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Start.COOP
MODULE 1
Identifying Core Members
and Business Idea

I
 Start.COOP by International Labour Organization (ILO) is licensed under a Creative Commons
Attribution-NonCommercial-ShareAlike 4.0 Unported License.

Start.COOP

Start.COOP has been developed as a low-cost, easy to use training tool for those interested in
starting and launching a cooperative in a participatory and efficient manner. It draws on technical
content from existing materials in different ILO cooperative training tools and peer-to-peer, activity
based learning methodology from the ILO’s Community-Based Enterprise Development (C-BED) pro-
gramme. The Start.COOP training tool has been divided into four modules that correspond to each
phase of the cooperative formation process to give you time to reflect on the importance of what
you are doing at a given time and to see how it fits into the big picture. The focus of the Start.COOP
modules is on the decisions to be made at each step with a view to increasing chances of success.

At the end of the training you will be able to:

• Identify the core members of your cooperative
• Define your business idea
• Research the feasibility of your business idea
• Prepare your business plan
• Decide on the organizational set-up of your cooperative

To learn more about the ILO’s work on cooperatives visit www.ilo.org/coop or email:
coop@ilo.org
To learn more about the ILO’s peer-to-peer, activity based learning methodology visit
www.cb-tools.org

Acknowledgements
Start.COOP was developed collaboratively by the ILO Decent Work Team Bangkok and the Coopera-
tives Unit of the Enterprises Department at the ILO. The text was drafted by Marian E. Boquiren.

Start.Coop

ILO Enterprises Department

Decent Work Team - Bangkok

II
CONTENT
Start.COOP Modules. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . IV

MESSAGE TO THE GROUP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . V

Follow the Signs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VI

Getting Started.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII

Learning Process. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . VII

SESSION 1:
FINDING THE RIGHT PEOPLE TO START
THE COOPERATIVE WITH. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Activity 1A:
Building on your differences and similarities. . . . . . . . . . . . . . . . . . . . . . 1

Activity 1B:
Competencies and qualities needed during the formation stage . . . . . 4

SESSION 2:
DEFINING THE BUSINESS IDEA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Activity 2A:
Identifying a common need.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Activity 2B:
Identifying root causes and effects. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Activity 2C:
Defining the business idea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

III
 Start.COOP
Modules

Identifying
Core Members and
Module Business Idea
1

Researching
the Feasibility of
Module the Business Idea
2

Preparing
the Business Plan
Module
3

Organizational
Set-up
Module
4

IV
MESSAGE
TO THE GROUP
Starting a cooperative is like setting up any business, but what makes a cooperative different from
other business models is that it is shaped through collective effort and group decision-making as
well as a set of cooperative principles that help to guide the business. The Start.COOP modules will
walk you through the process of starting and launching a cooperative in a participatory and efficient
manner.

Throughout the Start.COOP training, you will be playing the role of potential owner-members or the
core group who will be leading the set-up of the cooperative. You will carry out the exercises based
on the business idea you will define in Module 1. In many cases, the outputs in the various exercises
form the basis or inputs for the activities in the next modules. As you go through the exercises or
activities, try to think and act as the potential owner-members. It is highly recommended that all
individuals who may be involved in the actual set-up of your cooperative undergo the Start.COOP
training.

Module 1 will help you in identifying the right people to join in the formation of the cooperative. You
will then learn how to identify opportunities for collective action through an analysis of the common
problems or opportunities faced by the group. At the end of this module, it is expected that you
would have defined a business idea for the feasibility assessment in Module 2.

The style of this training is different from traditional approaches. You will work together as a team
to follow the simple step-by-step instructions for discussions and activities in the training guide.
A facilitator will be around to assist with any questions on the training content and exercises.
Because there is no group leader, all group members should take a turn reading the information and
instructions out loud to the group, and all group members share responsibility for monitoring time.
In this new style of training, you will learn from each other by sharing ideas and opinions, skills,
knowledge and experience. For this to work, all group members must participate in discussions.

Before and after the training, you will be asked to complete a survey to help understand the impact
of the training. This information will be kept confidential and will be used to improve the training
materials and organization of future programmes. It will also be helpful for identifying other training
on cooperatives that can be subsequently introduced to participants. Some trainees may also be
contacted by the training organizers in the future after 3, 6 or 12 months for another survey to learn
about the implementation of their action plans.

V
 Follow the Signs
The instructions in the training guide are easy to follow and the suggested timeframe for each step is
provided. Look out for these signs:

SIGNS AND THEIR MEANING

This sign indicates the suggested time for the activity

This sign indicates background information to be read to the group

This sign indicates group discussion

This sign indicates that the activity is beginning and that step-by-step instructions
need to be read out loud to the group and folloowed sequentially

VI
Getting Started
Before you begin the training, follow the simple steps below to get organized:

• Fill out the pre-training survey. Ask the organizers if you do not have a copy or have not already
filled it in.
• Organize into small groups of 5 to 7 people. The organizers will guide you in how best to do this.
• Identify one group member to volunteer to start the training as “Group Reader”. The role of the
“Group Reader” is to read the information and activity instructions out loud to the group. Any
group member with basic literacy can be the “Group Reader” and you should aim to share this
role among group members throughout the training.

All group members are responsible for monitoring time, but one group member should be nominated
for each session to remind the group when the suggested time for an activity/step has been reached.
You do not strictly need to follow the suggested timing, but you will need to manage your time for the
total training. If one activity lasts longer than the suggested timing, try to save time in other activities
to keep the balance.

All group members will receive the same training guide. Individual work as well as group work can be
completed in these guides.

Learning Process
Session Time

SESSION 1:
80 minutes
FINDING THE RIGHT PEOPLE
TO START THE COOPERATIVE WITH

SESSION 2:
200 minutes
DEFINING THE BUSINESS IDEA

VII
VIII
SESSION 1:
FINDING THE RIGHT PEOPLE TO START
THE COOPERATIVE WITH
Session Overview
5 minutes

The first task in establishing a cooperative is to Getting the commitment from peers
form a core group of potential member-owners to work together to build the coop
which should consist of people who have similar
ideas and interests and a mutual need or problem
to address. The successful establishment of a
cooperative depends largely on the people that
comprise the organizing group. Their commitment
and skills and how well they work together are
as important as the business idea. As soon as
the cooperative has been established, the core
group of people usually becomes the “founding
members”.

In this session, you will get to know each other,

become familiar with the style of this training,
and you will gain insights on how to select people
to join you in organizing the cooperative. There will be no teacher so you should help each other by
sharing your ideas and experiences, and you should ask questions to the group if you do not under-
stand a concept or activity.

Activity 1A:
Building on your differences and similarities
45 minutes

Before deciding to work together, it is important for people to learn about and understand each
other. The identification of synergies among potential member-owners is crucial to the successful
establishment and, ultimately, operations of the cooperative. Central to the success of a cooperative
is the relationship between the member-owners. Generally, members with similar backgrounds are
more likely to trust each other, work together, and accept joint responsibility for their activities.
Sometimes, however, people with other backgrounds may bring relevant knowledge or contacts to
the group. They can be members of the cooperative as long as they are willing to participate equally.
Oftentimes, it is also important that members live or work relatively close together since they need to
meet regularly for group activities.

Now, get to know each other, identify your differences and similarities, and assess how these can
drive you to work together to start your cooperative. You can also use this exercise in drawing up the
long list of potential member-owners. For this activity, you will perform the steps as they are read.
You will be using Worksheet 1A on page 3.
1
 Steps
STEP 11. In the small circle with the label “This is Me”, write down the following: (5 minutes)
• Your name
• Your livelihood
• Your reason(s) for wanting to form a cooperative
• What you can offer to the cooperative

STEP 22. Next, share with the group what you have written. Each member is given 2 minutes to introduce
himself/herself. As each person introduces himself or herself, you will write down the information
he/she has shared in a circle labelled “Member #”. (10 minutes)

STEP 33. Based on what has been shared by each of the members, in the big circle, write a list of every-
thing that all team members have in common. (5 minutes)

STEP 44. At the bottom of the drawing, answer the following questions: (10 minutes)
• How can your similarities draw you closer together to help build the cooperative?
• How can your differences hinder and/or draw you closer together to help build the cooperative?

STEP 55. Read aloud the similarities you have identified and share your answers to the questions with the
group. (10 minutes)

2
Worksheet 1A

MEMBER 2

THIS IS ME
MEMBER 3

OUR SIMILARITIES
MEMBER 9

MEMBER 4

MEMBER 8

MEMBER 5

MEMBER 7
MEMBER 6

How can your similarities draw you closer together to help build the cooperative?

How can your differences hinder and/or draw you closer together to help build the cooperative?

3
 Activity 1B:
Competencies and qualities needed
during the formation stage
30 minutes

The core members are expected to participate in the setting up of the cooperative in the following
ways:1

a) Ensure that the process of setting up the cooperative adheres to the cooperative values of equity,
self-help, self-responsibility, solidarity, equality, and democracy.

Cooperative Values

EQUITY: The cooperative SOLIDARITY: Members support

provides disadvantaged groups each other and those in other
and unprivileged people with fair cooperatives.
accommodation and treatment
according to their needs in order
to put them on equivalent ground.

SELF-HELP: The cooperative EQUALITY: Each member is

provides the platform for individ- entitled to one vote regardless of
uals and groups to improve their the number of shares he/she has
lives and communities through in the cooperative. Members have
their own work and effort. equal rights and benefits.

SELF-RESPONSIBILITY: All DEMOCRACY: A cooperatives is

members are in charge of the controlled, managed and operated
cooperative; so individuals must by its members. Every voice or
be accountable for their actions, opinion is honored and heard.
responsibilities, and duties.

Photo Source: Barefoot Guide Adapted from http://cultivate.coop/wiki/Cooperative_Values

b) Contribute financially to the cooperative by buying shares.

c) Allocate time for cooperative work and activities.

d) Participate in the preparation of the business plan, organizational chart, and other documentation
requirements.

It is important for the core group members to be realistic about their capacities and competencies to
perform the above responsibilities so that at an early stage they can seek external support or recruit
members who can provide the resources and skills they lack. The questions in the table below can
help you assess your competencies as well as identify your limitations. It is important to be honest
with yourselves about whether you meet the requirements and, if not, whether you can acquire the
required skills. For this activity, you should perform the steps as they are read aloud.

1 ILO / Guy Tchami, Handbook on cooperatives for Use of Workers’ Organizations, Geneva – Switzerland, International Labour Office,
2007.
4
 Steps

STEP 1 Read the questions carefully and individually place a check in the column that corresponds to
your answer. (15 minutes)

Skills/Quality /Knowledge Yes No

Are you committed to working democratically and for the good of all the
members rather than purely for personal gain?

Are you willing to share risks and rewards with other members?

Do you have a good understanding of the cooperative values and principles?

Do you commit to adhere to the cooperative values and principles?

Are you willing to devote some of your time for cooperative work?

Are you willing to contribute resources to help finance the set-up of the
cooperative?

Do you have good communication skills to promote your cooperative business?

Do you have good decision-making skills?

Do you have the ability to organize and mobilize resources?

Are you willing to work with others to achieve a common goal?

Do you have the courage to try new things?

Do you have previous business management experience?

Do you have financial management skills and experience?

STEP 22. Share with the group the questions where you answered “No”. As a group, identify the questions
to which most of you answered “No” and discuss how you can address these knowledge/skill
gaps. (10 minutes)

5
 SESSION 2:
DEFINING THE BUSINESS IDEA
Session Overview
5 minutes

Two interlinked elements must be present to initiate the formation of a cooperative. First, the
potential member-owners must feel a strong need to solve a common problem or take advantage of a
common business opportunity. Second, the problem faced by the potential member-owners is
something that is difficult to address on their own and thus, there is a need for a collaborative
solution. In this session, you will look into the needs of the potential member-owners and identify
one compelling need that can be the basis for the formation of the cooperative. You will then build a
picture of how the cooperative will serve your group’s needs in the years to come. The outputs in this
session can be used as your initial offer to other potential member-owners. Do not forget though that
all potential member-owners should agree on the identified need and the cooperative vision.

Activity 2A:
Identifying a common need
120 minutes

Steps
STEP 1 Look at the pictures below. Write a sentence or phrase below each set of pictures to describe the
problem. (10 minutes)

Problem identification set 1

I lost 50% of Cats and dogs, please I could have earned

my harvest due to come back another day to play. I more if I was able to
mould since I was not able need to dry my chips while the sun achieve the 12% moisture
to dry it properly before is shining and my buyer is very content required by my
storing. strict on food safety. buyer.

6
 Problems:

Problem identification set 2

I was not able to earn enough money today to pay for the
tuition of my kid tomorrow. I hope there is an organization who
can help daily workers like us in times of need.
I broke my leg
and could not work
for the next two weeks. As
you know, my family depends
on the money that I earn from
hauling fruits in the market. I have
used up whatever money that I had
to treat my leg. I am really despe-
rate now for money to feed my
family. Please help me. I will
pay whatever interest.

Problems:

STEP 22. Share your answers with the group. If there are differences in your answers, try to come to an
agreement. One of the important characteristics of successful cooperatives is for members to
resolve differences of opinions and still retain the trust of each other. (10 minutes)

STEP 33. Now that you have seen examples of what is meant by common problems, let’s now look into your
own needs. Use Worksheet 2A on page 9. In the box with the label “My Key Concerns”, write your
top two problems related to your work or livelihood. (10 minutes)

STEP 44. Each member of the group takes a turn in reading their problems. As each member speaks, write
down his/her main concerns in the boxes. Please look at the example after Step 9. (3 minutes
per member)

STEP 55. Look at all the problems mentioned by your peers. In the first column of the Ranking and
Prioritization Table (page 10), list all the problems as a group. Similar problems should only be
listed once. Make sure that all group members listed the problems in the same order. Please look
at the example after Step 9. (15 minutes)

STEP 66. Rank and prioritize the problems. In the column marked “My Ranking”, rank the problems in
terms of their importance to you. Place 1 on the most important, 2 on the second most
important, and so on, until 5 (less important). Please look at the example after Step 9.
(10 minutes)

STEP 77. Now read aloud the rankings. As each member reads his/her ranking, write it down. One column
corresponds to one member. Please look at the example after Step 9. (10 minutes)

STEP 88. When all the members have given their ranking, add the scores for each problem and place the
sum in the column “Sum”. Then, in the column marked “Average”, divide the sum by the number
of members to get the Average. Please look at the example after Step 9. (15 minutes)

STEP 99. As soon as you fill in the “Average” column, identify the problem with the lowest score. This is the
priority problem of the group. Discuss briefly if group members agree with the result. (5 minutes)
7
 To help the group in doing steps 3 to 9, please look at the example below. You can use a calculator
to complete these steps. (15 minutes)

Example: Group of Cassava Farmers – 5 farmers

Problems:

MY KEY CONCERNS FARMER 2 FARMER 3 FARMER 4 FARMER 5

High incidence of High cost of Lack of capital to High cost of Lack of capital to
pests and diseases transportation expand farm inputs expand farm
from farm to
Deterioration of market Deterioration of High incidence High cost of
quality of cassava quality of cassava of pests and transportation
High incidence of diseases from farm to
pests and disease market

12 divided by 5
1 + 3 + 1 + 4 + 3 = 12 = 2.40

Problem Ranking Sum Aver-

age
ME FARMER FARMER FARMER FARMER
2 3 4 5
High incidence of pests
and diseases 2 1 5 1 5 14 2.80
Deterioration of quality
of cassava 1 3 1 4 3 12 2.40
High cost of transporta-
tion from farm to market 3 2 4 3 1 13 2.60
Lack of capital to
expand farm 4 4 2 5 2 17 3.40

High cost of inputs 5 5 3 2 4 19 3.80

Priority Problem: Low quality of cassava

Note: This is a simple way to prioritize problems. You should, however, always ask if the majority of
the participants agree with the results.

8
Worksheet 2A (Steps 3 to 9)

MY KEY CONCERNS MEMBER 2 MEMBER 3

Problems:

MEMBER 4 MEMBER 5 MEMBER 6

MEMBER 7 MEMBER 8 MEMBER 9

Note: Please add more boxes if there are more than 9 members in your group. Also use the blank
space for your notes.
9
 10
Ranking and Prioritization Table

Problem Ranking Sum Average

My Member Member Member Member Member Member Member Member

Ranking 2 3 4 5 6 7 8 9

Priority Problem:
Activity 2B:
Identifying root causes and effects
30 minutes

In this session, you will look into why the problem exists. This activity involves asking “what are the
causes of the problem?” in order to uncover underlying factors that must be addressed in order to
minimize or altogether eliminate the effects of the problem that you commonly share. Root cause
analysis is situation specific.

Identifying Cause/s and Effect/s

IMMEDIATE EFFECT

What is the effect of the problem?

PRIORITY PROBLEM

What is the cause of the problem?

IMMEDIATE CAUSE

What is the cause of the immediate cause?

SECONDARY CAUSE

What is the cause of the secondary cause?

ROOT CAUSE

To familiarize yourself with the process of identifying root causes and effects, let’s go back to your
earlier example involving the cassava farmers whose main problem is the deterioration of the quality
of their cassava after harvest. Because of the fast deterioration of the quality of their cassava after
harvest, farmers are forced to immediately sell their harvest even at a low price. In most cases, they
receive 70% to 80% of the prevailing farm gate price because, according to the buyers, their tubers
are full of soil and blemishes.

Example: Analysis of Causes and Effects of Low Quality Cassava

Low income
IMMEDIATE
EFFECTS
Low price; deduction in price received Cannot sell to processors

PRIORITY
Low quality/Fast deterioration of quality of cassava
PROBLEM

IMMEDIATE Limited knowledge Harvested cassava exposed Cassava not washed

CAUSES on proper handling to rain and pests and cleaned properly

SECONDARY Limited No storage Lack of equipment and Water source

CAUSES training facility clean working area is far

ROOT Limited number of public extension Cannot afford investment individually; not practical to invest
CAUSES staff; limited government budget since individual cassava production is small

11
 Farmers are only able to deliver low quality cassava because they have limited knowledge on proper
handling since they have not received any training. They are not able to attend training because it is
very seldom that government extension officers are able to visit their areas due to lack of personnel
and budget. The blemishes and spoilage are also caused by exposure to rain and pests because they
have no storage facility. Farmers are also unable to clean their cassava properly because they do not
have adequate equipment and the water source is far from their homes. The average size of cassava
plots of the farmers is only about 0.25 hectares. Aside from the fact that they cannot afford the
investment, it is also not practical for them to invest in water system and facilities individually since
their production volumes are very low.

Now let’s analyse the root causes and effects of the top problem we have identified in Activity 2A.
You will perform each of the steps outlined below as a group. It is important that each member
participates actively in answering the questions and that an agreement is reached on each of the
causes and effects.

Worksheet 2B

STEP 1 What are the positive

or negative effects of
the problem?
(5 minutes)

STEP 2 Write the Priority

Problem identified in
Activity 2A.
(5 minutes)

STEP 3 Identify the cause(s)

of the problem you
have identified.
(5 minutes)

STEP 4 What are the causes

of the problems in
Step 2?
(5 minutes)

STEP 5 What are the causes

of the problems in
Step 3?
(5 minutes)

In case you need more space for your analysis, the next page has intentionally been left blank.
12
Page intentionally left blank

13
 Activity 2C:
Defining the business idea
45 minutes

The business idea is derived from or is a response to the shared problem or opportunity. Improving
the situation as a group provides the context for a cooperative business project. For example, a
group of porters in a vegetable trading centre may want to establish a cooperative in order to: raise
resources to buy trolleys to reduce the need to manually carry the baskets of vegetables; access
social security benefits; and set up credit services for members instead of relying on usurers. To the
extent possible, the business concept should address the root causes and not just the immediate
cause(s). When you have a broken wrist, for example, painkillers will take away the pain but you need
a different treatment to heal the bones properly.

To give you an idea on how to define a business idea, let’s look at how the cassava farmers
addressed their quality issues.

Root causes

I do not have a proper place to store my I am happy that I have a good harvest. I cannot afford to invest in a storage
cassava tubers after harvest. I also do But I cannot clean my tubers as it would facility and water system. I will also not
not know how to extend the shelf life. take more than 30 minutes walk to bring be able to get back my investment as I
The extension staff rarely visits our place. these down to the nearest river. only have a small plot.

Business solution to address root causes of problem

Let’s set up a postharvest facility owned and operated by cassava farmers in our village. Let us contribute for the installation of
a water system for the facility and even for our homes. We can also go into production of cassava chips which we can sell to feed
companies. We can ask for assistance from the Department of Agriculture, development programmes, and our local government
14 as well as approach banks and microfinance institutions to augment our resources.
Products and services of proposed cooperative

Washing and storage facilities Production of chips for feed companies Training for members
Water system for the homes Collective marketing of produce Social security benefits for
member-workers

Expected results and benefits to members

Access to bigger and more lucrative Less rejects; higher price for Increase in income
markets products Access to water
Access to social security

From the example, you have seen how the cassava farmers transformed their shared constraints into
a business opportunity where each and every member could potentially benefit. Let’s now define
your own business solution to the problem we have identified. Perform the steps as a group in the
sequence outlined below.

15
 Steps
STEP 1 Write down up to
three root causes of
your problem.
(10 minutes)

STEP 2 Brainstorm on how

you can address the
above root causes in
the form of a group
business. Write in the
box the idea(s) agreed
upon by all members.
(10 minutes)

STEP 3 What will be the

key services and/
or products of your
proposed cooperative?
Please make sure that
the service(s) and/
or product(s) address
the root causes of
your problem.
(10 minutes)

16
STEP 4 What are the
expected results
and benefits to your
members? Review
the effects of your
problem and see if
the expected results
and benefits offer a
better situation for all
members.
(10 minutes)

Congratulations!
You have just defined your business concept.
Learn how to assess the feasibility of your idea in
Start.COOP MODULE 2, Session 3.
17
Use this space for your calculations and notes.
Use this space for your calculations and notes.