1. –Cooperative Defined –Pros and Cons –Getting Started –Managing –New Generation Cooperatives Cooperatives In the Shellfish Industry

2. What is a Cooperative? 1.A business organization 2.Communism Answer: A cooperative is a BUSINESS

3. Business Characteristics Alligator Business Model (not coop)

4. Types of cooperatives Consumer Worker Producer –Marketing –Purchasing

5. Every Farm for Itself

6. Greater Bargaining Power Savings to the farms has to be greater than the cost of running the co-op.

7. Just sells to individuals Only sells wholesale Sells to a friend Has a diverse clientele

8. Co-op needs to cover its operating expenses from sales. Farmers need to make more by selling through the co-op.

9. Advantages Can focus on farming and increase production Can reach more diverse markets

10. LLC vs. Cooperative Similarities –Producer can own business –Taxes on profits paid by owners not company –Limits liability –Must cover costs –Must benefit owners

11. Why Are Co-ops Different? 1. Open membership 2. Democratic Control 3. Member Economic Participation 4. Autonomous 5. Education/training 6. Cooperation 7. Community Co-op Principals

12. Co-op Features The effect of the co-op principals Membership is open to persons who can use the co-ops services. Member control is usually one member one vote. Investment $ = control/votes Benefits are tied to usage –Operate at cost –Net margin allocated to members based on use. Investment $ = percentage of profits –Limited return on equity

13. Where are Co-ops Effective? New/unusual industries - butter in early 20 th Century in Midwest - cranberries Areas where private businesses dont think there is enough profit. –Small/remote salmon fishing districts Maintaining prices? –Kachemak Bay

14. The Cons Cooperating Start up Distraction Marketing Costs/financing Management Member dependent

15. Examples of seafood cooperatives Seafood Producers Kachemak Bay

16. Getting Started Planning Preparing Begin operations

17. Planning Process Collective Process Gather Information Get organized Research feasibility

18. Preparing the Business Membership Drive Business Planning Founding Documents –Articles –By laws (owners manual) –Membership agreements

19. Beginning Operations Elect directors Hire management Develop polices and procedures Set up business

20. Members role Elect directors. Vote on major decisions. Patronize the cooperative.

21. Resources Technical Assistance National Coop. Business Assoc. Coop. Devlpmnt Institute Coop. Devlpmnt Services Northwest Coop Devlpmnt Center Financing Coop. Devlpmnt Fund Blooming Prairie Foundation

22. Alaska Cooperative Development Program Purpose Partnership and Resources Clients

23. Instructors Andrew Crow Consultant and Cooperative Program Manager 907-786-5447 anacc@uaa.alaska.edu Home page – http://ced.uaa.alaska.edu/ac dp/index.html