Cooperative Development Institute – April 29, 2021
Business Ownership Solutions (BOS) works with business owners and their employees to think through whether conversion to employee ownership is feasible and could meet their needs, whether as a succession plan or as a growth strategy. We provide expertise in cooperative design, financial analysis, business planning, transaction structure and financing, and education and training needed to execute a successful conversion to an employee-owned company.
For business owners, conversion is one of the best ways to get a fair price for the business, sustain the legacy they’ve built, and, if structured properly, can provide substantial tax benefits for the current owner.
For employees, conversion can improve wages and benefits, and offers an opportunity to build wealth through ownership.
For communities, employee ownership conversion preserves local control and sustains the jobs and economic activity the business provides.
BOS promotes a model of economic and community development that is equitable and sustainable, that builds on the assets and strengths of our people, and that supports broadly shared prosperity.
Why Business Ownership Solutions?
Many business owners have not prepared adequately for a smooth transition to the next generation of ownership, leaving the future of the jobs, products and services they provide in question. The facts give us reason to worry:
- 60 – 80 percent of business owners want to retire within the next decade
- Of these, only about 20 percent have a plan for what to do with their business
- Only about 30% of family businesses survive into the second generation of the owner’s family
- Businesses sold to an outside investor have a 50-50 chance, at best
Converting independent businesses to worker-owned cooperatives would likely sustain these businesses. In fact, research shows that well-planned employee buyouts succeed about 80% of the time.