Stage 1: Exploration

• Learn about Co-Op structure, governance, and operations.
• Learn about ways to fund the sale of the business.
• Talk to business advisors, financial advisors, friends, family, etc.
• Begin a dialogue with workers who would lead and operate the business as a Co-Op. This is often the beginning stage for a transition team; sometimes called a buy-out committee.

Stage 2: Assessment

• Often called the Feasibility Study stage.
• The businesses’ books and finances are examined and evaluated.
• Any issues/aspects regarding real property, IP, trademarks, existing business contracts, etc. are known/understood.
• At least one valuation for the business is produced by a qualified expert.
• A transition team/buy-out committee made up of current workers members is formed. They are working in cooperation with the owner(s) & evaluating the feasibility of the conversion and their ability to run the business as a Co-Op.

Stage 3: Structure

• Often called the Due Diligence stage.
• A transition plan by the transition team takes form. Current worker skills are assessed. Roles, and specifically leadership roles in the Co-Op are identified as well as potential candidates for each. And the updated business plan continues to be worked on.
• Draft Co-Op by-laws and governing structure and process documents are written.
• The best financial structure of the sale is determined, understood, & tentatively agreed to. Funding sources are identified and applications are started if applicable.
• The sale price/buy-out amount is presented and tentatively agreed to.

Stage 4: Form

• The Co-Op is formally created and preparations are made to complete the sale and transfer the business.
• Defined management and leadership roles are filled.
• A Board has formed and is operating. By-laws are adopted.
• Incorporating documents are filed. And patronage model and structure are confirmed.
• Any member recuitment begins here.

Stage 5: Completion

• Often called the Closing stage…very similar to the final stage of buying/selling a home.
• Sale and Purchase Agreements are negotiated, finalized and signed.
• Sale financing structure if applicable is in place and finalized. Buy-out payment(s) are made.