Steps to Start A Food Co-op
The Food Co-op Initiative Guide
Dakota Community Market was founded in 2019 and has been following the FCI’s guide to starting a food co-op in stages.
Stage I: Organizing
Organizing commences when one or more people start with an idea to organize a retail food co-op. The organizing stage includes convening a core group, assessing common interest and needs, creating a shared vision, incorporation, building leadership and accountability systems, creating community excitement and support, committing time and money, coordinating initial market research and preliminary feasibility work, developing a membership program, launching a membership campaign, and reaching the Stage I target for membership. The co-op is born and functioning as a member-owned organization!
Stage II: Feasibility & Planning
There are two aspects of Stage II. The 2a Feasibility component comprises in-depth assessments of market potential, financial feasibility, organizational commit- ment and capacity, and preliminary design feasibility.
The 2b Planning component begins once the probability of feasibility has been determined through a thorough assessment. Planning includes many components, including pro forma financial budgets, the formal business plan, capital campaign planning, initial contacts with external lenders, general manager search, and site selection.
The feasibility & planning stage ends when a site has been secured through lease or purchase, with contingencies (e.g., contingent upon obtaining full financing) or with an option agreement.
This is a major decision point for the co-op.
Stage III: Implementation
Implementation begins when the site has been secured (with contingencies) and when there is sufficient capacity in all the cornerstones — vision, talent, capital, and systems — to launch the business operation. Implementation is when all the work you have done
so far comes to fruition. It has several components (sub-stages):
3a . Pre-Construction involves site and facility design, development bids (for construction and equipment) and financing (both internal and external). The pre-construction phase ends with a “no turning back” decision point before the close of financing and removal of contingencies. This is the final decision point.
3b . Construction and Renovation entails overseeing construction, equipment acquisition, building business relationships, developing merchandising plans,
and determining opening orders, store and product promotions, and staffing plans.
3c . Preparation for Opening involves building organizational and operational capacity, and implementing staffing, marketing, and membership program plans.
3d . Sustaining Operations beyond the store opening and the grand opening, includes preparing for the first year and beyond.
Our Plan for Using This Model
What does it take to start a food co-op?
From our FCI guide, starting a co-op is just as complex and time-consuming as starting any business, and will require thorough and careful business planning. New co-op development progresses through the following steps:
Gather background information
Assess community interest
Incorporate
Organize within the community n Recruit owners
Research feasibility
Create a formal business plan n Plan for financing
Select a site
Secure financing
Prepare for opening
Begin operations
Some steps, such as recruiting owners, will continue up to and beyond opening the store.