June 2023 THRIVE | Employee Ownership
Happy Summer, Neighbors!
In keeping with the spirit of optimism that maximum daylight brings, we’re continuing our focus on economic opportunity in Whatcom County with a spotlight on employee ownership. As an option for business owners that brings a variety of both individual and collective benefits, employee ownership offers a lot of upsides. Read on for more about this promising — and proven — opportunity to build resilience and prosperity.
President & CEO
With the “silver tsunami: comes a flood of retiring local business owners and potential business closures.
Retiring baby boomers own half of all the businesses in Washington state. In Whatcom County, there are more than 2,500 businesses with owners 55 and up employing 23,000 people; these businesses represent more than $835 million payroll and nearly $4 billion in revenue. Six out of ten owners in Washington plan to retire and sell their business in the coming decade; as many as one-third won’t find a buyer and will quietly close their doors without capturing the equity their business represents. A small percentage will pass their business to family members. Others will sell to another local owner, and some will find a larger company or out-of-area buyer. This last scenario tends to include job loss and further concentration of wealth.
“One of the most powerful aspects of a worker co-op is this idea that employees, who are also members, not only share in the proceeds of our work, but have a real opportunity to shape the direction of the company, even if their role is not management or leadership based.”
— Patrick Martin, General Manager, A1 Design Build, a worker-owned cooperative
What the Whatcom Community Foundation is Doing
Research. In 2018 the Community Foundation commissioned research by Project Equity, a nationwide nonprofit dedicated to improving local economic resilience through employee ownership. We recruited partners to join us in quantifying the opportunity in Washington as a whole, and by county, including Whatcom. (This attention to county-level data has since become the standard for the Employee Ownership Expansion Network so that all their affiliated centers have this level of analysis.)
Participating in an effort to establish a statewide Employee Ownership Resource Center in Whatcom County. Leveraging its knowledge and experience across the United States, Project Equity is facilitating this work, helping to define an effective model for Washington businesses based on the organization’s experience in other states. The organizing group, which resumed meeting in 2022 after diverting energy to the pandemic and 2021 floods, currently includes representatives from the Northwest Cooperative Development Center, WWU Small Business Development Center (SBDC), Port of Bellingham, Sustainable Connections, Bellingham-Whatcom Chamber of Commerce, and the Community Foundation. Expansion efforts are underway to include counterpart organizations from around the state.
The goal is to open doors to the center by mid-2024 to support enterprises interested in or curious about employee ownership. It is envisioned as a pressure-free place to learn and explore, while continuing to strengthen the pool of professional services and expertise needed in the community and throughout the state to create and convert employee-owned businesses. Services planned for the center include:
- Feasibility studies
- Educational opportunities
- Access to professional expertise and capital to assist with the conversion
- Raising awareness
- Coaching and other supports through a transition
Promoting the concept of employee ownership, as well as the statewide resource center, through education and advocacy at both local and state levels. This includes webinars held in conjunction with the SBDC, and advocacy efforts that contributed to the unanimous bipartisan support for SB 5096 which passed in the last legislative session. The bill creates financial incentives for employee ownership conversions and establishes an office of employee ownership within state government that will complement the nonprofit center.
How You Can Help
- Learn ten facts about employee ownership, benefits, and reasons to consider.
- Get to know the businesses you frequent – are they employee-owned? Do they know about the option? Companies like A1DesignBuild, Anvil Corporation, Circle of Life Care Cooperative, Exxel Pacific and Woodstone Pizza show the range of business types and sizes in our community owned by employees.
- Share this email with your favorite business owner who has their eye on retirement.
View the THRIVE Newsletter as e-mailed on 6/21/2023 HERE>