Now that you have identified the needs to address and gathered an active and reliable group of people to take part in the project, you need to ask yourself how can this business idea be turned into a viable business.
This step aims at helping you to:
Obviously, the process cannot be completed in one afternoon: you will need to make some research, gather the future cooperative members and organise workshops, meet external partners and mobilize resources… This is also designed to encourage you to communicate, share the idea with your environment and adapt it to external constraints, so as to increase your chances of success.
The outline of your elderly care cooperative idea is becoming clearer and clearer. At this stage, it is essential to get an in-depth understanding of the beneficiaries’ (i.e. elderly people) feelings and preferences. This will constitute the basis on which you will be able to determine which services will be provided by your cooperative, and how they will be marketed in the area.
Although it may certainly be fed by your initial needs assessment study (cf. step 1), a market survey should go further. It is aimed at concretely confronting the services that you are planning to deliver with the economic and social realities. Even though a need exists and it is identified, the tools to address them have to be in line with the users’ capacities, perceptions and habits to actually penetrate the market. The survey will help you identifying and anticipating potential opportunities or obstacles, and adapting your project accordingly.
If you are setting up a multi-stakeholder cooperative, the diversity of your future members may be a real asset in this step. Do not hesitate to confront the different point of views, so as to get a viable consensus between user needs and aspirations on the one hand, and professional and economic constraints on the other.
Now that you have gathered main information about your cooperative business, you are ready to draft a business plan.
The business plan formalises your cooperative goals, and the way these goals will be achieved and financed. Establishing it is fundamental, although it can seem long and tedious: it will allow you to clarify and organise your project implementation process – for yourself but also all the stakeholders, whether as future members or partners (especially potential investors).
Ideally, all the future cooperative members should be involved in this vital stage, so as to develop a shared understanding of the organisation’s aims and running processes. This is particularly important when your cooperative includes various types of members, as it is the case in a multistakeholder organisation. Different groups may have different needs, approaches, backgrounds and expectations, which may be complementary or contradictory: creating the business plan will be the opportunity to confront these ideas and find consensus, which is essential to ensure the future of the organisation. “Pin down any disagreements and find solutions to them. Write down any agreed decisions for the benefit of your own clarity” (Footprint Workers' Co-operative Ltd & Seeds for Change Lancaster Co-operative Ltd, 2012).
The process will also test the group’s reliability and solidarity. Withdrawals and deceptions are common during this phase: however, those can be more easily addressed before the cooperative settlement, than when the business is already launched.
Lastly, keep in mind that the business plan is a tool which is not specific to cooperatives, but common to all start-up companies. Although a cooperative does have its specificities, do not hesitate to broaden your sources of support and knowledge. Mainstream businesses do adopt useful and efficient tools to minimize their risks: transposing them to your cooperative environment can help you increase your economic stability. Therefore, you may consider seeking support from organisations which, even if they aren’t themselves cooperatives, could help with practical aspects like book-keeping.
You can find a list of national organisations in the downloads section of iCareCoops which may be help you to develop your business plan.
The plan might also include an explanation of your cooperative structure and how your team and members have an interest in seeing the business succeed. Many conventional financial institutions may still have little experience of cooperatives, so an explanation may be particularly useful if you are using your plan to borrow money.
The financial plan is a fundamental part of the business plan. It is aimed at providing an overview of the cooperative income and expenditure, its yearly profit and loss account, and its cash-flow forecast.
Launching a (cooperative) business requires initial investment: the amount of capital required for the start-up phase depends on national regulations, but also on the organisations’ needs in relation to the type of activities covered (purchasing material, paying wages during the first months, communication expenses…).
Several financing sources may be considered. However, the first level should always be the members’ contributions, in the form of cooperative shares: the price of the shares should thus be a fair balance between members’ financial capacities and business investment requirements. Further information about external funding mechanisms are presented in step 4.
In Annex 1, Seeds for change present a 5-steps methodology to establish a financial plan.
iCareCoops provides a sustainable, ICT-driven solution to our ageing society's increasing need for care. The project aims to develop a new way of promoting and supporting elderly care cooperatives as a model to organise elderly care in an efficient way.
AALEL (AAL Experience Language)