Co-operatives are defined by 7 principles.

1. A co-op is owned and controlled by its members.
2. A co-op is democratic
3. Every member contributes financially in some way
4. A co-op is an independent business, owned and controlled by its members.
5. It offers education and training to everyone involved, so they can develop the co-op and promote the benefits of co-operation.
6. It co-operates, works with and supports other co-ops.
7. A co-op supports the communities it works with.

For more information on co-operative principles and values, see this page on the Co-ops UK website.

• In order to set up a co-operative, you need at least 3 people (but more is okay too). 
• There is a lot of work to do when setting up any new project or business, so it is a good idea to define a core working group of people who have enough time to dedicate to the project.
  Having a core group which isn’t too big means that you can coordinate meetings and get feedback from everyone relatively quickly – it’s much harder and slower to do this when you have too many people!
• What about people who are interested but don’t have much free time?
  • It is great to keep these people involved in some way. They might be some of the first members of your co-op, or could be used for doing market research to sense check your ideas. 
• Splitting up roles and responsibility
  • Within the core group, it can be a good idea to try and split up roles and responsibilities as soon as you can.
  • Things like the overall aims and vision of the group need to be decided by everyone, but if you keep trying to make all of the decisions with everyone, things will take a long time and move slowly which may lead to frustration.
  • Try to use the skills and expertise of group members, as well as giving people a chance to learn new things. There are lots of governance structures which you can look up online to see what might work for your group, or you can ask a co-op adviser. 

• It is really important to make sure you have a sustainable business idea. It can be easy to want to set up a co-op because you are interested in something or because you see a need for it but unless there is a sustainable business model, it is likely to lead to burn out of the members as they try to keep it going. 
• If you are planning on using grant funding to make your business work, you need to make sure that funding exists that you have a chance of getting. 
• What questions can you ask yourself to test if you have a sustainable business model?
  • What other companies are doing similar things to your idea?
  • What will the costs of your business be? (Estimating staff costs, cost of supplies, rent costs etc.)
  • How many people will be willing to buy what you are trying to sell?
  • How much will people be willing to pay for your products/ services?
  • Who will be your customers – is it a certain part of the population? Will it be based on geography or some other demographics you can measure/ research? 
  • How will you advertise to the people who will buy your product? 
• Some of these things are easier to estimate than others. If the co-op you are planning on setting up is similar to any other co-ops, you could get in touch to see if they are willing to talk to you about their business model.

• In order to register your business, you will need to choose a legal model. Your choice of legal model should be based on how you want your business to operate. Some useful questions to think about are:
  • What will your products and services be? What do you want to do with profits – do you want to be able to distribute them back to people who have spent money with you or do you want them to be kept within the organisation?  
  • Will you be applying for money from grant funders? If you do, do you know that money exists for what you want to use it for?
  • Do you want to be able to use community shares to raise money?
  • Do you want to have an asset lock (something that protects what happens to the money and things a company has when it closes down)?
  • How important is it to you to be a co-operative? Would you be open to people in the future deciding that they want to keep the business going but not as a co-operative? Or do you want it to only be able to exist as a co-op?
  • Who is the organisation set up to benefit? The members or a wider group?
  • Who will the members be? E.g. Will they be members because they are interested in your group or because they buy things from you or work for you?  
• This can be quite a complicated thing to work out so please reach out for support if you need to!
• The Simply Legal resource from Co-operatives UK explains the main legal models and their advantages/ disadvantages.

It can often be easy to avoid conversations about money, especially if the main purpose in setting up your co-operative is social good.
It is really important to make sure you have enough money so that you don’t burn yourselves out by overworking. 

Some of the main ways of getting the money to start are:

No matter where you are getting the money from, you will need to have a legal structure and a bank account set up.

You will also need to be able to tell people what your plan is and why you think it will work. Some things to include are:

• Who is involved in the group?
• What are you aiming to do and why do you think it is important?
• Why did you choose the legal structure you have? How will it allow you to do what you want to do?
• How have you researched the costs and potential incomes of your business?

• It is important to remember that by running a co-operative, you are legally running a business and staff/ board members/ trustees have various responsibilities. 
• A lot of co-operatives are set up to fight against established ways of doing business, but you still have legal responsibilities as a business owner and employer and the co-op could be fined if you don’t do things right. 
• Depending on the legal structure you choose, you will have a different ‘regulatory body’. It is important that you know which regulatory body you are registered with, and what they require. (They will normally have some support for you to help make sure you get things right).

Remember, things will often be difficult and hard and you might not always agree, but part of co-operation is learning to work with other people.

Try to approach differences of opinion with mutual responsibility and care for each other, understanding that you are all probably doing what you think is best for the co-operative.

Making time and space to resolve tensions or disagreements early can save a lot of time in the future, and help to make sure that the co-operative thrives.