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I was wondering why don't more community members pool their resources together and start a business that will benefit the community.
If 100 people each gave $1,000 to start a community business like a restaurant, convenience store, lawn care business, they could create jobs, and revenue for themselves and their community. you can easily start a business with $100k
I think this would be a good idea. But what are some of the drawbacks and/or obstacles that a business like this would face?
With this community coop structure the "investors" would appoint or hire managers and workers and the investors would all get an equal sharing of the profit.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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One issue with co-ops, is you need to start with the group, not a failing business or property (as often the case). The USA lags terribly in successful co-ops, probably due to our quest of 'the ultimate capitalist wins'. Or the emphasis we place on individual success, rather than collective / group. a Co-op takes a really special group of people (and good training / follow-up).
Plenty of great examples and info on USA co-ops (Plus symposium coming soon. ) 2010 ACE Institute
ace.coop
Also search worker co-ops Welcome | US Federation of Worker Cooperatives Equal Exchange - Worker Owned Network of Bay Area Worker Cooperatives (NoBAWC)*:*Index
Davis CA, Olympia, WA, Madison, WI, Minneapolis, MN all are hotbeds of co-op development
Quote:
Originally Posted by misc.random
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With this community coop structure the "investors" would appoint or hire managers and workers and the investors would all get an equal sharing of the profit. Any ideas or stories about community coops?
For a serious Co-op success, look up Mondragon. They were hands down my best supplier when I was tasked with setting up a manufacturing operation in Spain. They were way more technically advanced and much more interested in growing their business (since it was THEIR business, not some 'state / trust-baby / public corp' joint that is squeezing the turnip) Mondragon Corporation - Wikipedia, the free encyclopedia Mondragon: A better way to go to work?
Good idea
carry on Co-ops were born from crisis, and I hope they thrive again soon!
Most serious road block today ??? 'Financing' of course... Banks are not kind to co-ops. Few Credit Unions lend commercially. (ironically, since CU's are co-ops...). There are some terrific stories about CU's also (which the banks are none to proud to hear). The Federal banking controls and SEC rules are written to a 'capitalist' form of commerce. Co-ops get into a bind quickly when trying to navigate those waters without high $$ lobbyists.
Last edited by StealthRabbit; 06-14-2010 at 12:39 AM..
Well then would like simple a community of investors to fund small business in their communties be a more feasible option to jump start local small businesses? Kind of like a REIT (real estate investment trust)
Where a group of residents each pitch in $1,000 and they all decide what local small business they want to invest in and get a small portion of the profits and a say in how the business is run. the community would own the business but NOT run the day to day operations.
I kinda like the idea though I can think of a lot of problems. We all know partners do not work due mostly to different minds and different ideas that clash. Imagine 10 or 100 minds clashing? Appoint a manager you say? Yea and all 100 members/investors want to be the boss.
I know of one success story in a small town near me.
Two farm tractor dealers closed in the same year in that farming community of 700.
Several farmers went together and put up the money for a small, new building, on the edge of town.
The parts manager was hired as the manager. It was not meant to be as big as the previous 2 dealerships. The place was able to keep its Massey Ferguson dealership for ordering parts and carrying a small line of machinery and do repairs.
The farmers stated from the beginning that they wanted the manager to show that in 5 years he could finance the loan to pay them back their original investment-------no added interest on their investment.
Today, the former parts manager is the owner and employs one full time mechanic and one part time.
Their intentions are to stay the way they were started-----small, with parts and repair offered and small inventory of new equipment.
I believe it was successfull due to the reputation of honesty of the former parts manager and the willingness of a group of farmers who only wanted their original investment returned to them.
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Quote:
Originally Posted by misc.random
Well then would like simple a community of investors to fund small business in their communties be a more feasible option to jump start local small businesses? Kind of like a REIT (real estate investment trust)... the community would own the business but NOT run the day to day operations.
I am considering participating in developing some of these and hope to get training this yr. Need to be cautious and compliant of SEC regs, as you are a 'lender'.
It is interesting the strong program success when they started lending through a local community accountability and distribution group. Thus the locals become the lenders and the knowledge to do so, the borrowers must convince their local group to allocate to their particular business idea, 'community' is responsible to pay back loan , and hence you can bet where they decide to shop, and who it is important to keep in business!!
Basically they went from from giving a 'hand-out' to giving a 'hand-up'. (equipping the locals for enterprise)
I think there will need to be some structural culture change to become very prominent in USA.
You might want to also examine 'local-currencies' / bartering groups in USA. They are working on 'buy-local'.
One avenue is for investors (or town) to buy the real estate and offer lower rents to businesses until they become viable. Then sell them the real estate and do again. (There is a Kansas town that has been successful doing this, via capital infusion from a 'movie-star'). Also the grocery in rural MN that the town sold to a High School kid (who now has 3 (in different towns) at last reading)
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.
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.
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.
But thanks for all the stories and links about various coops and community investment funds. In a perfect world, this form of micro community lending would be amazing for all the small towns across the country.
The other option is to invest by yourself, so you dont have to deal with partners. And also to manage things yourself, which increases profits for so many different reasons. More profits=more growth. More growth means more jobs.
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Co-ops were born from crisis, and I hope they thrive again soon!
