You’ve built your business and you want it to be left in the best hands when your next chapter begins. Who better than the hard workers who helped you get to this point? We think transitioning to an ESOP begins with understanding the direction and intention of your leadership team.
If you’re thinking about employee ownership as a succession plan, it takes the right kind of leadership. People who will be the leadership team or individual post-close must embrace employee ownership as more than just a financial or technical succession tool.
As you begin exploring succession planning, consider the following in your conversations with your leaders:
Employee-ownership arrangements may vary
From ESOP to holdco to co-ops and beyond, find the situation that is right for you. There are significant differences in each structure, and we can help you weigh the factors based on your situation.
Leadership holds the keys to success
Leaders who embody the more collaborative employee ownership culture, and want to infuse it into the company, are critical.
Play the long game
Even the most successful ESOPs require patience early on. There’s not always instant gratification for the new employee owners, but once their labor starts bearing fruit – whether it be ESOP account value statements in the coming years or the very real (and positive) shift in company spirit and sense of responsibility – the rewards will crystalize as the company performs.
The National Center for Employee Ownership is a trusted resource for employee ownership information, and it says ESOP companies perform better on a myriad of measures including margins, profitability, turnover rates, and more. You’re already doing your homework on employee ownership at this point, but the right experts like the NCEO can bolster your case to yourself and your stakeholders.