PHASE 5. SECURING COMMITMENT FROM LENDERS & OTHER STAKEHOLDERS

Cooperatives are like any start-up enterprise. They rely on a leadership team that includes paid management and staff. Depending on the type of cooperative, the organization will require upstream suppliers of goods and services in addition to what might be provided by members. Contingent on the size and scale of the membership, the co-op may conduct some business with downstream buyers. Co-op leaders need a solid business plan that builds confidence of lenders, suppliers, and buyers. Members may not be able to provide all the capital needed to launch the co-op and operating expenses may exceed income and cash flow periodically for the first 1 to 3 years of the enterprise. The co-op general manager or chief executive officer needs to understand, anticipate, and manage through these challenges at start-up and understand the cooperative business structure.