The Business Association Side Hustle

According to Zip Recruiter, the average CEO of a trade association makes $84,060 per year, with the high-end of their job postings showing salaries topping $220,000 per year. And that's in the non-profit arena.

This side hustle is an interesting diversion from the others I've written about, as it's focused on the creation of a professional trade association in which you will have a role as the CEO or Executive Director and make income. However, if you consider its for-profit counterpart, are these not the same objectives?

You've spent your entire career perfecting your skills. What you know could easily help thousands of your peers succeed in their careers as well as help them avoid a ton of problems that you've circumnavigated in your long career. What are your options for giving back?

The ones that come to mind quickly are writing articles for magazines, creating courses, conducting learning events, and arranging conferences, as well as similar venues. But have you thought about putting them all together to create a business association? In this Newsletter, I'm going to give you some ideas about creating an association that will help you pass on your knowledge and expertise, as well as collaborate with your peers to uptick both your personal and career field status. Or in a different vein, taking one of your personal interests to a whole new level.

How many trade organizations are there?

You might be shocked to know that there are approximately?22,200 national associations and 115,000 associations?with state, regional, or local scope in the United States. In addition, there are approximately 22,300 multinational, binational, and non-US national associations operating internationally. Their missions and purpose are as diverse as you can possibly imagine.

What do trade and business associations do?

Many of us belong to professional trade organizations to network with our peers and improve our knowledge in a particular discipline, like corporate education, engineering, or finance. That professional association is also nice to have as a resume credential to show your dedication to keeping current in your career.

The scope of activities covered by associations is as broad as you can imagine. It could be to lobby for important changes that would help your membership or provide a place where members could collaborate on joint projects or research. With over 115,000 of them, it could be for any reason ranging from professional training and advocacy to taking on projects that could help the common good.

If you go to Charity Navigator and type in "trade associations," you see thousands of these organizations. Most are listed as 501(c)(6) organizations or 501(c)(3) organizations. What do those designations mean?

What's The Difference Between a 501(c)(6) and a 501(c)(3)?

The difference between the two is the organization's primary purpose.?According to the Internal Revenue Service (IRS), 501(c)(3) organizations must serve the general public. On the other hand, 501(c)(6) organizations are usually formed to serve their members. Both are often referred to as nonprofit membership organizations. And these designations are obviously only US-centric.

It's unclear whether you can set up an association as a for-profit enterprise in the US. Some experts say that you can while others say absolutely not. According to the Indie Business Network , you can set up the association as a for-profit, but you absolutely, positively, need to check this out with a law firm that specializes in this law in your state.

Perhaps the biggest difference is going to be how you want to be taxed, but this is absolutely one area that you should check on with your lawyer and accountant in your state, as well as the IRS.

What Are The Steps Required to Set Up a Business or Trade Association?

1. The first step is to come up with a plan and a purpose for the trade association. What goals do you hope to achieve and what services do you hope to provide?

2. Once you have a plan in place, you will need to develop bylaws and create a board of directors if you head into the nonprofit arena. The board will be responsible for setting policies and overseeing the operations of the association.

3. Next, you will need to register your trade association with your state government. This process will vary from state to state, but will generally require filing articles of incorporation and bylaws with the Secretary of State's office.

4. Finally, you will need to create a membership structure and start recruiting members. The more members you have, the more powerful your trade association will be.

What Software is Available to Manage a Trade Organization?

The best one that I could find is from Membee.com . It costs $170 a month and includes the build-out of your website. Here are some examples of the diversity that can be created. You can click on each one to see the actual websites:

Membee is a membership software that helps organizations manage their membership services. It includes features such as online registration, payment processing, and event management. Membee also offers a complete website home page for members that includes access to their account information, benefits, and event registrations.

Membee Complete is an all-in-one membership management package that includes a modern, mobile-friendly, and easy-to-manage website. It also has access to all of Membee's membership management features as well as administrative access to both Membee and the back-end of your website. Additionally, it includes unlimited pages, bandwidth, storage, and support. The site also comes with a next-generation content editor, built-in SEO management and site analytics, and free site setup services.

What Are Examples of the Range of Dues

The cost of membership in an association can vary greatly depending on the size of a company and whether the organization is acting as the voice for the entire group on Capitol Hill (re: lobbying in the US). The Organic Trade Association , for example, has a sliding scale that ranges from $750 to $30,000 per year, depending on the company's organic sales.

The cost of membership can also vary depending on the type of organization and membership. Trade memberships - companies that sell products - typically cost more than associate memberships - businesses that don't sell products. Another distinction can be voting versus non-voting memberships. These sliding scales give organizations the flexibility to adjust their dues amount depending on their annual sales.

For example, using the Organic Trade Association as the example, a farmstead with total annual organic sales of $25,000-$74,999 would pay dues of $325-$849, while a business with total annual organic sales of $10,000,000 or more would pay dues of $50,000 or more. Non-voting memberships range from $50 to $3,590.

But more typically, the dues are going to be in a lower range if you're dealing with individual consumer memberships. Take, for example, The Actor's Center that's linked above. Their regular membership is $70; student and senior memberships are $50; and an associate membership depends on how much you want to donate, with the field set to $0.00.

Depending on what you plan as your services, the first step shown above in creating and putting together your association, those services will directly impact your fees and dues. Events, training, and other offerings can be separately priced or wrapped into the base fee.

Getting Started

The best way to get started is by filing articles of incorporation and bylaws with your state government and then creating a membership structure if you're going the nonprofit route. Once you have members, you will need to decide on what type of dues to charge them. Dues can vary greatly depending on the company's size and whether they are selling products or not. Finally, make sure you offer services that justify the cost of membership so that your customers feel like they're getting good value for their money.

Summary and Recommendation

This is one of the more unusual side hustles that I've presented because it involves creating an organization in which you will have a role as the CEO or Executive Director and receive income. But it's much like creating a business in which the goal is the same.

Starting a trade organization can be a daunting task, but with a good team, and the right software and membership structure in place, it can be an incredibly profitable business for you to consider. It might even give you the satisfaction that you may feel is missing from your current job. Even better, this is one side hustle that can elevate you in both your current job and in your profession which will lead to other opportunities, like public speaking, and the creation of a digital magazine. What company would possibly object to your taking such an active role in your chosen career?

? 2022, Joe DiDonato, Side Hustles Newsletter #18