Do some Internet and/or library research to discern whether there is a small business buying group or groups that new Venture Fitness Drinks, the fictitious company introduced in Chapter 3 and used as an example throughout this chapter, could benefit from. new Venture Fitness Drinks products contain all the ingredients used to make smoothies and similar fitness drinks and shakes.

PARTNERING FOR SUCCESS Organizing Buying Groups to Cuts Costs and Maintain Competitiveness 0: lower price, with no undesirable impact (other than the membership fee) on the other parts of their operations. The money that's freed up can go directly to a business's bottom line or be used to invest in customer service or other methods to increase competitiveness. There is no national directory of industry buying groups. The best way to find out whether there are buying groups servic- ing an industry is to conduct an Internet research and ask among industry participants. ne challenge that businesses confront is cutting costs in ways that don't erode their ability to remain competitive. Many cost-cutting techniques, such as scaling back on hiring, lowering marketing expenses, or reducing inventory, may save money but may also decrease a business's chances to remain competitive. One technique that can help to conserve a product- based business's financial assets without adverse side effects is to join or organize a buying group. A buying group, or buying co-op, is a partnership that bands small businesses and start-up firms together to attain volume discounts on products and services. In the UK and the Republic of Ireland, the Toymaster Group has been in operation since 1977 and now has around 250 members. They are all small, independent toys and games stores that operate under the name Toymaster and benefit from the combined buying power of all of the members. Some 55 percent of an average toy shop's revenue comes in during the pre-Christmas period and just 15 percent for each of the other three quarters of the year. This means accounting and money management is tightly controlled and this is what a buying group offers. Suma is the UK's largest independent co-operative wholefood wholesaler/distributor. They specialize in veg- etarian, fairly traded, organic, ethical and natural prod- ucts. They provide a unique, niche service as they are 100 percent vegetarian and stock no animal products or products derived from animals. They have close relation- ships with the growers and suppliers and cite that they have real commitment to fair trade rather than simply using it as a marketing device. The beauty of buying groups is that they generally allow businesses to obtain the exact same product for a Questions for Critical Thinking 1. Which of the four financial objectives of a firm- profitability, liquidity, efficiency, or stability-does participating in a buying cooperative contribute to the most? 2. Do some Internet and/or library research to discern whether there is a small business buying group or groups that New Venture Fitness Drinks, the fictitious company introduced in Chapter 3 and used as an example throughout this chapter, could benefit from. New Venture Fitness Drinks' products contain all the ingredients used to make smoothies and similar fitness drinks and shakes. 3. Identify three ways, other than buying coopera- tives, that small businesses partner with other small businesses to cut costs without sacrificing their competitiveness? 4. In an effort to improve the financial position of their firms, do you think the majority of entrepreneurs spend an equal amount of time focusing on (1) cost cutting and (2) increasing revenues? If not, which of the two do you think they spend more time on and why? The income statement, the balance sheet, and the statement of cash flows are the financial statements entrepreneurs use most commonly. Forecasts are an estimate of a firm's future in Page 2874_594based on Quast +rformance, its current circumstances, and its future plans. New ventures typically base their forecasts on an estimate of sales and then on industry averages or the