Feasibility Study and Business Plan

Implementation Considerations

I. Fiscal and Legal Responsibilities of Members:

A.  To incorporate - (if new cooperative)
B.  Pass bylaws - (if new cooperative)
C.  Amend bylaws – (if required for an existing cooperative)
D.  Provide equity capital
E.  Sign Marketing Agreements
F.  Elect Directors - (if new cooperative)
G.  Vote to implement project

II. Legal Actions or Decisions of Board of Directors:

A. To proceed with project
B.  To select lender and apply for loan
C.  To establish committees of members
D.  To hire manager
E.  To engage attorney
F.  To engage auditor
H.  To engage architect, project engineer, and/or general contractor
I.  To establish bidding procedures
J.  To hire consultants
K.  To get clearances from various governmental agencies to proceed with project

III.  Financing:

          A.  Loan closing

1.  Signing of documents
2.  Review of special provisions-(all loan agreements will include a number of special provisions which must be followed. These should be fully explained and understood by borrower and lender)
3.  Line of credit - drawing of fund schedule
4.  Repayment terms

    B.  Bank accounts

    1.  Bonding
    2.  Escrow account
    3.  Keeping lender informed of unusual events

IV.  Legal Matters of Project:

    A. Loan closing
    B. Contract bidding
    C. Preparing/reviewing all contracts with all parties doing work on project
    D. Helping secure clearances to proceed with project-zoning, health, EPA, water, sewage, etc.
    E. Mergers/consolidations

V.  Project Manager:

    A. General manager of cooperative - simple projects or
    B. Project/architect/engineer or
    C. General contractor

VI.  Preparation of Facility:

A. Recommendation of the manager

l. Shake down or trial runs

B. Acceptance by the board of directors

l. Warranties
2. Escrows

C. Dedication of project
VII.  Begin Operations

A. Training of employees
B. Monitor of operation by appropriate engineers
C. Changes in operations procedures
D. Full operation

VIII.  Evaluation of Project

Information developed by Jim Matson, USDA Cooperative Specialist

Last Revised: September 5, 2001

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