Cooperatives 101: Understanding the Cooperative Model for Youth Entrepreneurs

Did you know that adopting a cooperative model could help you explore self-employment opportunities?

Did you know that working in a cooperative model could allow you to pool your resources and generate finance for your business?

Did you know that being part of a cooperative model could provide you access to required training and market information?

Did you realize that as a cooperative member you could find a support network for you and your business?

To help you build a deeper understanding on how a cooperative model could help young entrepreneurs, YE! has brought forth a series of blogs- Understanding Cooperative Model for Youth Entrepreneurs. In the three blogs of this serious, we will learn about the relevance of cooperative principles for youth entrepreneurs, pros and cons of a cooperative model, and best practices leading to success of the cooperatives.  

Check out this first blog in the series to understand the cooperative model

Youth entrepreneurs often face various problems along their entrepreneurial journey. Some of the common challenges a youth entrepreneur may face include: limited access to finance, lack of appropriate skills and knowledge, lack of support networks, and lack of voice in the ecosystem. Through a cooperative model you can address some of these common challenges you face.  If you have been wondering what a cooperative model is and how it can help you in setting up your venture, read on!

• What is a cooperative model?

The universal definition of cooperatives describes a co-operative as, “an autonomous association of persons united voluntarily to meet their common economic, social, and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise”.

So, one can understand a cooperative as an enterprise which is jointly owned by all its members. The members volunteer to come together and form the cooperative institution to meet their common economic, social, and cultural needs and aspirations. It is democratically controlled by its members.

• What are distinct features of a cooperative?

There are seven key principles that acooperative follows.

1. Voluntary and Open Membership:

Anyone who is able to use the cooperative services and accept the membership responsibilities can become a cooperative member. It does not discriminate on the basis of gender, age, race, political affiliation or religious beliefs.

2. Democratic Member Control

A cooperative is a democratic enterprise, governed by its members. The members vote to elect  representatives that work together to set up cooperative policies and make decisions to meet the member objectives.

3. Member Economic Participation

By working together in a cooperative model, individuals pool their available funds, skills, knowledge, ideas, information and other relevant resources to contribute to the cooperative capital. At least some part of the capital is the common property of the co-operative and members democratically control it. This model makes members more accountable to the performance of the cooperative, thus also making a cooperative a reliable institution for outsiders.

4. Autonomy and Independence

A cooperative enterprise is autonomous and a self-sustaining enterprise, controlled by its members. Even if a cooperative enters into agreement with any other organization, it ensures that it maintains democratic control by its members in the operations of the cooperative.

5. Education, Training, and Information

A cooperative facilitates education, training, and access to knowledge for its members and leaders to help them effectively participate in the cooperative’s development of activities.

6. Cooperation among Cooperatives

Cooperatives give a collective voice to its members. They provide the possibility to collaborate with other cooperatives and other stakeholders at the local, national, regional and international level.

7. Concern for Community

Cooperatives are enterprises that are member-focused. They ensure that their policies and operations ensure sustainable benefits to their members. 

• How can the cooperative model benefit youth entrepreneurs?

As the cooperative principles are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity, it allows the youth entrepreneurs to benefit from the enterprise in multiple ways. 

Let’s take a deeper look at how the different cooperative principles can help youth entrepreneurs along their entrepreneurship journey.

1. Explore self-employment opportunities

Youth can collaborate with other young people with common interests, skills and experience, to build a stable enterprise. The cooperative model stands for voluntary and open-membership, thus allowing youth to jointly hone their skills, and address their needs in this democratically controlled enterprise.

2. Have a stronger voice

Youth can have a larger say in determining policies and decisions suitable for the entire business, as members lead and control the decision making in a cooperative.

3. Better access to finance, knowledge and ideas

Youth can systematically pool their knowledge and finances, and overcome the challenge of limited access to finance and initial capital in their business to build something stable.

4. Enjoy the autonomy in your business

Youth can be innovative, and take decisions without external interference from government, donors, investors, or other influential institutions. The autonomous nature of the cooperatives gives freedom to the coop enterprise to act independently, govern itself, and set its own rules of operation to fulfil member needs.

5. Hone your skills

Youth can acquire and improve their skills as the cooperative model strongly focuses on educating and training the members. As a cooperative member, you can raise funds or advocate for an appropriate training from the organizers. Alternatively, some of your members can attend the training and educate other members who did not attend the training.

6. Build your support network

As a cooperative member, you can promote cooperation among cooperatives and other stakeholders. By working in the cooperative model, you also share the burden of being the ‘founder’ with a network, therefore spreading the responsibility evenly among members. In addition, by joining a ‘group’, it significantly increases your chances of lobbying and advocating for your rights against (powerful) external actors. ou can overcome limited access to support networks by advocating for your collective interest at local, regional, and international levels.

7. Fulfil your interests

Youth can benefit from the cooperative because of its exclusive focus and priority on member interest and welfare.

Take a second look at making your entrepreneurial venture a cooperative!

Adopting the cooperative model can help you overcome the myriad of challenges your enterprise will face. A cooperative enterprise could allow you to explore self-employment opportunities, generate required funds, acquire skills, gain leadership, build a support network and sustain an enterprise.

You may also check out the figure below to understand how application of the cooperative principles can help you unlock the potential of your business enterprise. 

For more details on coop model and principles, you can find on International Cooperative Alliance

References:

https://www.shareable.net/why-are-young-people-joining-cooperatives-3-youth-leaders-share-their-views/

http://www.youthcoops.eu/about/ 

https://www.decentjobsforyouth.org/theme/youth-entrepreneurship-and-self-employment#Why

https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---ed_emp_msu/documents/publication/wcms_195535.pdf