What Is a Community-owned Business?
Community-owned businesses (COBs) include a range of business types and structures sharing a common feature: they are financed and owned collectively by local residents. People often look to COBS to fill vital community needs in situations where privately-owned businesses are unlikely to invest. While groceries and basic household goods have driven most COBs, the model provides a vehicle to fill local news deserts, provide affordable broadband, create commercial real estate trusts, theaters, pubs, and other community needs and desires.
COBs provide much promise for urban neighborhoods, but they’ve started most frequently in rural areas where large chain grocers or “superstores” some distance away have driven out small-town grocers or merchants and left residents with no place in town to buy fresh food or many necessities. A large portion of community-owned general stores opened thus far are in states where winter storms can isolate residents and create dangerous shortages (compelling trips on hazardous roads).
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.
A COB is defined by local residents investing money or buying shares in order to fund the start-up and operation of the enterprise. The number of shares each individual 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), which recirculates money throughout other local businesses and builds local wealth.
What’s the Difference Between Community-owned Stores and Cooperatives?
Community-owned stores are open to everyone, including residents who do not own shares in the store, but shareholders split any profits. Cooperatives are operated primarily to benefit members and may not focus on generating profits (most grocery co-ops also serve non-members, but may charge more to non-members). Community-owned stores could prioritize profits (depending on their bylaws) and typically will pay dividends to shareholders if profit is generated. 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.
Community-Owned Businesses in the United States (Non Co-op)
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 co-operatively 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. Contact us to learn more about these goals, get involved, or make 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, who researched and interviewed many of the businesses above. Amy now is a fellow with the National Coalition for Community Capital and occasionally speaks on community capital for AMIBA.
If you know of examples to add in any category (including failed attempts), informative links, or suggestions, please tell us!
Resources on Shared Ownership Models
A Cooperative Entrepreneurship Curriculum (Canada, 2016)
Strategies for Financing the Inclusive Economy (One of a series of publications on shared ownership models from the Democracy Collaborative)
Community Owned Pubs are on the rise in the UK
Follow us on social media (see bottom right) or subscribe to our monthly newsletter for updates.