EMPLOYEE OWNERSHIP IS A REAL POSSIBILITY
You might not have considered all of the options.
Most business owners, when considering their financing or exit plans, assume that selling the company to their employees isn’t an option. It’s easy to understand why: with rare exceptions, even if they put all their resources into one pool, most employees do not have the cash on hand to buy the company where they work. And even if they did, or could get a loan to fill the gap, many might rightly regard the risk as unacceptable. Not everyone is suited, financially or by temperament, to be an entrepreneur.
But as is so often the case, this assumption is based on incomplete information. There are thousands of successful, thriving, employee-owned businesses across the US. In Minnesota alone, there are approximately 300 such companies. Most are more successful than they were when they were privately-owned.
CRISES FACING MINNESOTA
We need decisive action to preserve Minnesota’s small businesses and jobs.
The Silver Tsunami
Retiring baby boomers own half of all small businesses, over 52,000 in Minnesota. 6 out of 10 will try to sell their business in the coming decade, and many won't find buyers.
Faced with the challenges of bridging this crisis, many business owners may feel that the best route is to close down; the investment of energy and capital may not feel worth it at the end of a long career as a small business owner.
Click below to learn more about the Silver Tsunami.
COVID-19 Impact
As of January 2021, over 70% of businesses in Minnesota have been negatively affected. Over half believe it will take six months or more to return to normal.
Many local businesses are shutting down or are forced to severely curtail operations. Others need to shift operations and invest in retooling in order to operate in our changed, socially distanced environment. As Minnesota experiences some of the highest level of job losses since the Great Depression, leading economists fear that many of these businesses will not survive.
Click below to learn more about the COVID-19 Impact.
What are my options?
Employee Stock Ownership Plan (ESOP)
An ESOP is the most common type of employee-ownership in the United States. If your company has 20 or more employees, low debt, and is consistently profitable, an ESOP may be a great option for you.
Worker-Owned
Cooperative
A great option for smaller companies, Worker-Owned Cooperatives are governed democratically. Worker-Owned Cooperatives are the most common type of employee-ownership around the world.
Employee Ownership
Trust (EOT)
The least expensive form of employee-ownership, an EOT is when the company is owned by a perpetual trust. It requires all profits above those needed for reinvestment in the business to go to the employees.
EMPLOYEE OWNERSHIP IS WORTH INVESTIGATING
The next step is to get advice and learn how to start your journey to employee ownership.
