These are common questions we hear from people as they begin the retail food co-op startup process. Our staff is happy to talk you through these early steps, just call or email us.
- What are co-ops all about, anyway?
- We want to start a food co-op. What should we do first?
- Will a food co-op work in MY town?
- What do you charge for your services?
- What are top mistakes organizers make that lead to setbacks or even store closure?
- When should we incorporate?
- How soon can we plan on opening? How long does opening a food co-op take?
- We found the perfect site for a co-op! How do we get started?
- How big should our store be? How much parking do we need?
- What will starting a co-op cost?
- That’s a lot of money! Can’t we do it for less if we buy used equipment, use member labor, etc?
- Are you accepting applications for Seed Grants? Are we eligible?
More Questions? Call or email us anytime.
What are co-ops all about, anyway?
Throughout your organizing efforts, you will encounter many people who do not know what a co-op is, how it operates or why it would be worth investing in. People are drawn to co-ops by a diverse array of factors, including community building, economic justice, access to healthy foods to name just a few. It’s a good idea to be well versed in many aspects of cooperatives so you can address your community’s interests. A collection of concise articles explaining the many aspects of cooperatives can be found on the Co-op: Stronger Together site.
The first step in starting a co-op is learning as much as you can. Learn about co-ops, learn about your community’s needs and vision, and learn about the organizing process. Some good places to start are the free e-book, The FCI Guide to Starting a Food Co-op, and our video, A Food Co-op for Your Community. Then check out the beginning steps in the handout What Do I Do First? and the webinar Let’s Start a Food Co-op! What do we do first?
Get involved with FCI! Sign up for our newsletter to keep abreast of educational opportunities. Follow us on Facebook to see what your peers are doing. Most importantly, call us at 844-324-2667 or drop us a line to let us know you’re out there. We can help you move the conversation from your small group of friends out into the community.
Retail food co-ops can succeed in many types of locations, but not all. The size and demographic makeup of a community are both factors. Selecting the correct items to fill your store’s shelves, based on the needs of your community, is another. Food distribution systems, market study and feasibility, and other factors may come in to play. We encourage you to contact us very early in the process of exploring a retail food co=op for your community so we can help you sort out the factors that apply, and see what work needs to be done before determining if a co-op will work in your town.
As a nonprofit organization, all the services of Food Co-op Initiative are free of charge. You will find it necessary to hire consultants for in-depth services as your project progresses. FCI is always available to answer questions and point you in the right direction.
We are able to offer free resources and services to you because of grants and donations we receive from supporters like you within the cooperative community and food support system. If you value a resource you are using, please consider making a donation so we may continue to develop and maintain our extensive resource library and consulting services.
Food co-op startups that make it to opening day have a high success rate compared to private businesses. Some do fail, however. The May 2016 Cooperative Grocer Magazine article Why Some Co-ops Fail is recommended reading for every co-op organizer.
Incorporation provides some protection to the organizers (the so-called “corporate shield”) and assurance to potential members and supporters that the organizers will be accountable. In most states incorporation is relatively simple and inexpensive. We recommend that you consider filing with your state office as soon as you have a group of committed organizers, evidence of strong community support and a preliminary, informal assessment that your co-op concept can be viable. While Articles of Incorporation are pretty standardized, we still recommend that an attorney familiar with cooperative laws in your state review your application. Refer to our Legal Primer for more details.
A five to seven year process is not unusual. In rare situations, a co-op with a very effective organizing team and substantial financial resources may have achieve a shorter timeline.As you work through the 4 in 3 Development Model steps, you will see how this time frame moves you towards ownership levels and support needed to fully finance your future store.
Maybe your local grocery store has just closed. Maybe a piece of tempting downtown real estate has just been vacated. Whatever the reason, you found a location and you’re raring to go. Unfortunately, starting a cooperative grocery store is much more complicated and time consuming than simply finding a storefront and building some shelves. Successful co-op startups put in substantial effort building community buy-in, having professional analysis of the market area and feasibility, and raising funds. As your vision and knowledge evolve, what today seems like the perfect spot might not even be on the list of sites for consideration.Take time to lay a solid foundation for your co-op, and worry about its exact location later.
When you have built your member/owner level and gained community momentum, your Board will charge a Site Selection Committee with reviewing site options. There are two webinars that outline the site selection process, a blog post, and . our Site Evaluation Checklist available to help in the final site selection process.
We have found a minimum of 3,000 retail sq ft is needed to create a financially viable, full-service grocery store. There will be additional “back office” and inventory space required as well. A professional market study can project potential sales volume for your store concept and recommend an appropriate size.
The number of parking spots will have a direct impact on sales. Adequate parking is critical and most co-ops will need at least six dedicated parking spaces for every 1,000 sq ft of retail space. This assumes that employees do not park in the customer lot. Parking spaces should be reserved for co-op customer use and as convenient to the store entry as possible. The only exception is dense urban environments where minimal parking may be the norm. Your local zoning and business codes may dictate specific standards.
A rule of thumb is $250 – $285/sq ft of floor space, including retail and back of the store (in a leased site). A good way to start forming your expectations is to download the Sources and Uses template. This is a document you will revise repeatedly as your project progresses.
That’s a lot of money! Can’t we do it for less if we buy used equipment, use volunteers to make repairs, etc?
Careful use of the Sources and Uses budget may show you places where you can do it for less. However, keep in mind that most “savings” come at a cost. For example, used refrigeration equipment is less energy-efficient, will require a larger repair budget after opening, and may result in lost sales if it breaks down. Your contractor, inspectors, and safety regulations may not allow people in the construction area other than professional builders. The investment in an attractive, modern store is part of your long-term marketing effort, ensuring a safe and welcoming experience for your owners and community.
Seed Grant applications are accepted on an annual basis as funding is available. See our Seed Grant page for current information and deadlines.
Any organizing group that intends to open a retail food co-op may apply. Applicants must be incorporated as a cooperative (or your state’s closest equivalent). FCI grants are on a reimbursement basis and require a substantial cash match. The number of grants we can offer is limited and therefore it is a very competitive process. We try to support a cross-section of the communities seeking co-ops, from rural areas to urban centers, small to large. Preference is given to those projects that appear to have a high likelihood of success.