What Is a Community-owned Business?
Community-owned businesses (COBs) include a range of business types and structures that share the common feature of being financed and owned solely by local residents. Their formation often is sparked by major unmet needs locally where the prospect of those needs being filled profitably by an individual entrepreneur is minimal. While COBs provide much promise for urban neighborhoods, they’ve started most frequently in rural areas where large chain grocers or “superstores” some distance away have driven out small-town grocers or merchants and left residents with no place in town to buy necessities. Not surprisingly, a majority of these stores have sprung up in states where winter storms can isolate residents and create dangerous shortages or compel trips on hazardous roads.
While a local entrepreneur is unlikely to try competing in such circumstances, community ownership can be a game-changer because it shifts people’s consciousness. Shopping decisions no longer are merely a choice between leaving town to the big store vs buying locally, it creates the opportunity for residents to buy from their own store.
A COB is defined by local residents investing money or buying shares in order to fund the start-up and operation of the enterprise. Generally, the number of shares each individual may purchase is limited to prevent any one person from having too much power. Community-owned stores have the additional benefit of tending to favor buying local products (and can write such preferences into their mission), which recirculates money throughout other local businesses and builds local wealth.
What’s the Difference Between Community-owned Stores and Cooperatives?
Community-owned stores are open to everyone (including residents who do not own shares in the store), but shareholders split any profits. Cooperatives are operated primarily to benefit members (most grocery coops also serve non-members, but may charge more to non-members) and may not focus on generating profits. Community-owned stores could prioritize profits (depending on their bylaws) and typically will pay dividends to shareholders if profit is generated. For more comprehensive information on cooperatives click here.
Joshua Bloom, who has blogged on this topic, identifies four broad structures of community-controlled business:
- Cooperative: A communally owned and managed business, operated for the benefit of its members;
- Community-owned corporation: A traditional, for-profit corporation that integrates social enterprise principles;
- Small ownership group: A small, ad hoc investor group that capitalizes and/or operates a business as a partnership or closely-held corporation; and
- Investment fund: A community-based fund that invests debt or equity in local business ventures.
Community-Owned (non co-op) Businesses in the United States
Family Matters; Malta, Montana
Washakie Wear; Worland, Wyoming
Little Muddy Dry Goods; Plentywood, Montana
Main Street Guymon; Guymon, Oklahoma
Quimper Mercantile; Port Townsend, Washington
Bobcat Cafe in Bristol, Vermont
Nunyuns Cafe and Bakery, Burlington, Vermont
Milford Theater; Milford, Pennsylvania
Black Star Co-Op is the the world’s first co-operatively owned and worker self-managed brewpub.
Lodge Pole Trading Post, Lodge Pole, Montana (population 250, on Fort Belknap Reservation). Opening 2017.
Lake Grocery, Willow Lake, SD
Washburn Community Foods; Washburn, Illinois
Putney General Store; Putney, Vermont
Both urban areas and rural towns are exploring community ownership models as a solution to food deserts. Other alternative business models employed to bring groceries to under-served areas include Mandela Marketplace, Oakland, CA; Stop One Meat Market, Rochester, NY and People’s Community Market, Oakland, CA. Also, the Seward Coop in Minneapolis provides an interesting study (2016 article) in ensuring a coop serves the needs of a diverse working-class population. Please tell us of examples we’ve missed!
Closed or Unsuccessful COBs (for which we have information)
The Bee’s Knees in Morrisville, Vermont closed in 2015 after 12 years in business.
Claire’s Restaurant and Bar in Hardwick, Vermont closed in 2014 after 6 years in business.
In Greenfield Massachusetts, a planned general store failed to meet its fundraising goals and organizing ceased in 2011 (story here).
Helping More Communities Assess and Employ the COB Model
Thanks to Amy Campbell Bogie, who researched and interviewed many of these businesses as part of her Bard (College) MBA in Sustainability. AMIBA is seeking funding to establish a Center for Community Ownership to enable and promote these models as tools to solve problems on a local level and increase community wealth. The Center will identify best practices, common challenges, and resources for the creation of community-owned businesses that can be disseminated to communities nationwide. Contact us to learn more or get involved. Amy now is a fellow with the National Coalition for Community Capital.and occasionally speaks on community capital for AMIBA.
News Coverage of COBs
How to Feed the Masses in Small-town America September 2016
How to Launch a Community-Owned Store 2012 (pdf)
Communities Saving Cherished Stores July 2009
Town Working Together to Carry Groceries November 2008
Communities Create Their Own Stores May 2005
Community-Owned Department Stores Replace Chains February 2003
This page always will be a work in progress. If you know of examples to add in any category (including failed attempts), informative links, or suggestions, please tell us!
Resources on Shared Ownership Models
A Cooperative Entrepreneurship Curriculum (Canada, 2016)
Strategies for Financing the Inclusive Economy (One of a series of publications on shared ownership models from the Democracy Collaborative
Community Owned Pubs are on the rise in the UK
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