This content is Employee ownership is equal
It is a well-known fact that small and medium-sized enterprises have been in a difficult situation in recent years. By mid-April 2020, 30{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of SMBs forced to closeWhile many of these closures were temporary, Owner is still navigating Pandemic-related challenges such as depleted cash reserves, inflation, employment issues, and employee retention.
We know one solution that can help owners bounce back from the pandemic and come out stronger than ever. It’s employee ownership.
Employee Ownership (EO) is a powerful business model that works as a worker-owned cooperative. Employee ownership opens up countless opportunities to take your business, employees, and community to the next level. Businesses that migrate to EO grow faster than traditional businesses, have happier employees, and help communities retain local businesses. In the EO model, employees own equity in the business. Employees are wholly or partially owners of a business.
In the United States, approximately 7,000 businesses operate under some type of broad employee ownership.there is 3 extensive models EO’s: Employee Stock Ownership Plan (ESOP), Worker-Owned Cooperative, and Employee-Owned Trust (EOT). Each has its own considerations and advantages, so you can find the model that best fits your business needs. EO is especially effective for small businesses and is a great option for owners without siblings or children to take over the business.
Read the story of Eileen Michaels, owner of A Yard & A Half Landscaping, a Massachusetts-based business. Over her 25 years, Eileen has grown her company into one of the nation’s leading landscape design, construction and maintenance companies. By 2013, A Yard & A Half was among the top 15{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of American landscaping companies and the top 3{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of all women-owned businesses in the country based on annual sales.
Many attribute the success of A Yard & A Half to Irene’s management style. As an owner, Eileen invested in her employees, opened and operated the books, shared profits, and utilized collaborative decision-making.
So when Irene wanted to retire, selling A Yard & A Half to her employees seemed like a natural choice. By giving employees the chance to buy the company, Eileen was able to get her three benefits. She profited from the business she built, rewarded her employees for their commitment, and ensured that her work and services remained in her greater Boston community.
Employee ownership helps small businesses regardless of whether the owner retires or not. Read on to learn what her EO means to small businesses.
EO = Enterprise Optimized
EO helps reduce employee turnover. According to the National Employee-Owned Center, employees at employee-owned companies typically work more than 50 percent longer than those at traditional companies. A sense of ownership and accountability, along with the ability to build more income and wealth, will incentivize employees to stay longer and perform better.
Additionally, when employees have a sense of ownership and a stake in the company, they are more likely to look for efficiencies and ways to improve productivity and profits. Employee-owned businesses are growing he 2{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} year over year over traditional businesses.
EO = Exit Opportunity
EO can facilitate a successful retirement. About 75{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of small business owners resort to selling a business However, many people have overly optimistic beliefs about the current value of their business. Moreover, 80{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of his business is not sold and very few businesses are passed down from generation to generation.
No wonder nearly three-quarters of former business owners regret selling their business, according to the Exit Planning Institute.
So if you’re nearing retirement or just getting ready for a new business venture, EO allows you to exit with a fair value guarantee. Customers and communities will also receive continuous service, and employees will have secure employment.
EO=Excellent Operations
EO encourages a mindset of ownership. With EO, employees learn to act like owners, improving business operations in the process. When employees own part of the business, they are more likely to look at the company’s success over the long term, rather than just focusing on getting the job done today. They tend to have an entrepreneurial perspective and are constantly looking for ways to contribute and improve. They take their promises seriously and are responsible for their actions.
The idea of ownership instills pride, accountability and responsibility. All of these have a huge impact on the bottom line of your business. Moving to an employee-owned business also means you’ll get the training and support you need to succeed in your new role as an owner.
EO = Permanent Organization
EO accelerates your growth plans. Moving to EO gives you the financial stability you need to introduce new products, expand your footprint, and grow your business. And moving forward, you can be confident that our valued customers will continue to rely on our reliable services and products.
“When we spoke [our customers] Many of our key accounts have doubled down on their relationship with Optimax on how employee ownership ensures Optimax is never sold,” said Rick, CEO of Optimax, an employee-owned company. Plympton said. “They gave us more work because they know the super supply chain can never be in jeopardy. They help us build functionality without compromise.”
With EO, your employees can keep their jobs and your community can continue to benefit from a thriving business.
EO = fair outcome
EO enables workers to build wealth. Employee ownership helps close the wage-wealth gap in the United States. According to Harvard Business Review, the richest 10{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of Americans own 90{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of his business assets, while the bottom half owns only 0.25{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} of hers.
Alongside homeownership and retirement plans, EO is another way to create wealth. According to the National Center for Employee Ownership, workers in employee-owned firms have a 33{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} higher median wage and a 92{ea2cba5bdf6fe62bbe85e24807814144a71e77d3ae7311fbc27a008558d1372c} higher median household net worth compared to traditional firms. increase. Employee owners are more likely to have savings for unexpected expenses and emergencies. More income also means more spending, which boosts communities.
For small businesses looking to retire one day, employee ownership is a great way to improve operations, maximize profits, and ensure business sustainability.
About Sponsors: of EO Equals website has detailed information and resources about types of employee ownership, as well as case studies of business owners who have made the transition.So you can also sign up For a free consultation with an EO expert who can develop a plan tailored to your business. Employee ownership helps more small businesses thrive, empower workers and build more equitable communities.
