New Zealand is an economy made up of small and medium sized businesses, according to MBIE they contribute to 42% of our GDP. Across our towns, suburbs and rural communities, independent business owners put their capital, reputation and energy into building businesses of their own. Many of these businesses are part of co-operative groups that give the owners the independence of running their business as they see fit, but still enjoying the benefit and support of being part of a larger brand and group, without paying additional fees to a franchisor that has it's own strategic goals and profit targets.
The cooperative business model brings together the entrepreneurial drive to own and operate a business with the benefits of operating within a wider group without paying excessive fees. Co-ops enable business owners to retain ownership of their businesses while collectively owning the organisation that supports them. They can pursue their individual ambitions, share resources and build something larger than any one member could create alone.
It is a model that deserves more attention, particularly as New Zealand looks for ways to improve productivity, strengthen regional economies and help locally owned businesses compete.
"For me, its relevance starts with a simple principle, the people who rely on a business should have a meaningful stake in its success and a voice in its future.", says Shaun Taylor, CEO of Professionals Group NZ.
A foundation of New Zealand’s economy
Some of New Zealand’s largest and highest profile businesses are cooperatives and they operate across a diverse range of sectors. Fonterra is listed on the NZX, but began as a dairy cooperative and continues to operate as a cooperative. Mitre 10 New Zealand is collectively owned by independent member businesses. Foodstuffs’ cooperatives support locally owned grocery stores operating under familiar brands such as New World, PAK’nSAVE and Four Square. These organisations remain co-operatives today.
Their success illustrates the model’s versatility. Farmers can pool resources to reach international markets. Retailers can combine purchasing, distribution and brand investment. Service based businesses can access capabilities that would be difficult to develop individually.
The reach is substantial. Cooperative Business NZ reports that the country’s top 30 cooperatives directly employ approximately 49,000 people and generate combined revenues equivalent to 12.5% of the value of New Zealand’s GDP.
Scale that preserves local ownership
One of the model’s greatest advantages is its ability to connect local enterprise with collective scale. An independent business owner may know their customers exceptionally well, have strong community relationships and respond quickly to local opportunities. But developing technology, negotiating supplier agreements and building a brand takes time and capital.
A cooperative gives owners a practical way to share those costs. It can also improve the quality of what they receive. Pooled resources can support dedicated specialists, better systems and more consistent professional development. The benefit extends beyond buying something at a lower cost, to accessing capability that might otherwise be out of reach.
This matters in a geographically dispersed country like New Zealand. A business in a regional town should be able to access sophisticated support while retaining the local knowledge and personal accountability that makes it valuable to its customers.
Members have a voice because they are owners
In a cooperative, membership carries a relationship with the organisation that extends beyond purchasing services you find in a franchise. Members participate as owners. Through shareholder meetings, membership committees, Annual General Meetings (AGM) voting and director elections, members have formal opportunities to influence group strategy and hold its leadership accountable.
That gives participation a clear purpose and the internal operations of the business are transparent. Members can question an investment, propose a change or challenge whether the organisation is delivering enough value. It also creates responsibility. Shared ownership asks members to consider the health of the whole business, including the investments and decisions needed to support future generations.
A well run cooperative makes that participation informed and useful. Transparent reporting, open communication and meaningful discussion help members understand the choices in front of them.
Bringing industry knowledge into governance
Member representation can bring real-world experience to the board table. Business owners understand the everyday consequences of strategic decisions. They know the pressures on margins, the difficulty of recruiting good people and how customer expectations are changing.
That experience helps a board ask better questions and assess whether proposed investments will work in practice. The Institute of Directors recognises member control and the election of directors from among members as key features of cooperative governance. Most cooperatives also provide for independent directors within their shareholder agreements. This independent expertise can strengthen the model further. Directors with experience in finance, technology, risk or organisational change bring additional skills and an outside perspective.
The objective is a capable board that combines informed industry experience with the governance and strategic expertise needed to guide a substantial business in a modern and competitive industry.
Knowledge sharing is a commercial advantage
The research collected by Cooperative Business NZ adds an important dimension to this discussion.
Its summary of a 2025 peer reviewed study, involving 68 New Zealand cooperatives, reports that cooperative principles and entrepreneurial success can reinforce one another. The study identifies knowledge sharing between members of the cooperative as a critical ingredient in achieving economic and social outcomes.
That finding makes practical sense. Across any network of business owners, there is considerable experience within the individual businesses e.g. investments that have worked or failed, emerging customer needs, competitor information and new ways to improve performance are just some examples. When those experiences are shared effectively, the whole organisation can learn faster. A successful initiative in one business can inform another. An emerging problem can be recognised earlier. Members can contribute ideas that improve the services they collectively own.
It is Shaun's view that "this is one of the model’s most valuable strengths. The membership is both a source of demand and a source of intelligence."
Value is measured where members experience it
Cooperative ownership also changes the discussion about financial performance. A cooperative must be commercially disciplined. Like any business it needs adequate reserves, the capacity to invest and a sustainable financial model.
But member value can take several forms. It may appear as competitive fees, better purchasing terms, stronger services, access to expertise or distributions to members. For a shared services cooperative, Shaun describes the goal as "high service and member value at low profit". The support organisation should be financially healthy while directing its resources towards making member businesses more successful.
Where distributable profits are available, they can be returned equitably under the organisation’s rules. Equitable does not necessarily mean identical: arrangements may reflect shareholding, participation or trading activity.
Retaining funds can also serve members well when those funds support worthwhile investment that benefit all members. The essential question is whether the money is being used transparently and effectively for their long-term benefit.
Why co-op principles fit real estate
Real estate is an industry that can be hyper-local, some agents and teams are well known in certain suburbs, but have a low presence a few kilometres away. It is an industry built on local knowledge, personal relationships and entrepreneurial effort. An owner in Invercargill faces different market conditions, values and clients from an owner in Auckland. Each needs the freedom to recruit, advertise and develop their business in ways that suit their market.
Yet their underlying needs still have much in common. Both benefit from a recognised national brand, a centralised website, effective marketing, being part of a national staff recognition programme, reliable technology, training and events, and access to experienced peers. Sharing investment in those areas allows owners to concentrate more of their energy on local customers and business growth while their operational needs are supported elsewhere.
The financial advantages become particularly relevant when real estate margins are under pressure. Operating expenses have increased, largely flat property values have limited growth in commission revenue, and competition for top performing agents continues to drive demand for higher commission splits. Office owners are being squeezed from both sides, making the cost of belonging to a national group an important commercial consideration. The traditionally lower fees associated with cooperative models can provide a competitive advantage, allowing owners to retain more of their revenue while accessing shared services and national brand support. Those savings create room to invest in recruitment, marketing and business growth, while protecting profitability through quieter market conditions.
With respect to governance in the fast changing industry of real estate, owners who use the systems, are at the coalface of an increasingly compliance heavy environment and lead teams locally can help shape what the group focuses on. Directors can determine the strategic priorities, and can be nimble and react quickly to industry changes. That connection becomes more valuable as technology advances and customer expectations rise.
It is also a natural environment for developing new business owners. Mentorship and shared experience can help ambitious salespeople build the skills and confidence required to lead a business of their own.
Professionals New Zealand: more than 40 years of shared ownership
These principles sit at the heart of Professionals Group New Zealand, the country’s largest cooperative real estate group.
Professionals began operating in New Zealand in 1983, when four entrepreneurial real estate owners recognised the opportunity to combine independent ownership with the strength of a shared network.
More than four decades later, our co-operative structure has been a major contributor to our longevity and is a key factor in our recent growth. Our members are shareholders, with a stake in the group and a role in its future. Our culture and values provide support and capability that help them develop their businesses and grow. Our current members have built their success on the shoulders of those who have gone before them and consistently share their knowledge with new members when they join.
“As Chief Executive, that gives me a clear measure of our purpose. The head office team is driven by delivering value and service to members, not generating excessive profits, clipping the ticket on supplier services or creating additional revenue streams within the business. This means we can keep fees below 5%, use members’ fees responsibly and build capability that supports their future success. And because members are our shareholders, the co-operative structure keeps that relationship visible, and members have a voice at our AGM,” says Shaun.
The co-operative structure encourages us to think beyond the next transaction or financial year. We focus on how we develop future owners through our Pathway to Business Ownership Programme. Unique to Professionals, the programme gives structured guidance to successful salespeople to help them transition to ownership by matching them with a member who acts as their mentor and business coach through the process. Although being a successful agent is the best start for being a business owner, there is often a skill gap between the two roles. Our recent growth in offices has partly been through the Pathway and our members have a vested interest in seeing the group succeed and membership grow.
New Zealand’s multitude of highly successful co-operative businesses have shown what independent people can achieve through shared ownership. In real estate, where local enterprise and collective capability are both so important, the opportunity remains compelling and is highly relevant.
For Professionals, it has supported more than 40 years of business and through our Pathway to Business Ownership Programme provides a strong foundation for the next generation of owners to build on.