Phase 6 Open for business ALT TXT decorative

The early steps to form the enterprise are now complete and the co-op is ready to open its doors and serve its members. It is now time to hold the first membership meeting. At this meeting the members will elect a board of directors to replace the interim board or steering committee. The results of the equity drive will be announced and any remaining financial commitments from members or lenders is secured. The board of directors typically elects the officers of the organization and assigns directors to serve on various committees. If a general manager was not hired in one of the previous phases, this person needs to hired at this time.

Steps Individuals Involved
• Hold annual meeting
• Elect directors
• Establish committees
• Hire staff
• Board of directors
• Manager/CEO
• Staff
• Accountant
• Advisors

Action Steps

  • Notify members of annual meeting
  • Develop meeting agenda
  • Identify needed board committees
  • Meet with lenders and funders if necessary
  • Select a bank to handle accounts and select auditor
  • Secure any additional assets
  • Develop member record keeping system of accounts
  • Hire additional employees and create payroll system
  • Obtain any needed permits or licenses

Critical Questions

  • What are the qualifications to serve on the board of directors?
  • Are qualified persons willing to serve on the board of directors? Are they committed and engaged?
  • Do the current and projected financial statements adequately reflect the fiscal condition of the co-op?
  • Is there sufficient capital to run the co-op until income streams exceed expenses?
  • Does the co-op have adequate staff to conduct business? Do they need additional training?

Potential Pitfalls

  • Unstable leadership transition
  • Ineffective board of directors
  • Poor marketing plan
  • Unqualified manager
  • Undercapitalized
  • Poor quality of products or services
  • Weak economic sector