From the International Economic Development Council (pdf):
For the busy owners of small businesses, short-term pressures often take precedence over long-term planning. That’s why many business owners lack a succession plan to ensure that the enterprise will continue when they’re ready to step down. The stakes are especially high when the firm is a community employer and the owner can’t find a buyer, or lacks family interested in taking over the business. But there’s a third, often overlooked option right under their nose: employee ownership.
Currently, there are at least 300 worker-owned cooperatives in the United States and nearly 7,000companies with employee stock ownership plans (ESOPs). The Democracy at Work Institute (DAWI) is a national nonprofit that provides research, education, and relationship-building initiatives in support of worker cooperatives, and which also helps businesses navigate the transition toemployee ownership. ED Now interviewed Joe Marraffino, co-director of DAWI’s Cooperative Conversion program, and Dave Hammer, executive director of DAWI technical assistance partner ICA Group, about strategies, best practices, and where EDOs fit in. The following interview has been edited for length and clarity.
IEDC – For Retiring Business Owners Worker-Owners Can Carry the Torch