In our competitive, fast-paced, globalized world, being a small business owner isn’t getting any easier. Increasingly, small business owners have to compete with multinational corporations with deep pockets while navigating increasingly complex and unreliable supply chains. Plus, suppliers aren’t always willing to accommodate requests from small shops, which can drive up your input costs.   

But just because you’re an independent business, doesn’t mean you need to go it alone. Across Canada there are thousands of entrepreneurs working together to help their businesses survive and to carve out space for locally owned businesses. By forming co-operatives, entrepreneurs have reduced their input costs, added value to their products, and positioned themselves to remain competitive.   

So, whether you’re an artisan in Edmonton or a farmer in southeast Saskatchewan, have you considered starting a co-op to help your business thrive? Here’s why you should:  

  1. Co-ops help businesses reduce their input costs

As a small business owner, you’ll probably work with the same suppliers as the big guys, but if you can’t purchase the same volume of product they do, you’re unlikely to get favourable pricing. That’s what Saskatchewan’s independent cannabis retailers encountered following legalization. Large cannabis producers weren’t interested in supplying a small shop in Esterhazy or La Loche when they could work with chains with locations across the country.   

In 2018, independent cannabis store owners founded the Weed Pool Cannabis Co-operative, a procurement co-op, with the goal of negotiating better prices for its 22 members. Now, the Weed Pool’s members make up the largest share of the Saskatchewan cannabis market, they’ve negotiated exclusive product deals and introduced their own product lines.    

2. Add value to your products

If you’re a producer, you might struggle to add value to your products. Maintaining a minimum volume or accessing the necessary equipment can be expensive, meaning you lose out on the value when you sell unprocessed materials. This is especially true for farmers who usually sell their harvest to large corporations that process and distribute it domestically or internationally.   

Farmers in Alameda pushed back on this arrangement and wanted to localize their food system when they created the Southeast Butcher Block Co-operative. With support from community members, farmers opened an abattoir and retail shop to give farmers more access to butcher services and locals greater access to locally grown meat.   

3. Scale up your business, together

Growing your business can seem like an uphill climb. It might mean investing in new equipment, introducing additional products, or acquiring new space to expand. Meanwhile, big box stores offer a one-stop-shop model designed to push small businesses out of their way or exploit small businesses that try to supply them.   

Flower growers in central Alberta wanted to grow their businesses and begin wholesaling their products to florists. Individually, no farmer could achieve the required product volume, nor could they shoulder the costs of setting up such a distribution network. So, they formed the Cooperative Flower Network, a producer co-op that maintains an exclusive business-to-business wholesale platform. Together, the co-op’s 11 growers can share the risks that come with expanding into a new market and reap the benefits together.   

Got an idea?  

We understand being a business owner is a lot of work. That’s why we’re here to help! Our team at Co-operatives First can streamline the process of setting up a co-operative and our team of experts can answer any questions you might have. So, if you and some other business owners have a shared need or recognize the same opportunity for growth, give us a call.