Why start
a cooperative?

According to Myriam Michaud, entrepreneur in the cooperative sector, there are several advantages to starting a cooperative, but it requires an entrepreneurial vision that goes beyond the simple quest for profits.

To know if you want to start a cooperative, it’s important to know the main differences between the cooperative model and the traditional model of private businesses. According to Myriam Michaud, these differences can be reduced to two fundamental principles.

01 A cooperative has a collective ownership.
There are no shareholders or single owners who personally make money in proportion to the organization’s revenues. All profits are given back to the members as dividends or are reinvested in the cooperative’s services, products or projects.

02 A cooperative’s decision-making powers belong to the members.
This power is not concentrated in the hands of the person or persons who have the most capital, but is distributed equally to everyone. In other words, it’s more of a democracy than a dictatorship.

Myriam emphasizes that, in theory, a traditional private business could follow these two principles, but in reality, it rarely happens.

“A boss could very well decide to invest all profits in employee benefits and improving products and services. He could also consult all employees when he makes strategic decisions, by giving their points of view an equal weighting to his own. But this model has a much better chance of becoming a reality if it is written in the organization’s statutes,” she said.

What are the advantages of a cooperative?

One of the greatest advantages for a cooperative is to be close to its members and users, Myriam explained.

“The closer you are to your clients, the better your chances of effectively meeting their needs. Private businesses are also close to their clients, but with a cooperative, you naturally go a little further. The proximity of clients is part of a cooperative’s DNA because its capital is its members and they are the ones who make the decisions.”

Another advantage of the cooperative model: strategic decision-making naturally takes into account a multitude of points of view. How many businesses have failed because an overly-confident boss stubbornly made poor decisions?

However, it may be harder for the creator of a cooperative to deal with this aspect, said Myriam.

“When I started my first cooperative, my main challenge was to leave the leadership to other people. Someone who starts a cooperative with a good idea must accept losing ownership of that idea. On the other hand, the founding members must be able to take responsibility for the idea.”

Why are cooperatives born?

Cooperatives are often born of a problem, discontent or, more generally, a need expressed by several people. When Myriam Michaud started to invest in cooperatives almost 10 years ago, it was precisely due to her discontent at Laval University.

“I thought it was unfortunate that, every day, students were paying a multinational company for poor quality food, rather than reinvesting the proceeds in the university community. I therefore ended up starting a student coffee shop, and then became administrator of the student coffee shop cooperative.”

Myriam points out that one of the most popular cooperatives in Quebec and Ontario, Desjardins, was also born of a problem and discontent.

“At the beginning of the 20th century, ordinary people were unable to obtain savings or credit. And even if they succeeded in obtaining a loan, they knew that their money would not go back into the community. Therefore they chose to create a cooperative.”

Lastly, cooperatives are also born when several entrepreneurs decide to pool their resources to buy expensive equipment, which is often the case in agricultural cooperatives.

How do you start a cooperative?

To start a cooperative, you need at least three people and a common need. In Quebec, the first thing you should do is go to the coopérative de développement régional in your administrative region (Centre-du-Québec, Montréal-Laval, Outaouais, and so on). These organizations exist to guide inexperienced people through the legal steps, their business plan and market studies.

“CDRs are indispensable for people interested in starting up a cooperative. In addition to providing quality guidance, they can point people to sources of financing exclusive to cooperatives, such as loans from the Caisse d’économie solidaire or the Réseau d’investissement social du Québec. »

Is there a personality type that is more geared toward starting up a cooperative?

According to Myriam Michaud, starting up a cooperative requires basic entrepreneurial skills, but a particularly strong talent for group work. You mainly have to be driven by the desire to serve a community and be able to “think of us”, to put your own interests aside when necessary.

In other words, you have to like to help.