Business and employment co-operative
Business and employment co-operatives (BECs) represent a new approach to providing support to the creation of new businesses. The first BEC was started in France in 1996, since then a further 55 such enterprises operating in 100 locations across the country has sprung up. The idea has also been adopted in Belgium, Sweden, Quebec, Morocco and Madagascar.
Like other business creation support schemes, BECs enable budding entrepreneurs to experiment with their business idea while benefiting from a secure income. The innovation BECs introduce is that once the business is established the entrepreneur is not forced to leave and set up independently, but can stay and become a full member of the co-operative. The micro-enterprises thus combine to form one multi-activity enterprise whose members provide a mutually supportive environment for each other.
A BEC thus provides budding business people with an easy transition from inactivity to self-employment, but in a collective framework. Intending entrepreneurs pass through three stages:
- First, they remain technically unemployed but develop their business idea under the wing of the BEC;
- Next, if it looks like being a success, they become a ‘salaried entrepreneur’ with the security of a part-time employment contract;
- Finally they become a self-sufficient business, sharing in the ownership and management of the co-operative.
BECs allow a small business person to achieve control over their working life, but with the support of a group of people who are facing the same problems and want to pool their enthusiasm and expertise. They help to overcome one of the most discouraging features of becoming self-employed – isolation. They thus lower the bar for becoming an entrepreneur, and open up new horizons for people who have ambition but who lack the skills or confidence needed to set off entirely on their own – or who simply want to carry on an independent economic activity but within a supportive group context.
BEC clients are in all sorts of activities from cookery, industrial cleaning, furniture restoration and organic horticulture to violin making, jewellery, translation and web design. At the end of 2005, the 90 sites in the BEC network numbered 2,618 supported entrepreneurs plus 1,138 salaried entrepreneurs (including 60 member entrepreneurs), with a combined turnover of €16.5 million in 2005. Two-thirds of entrepreneurs start off as unemployed, two-thirds are aged between 30 and 50 and 53% are women.
Stage 1 – Supported entrepreneur
Initially, the 'candidate business' works up their idea while remaining legally unemployed. They continue to receive unemployment benefit while developing a marketable product or service, testing the market and establishing a client base. The BEC handles the business administration and accounting.
Stage 2 - Salaried entrepreneur
The entrepreneur agrees to a part-time employment contract with the BEC, and in return pays over 10% of sales. They continue to build up the business and receive training, administrative support, and social insurance coverage. The salary grows as the business grows.
Stage 3 - Member entrepreneur
When the business is self-supporting, the entrepreneur can choose to join the BEC as a full voting member, and take part in its management, continuing to pay an administration charge of 10% of sales. Optionally, the business can spin off as a totally independent entity.
Business and employment co-operatives have aroused interest in various areas of policy-making:
- One of these is economic development in rural areas, as BECs are a good way to support the so-called SOHO-SOLOs, professionals who migrate to the countryside to carry on their business at a distance – and in so doing bring valuable skills, economic activity and social life back to depopulated areas.
- Another is the regularisation of informal work.
- A third is demography, and concern about how to raise the activity rate to counter the effect of an ageing population. BECs can help excluded groups such as ex-offenders to restart their working careers, and allow older people to work part-time.