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Business Strategy: A Core Element of Success

What is the biggest challenge facing worker cooperatives? Lack of access to capital? An effective and efficient governance system? A commitment to building firms that seek to democratize the economy? Based on ICA’s decades of experience starting and converting dozens of democratic firms and social enterprises, the biggest challenge facing most organizations, especially startups, is a lack of a solid business strategy.

Worker cooperatives and allied organizations face a duel challenge: they have to both understand the governance and workplace culture ramifications of creating a democratic workplace, and they must demonstrate the market knowledge and business intelligence to ensure these businesses thrive. As is typical for small businesses, at present, most business planning in worker cooperatives happens in an ad hoc fashion. The unglamorous tasks of dissecting markets, developing comprehensive financial models, evaluating the impact of different growth strategies on revenue and cost structures, and even basic analysis of business feasibility, are far too often incomplete or simply not undertaken at all. We know that ordinary employees can be successful business owners and can grow successful enterprises with stable, secure, high quality jobs. However, great care must be taken to ensure we’re creating businesses that are worth owning.

Let Us Help You Succeed!

ICA’s business strategy resources are designed to help co-ops help themselves, however, help from a seasoned developer can make all the difference. Recognizing many startup efforts do not have the funds to hire a consultant, ICA can review your business plan and provide a phone based consultation with you and any member of your team for a flat fee of $500. For more information, contact the ICA Group at ica@ica-group.org.

It should never be forgotten that whatever its social goals, a worker cooperative must be first and foremost be a successful business. This means that the firms understands the fundamentals of how to succeed, including:

  • Market

    Just like any other business, a democratic business must serve a viable market. It must address a real need or problem that a customer is facing, and it must be able to do so at a reasonable cost.

  • Management

    The new company will need competent leadership or management to lead it and the workforce must possess the necessary skills to manufacture the products or deliver the service.

  • Money

    The cooperative will need adequate financing (a mix of debt and equity) to cover the capital needs of the new business, the development costs and the losses that must be anticipated before the cooperative fully establishes its market.