What is a Co-op?
A co-op business is a worker-owned business. For current owners, it is a tool for succession management for owners that want to step away from the everyday job of running that business.
Never heard of a co-op? Sure you have: REI, every local credit union, your local CSA, a solar company, maybe even your local pizza shop! They’ve been around for decades!
A co-op is a pathway to plan for the future and create a fair return on your investment. It is a business transaction (sale) where employees purchase the business and take part in the running it.
For city governments, co-ops allow small and medium sized businessed to continue to thrive, even in a tight fiscal environment.
During an economic downturn, research as shown that Worker-Owned businesses, keep workers employed. Though there might be less hours for the employee, the business stays in place as it is a shared responsibility for the business to continue.
Some of the key benefits to transitioning a privately owned business to an employee-owned Worker Cooperative are:
Owner Benefits of a Co-Op
- The current owner can sell their business to the employees, creating the opportunity
for the owner to get a fair sales price for their business.
- The current owner can create a legacy, allowing the business to continue on after
they leave the business.
- The current can create secession plan as an exit strategy.
- The current owner can stay involved, take a less demanding position in the company, or step away completely.
Employee Benefits of Co-Ops
- Opportunity to become an owner of the business they are part of and take on leadership.
- Little to no cash required up-front to become an owner.
- Ability to learn “the business.”
- Increased pay and benefits.
- Voice in the future of their workplace, and abiltity to create rules and consequences
in their workspace.
- Equity in your workplace.
- Transparency in how their business is run and operated.
Societal (Government) Benefits
- Anchor businesses in the community.
- Prevent the unnecessary closing of businesses in the community.
- Create a platform for wealth building for workers.
- Increase wages for businesses in the community.
- Provide a solution for the “silver tsunami” of aging business owner (baby boomers) who want to sell their business.
- Response to COVID
- City of Santa Clara Co-Ops
- A Slice of New York Co-Op Resources (asony.com/coop)
- How REI's Co-Op Model Helps its Bottom Line
- Forbe Article Explaining Co-Ops