Exploring the Advantages of Cooperatives: Your Best Business Move Yet

Exploring the advantages of cooperatives: Why joining a cooperative might be your best business move yet

When considering avenues for business success, one often overlooked option that can prove highly advantageous is participation in a cooperative which has limited liability. This article will delve into the benefits of cooperatives, advantages and disadvantages, and why they offer the optimal choice for your business. From shared resources of workers in co ops and increased purchasing power of credit union to fostering a sense of community and mutual support to meet cultural needs and aspirations, cooperatives provide a unique and valuable approach to business ownership and operation. It is voluntary and open membership while some preferred to be under democratically controlled enterprise.

For business owners aspiring for a collaborative and sustainable workspace, exploring the benefits of joining to it might prove to be your most strategic decision yet.

Engaging with Cooperatives: Understanding the Concept of this practice

What is cooperative in the Philippines? It is often abbreviated as a co-op that functions as a business, owned and managed collectively by its members or board of directors which often consist of autonomous association of persons.  It is completely different from a traditional business because the members, whether individuals, businesses, or organizations, all hold an equal stake in achieving aspirations through a jointly decision-making process of persons united voluntarily to resolve common economic social challenges in business which seldomly takes part to the disadvantages of cooperative. 

Construction crew participating in a brief meeting

Manpower services in a cooperative society are prevalent across diverse industries, aiming primarily to offer goods or services at reduced costs compared to conventional market rates. It is covered to certain cooperative business examples in the Philippines.

What is the main Purpose of a Cooperative?

Various industries establish numerous cooperatives are democratic with economic social and cultural impact which creates advantages. These are combine different elements to provide comprehensive support to their members which they jointly owned and democratically accountable for the overall growth. Furthermore, they aim to promote economic resilience by diversifying revenue streams and providing members with access to essential financial services like credit and savings facilities. It also fosters collaboration and solidarity among members across different sectors, strengthening the movement as a whole.

Types of Cooperative Business

Numerous varieties of cooperatives that offer products and services exist, and each one of them has unique characteristics and benefits. Here are the most common types of co ops:

man in a checkered long-sleeved shirt is pushing a cart, and there is a woman standing beside him

Consumer Cooperative

These enterprises are owned and managed by consumers, with their main objective being the procurement and distribution of goods to both members and non-members.

experienced agronomist documenting observations of plants using his laptop

Producer Cooperative

Producers own and manage it, supplying the goods or services that the cooperative sells are mainly controlled by their member owners and meet their common economic goals.

Service contractor and client shaking hands as a sign of the deal

Service Cooperative

These cooperatives are involved in providing medical and dental care, hospitalization, transportation, insurance, housing, labor, electric power, communication, professional services, and various other services.

Employees of logistics and warehousing placing their hands together at the middle

Worker Cooperative

These are exemplified by construction and technology, which are those owned and managed by the labor force responsible for delivering the goods or services offered by the cooperative.

engineers and factory workers walking in front of front of machine lift container

Multi-purpose Cooperative

It’s a combination of two or more distinct business or economic activities, such as offering services along with providing tools and equipment.

The distribution of cooperative types in the Philippines varies, reflecting the diverse needs and economic activities across different regions. However, the breakdown is approximately aligned with the following percentages:

Kabraso Multipurpose Cooperative presenting the Percentage of Cooperative in the Philippines through pie chart

Courtesy: Cooperative Development Authority

“This pie chart shows the percentage of cooperative types in the Philippines as of 2020”

Advantages of Cooperatives

Cooperatives exhibit diverse operational patterns, members are united voluntarily to meet their specific economic activities. Consequently, the inherent benefits they offer vary accordingly. However, amid the backdrop of intensifying market competition, there has been a notable surge in corporate interest towards it.

In the contemporary business landscape, these are distinguished by their integration of diverse business activities, often leveraging both manpower and resources. In light of the prevailing market conditions across various sectors, enterprises are increasingly recognizing the value of adopting these principles to access the manifold benefits that they offer. Below, we explore how they can provide advantageous opportunities for businesses:

pile of coins and arrow pointing up

1. Cost Efficiency

Cooperatives enable businesses to achieve cost savings through collective purchasing, shared resources, and economies of scale. By pooling resources and negotiating bulk purchases, members can access goods, services, and inputs at lower prices than they could obtain individually.

engineers and factory workers walking in front of front of machine lift container

2. Collective Purchasing Power and Pooling of Resources

Among the paramount benefits of cooperatives lies in the amalgamation of resources and collective purchasing capabilities. Through resource pooling, businesses affiliated with them can attain economies of scale beyond what they could achieve independently. This translates into reduced expenses for partners, thereby enhancing their competitiveness within the industry.

A man showing somethingonthe ipad to the 2 other employees of logistics and warehouse

3. Risk Management

By sharing risks among members, cooperatives help businesses mitigate uncertainties and manage risk more effectively. The structures often provide a safety net for members, reducing exposure to market volatility, economic downturns, and external shocks.

man showing his tablet with pictures about corporate social responsibility

4. Sustainability and Social Responsibility

Fundamental tenets within cooperative frameworks, setting them apart from conventional business paradigms. Through the practice of democratic governance among its members, they prioritize decision-making processes that resonate with shared values and beliefs. Furthermore, the equitable treatment of members as partial proprietors ensures that profits are fairly distributed among them, diverging from the typical concentration of wealth in the hands of shareholders.

A young woman and a young man cheering their success, lifting their hands

5. Reduced administrative workload

Businesses aligned with cooperatives can streamline their operations by entrusting cooperative partners with administrative responsibilities. This enables companies to devote their resources and attention to their core areas of expertise, confident in the knowledge that tasks such as manpower management and labor relations are expertly handled by the cooperative.

A pen next to a clipboard labeled 'Tax Exempt

6. VAT Exemption

Multifaceted cooperatives, notably exemplified by Kabraso, offer significant cost-saving opportunities for companies. Collaborating with such cooperatives allows businesses to streamline their monthly cash flows, as Kabraso is exempt from charging the 12% VAT and 2% creditable withholding tax, as verified by the Bureau of Internal Revenue.

Looking to Make the Most of These Advantages But Don’t Know Which Cooperative to Pick?

Partnering with one can bring numerous advantages to businesses. It opens up many opportunities, including increased market strength, collaboration, and social impact. However, evaluating it thoroughly and the long-term implications before deciding is crucial. 

If you’re looking for a cooperative that checks out your objectives, Kabraso might be a good option for you. 

We bring to the table quality and dynamic manpower services that are sure to propel your business to success. Kabraso specializes in full service contracting that helps you maximize your organization’s capabilities as it is one of the most compelling example in the Philippines. 

Factors To Be Considered in Partnering with Cooperatives

Partnering with cooperatives can offer businesses numerous benefits, but it’s essential to approach such collaborations with careful consideration. Here are five key factors to keep in mind when exploring partnerships

Mission Alignment

Ensure that the cooperative’s mission and values align with your company’s objectives. Collaboration with one whose goals resonate with your business’s mission can lead to a more harmonious and productive partnership.

Financial Stability

Assess the financial stability and viability of the cooperative. Look into factors such as financial records, stability over time, and any potential risks or liabilities that may affect the partnership.

Governance Structure

Understand the cooperative’s governance structure and decision-making processes. Determine how decisions are made, the level of member involvement, and the transparency of governance practices.

Networking and Collaborations

Before entering into any partnerships, carefully evaluate the networking and collaboration opportunities offered by the cooperative. Assess whether the its network and partnerships are conducive to your business’s growth and expansion objectives.

Resource Sharing and Costs

It’s crucial to thoroughly assess the potential advantages of resource sharing within the cooperative. Consider how the cooperative’s resources can enhance your business’s efficiency, lead to significant cost savings, and, notably, expand market access opportunities.

: Bear in mind to read and analyze thoroughly everything, including investment requirements and associated costs.

Employees of logistics and warehousing placing their hands together at the middle

Choose Kabraso Cooperative and Experience the Most of these Advantages

The cooperative provides numerous advantages, opens up many opportunities, increases market image, and creates a good image for society. Partnering with a cooperative company, such as a multipurpose cooperative, can positively impact your business’s growth and future. 

If you are searching for a cooperative that might be a good choice for you, you are in the right place. Kabraso Multipurpose Cooperative would be the perfect collaborative company to build an efficient and seamless business operation. 

We offer top-notch, dynamic staffing services that will undoubtedly help your company succeed. Kabraso Multipurpose Cooperative is an expert in full-service contracting, enabling you to get the most out of your company. We are confident that by selecting Kabraso as your cooperative partner, you will profit immensely from our outstanding work and dedication to client satisfaction. We’re excited to potentially collaborate with you and help you succeed! Partner with us today!

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