There is a HUGE but subtle difference between what you're describing and Socialism.
Your friend bought into a sawmill. He also happens to work there. I don't think that you would label as "socialist" the degenerative case of a sole proprietorship where one person is the worker and owns the means of production, or if he brought in three partners who also all work there.
In Credit Unions/Co-ops and your sawmill example the workers (and members) are the people who own the means of production. In Socialism, The People own the means of production. See the difference? In socialism, ALL of The People are the supposedly the owners of everything (which means, of course, that nobody really owns anything). EVERYONE would own the sawmill that only those workers BOUGHT and own. EVERYONE (not just the members) would own the Credit Union. EVERYONE (not just the members) would own the Co-op.
Co-ops and worker-owned business are 100% compatible with capitalism. In capitalism a business exists to make a profit. That profit is usually but not necessarily measured in dollars. In terms of Credit Unions profit also includes the lowered costs of services to its members compared to a bank. In terms of your sawmill they probably also included the substantial non-tangible benefit of not being laid off in a down turn, which likely would hurt "traditional" profits in those times.
