10 reasons to go EO
- Project Equity
Project Equity has been helping business owners for the past 10 years sell their businesses to their employees—either through a worker cooperative, an Employee Stock Ownership Plan (ESOP) or an Employee Ownership Trust (EOT).
We are celebrating our 10th anniversary by sharing 10 reasons you should consider selling to your employees in our business owner newsletter and here in this blog. Each month, we will announce a new reason to celebrate with stories of business owners and businesses that transitioned to an employee ownership model.
If you are not yet subscribed to our Business Owner Insider, sign up here. In this monthly newsletter, we share stories about employee-owned businesses, explore transition topics, answer frequently asked questions, and keep you updated on upcoming webinars.
Reason #1: Going EO can help you leave a lasting legacy
Selling your business to your employees means continuing the legacy that you worked hard to build.
“Employee ownership keeps the mission of the business going long after the founders aren’t working there anymore. It ensures that there’s some consistency and a future that the owners can be proud of.”
Monica Rocchino, selling owner of The Local Butcher Shop
Watch: Selling your business, preserving your legacy
Hear from a business advisor, selling owners and employee-owners as they discuss the reasons to choose employee ownership, recorded at our 2023 Employee Ownership Equity Summit.
Reason #2: Going EO keeps your business in the community
Selling to your employees means keeping the business in the neighborhood it has served. Employee ownership positively impacts communities. It secures local jobs and as the employee-owners build equity, they invest more in their communities.
“There’s no question in my mind that this was the right thing to do. Not only for me personally but for the company, the community, the employees, the fishers and all of the stakeholders. “
Laura Anderson, selling owner of Local Ocean Seafoods
Watch: Learn why Laura sold Local Ocean Seafoods to her employees
We had a chance to sit down with Laura from Local Ocean Seafoods in Newport, Oregon to ask her about her experience transitioning to employee ownership. When she was ready to retire as the current owner, she determined the best fit for her business was an Employee Ownership Trust (EOT). Watch this short video to learn why she made that decision. (Hint: there’s more than one reason.)
Reason #3: Going EO helps you attract new employees
Selling to your employees sends a strong message to new recruits. It means they won’t just have a job, they will own part of the business. In industries with higher turnover, the benefit of employee ownership can mean hiring dedicated workers who stay longer.
“When I interviewed at Research Development Associates (RDA), I learned about the transition to an Employee Owned Trust and it was definitely something that made the company more appealing to me… I really liked the idea of working for a for-profit company that was focused not only on how our work could benefit our clients, but also benefit our staff.”
Charlene Taylor, employee-owner at RDA
Watch: It’s not just a job: Delta Pipeline Inc
Learn why this HR director finds that being an employee-owned company helps recruit and retain good employees.
Reason #4: Going EO gives employees a piece of the pie
Employee ownership is one of the few ways low to moderate-income workers can build wealth. Transitioning ownership in this way expands the opportunity for people to become business owners and gives them a chance to own a piece of the pie.
CT3 Education is a client we helped transition in 2022. They created an Employee Stock Ownership Plan (ESOP) to help retain workers and provide long-term wealth for its employees.
“I truly believe in the employee ownership concept and the benefits it can provide. It can create long-term generational wealth for those who traditionally might not gain that opportunity.”
Greg Pace, Financial Advisor and ESOP Committee Member at CT3 Education
Reason #5: Going EO helps you retain employees
The data is clear—companies that are employee-owned have longer retention rates. Studies conducted by the National Center for Employee Ownership found that after becoming employee-owned business productivity increases 4-5% on average and job tenure is 53% longer.
“Going from an employee to a business owner is an opportunity I couldn’t have foreseen coming. The norm in the restaurant industry is for people to move from job to job a lot. Being an owner makes me want to stick around.”
Koji Fujioka, employee-owner at The Local Butcher Shop
Learn how The Local Butcher Shop is retaining employees.
Watch: The Local Butcher Shop brings employee ownership to the table
Reason #6: Going EO helps you solidify your company’s values
For many retiring business owners, selling to an outside party can mean a change not only to the structure but also the value and integrity of the services and reputation they worked hard to create over the years.
In order to maintain their company values, we helped Hummingbird Wholesale create an Employee Ownership Trust (EOT) to embed the values of their company into a permanent new structure.
“One of the downsides of selling your business to a conglomerate or someone outside of the existing business is that they can gut the culture, lay off staff, and reduce the quality of the product being produced and sold. An employee ownership model maintains the values and integrity of the product and the business.”
Charlie Tilt, Co-owner of Hummingbird Wholesale
Read about Hummingbird’s transition.
Watch: Charlie Tilt and Ben Moe’s perspective on becoming employee-owned
Stay tuned! Another reason to go EO will be announced next month and will arrive in your inbox if you are subscribed to our Business Owner Insider.
