How to Use the Collective Business Model

In a collective business model, an association of various businesses within a certain trade pool their resources to create a more efficient way to run their companies. By using the collective business model, smaller companies can compete alongside larger corporations.

Instructions

Difficulty: Moderate

1. Start or join a trade association with similar businesses in your area to gain a competitive advantage in the marketplace. Trade associations offer their members educational programs, group purchasing plans and opportunities to discuss common problems. These associations usually require fees or dues from its membership.
2. Form a cooperative among businesses in your area to use the collective business model. In a co-op differs, each business is a partner and contributes equally to the running of the cooperative. Co-op members share the costs of supplies, distribution and even advertising, which results in increased buying power in the marketplace and the ability to compete with larger companies.
3. Use the collective business model by purchasing a franchise from an existing company. While this may not allow you the same flexibility as starting your own business, it will save you advertising costs, distribution fees and help develop your company's image and reputation. In many ways, a franchise is the typical example of how to use a collective business model.
4. Maintain the integrity of a collective business model by participating fully and ensuring that all members contribute equally. Many collective business models fail when a significant percentage of its members remain inactive and uninvolved and contribute little to the effectiveness of the association.
5. Maintain constant communication with every member of the association to increase the effectiveness of the collective business model. Schedule regular meetings to discuss the association's marketing position and promptly address the membership's concerns. Publishing a newsletter can create stability and solidarity.

Tips & Warnings

• The best collective business models downplay competition in the marketplace between members of the association while stressing the importance of increased buying power.