EurWORK European Observatory of Working Life

Coopaname, France: Business creation and entrepreneurship

About

Country: 
France
Organisation Size: 
Medium
Sectors: 
Consultancy business services
Category: 
Business creation and entrepreneurship

Coopaname is a business and employment cooperative, which is affiliated to a network of similar cooperatives in France and Belgium. The company offers services to unemployed people, many of whom are women. Specifically, it provides participants with opportunities to test and realise business projects in any sector, at the same time retaining their employee status. The initiative therefore allows people to engage in business creation endeavours, while still maintaining their social security entitlements.

Organisational background

The cooperative Coopaname was founded in 2004 as a business and employment cooperative (Coopérative d’Activités et d’Emploi (CAE)), which holds the distinct legal status of a SCOP (Société coopérative ouvrière de production). A SCOP is a cooperative company in which the employees hold the majority of the company’s share capital. Employees elect the management team, participate fully in decision-making, manage the company and share its profits, in accordance with the democratic economic principles of cooperatives. The rule ‘one man, one vote’ prevails, regardless of the amount of share capital owned by each individual. Coopaname’s central aim is to provide encouragement and support to individuals seeking to establish their own business, regardless of the type of sector it is in. The company forms part of a broader network (Coopérer pour entreprendre), which is an umbrella organisation for CAEs in France and Belgium.

The company has about 100 workers, including two managers and six workers who are assigned to the company’s operations. Other workers consist of both business people and employees of Coopaname, who are referred to as ‘salaried business members’. Social dialogue at Coopaname is informal, although the issue of setting up of a works council is currently being discussed.

Description of the initiative

The first French CAE was established in the east central city of Lyon in 1995. The cooperative Coopaname was founded in 2004, with the aim of expanding the initiative in the region of Paris. Currently, there are 42 CAEs in France, which together represent some 50 units. The objective of a CAE is to provide individuals, particularly former employees, with the opportunity to establish their own economic activity without having to bear the usual risks involved in business creation. In other words, the objective is to provide additional security to workers seeking to create their own business.

Individuals who express an interest in business creation are invited to participate in an information meeting. During this meeting, the operational rules are explained and the worker can then decide whether they want to integrate the company. In order to be accepted on the scheme, the worker has to present a project but does not need to devise an actual business plan. The company will support the individual in developing the project’s details and in securing the means to achieve the initiative, particularly in terms of finding potential customers or in defining a commercial strategy. On this basis, the workers can commence their business activity. Relationships between the worker and Coopaname are governed by the network’s charter. Each member of the network has to agree to comply with the provisions of this charter. The company will support the worker by managing all of the administrative, social, accounting and tax formalities.

As soon as the business activity begins to generate profits – in other words, when enough money is generated to finance employment – the worker must conclude an employment contract with Coopaname. Initially, this is a part-time but open-ended employment contract. Through this means, a worker, who would have been a former employee, could in accordance with French law continue to receive unemployment benefits. The amount of the employee’s wage strictly depends on the profits generated by the business activity. Accordingly, Coopaname receives the profits of the activity and then pays the employee. In total, 10% of the activity’s profits are devoted to financing Coopaname. The employment contract (wages, working time) will be amended in line with the development of the worker’s activity. As an employer, Coopaname has to comply with the provisions of French labour law and, generally speaking, is legally responsible for the activity. The workers are free to manage their business activity as they so wish; nevertheless, although they do not have an office within the company, they are legally employees of Coopaname. Therefore, the individuals are entitled to benefit from labour law and social security law provisions covering employees, particularly in the event of the failure of their activities, in which case they would be allowed to receive unemployment benefits. Each worker is entitled to engage in several activities.

The persons involved in the scheme can benefit from the support of others at monthly meetings. These meetings allow the participants to share their experiences and, in some cases, to set up a common activity. When the activity becomes economically viable, the workers can decide to leave Coopaname and to finance their own company; alternatively, they can opt to become shareholders. In the latter case, the workers are fully involved in the company’s development and participate in the management, thus monitoring the use of funds received by Coopaname. As long as they remain with the company, the workers can benefit from training – particularly management training – thus enabling them to acquire skills that they did not have prior to the start of the project. Generally, the support given to a salaried business member is provided by other members, but also by the permanent employees and managers.

One of the challenges that Coopaname, like other CAEs, is experiencing is to be fully recognised. To this end, the network has initiated dialogue with the trade union confederations for several years. On 24 November 2005, the network signed a framework agreement with the General Confederation of Labour (Confédération générale du travail, CGT). This agreement aims to harmonise the rights of the two categories of CAE employees – namely, permanent employees and salaried business members – in compliance with legal requirements, as well as to foster social dialogue in those companies. The agreement represents the first attempt aimed at recognising the distinct nature of CAEs and is likely to constitute an important step towards ensuring the survival of these companies.

Analysis

Since 1995, the number of CAEs like Coopaname has been increasing, growing from five CAEs in 1999 to 42 CAEs today. Coopaname alone consists of three operational units, while two other units are currently being established. In total, some 3,600 projects have been supported by French CAEs since 1995. Since its inception in 2004, Coopaname has supported 172 such projects. Altogether, 109 salaried business members were employed by Coopaname as at 31 August 2006, out of a total 1,500 members affiliated to the network. Seven of these members have become shareholders of the company. Of these 172 projects, 10 resulted in new jobs as employees in other companies, 11 in the creation of a new company, and 10 in a new job under various legal statutes (especially associations).

The initiative appears to be particularly attractive to women, as 60% of Coopaname’s salaried business members are female. In France, at national level, women are represented in only 29% of business creation initiatives. Although the initiative is open to everyone, 95% of Coopaname’s users consist of unemployed people or those benefiting from basic income support. The company benefits from both public and private financial support, which together comprise about 50% of its resources. Although the company could probably survive without such support, it would most likely restrict the number of projects it could initiate. Such restrictions would run contrary to the company’s objectives.

Coopaname first offers individuals the opportunity to test a business project on the market. When the activity is deemed viable, the workers can avail of the necessary support required to get the project underway, while still maintaining their employee status. In this respect, the initiative enables individuals to strike a balance between their commitment to a new business venture and their financial and legal security. The initiative is directed at people who have the sufficient skills and know-how to devise a new business idea and is particularly well suited to the creation of small enterprises. At the same time, it enables participants to avoid the usual risks encountered in sole trader endeavours. Key success factors include the following aspects: the philosophy of the company, which is based on the strong cooperation between and involvement of all employees; the concept behind the measure itself, which balances risk and security; the strong link between all actors in the region; the company’s inclusion in a national network; and the emphasis on management training directed at CAE managers, which was set up by the network.

Exemplary and contextual factors

The central objective of the Coopaname initiative is to promote an alternative method of business creation, whereby the sole trader is not left isolated. Coopaname’s approach to the social economy concept involves a strong cooperation between all participants, particularly between the salaried business members.

Cristophe Tessier, Université européenne du travail, Paris

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