Business Associations - Advantages & Disadvantages

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Business Associations

Business associations provide the means for businesses of either the same type (e.g., small businesses), for those who operate in the same industry, or, often, for those who share the same locale to access resources and network. Business association members can often enjoy reduced rates on services such as insurance and marketing while establishing their organization in their industry or city.

Business Association Advantages:

Marketing.

One of the advantages offered by business associations is an increased presence. Depending on what type of business association you're part of (and many businesses belong to more than one) you can increase visibility in your geographical area, within your industry, or within your community of, for example, small businesses.

Networking.

The definition of "business association" is right there in the name: by joining you've increased the possibilities of associating with other businesses. Whether it's your area's business association hosting a happy hour or an industry association holding a 3-day conference, you'll have opportunities to network with other businesspeople and expand your network.

Access to Services & Resources

Many business associations provide members access to discounted services. If you're part of a local retail business association, for example, you might offer discounts to owners and employees of other association member shops, and vice versa. Members of national business associations might get discounts on services such as insurance or accounting. In some cases, small business associations are able to pool their resources and provide discounted health care plans to business owners and member employees.

Your business association may also offer an expedited pathway to small business loans as a membership benefit. Also, local small business associations may provide access to work space, and if they're non-profit (the majority are) may have won state or national grants that give them funds to help out member businesses.

Reputation.

Some business associations are strict about who they accept for membership, so if you're part of that association people know that you and your business have met and continue to meet those high standards. Once you're a member you can advertise your membership, which can help give you an extra edge of non-member competitors.

Strength in Numbers.

It can be easier to get things done as part of a business association. Associations can represent a voting block, so they may be able to work with policymakers to ensure they're able to continue doing business in a favorable climate. In addition, business associations can use internal email blasts and members-only websites to keep member companies apprised of updated business regulations and what's needed to stay within compliance.

The number of business association members can also help your association negotiate better member rates on health insurance and other vital services.

Best Small Business Associations
Best Small Business Associations:
  • Local Chambers of Commerce.
  • National Federation of Independent Business (NFIB).
  • StartupNation.
  • Small Business Administration (SBA).
  • SCORE.

Business Association Disadvantages:

Guilt By Association.

You don't always get a say in what your business association decides, and if your association is politically active the leadership may take on an unpopular position. Even though you may not agree, your membership connotes that you do, and it could potentially cost you business.

Guilt By Disassociation.

Depending on what type of business you run, you could be expected to be part of any one of a number of business associations: local, trade, etc. If you're not, potential clients might wonder why, and given a choice between your business and a member business they may choose the latter, as they've conflated membership with reputation.

In addition, some business associations only allow one member of a specific trade and location to avoid competition between members, so if you're not the first you've no chance to get in and enjoy the association's benefits.

Fees & Dues.

Typically membership dues for business associations aren't prohibitive (depending, of course, on the association). But they can add up if you're a member of more than one. In addition, there are meet ups and conferences, some of which may be mandatory for continued membership, and each of those has its own cost.

As a business owner you need to choose what makes financial sense for your company, weigh the pros and cons, and belonging to all applicable business associations might not be the most sound plan.

Time.

Membership in whatever organization you join requires an investment in time. Some business associations may have monthly meetings; others may have yearly gatherings. You're not getting the most out of your membership if you don't attend, but membership obligations could take up time you need to spend on your business.

Best Business Associations for Women
Best Business Associations for Women:
  • Ladies America.
  • National Association of Women Business Owners (NAWBO).
  • Female Entrepreneur Association.
  • American Business Women's Association (ABWA).
  • National Association for Female Executives (NAFE).

FAQs:

How do I find a business association near me?

You should be able to look up your local Chamber of Commerce of SCORE chapter with relative ease - just search for either "chamber of commerce" or "score" plus "your city" and they should be among the top results. You can do the same with "business association" to find other organizations in your area.

Depending on the size of your city or area and their predominant industry, there may also be trade associations specific to your area that could prove beneficial to your and your business, such as the California Avocado Commission and the Northeastern Retail Lumber Association. Your city may also have a downtown business association whose membership is limited to companies in the downtown area.

Learn the ups and downs of associations with our list of business association advantages and disadvantages.

How do I find a trade or industry business association?

About the same way you search for local business associations: just search for "your trade" and "business association" and you should find what's available relatively quickly. There are trade groups for practically every industry; here are some notables:

  • The American Christmas Tree Association.
  • The American Pyrotechnics Association.
  • The Fantasy Sports Trade Association.
  • The American Mushroom Institute.
  • The International Webmaster's Association.

Find out more with our list of business association advantages and disadvantages.

How do I find business associations for minorities?

Online search is the best tool you have to find the business association that best suits you and your company, especially to find local associations for minority-owned businesses. Here is a list of national associations:

  • The Black Business Association (BBA).
  • The Minority Business Development Agency (MBDA).
  • The National Black Chamber of Commerce (NBCC).
  • The Latin American Business Association (LABA).
  • The Association of Latino Professionals for America (ALPFA).
  • American Indigenous Business Leaders (AIBL).
  • The Asian American Chamber of Commerce.

Explore whether associations are right for you with our list of business association advantages and disadvantages.

How do I start a business association?

If you can't find an association that fits you and your business you're probably not the only one out there, so you could potentially start your own. Begin with clear objectives and a rock solid mission statement. Decide upon your membership requirements and your target members and reach out to gauge interest - you don't want to start an association of which you're the only member. Also, starting and running a business association can be a fair amount of work, so it would help if you had other interested businesspeople to work with.

You'll need to figure out whether you're going to be for- or non-profit and file the necessary legal paperwork with your state, which is another reason to network prior to starting your association, as you may know of someone who can help you ensure you've filed all the proper documents.

Learn more with our list of business association advantages and disadvantages.