Your guide to cooperatives and mutuals
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Posted: Fri 19th Dec 2025
The cooperative (coop) and mutual economy is made up of organisations that are owned and controlled by their members, whether they're employees, customers, residents or suppliers.
Unlike traditional companies, these organisations operate democratically to meet shared goals, reinvesting profits or sharing them fairly among members.
This offers a people-focused way of working that fosters resilience, fairer jobs and greater gender equity.
Mutuals comprise of:
Employee-owned businesses.
Building societies.
Credit unions.
NHS Foundation Trusts.
Community benefit societies, membership groups and cooperatives – the largest and most established subgroup.
Support for coops and mutual businesses is widely available through Grow London Local, as well as organisations like Co-operatives UK and the Employee Ownership Association, and funding schemes such as the Community Shares Booster Fund.
Mutual and employee ownership businesses
Mutual businesses are people-powered. They distribute ownership and decision-making more widely among their members or employees, reinvesting profits to improve services.
They are common in the housing, farming, energy and cultural sectors. The mutual model also helps small businesses pool resources, reduce risk and keep services rooted in local communities.
Employee-owned businesses, meanwhile, give employees a significant share through individual shares or employee trusts.
A founder will often choose this model when they want to step back.
Instead of selling to another company, they transfer ownership to the employees, fostering motivated teams, higher productivity and long-term stability.
Download our factsheet to understand mutual and employee ownership businesses [PDF, 873 KB]
An introduction to cooperatives
Cooperatives are one type of mutual business and have been around since the mid-19th century.
There are now more than 7,000 in the UK, spanning sectors from housing and farming to retail, media and energy.
The cooperative model brings clear advantages:
Strength in numbers.
Democratic decision-making.
Loyalty.
Access to specialised finance.
For entrepreneurs and small business owners, cooperatives provide a powerful alternative to traditional models, rooted in shared values and community benefit.
Download our factsheet for a full introduction to cooperatives [PDF 740 KB]
How to set up a cooperative in the UK
A cooperative tends to work best when the people involved want to genuinely take part in shaping the business.
The process begins with forming a steering group to establish strong foundations. After that, it's about developing a clear business plan and financial model that outlines:
The cooperative's aims.
How members will get involved
How surplus will be reinvested.
Next, you choose a legal structure before registering your business and setting up governance, which typically follows the "one member, one vote" principle.
Download our factsheet to discover how to set up a cooperative in the UK [PDF 770 KB]
Benefits of a cooperative for small business owners and entrepreneurs
Being part of a cooperative offers shared ownership, democratic decision-making, resilience and community impact.
Members benefit from having a direct say in how the business is run, with profits reinvested locally, back into the business or returned to members.
Coops support sustainable growth, innovation and collaboration, making them particularly relevant to emerging enterprises.
This is also why they tend to have higher survival rates than traditional businesses.
Download our factsheet to learn about the benefits of being a cooperative [PDF, 2 MB]
Support available for cooperatives
Cooperatives in the UK benefit from a wide range of tailored support designed to help both new and existing coops thrive.
Grow London Local and organisations like Co-operatives UK provide tailored support across HR, finance, marketing and membership strategy, as well as training, events, networking opportunities, community shares and grants to unlock growth.
Online resources from the UK government and Co-operatives UK also offer guidance on legal structures, governance and registration, making it easier for entrepreneurs to set up and grow their cooperative.
Download our factsheet to see all the support available for coops [PDF, 2 MB]
Funding options for cooperatives
There are a variety of funding options available depending on the size and trading history of your cooperative, such as:
Reinvesting existing profits.
Support from grants, sponsorships, crowdfunding and loans.
Unique to coops are community shares, which work by allowing locals to invest in a coop that supports their community.
Tailored support from specialist bank accounts can also help coops balance financial stability with their social mission.
Download our factsheet to explore the funding options available for cooperatives [PDF, 2 MB]
The impact of cooperative businesses
Employee-owned companies are often both resilient and successful, but many entrepreneurs and small business owners aren't familiar with the benefits of the coop model and its value to the UK economy.
The UK's cooperative and mutual economy is worth £179.2 billion and is growing, leading and innovating, with more than 10,000 businesses across every sector and region.
Memberships across the sector exceed 65 million, with most coops sharing values such as equality, solidarity, self-help and social responsibility.
Download our factsheet showcasing the impact of cooperative businesses [PDF, 2 MB]
Coops and mutuals success in numbers: 2025
Number of coops and mutuals in the UK: 10,119
Income generated by coops: £43 billion
Number of people employed in coops and mutuals: 1.5 million
Coop survival rate in first five years: 82%
London cooperative success stories
Cooperatives not only make a healthy contribution to the UK economy but also provide good jobs for people, creating something everyone involved can be proud of.
Whether you're an aspiring entrepreneur, a business owner looking to convert to a cooperative or an existing coop, explore how the coop business model has worked for these London businesses in emerging sectors.
Arts and culture:
Digital:
Energy and environment:
Food services:
Technology:
Get more support
Speak to a Business Support Manager
Wondering if a cooperative is right for you? Book a consultation with one of our Business Support Managers for dedicated support.
Sign up to a webinar
Find out more about the cooperative and mutual business models with three insightful webinars, run together with Co-operatives UK:
5 March: Creative and digital sector coops
12 March: Local retail, energy projects, small-scale farming and pubs
26 March: Is a coop right for you?
If you'd like to join these webinars, make sure to register your interest now!
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