The following is a guest post from Chuck Huckaby of our Work at Home blog.
I am fascinated by the cooperative movement. I would love to see work at home businesses emerge which could form larger cooperatives and enable people to have the benefits of working at home without being “on their own”.
Sometimes cooperatives are associated with hippies or other subcultures that for one reason or another don’t commend themselves to people thinking about starting a home business or work at home business.
Here’s an example of a modern cooperative that’s in a field most people don’t associate with “cooperatives”… a taxi company called “Union Cab”. (Though it’s not really “unionized”… every worker is an “owner”.
(By the way, a cooperative can be in any field … even large scale manufacturing … there are fewer limits than one might imagine as long as folks can get along!)
I linked to their Rider Rewards program because I considered it innovative. If you ride the cab a lot, you get to prepay and get a discount… pretty cool.
As a cab company, some workers are paid on a commission basis for fares received during their shift. Others are paid hourly. This is in addition to other benefits the worker owned company provides such as health and dental benefits paid 60% by the cooperative.
When the company declares a “gross profit” (the term they use is “surplus”) over the cost of operations, payroll, benefits, etc. at least 20% is paid out to the workers in cash as bonuses. The rest is plowed back into the business as operating reserve, capital for expansion, etc.
Cooperative businesses aren’t free from the laws of economics… they operate within the same realities as other businesses. Corporations though have stockholders to compensate and the management pays themselves more than the leader of a similarly sized cooperative. Cooperatives can pay their workers more (in theory at least) because the workers themselves receive what would go to outside investors or “management”.
The person starting a cooperative won’t have the potential upside they’d have in starting their own business where they alone can set payscales. On the other hand, when there are many people to share the burdens of ownership, management, etc. it may increase the odds of success long term and make the process of growning a business less stressful than would be found in a sole proprietorship. Everyone – as an owner – gets to “worry” about how things are going!
If anyone knows of any home business entrepreneurs working as part of cooperatives, please leave a comment.