Business Models for Marketing Agricultural Products. Lots of Names. Corporation LLC Cooperative Association. Comes Down to Choices. What will it do? Who will control or own it? How will decisions be made? How do the profits or surplus earnings get distributed?
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Sales price = $6.00
Cost of sales (tax, labor, supplies) =$1.50
Fixed Costs = $ 2.50
Surplus = $2.00
$50,000 to cover expansion
Retain $.50 per dozen
Need 100,000 dozen to raise the funds
Five years at current production level
Each member invests the same amount
Each member can deliver as much as they can produce
One vote per person
Raise money through retained earnings
Members buy access to production capacity
Specific mutual obligations – co-op will buy and member will deliver
One vote per member
Raise money by selling access to processing capacityComparison
Can/will members be willing to spend this much money to buy shares of production capacity?
Not like an LLC where you can sell shares to investors who do not produce.
National Coop Organizations
Cooperative Development Funds