Being a business owner is hard work. Entrepreneurs are busy, which is why starting another business probably isn’t on the top of your to-do list. But hear us out.
What if you could work with other entrepreneurs to solve some problems you all have in common? Whether it’s high costs, marketing products on your own, lack of admin support, or just not having a support network, forming a co-op with similar businesses could provide solutions.
There are lots of great examples across Canada of business owners cooperating to leverage the benefits of working together. Here are three reasons you should start another (co-operative) business.
Lower your input costs
Lowering the cost of your inputs can boost your bottom line. Depending on the industry you work in, teaming up with other businesses could help you negotiate better deals with suppliers. That’s the goal of the Weed Pool Cannabis Co-op, a purchasing co-op owned by 12 independently owned cannabis retailers. On their own, these small retailers couldn’t get sufficient supply from large cannabis producers, meaning they couldn’t compete with corporate chains with deep pockets. However, once these stores pooled their buying power the co-op could negotiate discounts with suppliers, secure exclusive products, and pass along savings to member stores.
Build a channel to reach your market
For many small businesses, having a brick-and-mortar storefront is beyond their budget. But teaming up with other entrepreneurs to share space, create a market, or market their services can make having a physical business location more attainable. In Edmonton, a team of nine midwives formed a co-operative to open their own clinic to better serve clients, share space, and support each other. In Saskatoon, 10 consultants, coaches, and problem-solvers formed the Change Collective Consulting Co-op to offer comprehensive services to clients and market their unique areas of practice. By teaming up with fellow business owners you can scale up your business and increase your outreach.
Add value to your products
As a business owner — especially if you’re producing goods like food — you’re probably supplying other businesses. That means someone else is capitalizing on value that you could be adding to your products. Capturing that value and returning it to farmers is the goal of the Gathering Place Co-op in Waskatenau, Alberta. The co-op purchases beef, poultry, vegetables, pies, art, etc. from its member-producers and either sells it through the co-op’s market or uses it in its bistro. Instead of another grocery retailer or restauranteur benefitting from their goods, the co-op captures that value and returns the profits to its members.
Whether it’s connecting with clients, adding value, or cutting costs, building a co-op is a tested way of boosting your business’s bottom line. So, even though you’re busy, it might be worth your time to consider how a co-op might be right for you.
If you’re interested in learning more about co-ops or you want to build your co-op, we have the tools, resources, and experience to help you out. Check out the Co-op Creator for lots of detailed information about starting a co-op, and the Biz Plan Generator to write your business plan. Want to know more about co-ops? Check out our Introduction to Co-ops course.