Question

Identify three ways, other than buying cooperatives, that small businesses partner with other small businesses to cut costs without sacrificing their competitiveness.

Answer 1

Small businesses could cut costs by partnering with other small businesses without sacrificing competitiveness in the these ways:

• Sharing of production/warehousing facilities - Excess capacity could be shared with other businesses which have additional demand by charging a price. This would benefit both businesses
• Sharing of equipment / fixed assets - Idle equipment or unutilized portion of the fixed assets can be shared by charging a reasonable price, thereby benefiting both businesses
• Transport facilities which are used for purchases/sales can be shared.