Co-ops are different from other corporations. How they are different is generally found in the way they make decisions, interact with their owners, share profits, and raise capital. Choosing a business structure — and the right one — is key to a successful operation.
To assess whether a co-operative structure is right for your business, try this short questionnaire.
NOTE: If you’re not familiar with the different options for how to structure your business, check out our business model comparison.
For the following questions, choose a, b, or c for the answer that best fits your situation.
If you chose mostly ‘a’s, a co-op is a good fit for your business idea. A corporation or partnership model may be your best option if you mostly chose ‘b’. If most of your answers are ‘c’, think about using a non-profit corporation, charity, or community service co-op model.
How you answered questions 1 (Why do you want to create this business) and 3 (How should profits be distributed) are very important in determining a corporate structure. If you answered “a” for both, you probably have a great co-op business idea.
Co-operatives provide a different, and sometimes better, way of doing business – but they are not the right option in every situation. How you want your business to make decisions, handle profits, raise money, and interact with its owners, should determine whether a co-op is right in your situation. Contact us if you are still not sure if the co-op model is best for your idea.
If you enjoyed this tool on choosing a business structure, then you’ll like our article on doing a business model canvas.Was this useful?
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