For those of you who don't know, Dave Ramsey is a media personality, multimillionaire, and conservative capitalist with a presence on Youtube and several other platforms. While he seems like one of the last people who would give advice on how to start and run a cooperative, one of his videos from about a year ago actually helps deal with one of the biggest hurdles that starting a cooperative can face: obtaining financing. Specifically, Ramsey advises eschewing all debt when it comes to starting even some of the most capital intensive industries:

TLDW: Rasmey basically describes two strategies for businesses, in this case an agribusiness, on how they can start with capital requirements:

1. Start as small as possible as cheaply as possible. Use the proceeds from doing so to slowly but surely expand and upgrade capital over a period of several years starting from the position that requires the least amount of initial overhead.

2. Do a short-term lease or a lease with an option to buy arrangement. Leasing is basically another term for renting, and like residential renting it can be a lower-cost, lower-risk type of endeavor in the short run.

I'm surprised by how many types of even traditionally capital-intensive businesses can be started without debt, especially given that startup costs can be borne by several key individuals in the case of a coop.

Can You Run a Capital-Intensive Business Debt-Free?

Hey all, a group of us are in process of launching an agricultural marketing co-op and looking for banking services. The credit unions in our area (Louisiana) don't seem to have much awareness of or interest in cooperative businesses or the solidarity economy. Anyone know of a credit union that offers online banking services, and which is at least a little co-op centric in terms of its customer base and level of awareness?

(I just heard a podcast on the collaborative farming podcast where they talked about Vancouver City Credit Union. Looking for a similar option within the U.S.)

Thanks in advance for any suggestions or tips!

I didn't know what to title this but I think platforms like BetterHelp, DoorDash, Lyft, and Uber should immediately transfer to a cooperative model. In my head it would be easy, but that's just in my head. I think BetterHelp as a co-op would be revolutionary, but maybe that's just idealistic also.

what are the pros and cons of a restaurant owned by a cooperative, and if there’s any cons, how will i come up with a solution. Thanks

I propose a not-for-profit private equity firm, who performs leveraged buy outs and converts acquired companies into co-ops. This nonprofit would employ lawyers and executives experienced in setting up and operating co-ops, and networking between different co-ops, especially those in it's network.

The nonprofit gives equity to a trust, and consumers are offered a one off or reoccurring membership fee for discounts and voting rights. If it is a one off fee, it may be payed off over multiple payments if the fee is high, possibly financed by the nonprofit. These membership fees are used to pay off the debt and members are able to vote on key decisions and executive hires.

After 5-10 years, once the initial investment of the nonprofit is reimbursed (a small portion of the total acquisition price), the nonprofit private equity firm leaves the co-op to operate independently, as part of it's network of co-ops.

The main problem with this approach is that it leaves the company being converted with alot of debt, which must ultimately be paid off by the consumers, as the consumers are essentially buying the company.

This hypothetical firm would start small, then grow as it becomes more experienced and has access to more capital.

There has been a movement in Washington State for Consumer Coops to insulate coop boards from member interference. From my research I cannot find a a body of case law for coops in general that create precedents for any implicit standing of Members to assert their power over coop boards.

Does anyone know of any legal cases where a Board made it difficult of impossible for coop members to unseat the board or to make it impossible for member to assert influence by fielding insurgent board candidates?

This is especially relevant to REI as there a members who are attempting to become board candidates, but they can only be allowed to be candidates for the board if the Board Nomination and Governance Committee allows them to run.

I would think that there have been cases in the history of cooperatives where there have been conflicts of this kind. I cannot find any cases of this kind and attorneys I have spoken with know of no precedents either way.

I was just wondering what would a society look like if only cooperative businesses were allowed? Would it be better off economically? Could it compete with capitalistic societies and behemoth capitalistic companies? Do you think people in such a society would be more active in government and social policies?

Also, why doesn't a country like China have a purely cooperative model of businesses?

There's actually a big history of consumer owned businesses providing health insurance - you don't see them as much, because most of the developed world has just adopted variations on public health care systems. Goes all the way back to 19th century mutual aid societies.

I don't see the US getting public healthcare anytime in the immediate future - funny, because if Trump has a 'populist' agenda, you'd think that would be the first thing on his list. Consumer owned cooperatives are basically non-profit companies that run at cost - the 'profits' they make just go towards lower prices or better services. So they don't have the profit motive driving them to deny claims.

So in many ways consumer co-ops are similar to having the government provide healthcare - they aren't driven by the profit motive in the same way as private insurance firms. To get public healthcare, you have to win elections, then have politicians actually change the system. Health insurance cooperatives, you just have to start them and have them be successful businesses. Only one part of the larger equation, but it seems like a good here and now solution...?

Hey everyone,

I am on the board of a co-op, and over the last 10 years, we have acquired four private companies that were our suppliers to diversify and keep money within the co-op. For some reason, the previous board did not want to add them as members. Now, we are looking to open membership to them because it is the right thing to do.

Currently, we have three distinct service-based industries, and we are looking to acquire more local companies. We want to spread the co-op movement locally. We believe that doing so will increase our profit margin, membership, and member loyalty/pride.

Our goal is to double our revenue and have close to 100 members in the next five years.

Do you have any advice on growth and cooperatives? Will it be hard to integrate these new members into the cooperative movement?

I work with a fair amount of food co-ops all over the country. Occasionally, I'll talk to a co-op rep who is helping to coordinate the opening. I read that it can take years and I didn't really get from the article that I was reading why? Are they different from co-op to co-op or is there some sort of process you need to go through to officially become one? Mostly, when I get to that point in the conversation I want to schedule a follow up that is timely and doesn't feel too pushy.

I am a member at a local pottery studio. The members are great and help run the business through paid employment, work trade, and/or good will. But the members are not really happy with how the owner is running the business. Mostly as a thought experiment I am thinking about what it would take to buy the business from the owner and turn in into a coop.

Currently I envision there being a set of roles: member/owner, dues paying member, and staff. The former two are mutually exclusive.

I have only done an hour or so of reading, but my idea is: owners must buy a small share of the business from each other owner. Typical operation would have the owners cover losses or share profits. If most members became owners, the studio would likely operate at a loss. As long as the split losses were around the typical membership fees, that would be acceptable.

Any good resources for me to continue entertaining this idea? Happy to discuss further.

This thread is part of an attempt by the moderators to create a series of monthly repeating posts to help aggregate certain kinds of content into single threads.

If you have any basic questions about Cooperatives, feel free to ask them here. Please also remember to visit this thread even if you consider yourself a cooperative veteran so that you can help others!

Note that this thread will be posted on the first and will run throughout the month.

Hello,

I'm working on a Minecraft server with some friends, it's starting to generate some income.

I'm really interested into cooperatives, but never started/joined one. Do you think it is viable to run a Minecraft server with a cooperative status ?

Suppose some founders use investment to buy a building or buy land to build housing, to form a market rate cooperative, and let future members to lease rooms like any apartment. What is a fair way to share profit and loss between the investment that the founders put in and the rent future members pay?

Edit: Typical model is for future members to buy share in the coop before they can "lease" a room. If the money to buy share is as small as a leasing deposit that would not be market rate, but for market rate to buy share not many people can afford it. In a model that just let new members pay deposit like a typical lease, but they become partial owner by paying rent to share profit.

So, I started a film equipment rental business with 20,000$ and turned it into a multi million dollar business (during the hardest time in the film industries history no less)

But I'm burnt out now, and the novelty is largely gone for me.

It's a fun business with a great reputation and there's no reason not to assume it's going to do well.

My workers all make AT LEAST a living wage (which is much higher than minimum in Vancouver where I am)

I was thinking of opening it up to the film community as a coop. **EDIT** This would not be a worker coopertive as it's a small business with 2 full time and many part time/casual workers and they wouldn't want to take that on themselves they see how overworked i am. :D This would be a coop coop, like where anyone in the film industry here could join on as a member/owner?

The business could 100% be paying me out long term and still be plenty profitable, especially if new ownership also means new capital as well as a buyout/payback scheme.

I did sink years of my life into it, (like, an unbelievable amount of my time, physical and mental health) so while I want to pass this off to a group who's going to continue it's traditions and not just sell it to a big corporate shop, I also need to get something back for my time, energy. Would be happy to stay on as a part owner, but largely would like to be bought out and share the load, use that capital for other stuff, buy that little farm I've always wanted.

I guess my question is, how realistic is this? Anyone done something similar?

I’m wondering what the best states are to form worker cooperatives?

Thanks!

Hello, I'm posting here to see if there may be some folks who are looking for a coop living environment who have the passion and energy to help me create that. I live in Maine and reside cooperatively with 5 other people currently, in a home that I personally own. We are looking for another founding member to join us and start the journey of shifting this into a coop, and hopefully also becoming a nonprofit community center over time. There are a number of services we can offer as a coop business - most of us are healers (therapist, nurse, breathworker/reiki, massage therapist) and/or artists (classical pianist, tattoo artist). If this sparks any interest, please reach out. Another thing of note is that we are all queer and we do a lot of land projects and food growing here. The vision and mission is still forming here, for housing and beyond! Thanks 🙏

This post is for people to rant about the recent rent increase of this coop.

Background: They have a building reassessment for improvement with a very high quote for renovation. So, the board decided to increase “summer rent” by 50% to cover it (no member vote required for summer rent) as they anticipated members won’t vote for the “ school term rent” increase ever. However, still hinting they are trying to increase everything, including other tactics in the future such as changing the bylaws for them to not requiring member votes, forcing hydro fees to members by installing meters, etc. The board held a town hall where concerned members voiced their opinions about the role but it became hostile as the board kept their stance.

What went wrong? 1/ Chronic financial problem: They chronically messed up the financials for years leading to the current situation which the board and management resourced to this easiest option to save their years of alleged negligence. Obviously, members addressed the enormous rent increase even though for 4 months of summers are too much given economic conditions and punishing summer members and not term members (no rent increase) is not fair. The Board only convinced the members that the increase is only the equivalent of several uber deliveries or outing a month which left member speechless.

2/ Board fiduciary duties: Insiders shared that in the town hall it was unveiled that some of the board did not understand that they have to act in the best interest of the members but the “corporation”. A knowledge member pointed that out and they were embarrassed but later covered themselves that the rent increase will help the building financially aka corporation sustainability hence member of interest. Okay but indirectly. Their responsibility is to balance the conflicting interests of both though they seemed to work for the corporation than considering enough of member interest. Then the board flipped the script on members on what would be the best option besides rent increase… members owed nothing to them. They are elected and be trusted to act on behalf of the members to figure out the best option or challenge on management with the best options. It’s their responsibility.

3/ Board duty of care: The board has to demonstrate that they did all necessary due diligence to come up with the rent increase decision. But they seemed to have failed to do so as members are infuriated about it and all they got was this was the only way etc. They should have shown what options were available and why they made that choice so members can see if it’s the best choice or the lazy choice they/mgt presented but they failed to do so or just asking people to go back to the minutes.

4/ Board financial skills: The board never acknowledged that they need people with financial experience. A source told us that in one of the meetings that recruited interim board member, a director said that they were not looking for financial people. This is clearly a big issue when the building is struggling financially and having capital budgets issues. So all decisions have been allegedly made with none having financial expertise. In the town hall, there was a sentiment of the board that they don’t want to get anymore loans bc they don’t want to pay interest. However, is not that all corporations do, taking out loans to sustain their business unless they are over-leveraged, any finance person would have known that. The board did say they checked with the accountant and they suggested not to. But shouldn’t they do all due diligence and check with the banks to see if they still have leverage?!? If they had financial expertise, there would be a better solution for this and a better risk philosophy for loans taking.

4/ Board conflict of interest: Most of the board members living in units that are not subject to this rent increase (legally) and were still eligible to vote on this. This is a serious conflict of interest issues that the board ignored and kept blaming the legality of it “even they want to pay more”. A numbers of members pointed this out and they seemed to swept it under the rug.

5/ Communication: There used to be a fb group where members can voice their opinions but they quickly change it to a “sale only” page to silent people. Also, in the town hall, over and over their communication has been “for the best interest of the corporation”, “for the financial of the organisation” which infuriates members as they work for them, not the corporation. Moreover, comparing the increase to how many ubers or night outs per month members have to forgo for the rent increase has further upset people and showed that they are completely ignoring member interest and seeing them as enemy for not voting for the rent increase.

6/ Reconsideration plea: Some members ask for reconsideration or at least not make it 50% but the board said it’s locked in without mentioning that in the past there has been petitions that got successful to shut off members. Some members cried as they were on EI and it would be so hard on them.

Wycik Members, it’s your chance to rant in this post if you are reading this.

Do all types of cooperatives have to be one-vote-one-share, or are there types where a founder can own more shares? So it would be employee owned but the companies founder could retain more shares.

A follow up question: Since theoretically a business could have equal ownership, but still one person who makes all of the decisions (like a traditional CEO), would this still be a cooperative?

I’m not at all in a position or interested in founding a business or cooperative, I’m just curious. Thank you

I am doing Bachelor of Business Administration in India. What do you think are the relevance of study and theory of subjects such as Management, Marketing, and Organizational Behavior is in today's world? Would like to know how you learned these things if you did.

This may be a long shot, but I’m looking for people who could be interested in teaming up to form a multi stakeholder cooperative. Ideally, you’d be willing to exchange your time and skills for shares, but am open to other arrangements or ideas.

The idea is audacious, and I welcome any roasting.

It’s a worker/patron/supplier owned ethical alternative to Amazon. I’ve actually already built what amounts to a minimum viable product. It’s currently just me under an LLC, hoping to make enough revenue in the next couple months to pay to convert to a Limited Cooperative Association.

I’m looking for literally anyone who feels they could add value.