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Co-op Model Breathes Life, Prosperity into Local Communities

Economic and social benefits come from strengthening the operations of regional family businesses and non-profits

Part of what makes local communities special is the contribution of family businesses and local organizations that serve the economic and social needs of their neighbors.

Often these businesses are owned and operated by people who take pride in creating local jobs, remaining independent and giving back to their community. With deep entrepreneurial roots that can easily be several generations deep, these businesses are an intrinsic part of their community’s fabric, their customers know and trust them and the communities they serve depend on them.

Unfortunately, national chains through acquisition and consolidation, purchasing power and other economies of scale are threatening the vitality of regionally oriented and family-operated businesses that simply cannot compete with their limited resources.

In the face of this David versus Goliath struggle, many organizations, both commercial enterprises as well as non-profits, are leveling the playing field through the long-established co-op business model that allows them to remain independent while benefiting from the economies of scale that national chains enjoy.

But there is a tremendous byproduct to the co-op approach as well.  In addition to helping small businesses succeed, local communities are benefiting from keeping the wealth generated in the area and not sending it off to faraway corporate entities or investors.  Additional benefits include lower unemployment, better childcare and even lower prices.

The Co-Operative Model

Successfully used for decades in agriculture and across many retail sectors, a co-op is a business that is owned and operated by and for the benefit of its members. Well-known examples include Land O’Lakes, Ace Hardware, Organic Valley, and Fairtrade.

In essence, a co-op is really a community unto itself made up of business members and organizations most commonly within a single market sector. In the co-op approach, members enjoy access to business resources and knowledge sharing that can help them operate more efficiently and market themselves more effectively. These resources span a wide variety of business services, employee training, sales, and marketing.

Few businesses operating on their own can be an expert in every facet of their operations. As a member of a co-op, however, a business does not have to be. Members learn from fellow members who are managing similar businesses and best practices are shared between members. The co-op operates as a community of peers helping each other.

Members can also lower their purchasing cost for supplies and services by pooling their purchasing power with fellow members of a co-op for economies of scale. But unlike the franchise model, the business owner or non-profit organization still controls their own destiny, which means they can continue to contribute to their local community as they wish.

Social Entrepreneurship

“You can think of a co-op as a form of social entrepreneurship that is fortifying our local communities across America,” says Howard Brodsky, co-founder, chairman and co-CEO of CCA Global.

“A local business will give back between two and five times more than a national chain to their community,” Brodsky adds.  “So, by sharing access to expert business resources that a family business would not normally have and by providing greater purchasing power, a co-op helps family businesses to survive and grow in their communities. The business wins and therefore the community wins.”

One of the largest and most successful co-op organizations in America is CCA Global. With 14 divisions and more than 3000 locations across North America in flooring, lighting products, biking, and non-profit markets, CCA Global has demonstrated that the co-op model works in retail, service and non-profit sectors.

John Taylor, a third-generation owner of a family flooring business in Ft. Myers, Florida is one such example. Taylor joined a co-op run by CCA Global after 40 years as an independent operator to protect his business from the impact of big box retailers.

“Joining a co-op has given me the backbone to compete with the big brands using tools I never had access to before,” explains Taylor.  “Things like best-in-class insurance policies, administrative resources, credit card processing rates, employee training methods and marketing.”

Knowledge-sharing amongst members is another benefit for Taylor. “I learn so much from the other members. Looking back to the time before we joined the co-op, it felt like we had our heads in the sand. We are better with the co-op than without it every day of the week.”

Regional Non-Profits

With organizations in the non-profit sector addressing critical local and regional social needs and gaps, it can be particularly valuable to a community’s overall social well-being when a non-profit leverages co-op principles.

“As you look across the non-profit sector in America, it is largely made up of small organizations doing great work on a limited scale, says, Kirsten Moy, Senior Fellow, Aspen Institute. “Because they have a small staff, the constraints of talent and resources are very real. In many ways, they mirror a family-run business much more than a corporate entity. Borrowing ideas from a co-op model can help a non-profit improve its quality of operations and fundraising so they can deliver their mission to more people in the communities they serve.”

Critical to successfully operating a non-profit is managing operating expenses especially given the chronic challenges of generating funds for the mission. With the group purchasing power of a co-op, those savings can be used to extend the non-profit’s community reach or simply provide valuable operational savings.

Co-ops also pool insights not just purchasing power. Training models are developed in part by identifying those non-profit operators within the co-op who excel at one aspect of management and then sharing that with the other members.

Childhood Education

With the future of local communities in the hands of the next generation, early childhood education centers play an important role in a community’s long-term well-being. These centers face many of the same funding, operational and regulatory challenges as other sectors.

Take Kingston Children’s Center in Rockingham County, New Hampshire as an example. Founded in a church basement in 1972, Kingston Children’s Center provides year-round full and half-day early childhood education for over 200 children across the entire county.

Fourteen years ago, a representative from CCA Global shared the advantages of joining their early childhood education co-op with their staff. CCA for Social Good®, a division of CCA Global, created the Early Childhood Education (ECE) Shared Resources online platform specifically to help community organizations dedicated to this mission.

Kingston Children’s Center can access over 1600 practical tools to strengthen their business and support continuous improvement in operating an early childhood education center. This saves the center valuable time by being able to take advantage of templated documents typically used by childcare centers. In addition, members can save money on education materials, food, training, and supplies.

“We became a member of the co-op as part of an existing collaborative group, the Sea Coast Early Learning Alliance,” says Jemima Chapman, Program Director at Kingston. “Week to week, our collaborative saves money on the essentials that we depend upon to run our children’s centers.”

Kingston Children’s Center was also able to successfully navigate the regulatory process for earning a nationally-recognized early learning accreditation because the ECE platform provided access to the regulatory resources they needed.

“The co-operative model allows us to provide higher quality childhood education at a lower cost to families,” said Chapman. “As we think about our community, it really is an investment in our future.”

While no two communities are exactly alike, one need not look too deeply to find the independent family businesses, non-profit organizations and early childhood education centers all contributing to the vitality of the local and regional economy.

Employment, vital services, and education all enrich a community. The demonstrated success of the co-op model across these and other sectors is really a story about communities helping communities. In the end, it is not just about fortifying every business operator but strengthening the communities they love to serve.

“When regional and family owned business are able to thrive and prosper with the help of the larger co-operative, the communities they serve benefit tremendously.  It is ‘capitalism with a conscience’ because people work together for the greater good,” adds CCA Global’s Brodsky.

For more information on the CCA Global Partners cooperative model, please visit www.ccaglobalpartners.com. Information on the ECE Shared Resources™ online platform for early childhood education centers can be found at www.ecesharedresources.net.


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