Hey guys and gals!
When we began this journey we had to decide how we should organize as a company. Most commonly, a business would organize as a sole proprietorship, partnership, limited liability company (LLC), or a corporation. There are many factors to consider when looking at each type of organization - ownership, governance, taxation, and profits. For instance, in a sole proprietorship, one person owns the business, governs the business, has specific tax considerations, and is enriched when the business profits. A partnership is similar to a sole proprietorship, but several individuals organize as partners. A corporation, on the other hand, is owned by shareholders, is typically governed by a board or individuals with a majority of shares, has specific tax considerations, and shareholders are enriched relative to the number of shares held when the company profits. An LLC gives more leeway than a corporation, and in simplest terms can be considered a hybrid of a partnership and corporation.
Conceptually, a business is organized to offer products or services to consumers at margins sufficient to sustain itself and positively benefit ownership. In the above described organizations, we feel that there are inherent conflicts relating not only to ownership vs consumer, but also ownership vs employee. The described organizations have incentive to offer lower cost and lower quality products in order to maximize profit. They also have incentive to keep employee wages and benefits to minimums in order to maximize profit. This can lead to unhappy consumers and unhappy employees. In practice, it's necessary to find balance between these counteracting forces and many organizations do so to varying degrees.
We organized as a cooperative as we feel that this type of organization modifies the relationship between owner, consumer, and employee to a degree which aligns better with our core values. A cooperative passes the benefits of ownership, governance and profits to its members in a fair and democratic process. Membership is offered to consumers at a low price, and these membership fees crowdsource the equity the organization needs to invest in itself and grow. Members elect individuals to a cooperative board which governs the organization. Members also receive an annual dividend relative to the amount of business each member has done with the cooperative, less operating expenses. Finally, the relationship between the organization, member, and employee is mutually beneficial. The cooperative is able to offer better than status-quo wages and benefits to employees, employees have incentive to best serve members and the organization, and members receive a higher level of service and satisfaction than alternative organizations can provide.
We hope this explanation helps! It certainly isn't exhaustive but it should give a general idea of what we are and what we believe in.