RETAIN BUSINESSESin Bellingham, WA
As business owners retire, we help keep these businesses thriving in our communities
Employee ownership as a strategy for business retention
The city of Bellingham, Washington has an estimated population of 88,500 and is the county seat of Whatcom County. The county is located on the border of Canada in the uppermost western corner of Washington State. The median income of Bellingham’s residents is just under $50,000 and currently over twenty percent of the city’s population lives in poverty.
Bellingham seeks to curb the effects of the Silver Tsunami
Small, locally owned businesses are essential to Bellingham’s local economy and community vitality. Among the challenges the city faces is keeping small businesses and the jobs they provide rooted in the community, as the Silver Tsunami – the retirement of baby boomer business owners – impacts Bellingham.
The silent risk of the Silver Tsunami
Baby boomers (those born between 1946-1964) own nearly half of all businesses with employees in Bellingham. Cities and regions need to understand the risk of the so-called Silver Tsunami as these business owners retire. The risk is that these legacy businesses won’t be retained locally — either because they quietly close down, are sold to out of area buyers, or simply don’t have a succession plan as the owner marches into retirement.
Bellingham’s proactive approach
Bellingham is taking a very proactive look at this issue and is supporting local and employee ownership succession. Through the Whatcom Community Foundation, they have partnered with Project Equity to shine a light on the need for smart succession planning and to develop an effective strategy to engage with their legacy businesses.
Project Equity performed an analysis for the entire county to quantify the number of privately-held companies with employees that are 20 years or older — a good indication that they need succession planning — and the impact if these businesses are not retained.
- Represent over 1,100 of the businesses in Bellingham
- Employ an estimated 16,000 individuals
- Generate about $4B in revenue
Local ownership over the long-term
Keeping companies locally owned over the long term is a critical economic development strategy. Only 15 percent of businesses get passed onto the next generation because the kids aren’t interested in taking over their parent’s business. According to BizBuySell, the largest online marketplace for businesses, only 20 percent of businesses listed for sale ever sell. We clearly need more strategies for local business succession to avoid businesses inadvertently closing their doors due to lack of planning. The good news is employee ownership is viable for many companies, and it provides similar benefits to family ownership.
Employee ownership may be unfamiliar to many, but it keeps companies rooted in place, provides quality jobs and strengthens businesses for the long-term. It also offers a ready solution to the retiring business owner: there’s a buyer right there under your nose — the very employees who helped you build the company.
Local ownership is important to Bellingham’s future. Let’s make sure the Silver Tsunami doesn’t put us at risk.
Our latest articles
Sign up for our newsletter to receive our news and events straight to your inbox.
A Job Quality Agenda for the Next Administration was written by The Aspen Institute Job Quality Fellows urging policymakers to build an agenda for economic recovery focused on job quality and economic inclusion.
The City of Santa Clara launched an initiative to assist locally-owned businesses that are at risk of closure to learn about the option of employee ownership.
2021 is a new year, and a great time to make a resolution to focus on succession planning.