Co-ops: sustainable success and business breakdown
Not all new co-operatives, set up with enthusiasm and hope by their founder members, make it into long-term sustainable businesses. Inevitably, some fail.
"I suppose they fail for the same reasons as conventionally structured organisations," says Ian Taylor of Co-operative and Community Finance (CCF). "They fail because of market collapse, because the produce is no longer needed, because of recession, poor financial control – all the normal stuff. But co-ops certainly fail less."
One of the success stories of recent years has been the growth of community-owned and run shops, now numbering several hundred. CCF has lent to over a hundred of them, with only one failure – "and that turned out not to be a genuine community shop anyway," Taylor says. He talks of the way that volunteer support has helped many community shops become established businesses.
With other types of co-ops, particularly workers' co-op start-ups, there may be more challenges to overcome on the path to success. Co-operative business adviser Dave Hollings of Co-operative and Mutual Solutions (itself a workers' co-op) points out that small co-ops can be at risk if key members leave. "If you are a four person co-op and one person leaves, maybe a significant skill set will leave the business at the same time," he says. He also suggests that very small workers' co-ops can struggle to grow to the size – perhaps with 10 to 20 members – where longer-term viability becomes more assured. "So co-ops stay small and vulnerable," he says.
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