The first step in how to find new co-op members is deciding who should be a member and why.
Because the purpose of a co-op is to serve its members, it’s important for those setting up the co-op to understand who could benefit from it. That way, they can make it into an attractive proposition for potential members.
First, understand and put your value proposition into words (ie. what value do members get from joining the co-op?). For example, a group-purchasing co-op’s value proposition might be the money members save by joining the group. In a marketing co-op, the value proposition may be both the savings and the markets they can reach by working together.
As a group, agree on why someone might want to be a member and write it down. Everyone in the group will have similar reasons why they chose to join the co-op, so this should be easy. Take that self interest and turn it into words so that others understand the co-op’s value without much effort.
Once you’ve agreed on a value proposition and written it down, find a way to identify and reach potential members.
Start by defining how many members you need to recruit. If you’re starting a consumer co-op store, you’ll want as many members as possible. If it’s a co-op of producers who contribute vegetables or meat, you might want to be more selective about who can join.
Next, find ways to get this value proposition in front of these people during their regular, daily activities. For example, put a poster in a post office or buy online ads in The Western Producer. Think about the people you want to join, what they do every day, how they might engage with your offer, and make it happen.
For most co-ops, the best way to get your message out to people is through a board member with a good sales pitch. So, leverage your group’s network to spread the word.
Once you’ve attracted a potential member, it’s time to close the sale. To do this, a clear exchange is critical. A member should understand and go through the official process with clarity and relative ease. The process your co-op uses to admit members should be outlined in your bylaws. (Check out our templates for help.)
Most co-ops create a form that potential members fill out and submit to the board of directors to become members. This membership agreement outlines the expectations and responsibilities of the members and the commitments of the co-op to these members. Check out our sample membership agreement for help creating your own.
For most co-ops, you pay to become a member. You either purchase membership shares or pay a membership fee. Sometimes both. Outlining a brief cost benefit analysis can be useful. For example, shares might cost $5000 but the anticipated return/savings in the first year is $6000.
Be very clear what the cost is both initially and ongoing. A key feature to successful relationships is delivering on expectations. So, start off on the right foot.
Once a member has applied and paid for membership in a co-op, the board reviews and votes to approve their membership. This is an unfamiliar process for most people. So, clearly articulate this process to potential members
The co-op’s member registry should be updated after a membership is approved. Check out our sample member registry for a template.
Some co-ops require additional steps. (See “Special Considerations below.)
Provide a welcome package for new members. In the package, thank the new member for joining, reiterate the services and benefits of the co-op, and include a copy of the membership agreement and bylaws. A history of the co-op is also beneficial. (Check out Federated Co-operatives Limited’s.) Provide relevant policies/procedures, and reiterate the benefits members receive. (Check out Vancity’s approach.) Including the process of running for the board of directors and other decision-making processes is useful as well.
Depending on the type of co-op you have or the work it does, there may be other processes to consider when you try to find new co-op members. For employee-owned and producer co-ops, for example, the requirements for membership are often higher:
Members of worker co-ops also often have to make a larger investment in the co-op. They can do this through membership shares, investment shares, and/or member fees. To make this easier, some co-ops offer members the option of paying over time – often by having the money deducted from their pay cheque or dividends. Depending on the province you’re in, there might be a limit on the investment required of worker co-op members – if you’re not sure about the rules in your province, we can help you find out.
Also, because worker co-op members are also employed by the co-op, conducting an interview with the applicant before they are approved is recommended.
Member investment can be collected over time by withholding a portion of the member’s share of revenue (e.g. from sale of grain on behalf of members) or be paid monthly. Producer co-ops that provide members a service for a fee (e.g. seed cleaning co-ops, farmers’ markets) may not need a lot of investment because they recover their costs from what members pay. Some producer co-ops accept in-kind contributions instead of money. For example, if a co-op requires members to invest $5,000 to become a member, it could accept $5,000 worth of produce instead of cash.Was this useful?
Need a business plan? Start here. The Biz Plan Creator is an easy-to-use and helpful tool. Designed to guide you through the process, the Biz Plan Creator offers a user-friendly platform and clear advice at every stage. Plus, it includes a secure account and customized branding of your plan. So, you can leave and come back to your plan as needed. And when you’re done, a branded PDF business plan ready for investors and financiers is your reward.