A co-op is an organization that takes the idea of working together and puts it into a business structure. A cooperative is a business voluntarily owned and controlled by the people who use it — its members or owners. It is operated solely for the benefit of its owners, to meet their mutual needs. When groups of people have similar needs — such as the need for lower prices, more affordable housing, or access to telecommunications services — cooperatives offer great potential to meet those needs.
At its core, a co-op is a business. It is subject to the same needs and demands of any business: co-ops require sufficient financing, careful market analysis, strategic and comprehensive planning, well-trained and competent personnel. Co-ops are not immune to the market and economic forces that cause small businesses to struggle and fail. But in several important ways, co-ops are also unique and different. Most distinctly, a cooperative business is owned by the people who use its services — the owners. Co-ops may resemble other businesses outwardly, but the fact that they are owned by the community makes them unique.
Although definitions of co-ops vary, they all contain the following elements:
- Co-ops are owned and controlled by those who use their services (the owners).
- Co-ops are democratically governed.
- Co-ops are businesses, not clubs or associations.
- Co-ops adhere to internationally recognized principles.
A simple definition of a co-op:
A co-op is a member-owned, member-controlled business that operates for the mutual benefit of all members and according to common principles established for cooperatives.
The Seven Cooperative Principles
Ozark Natural Foods adheres to the Seven Principles agreed upon by the International Cooperative Alliance. Those Seven Principles are:
1. Voluntary and Open Membership – Cooperatives are voluntary organizations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.
2. Democratic Member Control – Cooperatives are democratic organizations controlled by their owners, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the owners. In primary cooperatives, owners have equal voting rights (one owner, one vote) and cooperatives at other levels are organized in a democratic manner.
3. Member Economic Participation – Owners contribute equitably to, and democratically control, the capital of their cooperative. At least part of the capital is usually the common property of the cooperative. They usually receive limited compensation, if any, on capital subscribed as a condition of membership. Owners allocate surpluses for any or all of the following purposes: developing the cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting owners in proportion to their transactions with the cooperative; and supporting other activities approved by the owners.
4. Autonomy and Independence – Cooperatives are autonomous, self-help organizations controlled by their owners. If they enter into agreements with other organizations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their owners and maintain their cooperative autonomy.
5. Education, Training and Information – Cooperatives provide education and training for their owners, elected representatives, managers and staff members so they can contribute effectively to the development of their cooperatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of “Co-operation.”
6. Cooperation among Cooperatives – Cooperatives serve their owners most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.
7. Concern for Community – While focusing on member needs, cooperatives work for the sustainable development of their communities through policies accepted by their owners.