Business and Employment Co-operatives :
An innovative company model dedicated to employment
Context : boom of entrepreneurial ambition
The success of the auto-entrepreneurial status is unrivalled. It unveils an entrepreneurial desire among our fellow citizens, but also reveals aspirations to work differently or, more simply, to get out of unemployment by creating a job ex nihilo which is not available on the job market.
The typology of entrepreneurs who create companies is in total upheaval. Micro or auto-entrepreneurs stem from unemployment; they lack entrepreneurial culture and networks. They come out of precarious situations, which do not allow them to take risks (especially financial risks). They choose the micro- or auto-entrepreneur status seeking self-employment rather than setting up a prosperous company, which could create employment and explore new markets. The difference between these two approaches is vast.
Micro- or auto-entrepreneurs often encounter the same difficulties : isolation, lack of support, impossibility to access important markets from a lack of credibility, acute insecurity in relation to their health care coverage, difficulties to balance their professional and personal lives, unreliable income, dependence on principal clients etc.
Business and Employment Co-operatives (BEC), has assembled into a network called Coopérer pour Entreprendre, which offers assistance in overcoming these problems. Our cooperatives were created out of an emergency to invent a new generation of companies, as well as a new economic organisation for the concerned areas. BEC is relevant to all, who, when creating their own business, wish especially to create their own job. The proposition of Business and Employment Co-operatives could be summed up as follows: rather than creating your own company, create a salaried job within a cooperative company which you would share with other entrepreneurs with contrasting skills and very different professional projects.
By creating a company collectively, which is strong and shared by all, “salaried entrepreneurs” can give themselves right-to-work law, safety, social protection, sharing expertise, business opportunities, financial tools and solidarity. No freelancer, independent worker or micro-company manager (EURL…) has access to these tools. It aims to recreate entrepreneurship where it once was through a cooperative entrepreneurial project, as well as through the emergence of a “salaried entrepreneur”.
The practical running of the BEC
Business and Employment Co-operatives (BEC) is open to all wishing to pursue an entrepreneurial project. Future entrepreneurs often contact the BEC after getting information from job centres or local stakeholders dealing with integration or economic development.
After participating in a group presentation of the cooperative, future entrepreneurs attend one or several individual meetings aiming to help them to clarify their projects and to justify the fact that the cooperative can be a relevant solution for them.
Professional projects are not selected according to economic profitability : You join the BEC when you feel ready to launch your project. Most projects concern 5 main sectors of activities: NTIC (New Technologies for Information and Communication), craft industry, arts and crafts (especially the building industry via cooperatives dedicated to this industry), service industries (especially services to individuals, under the “Borloo law”), services to companies and trade/commerce.
The entrepreneurs benefit from individual as well as collective support straight away to help them launch their activity and to commercialize their products or services under their own brand. This support is financed conventionally by the cooperative’s public partners, local authorities or State services, on the same basis as any other measures available for entrepreneurial creation.
As soon as the first invoices are sent, the BEC and the entrepreneur sign a CDI (long-term work contract) : the entrepreneur then becomes an employee within the cooperative with his or her own turnover. The salary is always quite low in the beginning, but it stabilizes and evens out over time. Each time the activity prospers it is revised in higher terms through mutual agreement. Support is given over the long term as well as during the project’s development: the entrepreneur learns his or her “entrepreneur’s job” by doing it, supported by the team that runs the cooperative and other salaried entrepreneurs (also called “mutual support”).
The cooperative is a multi-activity company assembling from 20 to 500 entrepreneurs. Legally and socially, they are employed by the cooperative: the cooperative invoices all of the entrepreneurs’ sales, receives payments and is legally responsible for their professional activity. Professionally and economically, they benefit from an expansive autonomy, necessary for their entrepreneurial practice.
Entrepreneurs pay 10% of their turnover towards the costs of running the cooperative. When the entrepreneur’s activity has stabilized and is running smoothly, he or she can choose to stay permanently with the Business and Employment Co-operative and can become an Associate (legally the BEC is a SCOP : Société Coopérative de Production). Hence the entrepreneur confirms his commitment in this collective company that is his. The entrepreneur is of course free to leave the cooperative whenever he wants, especially to create his own company : the BEC will have allowed him to test and launch his activity in total safety as well as preparing him for the management of his company.
Advantages for working within a BEC
The Business and Employment Co-operative offers a certain number of solutions to difficulties frequently encountered by micro- or auto-entrepreneurs:
4 Not being isolated : entrepreneurs receive support from the team running the BEC. They encourage each other through mutual apprenticeships and they benefit from customized professional advice and significant networking influences ;
4 Focusing on marketing the products or services: all administrative aspects, accounting, tax systems, insurance and legal aspects of the activity are shared at the cooperative level ;
4 Making the entrepreneurial approach safe : being employed with a long-term contract allows the entrepreneurs to develop their activity in their own way, with total security, and without losing possible social benefits while normalizing their income and various contributions over time, also producing mutual financial safety nets between activities ;
4 Allowing multi-activities : turnovers generated by two or three activities can be combined together and contribute to a sustainable activity;
4 Getting a health insurance coverage : the entrepreneur finances his or her own social protection with his or her salary (retirement, sick leave, unemployment…) equal to other employees;
4 Pooling some contributions : being in the cooperative allows the entrepreneur to pool efforts and some contributions (accounting, legal advice, administrative red tape, insurance, etc.).
4 Authorizing flexible professional collaborations and using professional networks: Mutual sub-contracting or collaborations within the same legal company are simple and flexible. They permit a smooth and safe expansion of the entrepreneur’s activities.
On top of pursuing their individual project to earn a living, the entrepreneur fully participates in the collective company whose development allows them to further ensure their own approach. They benefit from occupational medicine instantaneously, as well as insurance coverage for their activity. While growing in strength, the Business and Employment Co-operative establishes pooling, protection and learning mechanisms (profit-sharing schemes, encouraging collective projects, shared premises, typical commercial actions, development of financial tools, prevention of professional risks, etc.).
Business and Employment Co-operatives has been inventing a radically innovative economic organization for the last 15 years: a new type of reciprocity through which professionals mutually protect their professional career paths and entrepreneurial projects over the long term, while sharing a company.
Companies dedicated to employment
Business and Employment Co-operatives is a local development tool for its partners, local authorities or local State services, since it is well-established in its area like any other SCOP.
In urban areas, it links together and completes various support measures for the creation of a company or an activity. It offers a privileged space to develop collective projects, feminine entrepreneurship (50% to 70% paid entrepreneurs are women) and is also an alternative to workers in the entertainment industry without steady employment.
In rural areas, BEC exploits all multi-activity possibilities to set employment on the spot, while offering a salary and health care coverage based on diversified activities, some performed alone, and others in cooperation.
In quantitative terms, BEC’s efficiency is entirely measurable. Contrary to classical company creation support, BEC can measure the potential of the projects integrated within the BEC because they generate a turnover.
The work of the Cooperative is the expression of two indicators :
- Salaries paid to entrepreneurs, corresponding to the income from their activities;
- Return on investment nationally, corresponding to fiscal and social contributions paid by the BEC according to the total public money it receives.
Return on investment nationally is usually calculated by a factor of 3 for a BEC running smoothly: for each euro of public subsidies received, the BEC pays three Euros back of fiscal and social contributions (this figure does not include the savings made on paid social contributions benefits).
The “Coopérer pour Entreprendre” network is 15 years old. Continually evolving since its creation, it now includes about 6 000 entrepreneurs at various development stages in their activities. Coopérer pour Entreprendre unites 73 Business and Employment Co-operatives in France, present in 153 locations. Together, in 2011 BEC-salaried entrepreneurs had a turnover of slightly less than 50 million Euros.