The co-operative business model combines the best of small business ownership and a corporation. It often includes local wealth creation and reflects community interests, like a small business. But it also provides governance, potential for longevity and limited liability, like a corporation. Here’s a look at how the model compares to other types of business models.
Business Model Comparison
The co-operative business model has two key advantages. The first is how well it supports local economic, business and community development. The second is how versatile the model is – capturing both a small, three-person shop or a multi-stakeholder global partnership, and just about everything in between.
Differences to note
- The co-operative business model combines the best of small business ownership (local wealth creation, reflects community interests) and a corporation (governance, potential for longevity and limited liability).
- The co-operative model is the only one on this chart that provides a governance model where every voice around the table is equal.
- Remember that a co-operative is NOT (necessarily) community-owned. Rather it’s owned by members of a community who organize as co-op. For example, KPMG is a global group of independent accounting firms. The Co-operative Retailing System is a unique group of independent retails in western Canada. The BC Livestock is a group of ranchers in British Columbia.
- All members or shareholders generally have one vote. This differs from an investor-driven shareholder group where influence is based on number of shares owned. That said, you can have different classes of shareholders, which will impact decision-making influence. However, it will not impact the one share, one vote rule.
- Profit distribution – especially for consumer co-ops, like gas stations or grocery stores – is often based on shareholder or membership use of the service or product the business delivers.