Helping People Fill Local Needs Through Shared Vision, Investment
In hundreds of rural communities, residents have no way to obtain fresh food without long, costly drives that also can be dangerous in winter months. In countless cities, real estate leases are rising so fast that residents are being displaced and those without substantial wealth are denied opportunities to enter business.
These situations are just two among many where traditional private investment is unlikely to help and the required capital makes traditional cooperatives impractical. But from the remote town of Lodge Pole on Montana’s Fort Belkap Reservation to the metropolis of Minneapolis, people have banded together to launch community-owned businesses filling those voids and empowering residents.
What Is a Community-Owned Business?
Community-owned businesses (COBs) include a range of business structures sharing a common feature: they are financed and owned collectively by local residents. COBs can provide a vehicle to fill local needs including local media, affordable broadband, fresh groceries, household goods, theaters, pubs, affordable commercial spaces and other community voids.
AMIBA’s new initiative, the Center for Community Ownership, helps people create for-profit community-owned corporations. These are traditional business structures, but ownership and control lies entirely with local residents. After a corporation is formed to start a business (or buy an existing one), shares are sold to residents who become the owners. These owners then elect a board of directors and handle governance, including hiring a manager(s) to run the day-to-day business operations. Bylaws ensure the businesses forever remain locally-owned and controlled.
Though COBs provide much promise for urban neighborhoods, many early efforts have started rural “food deserts” where depopulation or/and large chain stores some distance away have driven out small-town grocers, leaving residents with no place in town to buy fresh food or other necessities. Many stores opened thus far are in states where winter storms can isolate residents and compel hazardous trips.
In many such places, community ownership can be a game-changer because it shifts people’s consciousness. Shopping decisions no longer are just a choice between leaving town to the big store vs buying locally, but the opportunity for residents to buy from their own store.
The number of shares each COB investor may purchase usually is limited to ensure decisions reflect the interests of the community and prevent dependence on any one person. Community-owned stores have the additional benefit of tending to favor buying local products (and can write such preferences into their mission), broadening economic opportunity, increasing the local multiplier effect to build local wealth.
Are COBs Different from Cooperatives?
While COBs encompass cooperatives, most coops are operated primarily to benefit members who pay a small fee, rather than invest significant capital. A community-owned store typically will pay dividends to shareholders if profit is generated. A for-profit COB is well-suited to attract larger investments from some residents, enabling more capital-intensive businesses.*
We fully support cooperatives, but have found many communities require an approach with flexibility, is simpler to set up and run, and — because it resembles traditional business structures — may make it easier to attract investment.
Along with real estate trusts and grocery stores, COBs are well suited to fill other community needs, including local media, general stores, child care, and a range of health services.
Can COBs Be Used to Prevent Closure of Needed Businesses?
Yes! COBs are not just a tool to fill areas of need — they are a tool to enable residents to buy a business that provides an essential service in cases where the current owners are selling or closing. There are countless business owners across the country without succession plans, putting towns or neighborhoods at risk of losing crucial services, jobs and local economic benefit. Creating a community-owned corporation also can provide aging business owners with the security of a willing buyer.
How Do We Create a COB?
The Center for Community Ownership (CCO) has assembled a team of nationally-recognized experts with expertise in managing legal, financial, and business planning, along with economic analysis work required to create COBs. We now are inviting inquiries from communities interested in starting a COB and offering a free assessment. Please contact CCO Director Andrew Connor to learn more.
Once you make contact, we will perform an intake and assessment to help you determine if this model is a good fit for your circumstances. If so, we will customize a plan for your project, provide necessary technical support, and collaborate with you to co-manage the project from start to finish. The Center for Community Ownership will be an active partner throughout the entire process to help you succeed!
Some Community-Owned Businesses in the U.S. (not traditional cooperatives)
Family Matters; Malta, Montana
Washakie Wear; Worland, Wyoming
Little Muddy Dry Goods; Plentywood, Montana
Garnet Mercantile; Ely, Nevada
Main Street Guymon; Guymon, Oklahoma
Quimper Mercantile; Port Townsend, Washington
Bobcat Cafe; Bristol, Vermont
Black Star Co-Op; Austin, Texas (The first cooperatively owned and worker self-managed brewpub)
Jubilee Food Market; Waco, Texas
Lodge Pole Trading Post, Lodge Pole, Montana (Opened 2018)
Lake Grocery; Willow Lake, South Dakota
Both urban areas and rural towns are exploring community ownership models as a solution to food deserts. Other alternative business models employed to bring groceries to under-served areas include Mandela Marketplace, Oakland, CA; Stop One Meat Market, Rochester, NY and People’s Community Market, Oakland, CA. Also, the Seward Coop in Minneapolis provides an interesting study (2016 article) in ensuring a coop serves the needs of a diverse working-class population. Please tell us of examples we’ve missed!
Closed or Unsuccessful COBs (for which we have information)
The Bee’s Knees; Morrisville, Vermont (Closed in 2015 after 12 years in business)
Claire’s Restaurant and Bar; Hardwick, Vermont (Closed in 2014 after 6 years in business)
Planned general store; Greenfield Massachusetts, (failed to meet its fundraising goals and organizing ceased in 2011)
Helping More Communities Assess and Employ the COB Model
Many support systems exist for traditional cooperatives BUT no support system exists to help people start community-owned businesses in North America. AMIBA is currently seeking funding to establish a Center for Community Ownership. This would enable and promote these models as tools to solve problems on a local level and increase community wealth. The Center will identify best practices, common challenges, and resources for creating community-owned businesses to share with communities nationwide.
Please consider a tax-deductible donation to help launch the CCO!
News Coverage of COBs
How to Feed the Masses in Small-town America September 2016
How to Launch a Community-Owned Store 2012 (pdf)
Communities Saving Cherished Stores July 2009
Town Working Together to Carry Groceries November 2008
Communities Create Their Own Stores May 2005
Thanks to Amy Campbell Bogie of the National Coalition for Community Capital for interviewing many of the businesses above. Amy speaks on community capital for AMIBA.
If you know of examples to add in any
category (including failed attempts), please tell us!
- Joshua Bloom, who has blogged on this topic, identifies four broad structures of community-controlled business:
- Cooperative: A communally owned and managed business, operated for the benefit of its members.
- Community-owned corporation: A traditional, for-profit corporation that integrates social enterprise principles.
- Small ownership group: A small, ad hoc investor group that capitalizes and/or operates a business as a partnership or closely-held corporation.
- Investment fund: A community-based fund that invests debt or equity in local business ventures.
Resources on Shared Ownership Models
A Cooperative Entrepreneurship Curriculum (Canada, 2016)
Keeping Wealth Local: Shared Ownership and Wealth Control For Rural Communities (Ford Foundation, 2009)
Strategies for Financing the Inclusive Economy (Democracy Collaborative, 2016)
Community Owned Pubs are on the rise in the UK
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