Family-owned businesses don’t often stay family-owned for long. Not many businesses have a strong succession plan, and family-owned businesses are no exception. Most are unlikely to remain family-owned as a 2014 study found.
56 percent of family business owners are either unhappy with their succession plan or don’t have one at all, and 62 percent of owners believe it’s unlikely their business will remain family owned by the next generation.
Fortunately, there are several options for family-owned businesses and an upcoming panel hosted by the Institute for Family-Owned Business will address the ways that employee ownership can stabilize a family enterprise for generations to come. Options like employee stock ownership plans and worker cooperatives offer successful models for the transition. Employee ownership also offers other benefits, such as a potential tax break on the sale of the business. The presentation will include examples and methods for succession planning using employee ownership models. CDI’s Director of Business Ownership Solutions, Rob Brown, will join the panel of expert advisors on the morning of September 29, 2016. Susanne Ward, founder and owner of Rock City Roasters and Rock City Café, who received support from CDI during her company’s conversion, will share her experience. The event will be held on the Husson University Southern Campus in Westbrook, Maine. Those who can’t join in person can participate online.
The Institute for Family-Owned Business offered an overall programming theme for the year on “Succession Planning in the 21st Century: A Bridge to Successful Transitions.” The series consisted of three seminars/workshops all at Husson University that all fall under the umbrella of Succession Planning. The first program was on Succession Planning 101: An Integrated Planning Model for the Family Business presented by Jane Hilburt-Davis and the second covered Awareness, Communication & Conflict Resolution in Succession Planning: The Game of Ten Played by Stephen Barton and Elizabeth Reuthe. This workshop on employee ownership is the final one in the series.
Someone on the panel should mention that USDA provides loan guarantees in rural areas for workers to buy businesses of owners who want to sell. If a worker co-op is formed, the selling owners may stay involved with the business as members of the co-op. There are also loan guarantees for purchasing preferred stock that is offered by a co-op, that local businesses or citizens could use to put equity in the co-op.
Loan guarantees are available for businesses that sell to their workers for staged financing. Selling owners may stay involved as members of the co-op. Loan guarantees for preferred stock that a co-op issues are also available. This should be mentioned by someone on the panel.