By Babajide Komolafe
Cooperatives are risky and have limitations. But the long term benefits are very rewarding for the individual, the group and the nation. If you and some other people have decided to form one (everybody should be encouraged to belong to a cooperative group), the following tips would help you avoid or reduce to barest minimum, the risk and limitations of investment through a cooperative.
Commonality of members: Don’t form cooperative with strangers, or with people you don’t have anything in common with. It’s either you are friends and you have known one another for a long time, or you belong to the same trade group, or work in the same place. Unity is critical to successful cooperative group, and this element of commonality is vital for unity. It promotes or facilitates unity of purpose, thinking and regular interaction and harmonious relationship among members
Don’t compel or levy: Don’t compel anybody to join. Cooperative is a marathon, and not a 100 meters dash. It requires sacrifices from time to time. To be able to meet up with the demands of belonging to a cooperative, the individual must believe in it, and be resolutely committed. Thus, the choice of being a member must be a personal choice, out of personal volition, with full recognition of the benefits and the demands.
Also, individual members should decide amount of contribution to be made. The contribution must be regular, but the individual must decide whether it is N1 per month or N10 per month. In fact, it is expedient that members are encouraged to start with small contributions, which can be increased as income increases.
Small and steady: Cooperatives should start with small business ventures, with little technical knowledge. Don’t attempt to start with big projects, which you know little about. This has caused the infant mortality of many cooperative groups. The truth is that most members don’t have the acumen to manage big business projects. But by starting small, individually and collectively, they can acquire the acumen over time.
Emphasise safety and not profitability: The higher the profit, the higher the risk of losing your money. This is an unbreakable law of business and investment. That is why if your cooperative would survive and endure, you must not emphasise profit or return. Your emphasis must be safety. Before you embark on any investment or venture, you must be very certain, how your money will come back, intact. Your members would criticise you more for losing their money than for not making any profit.
Focus on investment and not consumption: At the beginning, you can engage mostly in buying and selling essential commodities and electrical appliances (TV, Sound system) etc. But these are consumption oriented activities and only improve welfare in the short term. To improve or guarantee welfare in the long term, you must, as quickly as possible, start engaging in investment activities, i.e. activities that create jobs and generate wealth on a long term basis.
The difference between the two is like the difference between rain and well. Rain provides water and relief for a short period of time. But a well provides water for a long period. But while rain is for a season and based on chance (you don’t determine when it would rain), well water requires deliberate and planned hard work over a long time. But everybody knows that it is better and more expedient to have a well.