Having a great idea, a business plan and motivated people in place is essential. So is money.
It’s often assumed that getting the finance needed to get an organisation off the ground is difficult, but actually, if you have a viable idea, the finance should follow relatively easily.
For co-operatives with relatively few large purchases to be made – such as those selling food or refurbishing furniture – the costs will include purchasing goods to sell, renting premises, creating promotional materials, any phone and web costs, insurance and any staff costs or volunteer expenses.
For co-operatives with a large outlay there may be a significant expense at the start. A student housing co-operative, in particular, needs to cover the cost of a property, which will require a mortgage, and there will be the on-going cost of maintaining the property.
So, where you can get money from?
- Your university. First, try your university. Universities are encouraging enterprise amongst students, and are quite likely to support a new venture in some way. Many food co-ops use a space in either the university or student union to enable students to pick-up their food. Shrub benefited from similar space. And some universities offer small amounts of funding for students starting social enterprises. A university is likely to look favourably on a co-operative that is making essentials more affordable for its students.
- Grants. There are plenty of organisations – like Big Lottery or Esmie Fairburn – that can provide small amounts of grant funding to cover start-up costs, such as equipment, promotional materials or the like. A great place to look is Funding Central – although your university or student union may offer grants too.
- Loans. If you have a viable and sustainable business plan, you could access a loan from a sympathetic provider. Many co-operatives get loans through Co-operative and Community Finance, whilst ethical banks like Unity Trust Bank and Triodos are also known for making loans to co-operative organisations.
- Members. This is not always appropriate – especially among cash-strapped students – but many co-operatives get finance through members investing money to get it off the ground. A food co-operative could ask each individual to put £5 into the co-operative to get it off the ground; with 100 members that would provide £500 start-up funding.
If you’ve got a viable idea, getting the money to start a new co-operative – especially those that don’t require a big initial layout – is relatively straightforward; all you need is some imagination, confidence and tenacity and you’ll find the finance you need to be able to launch your co-op.
Or go straight to STEP FOUR: the launch (and after)