October is National Co-op Month so throughout the month, we will be highlighting the basics of cooperative development.  

So, what is a cooperative? A cooperative, or co-op, is an organization owned and controlled by the people who use the products or services the business produces. Cooperatives differ from other forms of businesses because they operate primarily for the benefit of the members. A co-op can be an effective business model when organized and managed correctly. Here are a few advantages of cooperatives: 

• Access: Co-ops are formed to provide a certain product or service that would otherwise be inaccessible in an area. They also allow open access to membership; anyone who is willing to accept the responsibilities and wants to use the services of a co-op can become a member. 

• Community commitment:  Co-ops value the advancement of their local community and will often try to provide services in line with those values.  

• Equal status: Cooperatives are defined by their democratic style of management. Each member gets one vote, so members stand on equal footing and have a say in decision-making. 

If you determine that a co-op is the right business model for you and that there is interest in your community, the first major step is to develop a steering committee. This group will represent the cooperative’s potential members, identify your mission, develop a detailed plan and timeline for development, and coordinate outreach to potential members. After the steering committee is developed, you can move on to next steps like conducting a feasibility study, drafting bylaws, and creating a business plan. 

The Kentucky Center for Agriculture and Rural Development (KCARD) is a cooperative development center and has assisted approximately 50 cooperatives in their development.  KCARD’s work is supported by the Kentucky Agricultural Development Board, the USDA Rural Cooperative Development Grant, and others. KCARD is happy to help with the business planning process at no charge.  Please contact us if we can provide business assistance to your operation. You can contact KCARD by calling (859) 550-3972 or via email at kcard@kcard.info.