment of … members, employees, suppliers and the environment.” A recent International Labour Organization study found that, in times of economic crisis, co-operatives fair better and are more resilient than traditional business models. Want to learn more?

In considering the co-op model, you must determine how to implement a democracy while eliciting a financial return – all within the competitive confines of the market.  But in today’s marketplace, existing as a member-driven, democratically-owned venture is certainly attractive to the increasing demands of ethical consumers and their penchant for fair-trade alternatives.

Co-operatives have another value: as profit-generating entities they also measure their success in terms of “improved wellbeing of the members and the communities where they live.” Decisions are undertaken by the membership where majority rules. This is based on the theory that we, ourselves, know what is best for the communities in which we live and work.

Co-operatives can be either for-profit ventures or non-profit organizations. Whether you’re living in a housing co-op or use a bike co-op for repairs, around the world co-operatives are guided by the same seven principles:

  1. Voluntary and open membership
  2. Democratic member control
  3. Member economic participation
  4. Autonomy and independence
  5. Education, training and information
  6. Co-operation among co-operatives
  7. Concern for community

If you are concerned by both the needs of your clients and the economic bottom-line, incorporating as a co-op is worth exploring. To find out more about the co-op business model, click here. Already convinced? Learn how to start a co-op here.

Hadley Nelles

Hadley works on the social innovation program at MaRS, helping social innovators and entrepreneurs connect with support services to turn their ideas into action. See more…