Press release

The secret to start-up success? Become a co‑op

New co-operative businesses are almost twice as likely as start-up companies to survive their first five years according to a new report released today (Tuesday 26 June).

The Co-operative Economy 2018, produced by trade body Co-operatives UK, reveals that just 44% of companies survive the difficult early years while 80% of co-operatives are still going strong.1

Co-operatives UK Secretary General, Ed Mayo, said: “We know co-operatives are resilient and sustainable businesses and these incredible stats reinforce that view. It begs the question ‘why are there not more co-operatives?’

Co-operatives are businesses owned and controlled by their members. The report finds that 7,226 independent co-operatives operate across the UK, ranging from well-known retailers like The Co-op and John Lewis to farmer-owned businesses, community sports clubs and web developers. Their combined turnover has hit a five-year high of more than £36.1 billion, while a record 13.1 million people now own and have a say in how the UK’s co-ops operate.

“It’s clear that co-ops are a sustainable way of doing business and a model that clearly resonates today as we face in to economic and political uncertainty. We’ve seen this evidenced in our own active membership which has grown by 15% to 4.6m in the last year as we’ve invested in building stronger businesses and stronger communities through things like our Co-op Academy schools.” Steve Murrells, Co-op Group CEO

Ed said: “It’s no surprise there’s a prevalence of empty offices and boarded up shops in high streets across the UK’s towns and cities when more than half of all companies fail in their early years."

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the first year 93% of businesses remain in existence. There is a marked drop to 76% after the second year followed by another significant fall to 61% after year three. Co-operatives are far more resilient with a survival rate of 96%, 91% and 87% after the first, second and third years of existence respectively.  

Co-operatives enjoy strong sector support which today (Tuesday 26 June) has been given a boost through the announcement of extension funding for The Hive – a specialist business support programme for new and existing co-ops – until the end of 2020.

A £1 million programme spread over three years, The Hive was launched in spring 2016. Funded by The Co-operative Bank and delivered by Co-operatives UK, it has provided over 500 organisations with specialist support and training.

“We’re proud to continue to fund The Hive programme and support co-operative businesses as they develop and grow into successful and sustainable businesses in the current economic climate. The Hive is a great initiative and one that we hope will encourage more individuals and groups to set out on the path of starting up their own co-operative business.” Ryan Etchells, Head of Business Banking at The Co-operative Bank

Ed added: “We welcome the additional funding from The Co-operative Bank to extend this vital support for co-ops in the crucial early years of operation. Here’s an option that gives businesses twice as much chance of succeeding and in today’s climate, this is precisely what the economy needs, but where is the wider support?

"We want to see the co-op business model promoted by government and professional services, in the education sector and even more vocally by co-operatives themselves. If we want to see a more successful economy, where people have a say in decision-making and receive a fair share then we need more co-operatives.”

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1The survival rate of co-operatives is tracked on a yearly basis in the Co-operative Economy report. Data is calculated using a base point of co-operative new-starts in 2012, with their survival tracked over subsequent years. This is compared with company survival rates as published by the Office of National Statistics over the same period.