Co-Op Distribution of Income

The sharecropper fee pays the bills.  As long as the company maintains inventory, everything else is money headed for someone's pocket.

My proposal is as follows
    80-90% of net paid to the sharecroppers
    5-15% being reinvested into expansion, development and capital improvements
    5-10% going to the shareholders of the co-op.  

For the sharecroppers, add up the total time contributed by all sharecroppers, divide that into the payout to determine the hourly payout.  Each sharecropper then receives a check for time multiplied by hourly payout.  You put in more time than me, your check is twice as big.  
The sharecroppers are the backbone of the enterprise and the reason for the existence of the co-op.  The lion's share of the proceeds must go to them.

Reinvesting in the company expands opportunity.  There is much that can be done, much that should be done, and some things that would have to be looked at carefully.  Early on, the investment will make a tremendous contribution to the abilty of the company to improve lives.  As more projects come on line, there will be a tendancy for a diminishing return on investment.  There will be some projects that become a drain on resources and offer little gain.  The implication is that, eventually, progress should be arrested in favor of duplication.

The shareholders deserve a fair return on their investment.  Over time, it is foreseeable the shareholders will drift away.  While they have the option of selling shares to active sharecroppers, some will choose to hold on to their shares.  With a $500 initial inestment, a handsome income can be realized with long term development in mind.  If the company nets $1 Million, 10% to the shareholders = $100k.  The shareholder would see their investment returned every year, and this can be much higher.  That's not so bad a deal for taking a risk, getting the enterprise started, and offering opportunity to a great many people.  Over the long term, preventing animosity between shareholders and sharecroppers will be essential.  Most of the shareholders will also be sharecroppers, so they will have paid their dues.  The fact the shareholders are keeping the opportunity alive should speak volumes as to their dedication to the sharecroppers.  It would be difficult for the shareholders to cancel all contracts and bring in cheap labor...the sharecroppers could simply start a new co-op and take all their spending along with them.

Issues and Knock-On Effects:
The percentages are arbitrary and negotiable.  The first year(s) would see a higher reinvestment rate as there are a number of projects that can be started, any one of which will soak up cash like a sponge.  Taxes and depreciation may see a difference between the shareholders payout and the taxable payout.  The shareholders should see at least some return on investment after taxes.  A high rate of sharecroppers who are not also shareholders would see the sharecroppers interested in maximizing their percentage.  Not enough sharecroppers would equate to projects being understaffed.  This would suggest investing in labor saving equipment for existing projects and curtailing additional projects.  If the hours available are low, the sharecroppers would seek investment in new projects.  
As a sharecropper, I would like to see a cap on the shareholder payout, and maximum opportunity.  
As a shareholder, I would like to see higher sales, lower costs, and opportunity balanced with performance.
As a customer, I would like to see a greater diversity of products, enough to meet my demands, and more savings.
As a competitor, I would like to see infighting and bickering over minutia.
As a Land Company investor, I would like to see a higher overall profit, duplicatabity and improved resilience.
As a potential recruit, I would like to see a high payout rate, ample opportunity, plenty of hours available, lots of side benefits.
As a potential founder of a new co-op in another town, I would like to see harmony. resilience and success.

The bills paid by the sharecroppers fee only covers the core bills.  High energy use would result in a high energy bill.  Those higher charges would be paid from general revenues.  This means it is coming out of the pockets of the sharecroppers and Shareholders.  If such a high level of energy is being used, I would expect a proportional rise in production and sales.  The incentive here is for everyone involved to strive constantly to keep the bills down.  It's good for them, good for the company, good for the environment.

Productivity becomes a key variable in the time-payout equation.  If you are not working, we are all losing money.  Carry your share of the load when you are working.  Rather than berate someone who is not meeting expectations, we would do well to teach them and improve their skills.  Lifting them up serves us all.  Putting them down hurts us all.  The tendancy is towards becoming a merit shop: high performance leads to greater responsibility and more hours.  Low range performers would be placed in roles which do not require performance, for example, tool room staff or project manager.

Waste is money lost right off the top.  Getting the most out of the product, maximizing yield, accuracy, and recovery of the waste stream will be in focus.  This is the same as any other business.  Employes don't have much incentive in this area.  Sharecroppers are directly affected.  Under no circumstances will ethics violations be tolerated.  We will not cheat the customer.  In many cases, we are the customer.  It just doesn't make sense to cheat ourselves.  We will not serve adulterated product.  It makes no sense to serve ourselves a product that is no good.  We will not sacrifice safety in favor of savings.   There's 200 shareholders.  How much are you saving yourself at 1/2 of 1%?  It just isnt worth it.

Free stuff can have a major impact on operations.  Compostables brought in is money in the bank.  Scavenged materials can move a project forward when the budget is not in place.  Each new project brings additional income potential.  

If reinvestment capital is not available, existing projects which are producing income need to be promoted to the general public to boost sales and volume.  Build the business we already have.  


Cooperative Enterprise, Plan Outline