Industry associations – are they worth it? – StartupSmart
As witnessed during the recent carbon tax debate, industry bodies can be vocal, high profile and, in some cases, highly effective.
But for many start-ups, joining an industry association is one of the last things they think of during the frenetic process of starting and running a business.
Maybe it’s the lack of time or the fact that entrepreneurship, by definition, is an independent activity. Either way, is it time for start-ups to start taking their industry associations more seriously?
StartupSmart garnered two opposing opinions on the merits, or otherwise, of joining an industry body. Read both points of view and let us know your thoughts in the comments section.
Graeme McCormack
There is no doubt that starting up a business is a daunting task for first time entrepreneurs. It’s easy to get lost between looking for new premises and ensuring the correct forms have been filled in – ensuring the t’s have been crossed and the i’s dotted, so to speak.
Comparatively then, submitting your membership form for your relevant industry body may seem like a low priority.
After all, it isn’t a legal requirement for a start-up, and industry bodies vary hugely from industry to industry – with horror stories being mentioned more often than the positives.
However, depending on the industry that entrepreneurs are moving into, there are some significant benefits to membership in an industry body.
This varies from networking evenings that build up relationships within the industry and group discounts to simply providing tips that can set business owners on the right track to success or increased bottom lines.
There are a range of services that industry bodies can (and should) offer.
These include a comprehensive and informative website, online forums, monthly eNewsletters and events that either celebrate the industry or provide opportunities for networking.
A helping hand
At the very least, they should be able to provide information on market trends and research, as well as providing practical material on the day-to-day business operations such as legal, accounting and bookkeeping, product innovation and growth strategies.
For start-ups, this information is invaluable and helps to position the business for success.
The biggest advantage in ensuring that industry body membership makes the “to-do” list before starting operations is that industry associations should provide the start-up business owner with the right industry knowledge and expertise at their fingertips to set them up for success.
Industry bodies need to act as a bit of a “one-stop-shop” for their members, in terms of directing them to quick-fire solutions for the day-to-day challenges that they will face in their respective business.
What is often overlooked is that these associations are (more often than not) started by people who are either in the industry, or are old hands that still maintain a keen interest.
The potential for these industry bodies to act as a pseudo mentor figure for start-ups is huge and members should consistently put pressure on their peak body to provide tangible and relevant information that benefits all members.
Bottom-line benefits
For product-based operations, there should also be access to better rates with major partners of the industry body.
This means that there are bottom-line impacts on paying your membership costs to go with the intangible sourcing of information and building networks within the industry.
For service-based industries, there should also be some kind of accreditation or endorsement from the industry that can set members apart from their competitors and help to garner new business.
When it comes to hiring a service provider, would you rather someone who is accredited by the peak body, or one who doesn’t have a third party endorsement?
Another benefit is industry advocacy and driving the growth, development and awareness of the industry itself, for the betterment of all stakeholders and particularly members.
Depending on the industry, this could be by way of promoting their particular product(s) or services to the end-user, thereby generating increased awareness and sales; or it could be by-way of the association delivering better business/working conditions for its members, through lobbying regulatory and government reform.
Power in numbers
This should be a staple of any peak body. As every union knows, there is power in numbers, and the peak body should have a mandate from their members to speak for the industry and promote its interests.
This mandate is dependent on engagement from their members, however, so any start-up which feels that their industry body isn’t adequately promoting their views should voice their concerns.
This can happen when major financial backers start to throw their weight around a bit in a bid to have their views heard over other constituents, which leads to a balancing act.
Speaking out ensures that you have the best chance of being heard. The board of the peak body can only hear what is being told to them, and should always be open to hearing the views and concerns of their members and acting on them.
While industry association membership may seem like a low priority when it comes to starting a business, there are a number of benefits that can be gained from utilising their resources from the ground up, as opposed to implementing avoidable and ineffective processes that require wasting time and money when it becomes apparent they don’t work.
So perhaps, in hindsight, the hour or two that you spend researching the industry body and going to an event, and the comparatively small membership fee, might be worthwhile in securing a profitable, secure and bright future for your business. It’s at least worth some research.
Graeme McCormack is the Executive Director for the Australasian Sandwich Association – the peak body for the café, sandwich and foodservice industry. He is also founder and CEO of Faction, a specialist franchise operations company.