Working up and testing the idea: Is this a viable business?

Once you have your big idea, there are two things that you need to test at this stage:


Is this a viable business?

Remember a co-operative is a trading enterprise, you need to ensure that there is a viable trade involved. If all you are planning to do is campaign for a change, or own a community asset in trust and not actually deliver a product or service, then that's fine, but it's maybe not an enterprise.

Equally, trading in order to create social change, or safeguard an asset, is fine too, but we do need to take the trading part seriously if it is to meet your other aims.

In exploring your business model and its viability, you should work towards answering the following questions:

  • What is your product or service?
  • How you are going to deliver it?
  • Why will people want it?
  • Who else is already doing it?
  • How will being a co-operative form part of your Unique Selling Point or USP.
  • How much do you sell your product or service for? Getting this wrong and selling too cheap is one of the main reasons for start-up failure.
  • How much of your product or service do you need to sell to “break even”?
  • And, importantly, do you have everything you need to deliver it?

The process of gathering the information needed to answer the questions above is known as 'market research' and the presentation of it is known as a 'marketing plan' – an important part of the Business Plan that you will create later.

See also: Feasibility study: Understanding your market

At this stage you can also start to collect information relating to possible premises, equipment, suppliers, staff requirements etc. and start to budget for how much money you'll actually need upfront to get started.

See the following relevant sections for additional information and useful downloads

Updated: 15/02/2017