Business Development

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.

Multi-colored graphic of thought bubbles and text boxes connected by arrows

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

Leading the Co-op: Director Key Responsibilities and Board Training Programs

One of the unique aspects of the cooperative business model is that members democratically control the enterprise.[1] Commonly, cooperative members elect a representative board of directors to govern the business.

Cooperative directors are tasked with varied and sometimes complex tasks, from monitoring financial performance to assessing the co-op’s general manager and more. In serving in a vital role in their cooperative, directors also take on various responsibilities – some of them legal in nature. Key among these responsibilities are the fiduciary duties directors owe to members, other directors, and the cooperative.[2]

  • Duty of care – Generally, requires that cooperative directors use care in their actions as judged based on the care that an ordinarily prudent person in a similar position would exercise. Directors are generally expected to make informed decisions, exercise reasoned judgement, and adequately supervise those to whom they delegate responsibilities.[3]
  • Duty of loyalty – Generally, requires that cooperative directors act in good faith and for the benefit of the cooperative, including not receiving preferential treatment compared to other members and appropriately addressing or avoiding conflicts of interest.[4]
  • Duty of obedience – Generally, requires that cooperative directors comply with applicable laws and authorities. It is important for directors to be generally familiar with key authorities like the co-op’s bylaws, articles of incorporation, policies, and other key legal instruments.[5]

A deeper dive into the legal responsibilities of agricultural cooperative directors, “Navigating Your Legal Duties: A Guide for Agricultural Cooperative Directors,” is intended as a practical resource for directors that includes self-assessment tools to help directors identify areas where they can learn more. The resource is published by the National Agricultural Law Center.

For a wider-view of the types of responsibilities that directors take on in leading their cooperative, “The Circle of Responsibilities for Co-op Boards,” by James Baarda is a helpful publication.

Tan office chairs around circular meeting table

Most Cooperatives Provide Board Training in Key Responsibilities

Cooperative board training programs can help directors understand their roles and responsibilities, including ensuring that new directors, and even seasoned directors, have a firm grasp of their fiduciary duties, among other areas. In a survey of 500 cooperatives across industry sectors and the United States, co-op enterprises shared the topics in which they train directors:

  • 80% or more of responding cooperatives train board members in fiduciary duties, financial topics, and the cooperative model
  • Many cooperatives, between 53% and 78% of responding cooperatives train directors in ethics and compliance, industry-specific topics, legal and regulatory issues, and risk management
  • Almost half of responding cooperatives (49%) train directors in corporate social responsibility/sustainability/social impact
  • Some responding cooperatives train their directors in meeting facilitation and conflict resolution – 41% and 32%, respectively[6]

Training is a Key Part of Global Co-op Principles

According to the globally-recognized cooperative principles stewarded by the International Cooperative Alliance (ICA), Principle 5: Education, Training and Information recognizes that, “Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. . .”[7] The ICA’s Guidance Notes on the Cooperative Principles clarify what might seem like a redundant phrasing – education, training, and information have distinct, important meanings:

“ ‘Education’ is about understanding the Co-operative Principles and Values and knowing how to apply them in the day-to-day operations of a co-operative business…”

“ ‘Training’ is about developing the practical skills members and employees need to run a co-operative in according with efficient and ethical business practices and to democratically control their co-operative business responsibly and transparently.”

“ ‘Information’ is a duty to make sure that others who are members of the general public . . . know about co-operative enterprise.” [8]

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

A Commitment to Continued Learning: Developing a Board Training Program

As directors navigate complex business landscapes trying to ensure their cooperative enterprise is responsive to members’ needs and remain sustainable over the long-term, training programs can help directors develop their technical and soft skills. To develop a board training program, cooperatives may look both internally and externally. For example, training programs may be specifically constructed and hosted by a local cooperative’s key employees or by a federated cooperative partner. Various education and nonprofit institutions that work with or support cooperative enterprises like councils, cooperative associations, and universities that offer generalized training opportunities and educational resources. Further, industry-based associations, like agribusiness, housing, or financial industry associations, often host learning sessions, updates, and professional development opportunities.

As cooperative managers, directors, entrepreneurs, and developers look toward a new calendar year, prioritizing training that can help directors lead their co-op more effectively may be a worthy goal to add to the list of resolutions!

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] “Cooperative identity, values & principles.” (2018).  International Cooperative Alliance. https://www.ica.coop/en/cooperatives/cooperative-identity

[2] Scott, H. & Traxinger, M. E. (2021). “Navigating Your Legal Duties: A Guide for Agricultural Cooperative Directors.” National Agricultural Law Center. https://nalcpro.wpenginepowered.com/wp-content/uploads//assets/articles/Co-op-directors-guide.pdf

[3] Id.

[4] Id.

[5] Id.

[6] Berner, C. & Schlachter, L.H. (2022). “Findings from the Cooperative Governance Research Initiative: 2021.” University of Wisconsin-Madison Center for Cooperatives, 31. https://resources.uwcc.wisc.edu/Research/CGRI_2021Report_web.pdf

[7] “Cooperative identity, values & principles.” (2018).  International Cooperative Alliance. https://www.ica.coop/en/cooperatives/cooperative-identity

[8] “Guidance Notes on the Cooperative Principles.” (2017). International Cooperative Alliance, 59. https://ica.coop/en/media/library/the-guidance-notes-on-the-co-operative-principles

Why Small Businesses Should Consider Video in Social Media Marketing

Social media platforms offer numerous opportunities for small businesses as they market their products and services – from free access to broad and vast audiences of potential customers to opportunities to drive traffic to websites where businesses are selling goods or services to tools for selling products and services directly on social platforms.

The importance and reach of video marketing on social media platforms means that entrepreneurs developing their social media marketing strategies and building their digital skills would be well-advised to invest in creating video content. Consider that:

For more information about social media and video marketing, including a helpful overview of how different social media platforms utilize video and tips for effectively incorporating video into marketing for various platforms, check out this guide from Vimeo. Vimeo also has a blog dedicated to video marketing for business with articles and resources ranging from “Small Business Saturday ideas for both planners and procrastinators” to “How to set up Instagram Shopping for your small business.”

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

Upcoming “Foodpreneur School” to Focus on Social Media Marketing for Food & Farm Entrepreneurs

Food and farm entrepreneurs ready to learn more about using social media marketing and creating impactful video for marketing, join us for “Foodpreneur School” in Hillsboro, Ohio on Tuesday, October 25, 2022! Foodpreneur School is an educational program for food and farm entrepreneurs ready to grow through enhanced sales and marketing. Experts from Ohio State University will teach entrepreneurs about creating impactful video content and effectively using social media for small business marketing. Entrepreneurs are encouraged to bring their preferred devices (mobile phone, tablet, laptop, etc.) for managing their social media presence, as the session will be interactive! Learn more and sign up for no-cost online.

If you require an accommodation, such as translation, to participate in this event, please contact Samantha Black at black.1156@osu.edu or 614-247-9705. 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, visitcfaesdiversity.osu.edu.

Developing your Business’s Social Media Marketing Strategy

In a 2017 survey of over 3,000 consumers in the U.S., Germany, Colombia, and Mexico, 35% of people reported they go to social media for information when they’re considering buying something and want to research options. That figure was closer to 50% for consumers aged 18-34.

As small businesses and entrepreneurs consider how they will market their products, social media can offer numerous potential benefits – from helping build brand awareness, to offering a way of reaching large audiences in a cost effective way, and driving traffic to a business’s website, among many other opportunities.

An individual working at a computer.

Developing a Social Media Strategy

Consider these four questions from a 2020 Harvard Business Review article as you develop your social media strategy:

  1. “What are your goals?”

Are you trying to expand to a new geography? Launch a new product? Increase sales? Whatever the answer, your strategy should be tailored to fit your goals, so start out by identifying those goals. Remember to ensure your goals are SMART – specific, measurable, action-oriented, realistic, and timed.

  1. “Which platforms should you use?”

Different social media platforms have different formats, business tools, and more. For example, Facebook has useful business tools like detailed analytics and allows businesses to incorporate lots of information like contact details and hours of operation. Meanwhile, Pinterest and Instagram are highly visual platforms with focus on photo and video content; categories like food and DIY projects are some of Pinterest’s most popular categories. Check out the “Social media platforms for businesses” section of this recent article from Business News Daily to learn about the different business tools and formats of major social media platforms.

  1. “What is your content strategy?”

Will you use pictures? Video? To develop effective digital marketing for a small business, entrepreneurs will need to consider the type of content that is right for them based on their target customers, their resources, and more. Authors writing for the Harvard Business Review counsel, “Your content should be unique, useful, and shareable.”

  1. “Are you ready to talk with your audience – in real time?”

Social media platforms offer opportunities for businesses to engage with their customers and it is important for businesses to relate to and interact with customers on social platforms. As one author shared tips for businesses using social media, “Create a consistent voice and tone . . . one that resonates with your audience and influences how they see your brand.” If you’re using social media for customer service functions, consider that 42% of consumers expect a business to respond to complaints raised via social media within 60 minutes.

Upcoming “Foodpreneur School” to Focus on Social Media Marketing for Food & Farm Entrepreneurs

If you’re a food and farm entrepreneur ready to learn more about using social media marketing, join us in Hillsboro, Ohio on Tuesday, October 25, 2022! Foodpreneur School is an educational program for food and farm entrepreneurs who are ready to grow through enhanced sales and marketing. Speakers at the October 25 session will include experts from Ohio State University sharing the ins-and-outs of social media marketing for small business and insights on creating impactful video content for marketing. The session will include hands-on learning opportunities and entrepreneurs are encouraged to bring along their preferred devices (mobile phone, tablet, laptop, etc.) for managing their social media presence. Learn more about the session and sign up for no-cost online!

If you require an accommodation, such as translation, to participate in this event, please contact Samantha Black at black.1156@osu.edu or 614-247-9705. 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, visitcfaesdiversity.osu.edu.

Are you a small business using online marketing? Learn about legal basics of branding and marketing in our digital world!

Did you know that internet users spend an average of almost three hours per day on the internet? Three hours! In explaining why digital marketing should be a priority for small businesses, one author shared, “even if you are not selling your product or service online, then you likely could still count yon your target audience being on the internet at some point during any given day.” As people spend significant amounts of time online and social media platforms offer numerous opportunities for small businesses as they market their products and services, like the ability to connect with huge audiences for little or no cost, it should be no surprise that an estimated 91% of small businesses allocated resources to digital marketing in 2021.

Graphic of marketing images, including retail storefront, smartphone, online application, and computer.

But have you ever considered the potential legal implications of your online marketing? For example, a 2016 fact sheet, “The Legal Implications of Social Media Marketing & Advertising,” shared the following potential legal considerations for businesses using social media:

  • Social media posts could be considered ‘corporate speech’ and be used against companies in lawsuits, for example in false advertising and other claims. (This is one reason it is important for businesses to identify authorized users and develop written policies about how social media accounts are used or maintained.)
  • Social media activities may be subject to regulatory laws and agencies like the Federal Trade Commission, National Labor Relations Act, and the Food & Drug Administration
  • Issues around content ownership can have important impacts – for example, businesses need permission to use content generated by other users, including content that includes their products or incorporates their brands.
  • Digital marketing spaces create considerations around the use, protection, and monitoring of intellectual property like trademarks and copyrights.

“Legal Basics of Branding and Marketing: What to know in a digital world” seminar to be held in Piketon, Ohio

Entrepreneurs interested in learning more about the legal basics of branding and marketing can attend a free education session in Piketon, Ohio on Wednesday, August 17, 2022. The session is one of three educational presentations by legal professionals as part of the event, “Building Legally Resilient Small Businesses: Quick Advice Legal Clinic for Entrepreneurs,” which will be co-hosted by the Entrepreneurial Business Law Clinic at Ohio State’s Moritz College of Law and partner business development programs at the OSU South Centers. During the evening program on Wednesday, August 17, 2022, entrepreneurs can participate in one or all three free public education sessions on common legal issues for small businesses. There is no cost to participate in the program, but registration is required.

6:00 p.m. – 6:30 p.m. – “Legal Basics of Branding and Marketing: What to know in a digital world,” taught by Patrick Perkins, OSU Moritz College of Law

6:30 p.m. – 7:00 p.m. – “Legal Structures for Small Business,” taught by Paige Wilson, OSU Moritz College of Law

7:00 p.m. – 7:30 p.m. – “Working with Independent Contractors,” taught by Jacqueline Radebaugh, Jason Wiener p.c.

Entrepreneurs can also sign up for no-cost, one-on-one consultations with volunteer attorneys to explore their legal questions and receive guidance in areas like business structures, employment, contracts, marketing and advertising, worker and other cooperatives, commercial real estate, and more. Sessions will last up to 30 minutes and participants can register for up to two sessions. Entrepreneurs interested in a one-on-one appointment will be asked to submit basic information about their legal question so staff members can try to match participants with a volunteer attorney whose practice area most closely matches their legal question. Please note, space is limited.

Event Details: August 17, 2022, 6 p.m. – 8 p.m.

LOCATION: OSU South Centers Endeavor Center

1862 Shyville Road, Piketon, Ohio 45661

COST: No cost to attend, but registration is required.

Register by visiting go.osu.edu/legalclinic

Questions? Reach out to Hannah Scott at scott.1220@osu.edu or 614-247-9705.

If you require an accommodation, such as translation, to participate in this event, please contact Samantha Black at black.1156@osu.edu or 614-247-9705. Requests made by August 3, 2022, 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, visitcfaesdiversity.osu.edu.