The Journey Of Establishing A Service Co-Operative: Lesson From Brand Ambassadors And Marketing Co-Operative Society In Nairobi
Written by: Mark Matabi, Co-operatives Specialist / Country Lead, EMIRGE Kenya
The idea of developing and strengthening service oriented co-operatives in Kenya was a key initiative under the USAID/EMIRGE program. Three service sectors were identified for pilot purposes to include branding and marketing, building and construction, and beauty and wellness service groups. After 12 months of formation, capacity building activities, and processes, only the group of free-lance sales agents had successfully established the Brand Ambassadors and Marketing (BAM) Co-operative Society. Implicitly, starting a new co-operative takes energy and resources!
Based on the advisory experience in co-operative development work, guidance, training and coaching of the service group in co-operative membership, legal, tax, finance and business process/service issues were paramount. Such answered questions and concerns in the process included:
The essential learning in the efficient and timely establishment of BAM co-operative, was coherent adherence of the following step-by step procedures. First, was the sensitization, identification and assembling of the group members who were were interested and willing to work together.
A group of over 200 young sales agents were sensitised and mobilised on the need of using co-operative business model to offer sales and marketing services. Afterward, the relevant information was collected and feasibility undertaken, and unanimously acknowledged by the majority of the potential members that there was mutual need for a co-operative business.
The second step by the EMIRGE team was to hold several meetings of potential members to discuss needs and vision. Numerous pre-co-operative education and training activities were conducted to understand the co-operative business model, structure and system, roles and responsibilities of members and leaders. Then, a co-operative steering committee was selected to coordinate business research on whether there is enough interest in a co-operative to justify further co-operative planning.
With the potential members having sufficient interest in the co-operative business model, the EMIRGE co-operative development team supported the steering committee to conduct an economic feasibility study on whether the proposed co-operative is likely to be successful and beneficial to its members by determining important factors including markets and volume of business, potential membership, facilities needed, operating costs, capitalization and funding options. It was confirmed in this stage that the young potential members had sufficient skills and capacity to start a branding and marketing co-operative.
When the members positively affirmed that the co-operative would make practical and financial sense, more meetings were held to affirm their commitment. It is at this juncture that the EMIRGE team supported the group to develop their three-year businesss plan. The plan was to define how the co-operative would be structured and financed. The group’s 2018-2020 business plan was to substantiate member benefits and the co-operative’s short and long term viability. Subsequently, short workshops were convened to review the business plan in which more adjustments were made by the potential members. By this time, the number of potential members had reduced to only 20 percent of the original number.
But given the legal provision in Kenya of the formation of a co-operative is 10 members, the EMIRGE team, together with the co-operative officers, supported the group with drafting legal papers to secure the membership commitment. The by-laws would clarifed co-perative organisational details, prepared necessary legal papers for registration, and secured the written and financial commitment of members.
Through the State Department of Co-operatives Development, BAM co-operative was officially registered. The inaugural co-operative general membership meeting was held and official board of directors elected. In essence, the members formally began the co-operative and accepted the articles and by-laws.
Today, the BAM co-operative leaders are working with the members to implment the three-year business plan. The official start up operations are on with the co-operative securing finances and permits and licences required, and seeking sales and marketing businesses from various partners. The co-operative is already getting recognition from County Government of Nairobi City and Corporate organsiations while establishing and maintaining communications with members.
From this process of BAM co-operative compared to other two service groups, it is clear that each (pre)co-operative has unique aspects and faces different start-up challenges even if there are common areas critical to the future success. The main reasons that new co-operative businesses fail are insufficient financing and lack of business expertise.
Starting an co-operative can be a challenging and yet, rewarding activity. It requires research, careful planning, patience, and uncounted hours of time. The co-operative may not turn out exactly it was originally conceptualized. Some will inevitably take longer than you wish it would to get started.