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Is Cooperative Business the New Way to Succeed in Modern Business?

Is Cooperative Business the New Way to Succeed in Modern Business?

The world of modern retail is ruled by a number of big names who control a massive proportion of a market worth over $5 trillion in the United States alone. Walmart is the world’s largest retailer by revenue. If you are an independent farmer or food producer, how do you approach such an organisation?

The simple answer is you don’t. There is no way that an independent producer can make any inroads to the large retailers alone and so a cooperative model is often the only way in which individual producers can create a large enough brand to engage with the large players in the retail industry.

What is a Cooperative?

A cooperative will look, from the outside, like any other business however the major difference is rather than being owned by investors or shareholders they are owned by their members. Ordinary people who are farmers, food producers or employees. It is owned and managed by its members for the benefit of its members.

It allows individual farmers or producers to create a brand that can be competitive in a challenging market. Members of a cooperative democratically vote with a one organisation one vote model to make key decisions and to set policies.

Types of Cooperative Organisation

There are a number of basic models of cooperative:

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  • Producer – Owned by food producers like farmers or fishermen who join forces to process and market their products under a single brand.
  • Worker cooperatives – Organisations owned by some of all its workers. It gives workers the chance to own their own company, something which would be out of reach of any individual. There are various businesses from restaurants and bakeries to small manufacturing cooperatives.
  • Consumer cooperatives – Consumer cooperatives allow numerous individuals to come together to buy anything from groceries to utilities and fuels with the benefit of bulk buying, which allows them to command better deals from suppliers.
  • Retail cooperatives – These consumer cooperative generally involving independent business owners. For example, Best Western Hotels encompasses a number of independent hotels that benefit from an international cooperative to reduce the cost of products and services to create a powerful, international brand for otherwise relatively small businesses.

The power of a cooperative allows otherwise small companies or individuals to act with the power of larger organisations while retaining inclusive business practices.

Why Producer Cooperatives Work

An producer cooperative allows individual farmers, fishermen or food producers to achieve a market scale and economic presence which would not be possible by themselves. By coming together as a collective they can create a central, large bargaining power when dealing with the major retailers for the sale of their products. In addition, they can achieve reduced costs by pooling capital and resources to employ bulk purchasing and centralised production and processing.

Cooperative organisations can create marketing resources and brands that would be out of reach of individuals. However allowing an organisation to be formed following the ethical and business ideas of the individuals creates an organisation with shared values as opposed to a ‘faceless’ conglomerate.

Introducing the Rochdale Principles

Most major cooperatives follow the Rochdale Principles, a set of ideas established in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale, England. The Rochdale Society of Equitable Pioneers was a group set up with the challenges of the Industrial Revolution which forced large numbers of skilled weavers into poverty as their roles were replaced by factories. They banded together to open their own store which sold food which they otherwise could not afford. They pooled resources of £1 per person to allow them to open a store selling high quality, unadulterated goods.

The principles they created to run their first cooperative were formed by trial and error but created a set of ideas that stand even today. The principles set out values such as self-responsibility, democracy and equality as well as the importance of honesty and social responsibility.

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Cooperatives are naturally democratic organisations controlled by their members, there is no discrimination allowed in the establishment of the membership and an expectation that each member contributes and that at least part of the capital is given as common property of the cooperative.

The principles build in elements that value and develop local communities and cooperation between cooperative organisations. It is good for business, developing links and allowing smaller organisations to work together to become powerful yet responsible alliances. The most important element is that you as a consumer can trace your product through the organisation to an individual farmer or producer.

Old Fashioned New Business

In an age where consumers have a greater interest in the source of their food, the ability to trace products through a brand to individual producers is a major asset. It gives an opportunity to prove the brand heritage.

Case Study – Cabot Creamery

Cabot Creamery is one of America’s most popular cheese brands and it was established in 1919 when 94 families in Vermont formed a cooperative to secure their livelihood. Now the cooperative encompasses over 1,000 individual farms and over 1,000 employees in four production plants.

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Photo credit: Cabot Creamery

    Photo credit: Cabot Creamery

    The scalability has allowed the cooperative to grow to a business with a turnover of hundreds of millions of dollars.

    The People Behind the Cooperative

    The important story behind cooperatives are the individuals who make up the membership. Cabot Creamery encompasses over 1,000 farming families, many of whom have been members for generations. From small specialty farms with 50 cows to larger establishments with many hundreds of cattle, the key is that each is a small to medium-sized business working within and supporting a local community yet an intrinsic part of a major food brand.

    Cabot Creamery is keen to share the stories of their individual farms and the families which own them, it is a major part of their marketing and most welcome consumers to visit the farms and to meet the families allowing them to understand and appreciate the nature of the cooperative.

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    Cabot Creamery - one of the farming families

      Photo Credit: Cabot Creamery – Birch Mill Farm

      You can learn more about how Cabot Creamery have developed their sustainable cooperative online at: https://www.cabotcheese.coop/our-coop

      Creating a Better Business

      It is the unique nature of a cooperative is as engaging for a modern consumer as it was necessary for the original co-op members 100 years ago. The cooperative model still makes considerable financial sense for small organisations or producers. However, a more enlightened consumer who wants to understand the source of their food can be satisfied with the story that a cooperative business delivers. We can see from the Cabot Creamery case study that the cooperative have enabled a large number of producers to make a viable business. A major part of their success is the transparency of their membership and they make a large play on the fact that their members are family farms, reinforced by supporting a large number of community activities. In this way, they ensure that their local producers are seen to be grounded within their community.

      The value of local community is vital for the development of a cooperative brand, not only is it built into the values of cooperative organisation it is a vital differentiator between cooperatives and other corporate entities.

      An organisation which is built from its foundations on sound, ethical values with sustainability, individuals and local community at its heart seems to be a very modern principle, yet the Rochdale Principles have just held their centenary.

      A Cooperative Future?

      Whereas the cooperative model is one based in the past, it is one which is growing from strength to strength. There are 2.6 million cooperatives worldwide with over 1 billion memberships and clients, generating $3 trillion in annual revenue (Results of the 2014 Global Census on Co-operatives).

      It is clear that cooperative business is good business.

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      Last Updated on July 2, 2020

      13 Common Life Problems And How To Fix Them

      13 Common Life Problems And How To Fix Them

      In life, we encounter problems as we breathe. But it doesn’t get to us until we feel a major impact, and that’s when it becomes a source of concern, hurt, or sorrow.

      Life problems, depending on their magnitude, can be clogs in the wheel of progress, and we may not be able to attain our full potential if we don’t learn to place our problems in the proper perspectives as suggested in Robert Schuller’s Tough Times Never Last.

      In this article, I have identified some common areas where you will most likely face problems as you make progress towards reaching your full life potential. I have also suggested practical approaches in handling, managing, and solving such problems.

      1. Financial Crisis

      We live in an uncertain world and a financial crisis may come at different stages of life. While you should always anticipate and prepare for a financial crisis, it may still catch you off guard or the magnitude may be far more than any preparation you have made over the years.

      It could be that you lost your job or a major investment, got slammed with a lawsuit that threatens your savings, or have your livelihood be affected by a major disaster. So what do you do when you are in a financial mess?

      Solution

      To overcome a financial crisis, you will have to come to terms with the crisis. Acknowledge and accept the situation and begin recovery by setting your financial priorities right.

      The next thing to do is to identify the cause of the crisis. If it’s due to a job loss, then your effort should be directed at getting a new job. If it is having multiple debts, look for ways to consolidate your debt so that your monthly debt repayment can be consolidated into one instead of being burdened with multiple payments.

      You can also sell some of your assets to raise money to save the situation, or look for a better job if you are earning less at your current job. Don’t hesitate to ask for help from family and friends if you need to.

      2. Health Crisis

      Another major problem that might come up in your life is a health crisis. This is not far-fetched because our body systems work round-the-clock, even when we are sleeping. As a result of this, and if you don’t maintain routine health habits, health deterioration might begin to set in. Things might even get serious if you don’t attend to it early.

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      Solution

      When you are facing a major health crisis, the first thing to do is to consider lifestyle changes. This includes cutting down on junks, eating healthy diets, exercising, breathing fresh air, taking some sun, etc.

      Apart from the lifestyle changes, you have to seek quality medical help and make sure you get different opinions about the state of your health so you can get the best affordable care.

      3. Relationship, Marriage, and Family

      There may not be anything as sweet as love and family life, but it can also be the source of pain for some. Human imperfections in a relationship can cause a major crisis in life. This has been a stumbling block to many on their path to fulfillment.

      Solution

      The best thing to do is to prevent relationship problems from happening, but if they do happen, you need to face reality and begin to take steps towards addressing them. Do your best to keep the lines of communication open as this can help in strengthening your struggling relationship. Talk about the challenges with your partner and look for common grounds.

      You can also arrange to see a counselor together or read books that address the specific challenges you are facing. The worst thing you can do is to end a relationship and that’s only when you have exhausted all other options.

      4. Workplace

      The workplace is supposed to be a place where we dutifully render the services for which we’ve been hired.

      However, it is not impossible to face animosity at work—dealing with toxic people who would rather not see any good in what you do. It might be caused by differences in background, attitudes, and unhealthy competition that can result in personal conflicts. This can create undue stress and reduce productivity.

      Solution

      Be as professional as possible when dealing with toxic people. Be kind and show understanding, and try to avoid personal confrontation.

      You can even try to reach out to the persons and invite them over for a coffee and get to understand their worldview. This can help you to connect with them at their level so that you can avoid unnecessary stress for yourself.

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      5. Career Pressure

      In your quest to become more successful, you will likely encounter work-related pressure. Such can come when trying to stabilize your career or climb the career ladder. It can also come as a result of overworking and having no life. Career pressure is one of the most common life problems.

      Sometimes, it may be that the promotion you are working hard to get is not coming or positions you are qualified for are being offered to others. The pressure can get more intense when you find that most of your colleagues are moving ahead of you.

      Solution

      Check to find if you have personal or attitudinal problems. Some attitudinal problems can put you at a disadvantaged end. It may be poor communication, poor personal grooming, or poor relationship and networking skills. If it is any of these problems, then work on improving yourself in those areas.

      You can also observe your colleagues who are succeeding and take note of what they are doing differently.

      6. Unfair Treatment

      We are in a world where some people often think they have some privileges over others and may want to exercise this thinking and treat others unfairly. If you find yourself in an environment where you are being oppressed or treated badly because of your race, gender, or current status, this can make you feel really bad and can also affect your psyche and productivity.

      Solution

      There is the temptation to decry your treatment, defend yourself, and demand a change immediately, but you should really wait for the right opportunity to do that.

      When the time is right, reach out directly to the person or authority involved, and make it private. Meanwhile, you should be factual about the instances of your unfair treatments. Don’t just say it that you are being treated badly; give several undeniable instances.

      Once you’ve made your grievances known politely, keep being you. If things don’t change, you can cocoon yourself in that environment. If you have an option to leave, you can do so as well.

      7. Emptiness and Boredom

      When you are in a rut, everything becomes normal, dull, unproductive, and yet difficult to change. This can lead to feelings of emptiness and boredom. This may not seem like a serious life problem, but it can have a great impact on your life.

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      Solution

      To overcome boredom and emptiness, break out of your routines, and deliberately create a new experience for yourself. If you can’t leave your job to find a new one, start doing other things that reflect your true passion. Sometimes, the things that give us the needed drive in life are not our day jobs.

      8. Confusion

      Confusion is described as a change in mental status in which a person is not able to think with their usual level of clarity.[1]. It is inherent in forgetfulness and lack of concentration.

      It can be caused by different things including medical and environmental factors. It can also be due to the experience of a loss, a heartbreak, or abuse.

      Solution

      Don’t allow the situation to deteriorate into something more serious. Try to snap out of whatever experiences you have had that is causing confusion. Seek medical help if necessary or talk to a psychologist.

      9. Friendship Problems

      We need friends in our lives to rob minds and hang out together and even help us when we run into trouble. But many people have found themselves in serious trouble as a result of the company of friends they keep. They’ve experienced jealousy, backstabbing, and betrayal of trust. Some friends have even used the information freely provided in times of friendship to betray trust.

      Solution

      Don’t open up on everything to friends. Keep some information only to yourself. If you notice that a friend is working against you, confront them with the truth. Limit your interaction with them or get rid of such toxic friends completely.

      10. Haunting Past

      We all have pasts, and we might have done some crazy stuff in the past before we begin to live a more civilized and decent life. But sometimes, the past comes back haunting. It’s even worse when life problems of the past haunt you back and become problems of the present.

      It may be that what you have done is now striking your conscience, keeping you awake at night. Or someone who knows about it is trying to use it against you, and it is standing in the way of your progress.

      Solution

      Be true to yourself and forgive yourself. If it is an issue with another person, you can reach out to the person to settle with them. If it is a secret that is now being leaked out, own up to it, take responsibility, and move on.

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      11. Safety and Security

      You may find yourself in an environment where there have been unexplained murder, gun violence, police brutality, insurgencies, and other life-threatening situations. This can make you feel like you might be the next victim. What should you do in this situation?

      Solution

      Ensure that you watch where you go and keep your home secure. You can also get involved in a neighborhood community watch to collectively find solutions to the threat. If the situation persists, you can move to a more secure location.

      12. Failure

      Failure can bring disappointment and can also slow the pace of progress. But failure is also part of life, and we have to learn to deal with it. But what do you do when an experience of failure weighs you down?

      Solution

      You can read a book or biography to get inspired by other people’s success stories.

      13. Grief

      No one loves to grief but we can’t totally shield ourselves from it. The loss of a loved one is painful and, if not properly handled, can lead to an emotional breakdown.

      Solution

      Take your time to express emotions. You can also pen an emotional tribute to the individual. Writing can help us bring out the feelings that cannot be expressed otherwise, and it helps us breathe a sigh of relief.

      You can also cope with your grief by helping them to realize some of their unfulfilled dreams or do something in their honor. Lastly, while you think about your loss, you will still have to move on, accepting the fact that life is transient.

      The Bottom Line

      Problems are what make life worth living. They help us adapt to become tougher as we adapt to different situations. Always remember that whatever problem you are facing has a solution or, at least, a manageable approach.

      Therefore, never allow your challenges to stop you from fulfilling your true potentials in life.

      More Tips to Help You Get Unstuck

      Featured photo credit: Danka & Peter via unsplash.com

      Reference

      [1] Medicinet: Confusion: Symptoms & Signs

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