NW Biodiesel Network 2 11 09
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Transcript of NW Biodiesel Network 2 11 09
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NW Co-op Development Center
Eastside Chapter – NW Biodiesel Network Feb. 11th, 2009
Eric Bowman; Cooperative Development [email protected]
1063 S Capitol Way # 211Olympia, WA 98501
360.943.4241
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Presentation Overview
1. Intro; the Center2. Co-ops 101 & Benefits of Cooperation3. NW Co-ops in biofuels4. Consumer-owned models5. Group dynamics6. Mechanics of Developing a Board7. Q&A
Forming & Running a Successful Biodiesel Co-op
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NW Co-op Development Center
The Centera 501(c)3 nonprofit which provides development services for new and existing co-ops
Our mission to foster community economic development through the co-op business model
We’rea team of co-op developers with skills specific to start-up and organizational business development
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Co-op 101
A co-op is any corporation, that’s member:◦Owned◦Benefited◦Controlled
Top 100 co-ops’ 2007 revenues = $150 Billion!◦Ag & Grocery◦Energy/Communications◦Finance◦Hardware/Lumber
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Ownership
Member-Owners can be◦Consumers◦Producers/Farmers◦Workers◦Other Businesses
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Co-ops in NW Biodiesel
Biodiesel◦Production/marketing
Pendleton Grain Growers◦Joint-ventures
Inland Empire Oilseeds, LLC (Odessa Union Warehouse Co-op, Reardon Grain Growers, Reardon Seed Company)
◦Consumer-owned Bend Biofuels Co-op
◦On-farm consumption/co-op production
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Consumer Co-ops Models
Together consumersBrewDistributePurchase
◦Equipment◦Feedstock◦Wholesale Biodiesel
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Bend Biofuels
200 member buying groupDistributor-owned card lockNegotiates w/ wholesalers
COCC Biofuels Club◦educational◦brewing non-ASTM spec
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Flower Power – Salem, OR
60 MembersSeQuential B99 at cost plus:
◦OR/Fed Road taxes ◦delivery fee ◦$.05 co-op overhead
Pringle Creek:◦waived rent/utilities◦Building garage
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Residents in Eliot, ME
65 homeowners and small businesses
Co-op bulk purchase HHO, “bioheat”
Average savings ~$300locked-in price
◦capped "downside protection" ◦always pay the lowest price
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RIP
Many I-5 collectives and co-opsTacoma Biodiesel Co-opOlyBiofuelsGoBiodiesel – Portland
◦Biodiesel Weasel
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Why Cooperate?
to access resources not individually achievable
Marketable Co-op Benefits; “Goodwill”Keep profits, ownership and control local AccountableTrusted
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Unique Characteristics of Co-ops
Owned/controlled by members, not outside investors Exist solely to serve membersReturn surplus to members based on use, not
investmentPay taxes on income kept for investment/reserves;
surplus revenue returned to members who pay taxesEconomy of scale = valued added
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Distributed Energy Production
Distributed Resources = Distributed Opportunity• Many small sources• Diseconomy of scale• Rethinking
infrastructure
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Co-op Development Stages
Identify a need a co-op could meet
Form Steering Committee Research Feasibility Review Findings (Go/No Go) Membership Drive Planning and Financing Begin Operations (Go/No Go)
How We Can Help
Facilitate identifying mission and goals
Train founding Board members Market and feasibility research Assist with organizing Professional, 3rd party
perspective General business consulting
Project Lifecycle
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Organization
Why all the process?◦Going into business is hard and complicated◦Risking your money and your neighbors
Need an agreed upon roadmap
If you don’t know where you are going, any road will get you there – Wizard of Oz
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Why form entity at all?
CreatingSomething bigger and beyond oneselfFormal structure to work together
(governance/conflict resolution)Solid foundation for growthLegitimacyCommitmentLimited liabilityEconomy of scale
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Why not LLC?
LLC = tax flexibility of a partnership + limited liability of a corporation
Pros (primarily flexibility)◦ More attractive to capital (if you need a lot)◦ Make quick decisions to respond to market pressures◦ Members can include persons, other LLCs, S-Corporations
Cons◦ Legal costs◦ Power can concentrate with management or Board◦ Model is new; sometimes liability isn’t so limited◦ Governance (Board/operating agreements not always required)
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Co-op to Co-op Supply Chain
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Relationships and Authority
Management
BusinessBoard
Membership
Elects
HiresOperates
Services
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Start-Up Board Development
Shifting functions1. Steering Committee or Exploratory Board2. Founding Board3. Working and/or Managing Board4. Governing Board
◦Post-hire role more strategic
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Board’s Circle of Responsibilities
1. Represent members2. Establish policy3. Supervise top management4. Oversee asset development5. Preserve co-op character6. Assess performance7. Inform members
From USDA’s Management Tip Series by James Baarda (CIR6)
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Recruitment
OngoingCandidates don’t just appearBe strategic
◦ i.e. PlanPlan for attritionThe future!
The U.S.
The Entire Universe
Co-opBoard
Members
Regional FuelConsumers
BiofuelConsumers Input
Providers
Go
vern
men
tS
take
ho
lder
sNGO
Stakeholders
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Group Dynamics
Forming individually focusedStormingopening upNormingbuilding trust Performing interdependent
-----------------------------------
What next?Adjourning, Mourning, re-Norming or Transforming
Forming
Norming
Storming
Performing
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Creating a Shared Vision
Strategic PlanningWorld is ever changing Requires sense of where you’re goingVisioning Process:
◦Agree on participants/roles◦Design process◦Conduct process◦Format statements◦Keep it alive!
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“Opportunities for improvement”
Dysfunctional group dynamicsDisengaged membersUncertain of rolesFocus on triviaLack follow thru
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Solutions
This is a relationship, treat it as such◦Cultivate◦Maintain◦Socialize
Your job = hold each other accountable◦Avoid or move beyond unhealthy
dynamics◦Follow through◦Focus on what works, not what
doesn’t!
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More Solutions
Conflict◦Necessary & productive◦= relationship building◦Deal with creatively
Seek out trainingFocus on vision Behave with maturity
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Why do it?
Compelling economic interestGuidance exists
◦Everything we just discussedBe a part of a teamExperience challengesOpportunity to serve & build something together:
◦Collective equity, rather than private◦Accountable business
Personal prestige, pride & satisfaction
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Thank You!
Eric Bowman
Northwest Cooperative Development Center1063 Capitol Way S # 211 | Olympia, WA 98501
360.943.4241
[email protected] | www.nwcdc.coop
Fostering community economic development through the cooperative business model