Finances – securing start-up finance and financial planning

This section will help you consider your opetions when it comes to securing finance to starting your co-op and financial planning.

Start-up Finance

Most start-up co-operative enterprises require some money in order to get going. This money is typically needed to buy the tools and stock to make the product or to develop the infrastructure to deliver the service, including paying for things such as utility bills, wages etc. until the business starts to generate some income. This money is known as start-up finance and is just for the start-up phase. An enterprise should not be permanently reliant on injections of finance.

It is always worth exploring whether a business can start without finance and expand slowly. For example Suma Wholefoods, a multi-million pound turnover co-operative began as a simple food co-op in a front room in Leeds. A market stall might allow you to test your idea before looking at taking on a shop.

We can categorise start-up finance into 3 main types:


Money that you don't need to repay, but normally do need to spend in accordance with the wishes of the funder.


Money that you do need to repay, normally with some interest.


Money that is invested in the enterprise (normally as shares), may be withdrawn at some point in the future and normally gives rights to the investor to receive a share of any profits. In the case of a co-operative, an investor would normally become a member of the co-operative and an initial buy in through shares may be a condition of membership. Equity also normally gives some degree of control over the enterprise.

Many co-operatives are using community investment to fund enterprises, particularly renewable energy projects. For a full overview of community investment, visit the Community Shares website.

See the following section for additional information and useful downloads

Financial planning

In order to engage with funders, be they grant giving bodies, lenders or investors, you will need to be fairly sure of your financial projections. Robust financial projections will also give you the confidence to proceed to trading, engage with other stakeholders and recruit members.

As part of your business planning, you would normally create the following documents (typically as spreadsheets), covering at least the first 3 years of trading:

Cashflow projection

A prediction of all the actual cash that will flow in and out the enterprise over time. This allows you to see easily whether you'll run out of cash or not.


Profit and loss projection

A summary of incomes and expenditure allowing you to see how profitable the enterprise will be as the enterprise trades over time.

Balance sheet

A predicted snapshot of the assets and liabilities of the enterprise at a given time; what the business is “worth”.

You would normally create these documents for any start-up enterprise and, as a result, there are many worked examples and templates available on-line. Your financial planning will form the core of your business plan.

Of course there are lots of other things to consider, such as tax, business rates etc., but again these are common business issues and there are lots of resources and advice available out there.

See the following section for additional information and useful downloads

The above infographic has been reproduced with permission from, and originally created by, Mark Simmonds for Transition Enterprise Handbook on behalf of the Transition Network.

Updated: 15/02/2017