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THE CO-OPERATIVE DIFFERENCE

THE CO-OPERATIVE DIFFERENCE. HOW CO-OPS CAN LEAD THE RECOVERY FROM RECESSION!. WHO ARE WE?. SO WHY AM I HERE TODAY?. The Importance of Structure Organised Labour M odels The Importance of Taxation in the Labour M odel Detailed Cost C omparisons

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THE CO-OPERATIVE DIFFERENCE

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  1. THE CO-OPERATIVE DIFFERENCE HOW CO-OPS CAN LEAD THE RECOVERY FROM RECESSION!

  2. WHO ARE WE?

  3. SO WHY AM I HERE TODAY?

  4. The Importance of Structure • Organised Labour Models • The Importance of Taxation in the Labour Model • Detailed Cost Comparisons • Practical Application 1 – A Worker’s Co-operative in the Construction Industry • Practical Application 2 – Zombie Enterprises • Practical Application 3 – The “Family Office” • Practical Application 4 – Succession Planning

  5. STRUCTURE

  6. CO-OPS VS. ALL BUSINESSES

  7. Survival rate in first three years: Co-ops: 91% All Businesses: 56% Productivity gains over 4 year period: Co-ops: 33% All Businesses: 17% 96% of community store start ups using co-op model still in business today

  8. ORGANISED LABOUR MODELS

  9. A specific example – a Company in the Construction Industry But this applies to all enterprises relying on people actually doing something on the front line

  10. Direct Employment Subcontract Labour Agency Labour Co-operative

  11. A Co-operative has a price and productivity advantage How is this derived?

  12. THE IMPORTANCE OF TAXATION IN THE LABOUR MODEL

  13. Tax is the single biggest overhead cost in a typical enterprise • Dividends are tax deductible in a genuine Co-operative • Governments will not legislate against a model that creates economic growth and employment

  14. Also fulfils Government social agenda of responsibility, self improvement and bringing products/services to the market in an ethical way • ‘Mutuals Support Programme’ actively encourages owner managed businesses • HMRC confirm to ICAEW that dividends in owner managed businesses are not disguised remigration

  15. DETAILED COST COMPARISONS

  16. Direct Employment 18.64 11.48 Subcontract 18.00 12.91 Co-operative 16.21 14.30

  17. PRACTICAL APPLICATION 1: A WORKERS’ CO-OPERATIVE IN THE CONSTRUCTION INDUSTRY

  18. Scaffco:

  19. PRACTICAL APPLICATION 2: REVIVING ZOMBIE ENTERPRISES

  20. Zombie Company – neither dead nor alive • 146,000 Zombie Companies in the UK and counting (R3 - Insolvency Practitioner's Body) • Approximately 50,000 will go bust if interest rates go up (R3)

  21. The Profit + Loss Account of Zombie Co. with low interest rates…

  22. The Profit + Loss Account of Zombie Co. with normal interest rates…

  23. The Profit + Loss Account of Zombie Co. reformed as a Co-operative - low interest rates…

  24. The Profit + Loss Account of Zombie Co. reformed as a Co-operative - normal interest rates…

  25. PRACTICAL APPLICATION 3: THE “FAMILY OFFICE”

  26. Used by wealthy families to preserve wealth down the generations • Families of more modest means who have assets can put these into a Co-operative • Can preserve and protect assets for the benefit of future generations without the need for complex and costly trust structures

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