Is this a good business idea?

[samston]

Co-op situations may be best for small businesses, which a community restaurant may be in the end.

What if they need more money? Can you imagine asking 100 people for more money after you used up the first amount. What if only half give you more money, then they get more shares? It would turn into a mess quickly. There would also be trust issues and management issues. That is 100 bosses with different ideas of how the money should be used and dividends paid out. It is a neat idea, but it is nothing i would consider for myself.

In the terms of association, simply state how the profits are shared, who has day to day managerial control, or how liabilities will be paid for.

As a small business, government loans/grants, bank loans and donations would be sources of finance, as well of course as revenue and capital.

Well the other option is high unemployment, a great recession, flat wages, and dying communities. The old saying there is power in numbers is very true.

In recessions, there is less demand for goods and services. At the outset, you'd have to prove to any lender that there is a demand for the product. If a restaurant or lawn-mowing business took advantage of the recession, and offered low prices, then it could work.

One factor though is competition. Say a group of persons down the block start up their own business, and it eats into the other firm's customer base. What then? There is nothing to stop competitors from entering.

[Time and Space]

I think this is a great idea, funny thing is I was just on another thread, one totally unrelated to this, and the same idea came to my mind...

But I called it a 'federation' of united interest..or something like that...

In other words during a time when banks don't want to lend, people of simuluar interest, getting together and pooling or forming their own 'capitol' pool...to fund whatever...

Whether that be talent, or food, or products...would depend on groups aim...

One thing this recession really highlights is that nothing can be done without 'capitol'...

You can have the best most ingenious idea in the world, but without capitol to move it, your idea just sits dead in the water...

[killer2021]

If you ask me, finance the business yourself. When you own 100% equity, you make all the decisions. Even if you have venture capital, they will try to influence the business. Its only when you have 100% equity that you make the decisions.

[Time and Space]

Originally Posted by killer2021

If you ask me, finance the business yourself. When you own 100% equity, you make all the decisions. Even if you have venture capital, they will try to influence the business. Its only when you have 100% equity that you make the decisions.

I don't mind other people influencing ways to increase the 'bottom line'...as long as there financially sound ideas that don't take away from the intent or aim of the company...

My aim would be to turn a profit, while doing something I thoroughly enjoyed and believed in, and if someone on the team had a better way of doing that, more power to them...

I think under a succesful model, different people could bring different traits to the table that could benefit the company or venture..

I'm more of a creative 'big picture' type of soul, and could definatly use help in the smaller finance areas of a business...

[iliveinsa]

I realize this is an old post, but there is new information so I thought I would share:

1. There are sometimes restrictions on the number of members or shareholders that certain types of entities can have. This may depend on your state, but S-corps and LLCs are often limited to 75 or 100 shareholders. More shareholders and you will have to be a C-corp, which pays corporate taxes instead of just passing through the taxes.

2. There are securities laws that restrict the sale of unregistered securities to the public. This limits your ability to advertise to find those 100 people that want to invest $1000 to get a local coffee shop or grocery co-op or whatever.

3. I disagree with those that indicate that all 100 people will want to run the business. On the contrary, I think many investors won't want to be the one operating the business, but that's just me.

4. BIG NEWS: the JOBS act passed last year will allow equity crowdfunding with reduced restrictions as those shown above (e.g. easing up on securities registration issues). Stay tuned for new ways to raise equity for your business coming in 2013!

[mainebrokerman]

its a decent premise,,if keeping things very plain and simple,,, and clear

very clear parameters have to be instilled early on,,,,because if you get 100 folks to go in together- you are going to have this
1. my kid should be working there
2. I dont want that person working there
3. who and what is defined as profits????? (not as easy as it sounds)
4. i wanna know what everyone makes
5. they are getting paid too much
6 we dont need to do upgrades
7 I saw so and so ,,buying products at wal-mart and not here-his wife shouldnt be working here
8. so and so is having an affair
9 Im going to have a talk with the store manager- he doesnt know what he's doing
10. we are wasting monies, on a website, and advertising
11. who gets health insurance and why??
12. they are giving sweetheart deals- costing me money!!

[MartinGref]

this model works as venture capical funds. you invest your $ and professianal people will be hanling all business things.

[JimFleming12]

One problem with co-ops, is you need to begin with the team, not an unable company or residence (as often the case). The USA lags really in effective co-ops, probably due to our pursuit of 'the greatest naturalist wins'. Or the focus we position on personal achievements, rather than combined / team. a co-op requires a really unique individuals and excellent coaching / follow-up . . . . . . . . . . . . . . .