Running a small business has its good moments and bad moments, and one of the things a small business may have issues with is meeting minimum order requirements. It can be frustrating when you feel that you are not getting the same opportunities and services that large businesses receive. One solution to this may be a buying group.
What are Buying Groups and Should You Join One?
A buying group is a collection of people and companies who join together to increase their buying and bargaining power. Together, they can bargain for better discounts and services.
Before you decide to start a group, do research to see if one already exists in your category. You may be able to join an established group. This might be a better choice than starting your own. If an appropriate group does not exist, it may be time to start your own.
Steps of Buying Groups
The first step to starting a buying group is to find other business owners that need the same help you do. You need to reach people outside of your area that is not competition. These potential members to meet certain criteria and agree to your group terms.
Once you’ve gathered your initial members, you all need to decide on what products to buy and which providers you want to use. You and the other members need to set up and organize the group. This can include all bank accounts needed, a Board of Directors, and other details needed for your group to be successful. Once everything is organized, you can register your group and begin saving.
Most buying groups are run as their own companies, and they will require employees and, of course, good planning. Don’t forget to treat your buying group as carefully as you would any other business venture.