Co-op center aiding rural Montana business ventures

The Montana Cooperative Development Center http://www.mcdc.coop , restructured and settled in a new home, continues with its original mission: helping rural communities by fostering cooperative business models.

Cooperatives are businesses where the customers are the owners. But putting a cooperative business together is not an easy process.

By JO DEE BLACK
Tribune Staff Writer

http://www.greatfallstribune.com/news/stories/20040512/localnews/401957.html

That’s where Montana Cooperative Development Center personnel step in, offering expertise in areas such as market studies, finding start-up funds, drafting bylaws and board member training.

Co-ops are long standing institutions in many rural communities, where farmers and others pool resources to provide electric and telephone service, gas stations, farm stores and grain elevators.

But the model, which pays dividends called patronage fees to members, can be used broadly.

About a dozen Conrad women turned to the development center for help after a gym they were members of, Weigh to Go, was put up for sale. With no offers on the table, the group looked at ways to prevent the business from closing.

"There are a number of us who felt strongly about keeping it (the gym) open, and we started thinking this might work as a cooperative," said Elaina Zempel. She’s an investor in the group, Fitness Co-op, which is raising money to buy the gym.

Zempel is also part of the Montana Cooperative Development Center’s seven-member technical assistance network, field personnel contracted to give hands-on help in rural communities.

There are three full-time employees based out of the center’s new office in Great Falls.

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Ty Duncan
Executive Director of Montana Cooperative Development Center.

http://www.mcdc.coop

Montana Cooperative Development Center, Inc.

PO Box 3027

Great Falls, MT 59403

406 268-2644

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Fitness Co-op members relied on help from the development center staff members to set up meetings, facilitate discussions and come up with guidelines.

"This is rural Montana and we all go to church together; our kids are in the same activities," Zempel said. "We needed a third party to help everyone bring up concerns without hurting feelings."

Fitness Co-op has about half the 30 investors needed to make a run at operating Weigh to Go. The group is looking for people willing to invest $500 or sign up for a year-long, $25 a month membership. The co-op will host a day-long open house May 18.

"At the end of the week, we’ll count up the number of investors we have and see where we are at," Zempel said.

Free enterprise and private entrepreneurship are healthy for the economy, but don’t always work in small towns, Zempel said.

"When you don’t have the economy of (a large) population, you have to do things a little different to keep providing services," she said.

Up-front investment from co-op members means fledgling enterprises don’t need to sweat out making loan payments, said Ty Duncan, executive director of the Montana Cooperative Development Center.

"They can work on building up their base, and all they have to do is cover their monthly cost, not a debt load," he said.

Maintaining existing businesses is critical to the state’s small towns, said Cheryl MacArthur, the development center’s program manager.

"Rural communities are impacted so much if they lose a business," she said. "We work to help them get beyond that and keep viable and sustainable businesses."

The Montana Cooperative Development Center is now a stand-alone nonprofit organization, no longer under the umbrella of a state agency.

The center’s recent transitions included growing pains. It was moved from the Montana State University-Northern in Havre, to the Montana Department of Agriculture in Helena. It’s now a free-standing, private nonprofit agency based in Great Falls.

Community leaders in Havre, where the Montana Cooperative Development Center debuted in 1999, bemoaned its move to the more urban Great Falls.

Duncan said a change in the eligibility rules required the shift from a public to private entity to remain eligible for federal funds.

The state gives the center $65,000 a year, but it also relies on federal grants, including one from the U.S. Department of Agriculture.

In fiscal year 2003, the Montana Cooperative Development Center received a $54,000 grant from the U.S.D.A. Rural Cooperative Development Grant program.

The center also used about $100,000 from a 2002 U.S.D.A. grant for operations this year.

For fiscal year 2004, the Montana Cooperative Development Center is applying for $300,000 from the U.S. D. A. Rural Cooperative Development Center.

Black can be reached by e-mail at [email protected] or by phone at (406) 791-6502.