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STRATEGY

Starting a New Business Cooperative

Howard Brodsky of CCA Global Partners on choosing a co-op partner.
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If you are forming a co-op, don't accept just anyone, warns Howard Brodsky, the founder of CCA Global Partners, a multibillion-dollar company that manages co-ops and has more than 3,800 members. Some co-ops make the mistake of indiscriminately adding members in the interest of attaining scale quickly, he says. Here's what you should look for in a co-op partner:

Strong reputation in the industry If early members are known as effective sellers or leaders, others will want to join.

Good credit Co-ops must negotiate with manufacturers and others in the business community. Bad apples reflect poorly on the whole barrel.

A mix of skills Look for smart product, marketing, and finance people. Building a co-op is like staffing a company from the ground up.

Ears to the ground A big advantage for retail co-ops is members' closeness to their customers. Choose members who are good at sensing changes in consumer demand.

Compatible personalities Co-op members need to support one another. They often develop close friendships. Don't include anyonewith whom you wouldn't want to go to dinner.

To learn more about co-ops, go to the websites of the National Cooperative Business Association, NCBA.coop, and BizUnite, a buying group that services co-ops, BizUnite.com.

Last updated: Feb 1, 2010

LEIGH BUCHANAN is an editor-at-large for Inc. magazine. A former editor at Harvard Business Review and founding editor of WebMaster magazine, she writes regular columns on leadership and workplace culture.
@LeighEBuchanan




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