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Business Services Co-operatives

A business services co-operative is a group of small business owners who have come together to increase the competiveness of their enterprises.
There has been a growing trend in recent decades for Australian businesses to work together for mutual benefit.

Small businesses often lack the bargining power and resources of larger businesses, but they can bridge the gap by jointly undertaking ventures with like-minded businesses.

While interfirm collaboration can take many forms (franchises, joint ventures, business incubators), a number of Australian businesses have chosen the co-operative business structure to gain the benefits of a larger group.

The role of these co-operatives is to provide services to meet the needs of member businesses. Like an agricultural co-operative, a business services co-operative is regarded as an extension of the members' business and operates to provide benefits to businesses as users of the co-operative's services, not as investors.

Benefits of collaboration

Increased purchasing power through joint purchasing operations by which members obtain favourable trading terms and pricing, which increases their competiveness, particularily against larger businesses and imports.

Increased market penetration and product or service recognition through co-operative marketing arrangements, which increases their market share, particularily against larger competitors, and improves export marketing capacity.

Improved performance and efficiency through joint investment in equipment, services and technology, which would otherwise be beyond the resources of any one firm.

Access to research and development through joint research projects with major research institutions, which can open up new product markets.

Increased negotiating power with public and education sectors through industry associations, which can ensure the needs of particular small business sectors are considered in the design of public policy and training curriculum.

Activities of Australian business services co-operatives

Plumbers, florists, nurseries, liquor stores and travel agents use co-operatives to aggregate their purchasing power to obtain favourable trading terms and pricing, which increases their competitiveness, particularily against larger companies and imports.

Pharmacies, newsagents, furniture retailers, motel owners, fitness clubs and professional artists use co-operatives to increase market penetration and product and service recognition. Some of these co-operatives also purchase goods for sale by member businesses.

Independent film makers, doctors (GPs), architects and taxi owners also use co-operatives to share resources to improve the performance and efficiency of their businesses through joint investment in equipment, services and technology, which would otherwise be beyond any one firm.

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