Business Development

10 Questions to Ask your Attorney When Building your Cooperative

Cooperators building a new enterprise encounter many questions. Some of those questions are best answered by professionals with specialized expertise, including lawyers, accountants, tax professionals, insurance advisors, financial experts, and others.An illustration of two people in business attire sitting across the table from a person in a business suit with a computer with a checklist, scales of justice, and a law book in the background.

In a recent online learning program of the Appalachia Cooperates Initiative, cooperative attorneys Mike Russell and Jacqueline Radebaugh, shared their perspectives on how cooperators can prepare for working with an attorney and the 10 questions they suggest cooperators consider asking their attorney, including:

  1. What do we need an attorney for?
  2. How do you bill? What should we budget for the services we need, or you recommend?
  3. You’re very expensive! What questions should we think about on our own time? Can you recommend an attorney within my budget?
  4. What kinds of cooperatives have you worked with in the past? Can we talk with one of them?
  5. Given our goals and our situation, what entity structure(s) should we consider and why?
  6. What do your words mean?
  7. Why and when should we talk to an accountant? What other professionals should we talk to? Do you have referrals in my state?
  8. We need to raise funds. Is there anything we should know before we start talking with people, posting things online, or seeking investors? When do we need to think about securities law?
  9. Do we need insurance? When?
  10. Consider framing your questions as “If we want to do X, what do we need to think about?” rather than “Is this allowed?”

A thumbnail image of the handout "10 Questions to Ask your Attorney When Building your Cooperative" Download the pdf to read.

Access the handout “10 Questions to Ask Your Attorney when Building your Co-op_Handout_12.2024.”

Preparing for Meeting with an Attorney

To make their time more effective and efficient, it can be useful for cooperators to do some “homework” before meeting an attorney. For example, business planning can help cooperators explore their needs, grow their understanding of potential issues, and identify questions for professionals.

Consulting knowledgeable business development experts, like cooperative developers, can help with business planning, and exploring reputable online educational resources can help cooperators develop their understanding of concepts that will form the foundation of their business. For example, the following online cooperative education resources are great places to start when learning the foundations of cooperative business:

View a recording of the program, “10 Questions to Ask your Attorney when Building your Cooperative,” with Mike Russell, Esq., The Legal Aid Society of Cleveland, and Jacqueline Radebaugh, Esq., Jason Wiener p.c., on December 11, 2024.

Finding Legal Services for Cooperative Development

Cooperators should seek advice from competent, appropriately licensed advisors as they make decisions for their cooperatives. The resources below offer a helpful starting point for cooperators identifying legal service providers but are not the only way to locate an attorney.

  • Similar businesses may be able to offer feedback or recommendations for professionals they worked with.
  • State and local bar associations and law libraries may be able to help cooperators identify legal service providers in their communities.
  • In Ohio and West Virginia, the CFAES Center for Cooperatives built the Cooperative and Collaborative Enterprises Legal and Accounting Resources Directory to help locate cooperative expertise. The information was provided by the listed individuals and does not indicate a referral or reference by the Center or The Ohio State University.
  • The Cooperative Professionals Guild is a national member-led community of legal and accounting professionals specializing in cooperatives.
  • Legal aid organizations might provide transactional support to cooperatives for qualifying individuals.
  • Community-facing business clinics at law schools may provide limited assistance to cooperatives as part of their mission.

This information is provided for educational purposes only. It is not legal advice. It is not a substitute for the potential need to consult with a competent attorney licensed to practice law in the appropriate jurisdiction.

 

References

Russell, M. & Radebaugh, J. 10 Questions to Ask your Attorney When Building Your Cooperative. [Presentation]. CFAES Center for Cooperatives Appalachia Cooperates Initiative. go.osu.edu/ten

Free Upcoming Webinar: 10 Questions to Ask your Attorney when Building Your Cooperative

A photograph with a person's hands, a wooden gavel, and bronze scales of justice with a wooden question mark in the foreground.People starting a cooperative have diverse and varied goals, from wanting to build democratic workplaces, to helping farmers or artists reach new markets, or finding ways for small businesses to save costs. Creating a business with the unique values, principles, and characteristics of a cooperative that serves members’ goals is not a one-size-fits-all structure. The frameworks that build a cooperative can include its legal structure, tax treatment, key partnerships, capitalization strategy, and more, which can take on a variety of distinct approaches.

This complexity can be overwhelming for groups new to the cooperative model and working to build their own cooperative enterprise. That is why building a team of competent advisors is an important part of the business start-up process. Those advisors can include attorneys, accountants, tax advisors, risk management and insurance advisors, industry experts, and others who can help the group build the frameworks that will help accomplish their goals.

How can different legal structures accomplish cooperative ownership?

 

That question, along with helping cooperative entrepreneurs prepare for meeting with an attorney during their pre-venture phase, is the subject of an upcoming learning program with the CFAES Center for Cooperatives’ Appalachia Cooperates Initiative.

On Wednesday, December 11, attorneys Jacqueline Radebaugh, Managing Partner and Shareholder with Jason Wiener p.c., and Mike Russell, Attorney with The Legal Aid Society of Cleveland will talk with entrepreneurs and business developers about legal frameworks that can accomplish cooperative business approaches and working effectively with an attorney, including how to prepare for working with an attorney who can best advise on the right structure for a business.

Staff from the CFAES Center for Cooperatives will share resources for locating professional advisors for a cooperative or other emerging business, with a particular focus on Appalachia.

Date: Wednesday, December 11, 2024

Time: 1 – 2 p.m. Eastern

Location: Online via Zoom

Cost: Free

Questions: Ann Luther (luther.111@osu.edu or 740-289-1952)

REGISTER HERE

 

This online learning program is presented as part of the CFAES Center for Cooperatives Appalachia Cooperates Initiative, a learning and peer-exchange network connecting cooperative, community, business, and economic developers and advocates in Central Appalachia to resources about the cooperative business model.

Event Details

Online events are hosted by the CFAES Center for Cooperatives at Ohio State via Zoom. Participants can join via the Zoom application on a computer or mobile device or by telephone. Unless otherwise noted, events will not be recorded. Registrants will receive Zoom connection details via email prior to the event. Events will be presented with automated closed captions. If you wish to request traditional CART services or other accommodations such as interpretation, please contact Ann Luther at luther.111@osu.edu or 740-289-1952. Requests made two weeks in advance will generally allow us to provide seamless access, but the university will make every effort to meet requests made after this date.

CFAES provides research and related educational programs to clientele on a nondiscriminatory basis. For more information, visit cfaesdiversity.osu.edu.

Food & Farm Marketing Program Hosted in Meigs County, Ohio

The CFAES Center for Cooperatives, OSU Direct Food and Agricultural Marketing program at OSU South Centers, and OSU South Centers Small Business Development Center recently collaborated to present Food and Farm Marketing Basics at the Meigs County Fairgrounds on October 29th.  The free workshop hosted 10 participants with interests in learning and gaining information on marketing their food and farm businesses.

Attendees were introduced to marketing skills and how to better connect with their customers.  Christie Welch, who leads the Direct Food and Agricultural Marketing Team for OSU Extension, provided detailed information about how customers make buying decisions.  The importance of market analysis and how to understand the customer mix and developing customer profiles provided participants key takeaways from this session.

Melanie Sherman, Business Counselor with the OSU South Centers Small Business Development Center, presented effectively representing your brand through your food and farm business.  Attendees worked through the stages of brand and logo development and the importance of brand identity, while deciding what type of emotional response you want your brand to produce.

The team will host this free event again on Wednesday, January 8, 2025 from 12:00 pm- 3:00 pm in Lancaster, Ohio at the Fairfield County Agriculture Center.

Learn more and register here for the January 8, 2025 program.

A stall of vibrant, fresh vegetables like tomatoes and cucumbers, at an outdoor farmers market.

Conference on Co-op Law and Development Offers Unique Learning Experience

On September 17 and 18, 2024, attorneys, accountants, business developers, entrepreneurs, and students from eight states and the District of Columbia, gathered in Columbus, Ohio, to explore the intersection of law and cooperative business development. The 2024 Cooperative Law Conference, organized around the theme “Building a Cooperative Economy Together,” explored legal considerations when raising capital, key responsibilities for co-op directors, selling a business to workers using a cooperative structure, and more.

Attendees of the 2024 Cooperative Law Conference pose for a group photo.

From keynote presentations by Cooperative Hall of Fame members Terry Lewis, Esq., and Dr. Jessica Gordon Nembhard, to skill-building sessions on drafting co-op bylaws and understanding cooperative taxation, to a panel conversation about ‘growing and supporting new cooperators,’ the agenda included 13 learning sessions for both beginners and experts.

Two women standing talking to each other in front of a table in the foreground with conference attendees talking in the background.

Creating a Space for Co-op Legal Education

“Our goal was to create a space for entrepreneurs, developers, professionals, and future cooperators, to learn about the unique legal, tax, and financial characteristics of cooperatives, especially since learning opportunities about these concepts can be limited in our experience. I was energized by the engaging sessions, the opportunities to connect with knowledgeable experts, and the stories of people working to grow cooperatives,” shared Hannah Scott, program director of the CFAES Center for Cooperatives. “We want to thank Jason Wiener p.c., Dorsey, Ralph K. Morris Foundation, USDA Rural Development, Legal Aid Society of Cleveland, Legal Aid of Southeast and Central Ohio, and National Council of Farmer Cooperatives, for their support of the conference,” Scott noted.

Attendees of the 2024 Cooperative Law Conference listen to a presentation on the conversion of existing businesses to worker cooperatives in an auditorium-style classroom.

Organized by Collaborative Partners

The conference, first held in 2018, was hosted this year by The Ohio State University’s College of Food, Agricultural, and Environmental Sciences Center for Cooperatives, and organized by a collaborative group of developers and practitioners, including Jacqueline Radebaugh, Partner and Shareholder with Jason Weiner p.c.; Michael Russell and Catherine Donnelly, attorneys with Legal Aid Society of Cleveland; Meegan Moriarty, Legal and Policy Analyst with the U.S. Department of Agriculture’s Rural Business-Cooperative Service; Bill Scott, accountant and Principal with CliftonLarsonAllen LLP; Dave Swanson, Partner with Dorsey & Whitney LLP; and Melissa Will, Training Coordinator with Legal Aid of Southeast and Central Ohio.

A photograph of a woman sitting at a table speaking into a microphone in the foreground with three people sitting at tables in the background.

Connect with the CFAES Center for Cooperatives

The CFAES Center for Cooperatives at Ohio State assists entrepreneurs, educates the community, and generates knowledge about the cooperative business model with a special focus on food, agriculture, and rural communities. Learn more at go.osu.edu/cooperatives.

A Closer Look at Worker Cooperatives

Worker cooperatives are becoming a popular form of the cooperative business model and generating more attention these days.  A worker cooperative is a business where workers own most of the equity and control the voting shares of the business, while participating in profit sharing, oversight, in some cases, management, while operating by democratic cooperative principles.  The OSU Center for Cooperatives team recently spoke with area worker cooperative leaders to hear about how they got their start and navigate current worker co-op operations and trends to continue propelling their businesses forward to be successful today.

Grace Corbin, Vice President of the Board of Directors and Marketing Coordinator with Casa Nueva, shared with us about the start of the Athens based restaurant.  “Back in 1985 it was known as Casa K Pasa at the time and the owner split town.  So the workers decided to band together and found a way to make it a co-op so they could maintain employment.  Today Casa has more than 15, and less than 20 member, worker owners right now.  We also have between 35 and 40 employees that is complicated, confusing and fun.”

We also spoke with Octavia Cordon, worker owner from Phat Daddy’s On Da Tracks, to get her perspectives on starting a worker cooperative.  “One of the biggest things that attracted me to the cooperative model is the equalness between members.  We started out, myself, my husband and my daughter, and we have differences of opinions and stuff like that, but the cooperative principles help guide us.  Because we’re just three years in, and still building up the business, we learn something new everyday.  When we started out it was just 5 of us, with 3 worker owners and 2 regular employees, who are on track to becoming full members.  Now today, we have 22 employees total.”

Mavery Davis, CPA, Director of Lending with New Economy Works West Virginia, explained to us about what motivates him through the cooperative lens.  “People want an opportunity to do something different and have meaningful work.  They say whether or not they get to work during Covid, or if that’s somebody else’s decision to make.  It takes trust, and co-ops move at the speed of trust!”

We also learned about Casa Nueva’s embeddedness in the community and how they make a difference in giving back.  Grace told us about the nontraditional means of how the tipping process works at Casa.  “Since don’t accept tips, and haven’t been since 2012, what we do with that money that is left is to donate it to a different nonprofit in our community every month.  A lot of the organizations that we chose like to promote that any money left is going to them.”

Josh Brown, Live Entertainment and Booking Coordinator for Casa, explained to us about the importance of working cohesively together as a group of shared owners.  “It’s (worker cooperatives) definitely got an upside with lots of brains working to solve a problem, which is very helpful.  The downside though is that everything takes time, for us it’s usually matter of months before something actually gets done of any significance.”

This discussion is part of the Appalachia Cooperates Initiative, (ACI), led by the CFAES Center for Cooperatives, a learning and peer-exchange network connecting cooperative, community, business, and economic developers and advocates in Central Appalachia to resources about the cooperative business model. The goals of the ACI are to:

  • Develop practitioners’ understanding of the co-op business model and development resources to better recognize and act on co-op opportunities 
  • Foster relationships among practitioners that will facilitate joint co-op development activities and allow practitioners to better utilize existing resources 
  • Raise awareness of the co-op business model as an opportunity for economic development and justice in the region 

To view this program recording in full please click here.  

Cooperative Farmers Markets

An abundance of fresh vegetables stacked on a table at an outdoor market.

Here in Ohio, the growing season is ramping up quickly! In some communities, farmers markets have already kicked off their season and in others, local food enthusiasts won’t have to wait long to enjoy the market. The estimated 8,000+ farmers markets across the United States[1] are an important way farmers sell to customers directly.

Based on the most recent U.S. Department of Agriculture (USDA) Census of Agriculture, in Ohio an estimated 8% of farms sell approximately $90 million worth of products directly to consumers.[2]

Advocates of farmers markets, like the Farmers Market Coalition, cite benefits like:

  • Helping farm businesses succeed – Farmers with direct-to-consumer sales are more likely to remain in business than other farms, according to USDA data.[3] Producers with farms that sell food through direct channels, like farmers markets, were more likely than all U.S. farms to be female and aged 34 or younger.[4]
  • Creating community food access points – 99% of farmers markets responding to a 2019 USDA survey sell fruits and vegetables and about half of responding markets accepted Federal Nutrition Programs like Supplemental Nutrition Assistance (SNAP)[5]
  • Positive community impact – About half of farmers markets responding to a 2019 USDA survey had a paid market manager and just over 5,000 markets across the U.S. engaged over 31,000 volunteers.[6]

A stall of vibrant, fresh vegetables like tomatoes and cucumbers, at an outdoor farmers market.

Farmers Markets and Business Structures

Starting and growing a successful farmers market involves many moving parts – building a community of farmers, engaging with local community leaders and patrons, effective marketing, and strong operational plans. Among the important aspects for new and established markets to consider is their business structure – like whether the market is an independent legal entity like a corporation or part of a larger umbrella organization. A market’s business structure can impact how decisions are made for a market, the extent of personal liability for market leaders, eligibility for certain types of funding like grants or charitable donations, how the market is taxed, and more.[7]

The Farmers Market Legal Toolkit from the Center for Agriculture and Food Systems at Vermont Law School provides helpful information about business structures for farmers markets, along with information about accepting public benefits and managing risks at markets.

Cooperatives as a Business Structure for Farmers Markets

An illustration of raised hands in rainbow colors.Cooperatives are one of various business structure choices for farmers markets. Cooperatives are member owned and controlled businesses that distribute benefits based on use and grounded in principles like democratic member control and concern for community.[8] Cooperatives operate across sectors from insurance and financial services to housing, purchasing, and utilities. In agriculture, cooperatives market various food and agriculture products, procure supplies and inputs, and provide services, like financial services.[9]

Farmers markets structured as cooperatives might be owned and governed by farmers who sell at the market, by community members who shop at the market, or by both groups in a “multistakeholder” cooperative.

Cooperative markets owned and governed by farmers are one form of marketing collaborations for farmers. Learn more about “Marketing Collaborations for Farmers” in our blog post here.

Some of the potential benefits of structuring a farmers market as a cooperative might include:

  • Member engagement and decision-making – Many decisions for a cooperative are made by a board of directors elected from and by the members. Members elect the board and can cast their vote on certain major issues for the cooperative. Democratic control is a defining principle of cooperatives and members generally vote using a “one member, one vote” set up. Cooperatives generally distribute their profit to members based on their use of the business.[10]
  • Community focus – As a business, the focus of a cooperative is on providing benefits to its members.[11] The internationally recognized cooperative principles highlight that “[c]ooperatives work for the sustainable development of their communities.”[12] This member and community orientation might create opportunities for cooperative farmers markets to develop a community-orientation and focus.
  • Existence of the market beyond current leaders – Operating a farmers market can be a lot of work. To ensure the successful operation of a market well into the future, it may be important to consider how to effectively share or transfer responsibilities for leadership and how to create a stable structure. As independent legal entities that are governed by a board, cooperatives may have opportunities to share leadership responsibilities and generally can exist perpetually as long as appropriate formalities are met.[13]
  • Limitation of liability and easily updated membership – Generally, cooperatives are legal entities created by filing appropriate forms with a state agency. As independent legal entities, generally the personal liability of each member in a cooperative is limited to the equity the member holds in the cooperative. Cooperatives set up as separate legal entities can add and remove members.[14]

However, cooperatives may have disadvantages compared to other potential business structures for farmers markets. For example, cooperative markets may be limited in their ability to legally use volunteers and unpaid staff compared to nonprofits, they may be limited in raising certain kinds of capital compared to corporations, and they rely on strong engagement and participation from members compared to structures that rely on just one or a few members like limited liability companies.[15]

People in business professional dress standing in a circle holding wooden gears together.

 

Like any decisions for a business with varied and far-reaching consequences, those interested in exploring the right business structure in their specific situation should consult knowledgeable competent professionals, like attorneys, accountants, and others. This information is provided for educational purposes only. It is not legal advice. It is not a substitute for the potential need to consult with a competent attorney in the appropriate jurisdiction.

Take a deeper dive into the cooperative business model, including cooperative legal frameworks, governance, financial concepts, and more with Co-op Mastery: Beyond Cooperatives 101 at go.osu.edu/coopmastery.

 

References

[1] 2019 National Farmers Market Managers 2019 Summary. (Aug. 2020). U.S. Department of Agriculture National Agricultural Statistics Service. https://downloads.usda.library.cornell.edu/usda-esmis/files/pz50hd694/gx41n598k/jd473j98z/nfar0820.pdf

[2] Data from the 2022 Census of Agriculture “Ohio: Market Value of Agricultural Products Sold Including Landlord’s Share, Food Marketing Practices, and Value Added Products: 2022 and 2017” and “Ohio Historical highlights: 2022 and Earlier Census Years,” U.S. Department of Agriculture National Agricultural Statistics Service.

[3] Key, N. (2016). “Local Foods and Farm Business Survival and Growth.” U.S. Department of Agriculture Economic Research Service. https://www.ers.usda.gov/amber-waves/2016/march/local-foods-and-farm-business-survival-and-growth/

[4] Direct Farm Sales of Food: Results from the 2020 Local Food Marketing Practices Survey. U.S. Department of Agriculture National Agricultural Statistics Service. https://www.nass.usda.gov/Publications/Highlights/2022/local-foods.pdf

[5] National Farmers Market Managers. (Aug. 2020). U.S. Department of Agriculture National Agricultural Statistics Service. https://downloads.usda.library.cornell.edu/usda-esmis/files/pz50hd694/gx41n598k/jd473j98z/nfar0820.pdf

[6] National Farmers Market Managers. (Aug. 2020). U.S. Department of Agriculture National Agricultural Statistics Service. https://downloads.usda.library.cornell.edu/usda-esmis/files/pz50hd694/gx41n598k/jd473j98z/nfar0820.pdf

[7] “Why does the market’s business structure matter?” Farmers Market Legal Toolkit. Center for Agriculture and Food Systems, Vermont Law School. https://farmersmarketlegaltoolkit.org/business-structures/why-your-choice-matters/

[8] (2014). Co-op Essentials: What They Are and the Role of Members, Directors, Managers, and Employees. USDA Rural Development Cooperative Programs.

[9] Wadsworth, J., Lapp, K., & Rivera, J. (2021). Agricultural Cooperative Statistics 2019. Washington, D.C.: U.S. Department of Agriculture Rural Development Service Report 83.

[10] “Co-ops 101: An Introduction to Cooperatives.” (2012). U.S. Department of Agriculture Rural Development, Cooperative Information Report 55. Retrieved from http://www.rd.usda.gov/files/cir55.pdf

[11] Zueli, K. & Cropp, R. (2014). “Cooperatives: Principles and practices in the 21st century.” UW Extension.

[12] “Cooperative identity, values & principles.” (n.d.). International Cooperative Alliance. Retrieved from https://www.ica.coop/en/cooperatives/cooperative-identity

[13] “Legal Foundations of a Cooperative.” (1995). U.S. Department of Agriculture Rural Business – Cooperative Service, Cooperative Information Report 45, Section 9. Retrieved from https://www.rd.usda.gov/sites/default/files/CIR45-9.pdf

[14] “Legal Foundations of a Cooperative.” (1995). U.S. Department of Agriculture Rural Business – Cooperative Service, Cooperative Information Report 45, Section 9. Retrieved from https://www.rd.usda.gov/sites/default/files/CIR45-9.pdf

[15] “Cooperatives.” Farmers Market Legal Toolkit. Center for Agriculture and Food Systems, Vermont Law School. https://farmersmarketlegaltoolkit.org/business-structures/cooperatives/#topic-overview

Business Basics to Help “Do Business Better”

Whether you’re a sole entrepreneur running a retail business, a group of workers who own a café cooperatively, or a non-profit organization working to improve your community, basic business skills in marketing, finance, and human resources can be important for success and cooperative approaches might help you overcome challenges. That was the simple idea behind a learning series in Gallipolis, Ohio, this spring presented by the Small Business Development Center at OSU South Centers and College of Food, Agricultural, and Environmental Sciences Center for Cooperatives and sponsored by United Way of the River Cities and Gallia County Chamber of Commerce.

A woman teaching attendees in front of a slide presentation People sitting at a conference room table watching a presentation A woman teaching attendees in front of a slide presentation

Caption: Training participants heard from Melanie Sherman, Hannah Scott, and other partners during the series, held at Ohio Valley Bank On the Square in Gallipolis, Ohio.

Explore Resources from the Training Series

The three-part learning series kicked off on March 28, 2024, with a dive into best practices in branding, identifying target markets, finding low and no-cost media tools, and exploring cooperative approaches to small business marketing. As part of the training, CFAES Center for Cooperatives staff shared approaches like group purchasing of supplies, pooled advertising and customer outreach, and shared space, that may help small businesses lower costs and reduce transaction costs.

A slide titled "Business Basics Marketing" with logos for The Ohio State University College of Food, Agricultural, Environmental Sciences, Ohio Small Business Development Centers, and U.S. Small Business Administration

Explore select slides from the finance training here.

Accessing capital and managing finances can feel like a hurdle for small businesses and community organizations. Whether it is funds to purchase a building, hire staff, or invest in new equipment, or understanding basic financial statements to make better business decisions, these areas can seem overwhelming. On April 25, 2024, Hannah Scott, CFAES Center for Cooperatives Program Director, and Melanie Sherman, a small business counselor with OSU South Centers, helped attendees learn about basic business financial terms and statements, reviewed best practices for pricing products, and outlined processes for finding loans and grants. The team introduced participants to the worker cooperative model, using a mock worker co-op as a model throughout the presentation to help attendees learn about the unique business model. Worker cooperatives, among other opportunities, may help individual entrepreneurs pool equity investments and share risk.

A slide titled "Business Basics Financial Literacy" with logos for The Ohio State University College of Food, Agricultural, Environmental Sciences, Ohio Small Business Development Centers, and U.S. Small Business Administration

Explore select slides from the finance training here.

Hiring and retaining the right team is integral to business success. Small businesses and non-profits need to consider many factors to manage talent, from meeting various regulatory requirements to keeping workers engaged and effectively reaching new candidates to join their team. On May 23, 2024, Melanie Sherman and Hannah Scott, both with business programs at the OSU South Centers, shared basic considerations for recruitment marketing to help hire the “right” employee and cooperative shared service approaches for human resource functions. Ms. Scott also introduced participants to employee owned business models, like worker cooperatives, which can create benefits for workers like increased wages, greater retirement earnings, and opportunities to meaningfully shape their workplace.

An image of the title slides of the presentation "Business Basics: Human Resources for Profits and Non-Profits"

Explore select slides from the finance training here.

Connect with the Speakers!

A black and white photograph of a sign for the OSU South Centers and Endeavor Center with a field and buildings in the background.

Do you want to learn more? Offer similar trainings in your community? Interested in one-on-one counseling to grow your business? Reach out to Melanie or Hannah!

Melanie Sherman, CBA
Venture Development Analyst

614-247-9729 Office / sherman.1675@osu.edu

Hannah Scott, JD
Program Director

(614)247-9705 Office / scott.1220@osu.edu

Cooperative Frameworks in Ohio

An enterprise’s legal structure informs who is in control and how they exercise their control, who is liable for losses by or actions of the organization, how the enterprise raises capital, and who receives income and suffers losses, among other characteristics of the enterprise.

Business entities are organized according to state law and there is great diversity in the cooperative laws across the United States.

For a deeper dive into the framework for cooperatives under the Ohio Cooperative Law, including the key roles of members, explore these educational resources.

Image of cover for "Key Roles of Members in Ohio Cooperatives" resource.  Image of cover for "12 Key Roles of Members in Ohio Cooperatives Infographic" resource.Image of cover for "Quick Summary: Ohio's Cooperative Law" resource.

 

 

 

This information is provided for educational purposes only. It is not legal advice. It is not a substitute for the potential need to consult with a competent attorney licensed to practice law in the appropriate jurisdiction.

 

References

O’Brien, D., Hamilton, N., & Luedeman, R. (2005). “The Farmer’s Legal Guide to Producer Marketing Associations.” Drake University Agricultural Law Center. Retrieved from https://nationalaglawcenter.org/wp-content/uploads/assets/articles/obrien_producermarketing_intro.pdf

Could Cooperation Help Your Small Business Market Better?

Product, price, place, and promotion. One of the keys to success for a small business is mastering marketing. Whether entrepreneurs are advertising their business, using promotional strategies to reach their target customers, or working to place their products into a new market channel, marketing encompasses many aspects of business. Are cooperative approaches to marketing opportunities a fit for your small business to save time and resources?

Does your business use supplies that many other businesses also use?

Purchasing supplies as a group, via a purchasing cooperative, for example, may help businesses lower per unit costs for supplies, improve market information across the supply chain, consolidate transactions to reduce administrative burdens, reduce inventories, coordinate shipping, or even control quality attributes.[1] For example, restaurants may use a purchasing cooperative to purchase food, packaging, equipment, and other commonly needed supplies together in bulk. The Wendy’s Quality Supply Chain Co-op works with suppliers to provide member restaurants with products and services, pooling billions of dollars in buying power.

For a more detailed look at the purchasing cooperative model, see the publication “A Guide for the Development of Purchasing Cooperatives,” by the U.S. Department of Agriculture.

Golden french fries in white paper container. White toilet tissue rolls in a wire shopping cart. Yellow paper shopping bags with polka dots and stars.

Could your business advertise with businesses in the same industry or geography?

Marketing cooperatives and similar approaches may offer opportunities for small businesses to reach new market channels or audiences while reducing costs and administrative burden for individual businesses.

In Ohio, businesses in the tourism industry like convention and visitors bureaus, lodging, restaurants, attractions, festivals, and others, may be able to utilize TourismOhio’s “Ohio, The Heart of It All Co-op Advertising Program,” which provides members opportunities to purchase advertising like paid social, digital, and paid search, as well as opportunities for marketing contact creation offerings like photography, videography, storytelling, and influencer engagements, among other potential benefits.

Illustrated image of computer screen with various graphics, including play symbol, money symbol, text bubble, light bulb, and megaphone.

Does your business have the ability or opportunity to share physical space with other businesses?

In some instances, cooperative approaches to helping businesses access the physical space they need to operate or market their business might offer benefits. For example, shared-use space like business incubators or artist cooperatives might help create affordable opportunities for start-up businesses, help businesses attract new customers in spaces where customers who enter the space to shop at one business may also be encouraged to shop at others, and reduce administrative burdens by sharing maintenance and upkeep for the space and outdoor areas.

Learn more about artist cooperatives in this “Toolkits for the Arts: Toolkit 2: Form an Artist Cooperative” from the Tamarack Foundation for the Arts in West Virginia.

Open sign on inside of glass window.

Some Considerations for Working Cooperatively

Small businesses exploring how a collaborative approach might help them better market their products and businesses will need to consider various key questions. The questions below are a starting point but are by no means exhaustive. Entrepreneurs who are interested in exploring a cooperative approach further can reach out to the College of Food, Agricultural, and Environmental Sciences Center for Cooperatives at Ohio State.

  • Who will be engaged? What is their role?
  • How will the group make decisions?
  • How will the group be formally organized?
  • How can the group manage risk?
  • Will working together provide the intended benefit

Graphic of light colored light bulb and hands connecting colored puzzle pieces

Contact Us!

For more information about the CFAES Center for Cooperatives at The Ohio State University visit go.osu.edu/cooperatives. Contact the CFAES Center for Cooperatives at osucooperatives@osu.edu or 614-247-9705.

For assistance with registration or additional questions about events, please contact Samantha Black at black.1156@osu.edu or 614-247-9774.

CFAES provides research and related educational programs to clientele on a nondiscriminatory basis. For more information, visit cfaesdiversity.osu.edu. For an accessible format of this publication, visit cfaes.osu.edu/accessibility.

[1] Reynolds, B. & Wadsworth, J. (2009). “A Guide for the Development of Purchasing Cooperatives,” U.S. Department of Agriculture Rural Development, Cooperative Information Report 64.

Wait, Who Owns that Photo? A Basic Intro to Copyright for Small Business Marketing

As the calendar turns to a new year, it is a natural time for entrepreneurs to consider how they want to improve and to plan for the coming month, quarter, and even year. It is also a great time to review past marketing strategies and plan for the coming year. Have you thought about how you can improve your business’s marketing in the new year? Here are some thoughts to consider.

Marketing and Legal Considerations: Intellectual Property

Whether a business is thinking about entering a new market channel, wants to reach a different target customer group, is planning to refresh its website, or thinks a new social media platform would be useful, business marketing and branding can include legal considerations, including factors like content ownership and the use, protection, and monitoring of intellectual property like trademarks and copyright, among various other areas.[1]

As they market themselves and their products, businesses may create intellectual property and that may be useful to monitor or protect, depending on its value and many other factors. Also, businesses may need to use others’ intellectual property in their marketing efforts and will likely want to avoid infringing others’ property rights as they do.  The following is a brief introduction to one basic area of intellectual property, copyright, and may be helpful. As small businesses develop or update their marketing plans, it may be useful to consult with an attorney about potential intellectual property needs.

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Introducing Copyright Basic Concepts

What is copyright?

Copyright law protects “original works of authorship fixed in any tangible medium of expression. . . “[2] In general, a copyright gives the owner legal rights to reproduce copies, distribute copies, display or perform a work, and develop derivative works.[3]

Some examples of copyrightable works include: websites, pictures, advertisements, musical recordings, business plans, software, sales presentations, and more! Facts and ideas are not copyrightable.[4]

Who owns a copyright?

In general, initially the author of a copyrightable work owns the copyright.[5] However, an employer generally owns the work created by its employees in the scope of their employment.[6] Further, when a certain type of copyrightable work is specially ordered or commissioned from an independent contractor, the party who commissioned the work owns the copyright if there is a written agreement to that effect.[7] Copyright owners can transfer parts or all of their ownership.[8]

How is a copyright created?

When a work that qualifies for copyright protection (e.g., the work is original and expresses a minimal level of creativity) is “fixed in a tangible medium” (for example, when it is written, recorded, or saved in a digital format), it is protected by copyright. As one guide for entrepreneurs put it, “No action is required to obtain copyright protection,” and while a copyright notice may be advisable, it is not a legal requirement.[9] However, registration of a copyright can confer additional rights and benefits, including the right to sue for infringement.[10]

Social Media Platforms and Intellectual Property

Social media platforms offer various opportunities for small businesses to market their products and services, like the ability to connect with large audiences for little or no cost.[11] As entrepreneurs use social media platforms to market their products, services, or businesses, they should be aware that these platforms may have specific policies related to intellectual property. For example, TikTok’s Intellectual Property Policy states that it is a violation of the platform’s Terms of Service and Community Guidelines to post, share, or send content that violates or infringes another’s copyrights, trademarks, or intellectual property.[12] For a deeper dive into music use on TikTok, check out the article, “Music Licensing in the Age of TikTok.”

Developing a Marketing Plan

Outline of head with multi-colored graphics of business icons like pie chart, bar chart, and gearsAs businesses consider their marketing opportunities for the coming year, a written marketing plan may help keep ideas organized, track progress, and communicate plans with key team members. Some questions to consider in developing a marketing plan include:

  • What is the profile of your target customer(s)?
  • What product or service are you marketing?
  • What is your advantage compared to competitors?
  • What promotion strategies will you use?
  • What are your sales goals or forecast?
  • How will you measure outcomes and success?

Tools and Resources for Entrepreneurs

As entrepreneurs build digital marketing strategies, they will likely need images, videos, graphics, and other content. Various online outlets offer imagery like photos, illustrations, graphics, and video, as well as sound like music and sound effects, that are licensed for users to use for little or no cost.

Want to learn how to build a website for your business or enhance your social media marketing strategies?  Connect with the Small Business Development Center at The Ohio State University South Centers, which covers a 10-county region in southern Ohio.

Looking for help developing or updating a marketing plan for your small business? Connect with your local Small Business Development Center (SBDC). SBDC’s offer free business consulting and at-cost training to small businesses across the country. Find your local SBDC online here.

Food and farm entrepreneurs who want to learn more about direct marketing their products can explore the Ohio State University Extension Direct Food & Agricultural Marketing program, including online resources like webinar recordings and short videos.

Important note: This information is provided for educational purposes only. It is not legal advice and is not a substitute for the need to consult with an appropriately licensed attorney.

 

Sources:

[1] “The Legal Implications of Social Media Marketing & Advertising.” (n.d.). Pillsbury Winthrop Shaw Pittman LLP. https://www.pillsburylaw.com/images/content/1/0/v2/102362/FACTSHEET-SocialMediaMarketingAdvert.pdf

[2] 17 U.S.C. §102

[3] 17 U.S.C. §106

[4] Bagley, C. & Dauchy, C. (2012). “The Entrepreneur’s Guide to Business Law: 4th Edition.” South-Western, Cengage Learning: Mason, Ohio.

[5] 17 U.S.C. §201(a)

[6] 17 U.S.C. §201(b)

[7] Circular 30: Works Made for Hire. (2021). United States Copyright Office. https://www.copyright.gov/circs/circ30.pdf

[8] 17 U.S.C. 201(d).

[9] Bagley, C. & Dauchy, C. (2012). “The Entrepreneur’s Guide to Business Law: 4th Edition.” 534. South-Western, Cengage Learning: Mason, Ohio.

[10] Id.

[11] Fountain, T. (Jan. 25, 2021). “Why Small Businesses and Startups Should Invest in Social Media Marketing.” Forbes. https://www.forbes.com/sites/forbesbusinesscouncil/2021/01/25/why-small-businesses-and-startups-should-invest-in-social-media-marketing/?sh=3e686afe563e

[12] Intellectual Property Policy. (June 7, 2021) TikTok. https://www.tiktok.com/legal/copyright-policy?lang=en