Co-Op Conversion
Converting a company into an employee-owned company can be complex, but RMEOC has a step-by-step process to help you start and complete the conversion process.
Employee Ownership Impact
Growing A Legacy
80% of business owners who try to sell don’t find a owner.
Many businesses end up restructured or re-sold. A sale to employees provides a built-in buyer, keeps the business going, and preserves its jobs and culture
Building a Better Business
EO VS Traditional Businesses:
50% Higher growth in employment and sales
25% ESOPs more likely to stay in business.
90% Worker co-ops are still in business after 5 yrs. vs. 20% of traditional businesses.
Improving Employee Life
Employee Owners
4X Less likely to be laid off during economic downturn
2.5X Greater household wealth vs. employees in traditional firms
EO improves job quality, builds wealth for employees, and keeps businesses rooted in local communities
Are you interested in employee ownership conversion?
Here are a few things to consider when you are interested in the idea of converting your company into an employee-owned business.
Things to Consider
Conversion of Company Readiness
What are the reasons you want to convert your company into an employee-owned business?
Do you want to retire right away?
Is your exit happening at the right time?
Do you want to continue to be a part of a cooperative as a member owner? If so, how long?
Financial Readiness
How many employees will become initial owners?
Do you have any outstanding financial debts?
Will you help cover a full or partial company loans or/and member equity buy-in to support EO transition?
What benefits will you get when selling your company?
Cultural Environment at Workplace
Who will step up to fill your place as a leader once you depart?
What are general cultural environments at work?
Governance Structure
What is an ideal governance structure and a legal model of EO for your company
The Conversion Process
The Conversion process can vary depending on the condition of a company. Here is the standard process of employee ownership conversion that RMEOC provides.
- Initial consultation, including follow-up resources sent to owner/employees
- Owner interview & assessment to gather information
- One workshop with key concepts of EO & gauge interest
- Evaluation of fit with EO and determination about whether to advance to Phase 2
- The preliminary financial feasiblity analysis
- A full feasibility study, providing industry analysis, market analysis, organizational & technical analysis, and financial analysis
- Time period: 1-3 months
- The trend of employee ownership in the U.S.
- Legal Models & Governance
- Coop Finance I
- Coop Finance II (open book management)
- How to raise capital?
- How to build democratic workplace culture?
- How to resolve conflicts?
- Overview of the By-laws
- Time period: 1-3 months
- A business model is nothing more than a blueprint that explains how a company aims to make money. It explains who your customer base is, how you provide value to them, and the financial numbers to go along with it. The business model canvas
Mission Accomplished
Converting to employee ownership offers both tangible and intangible benefits to everyone from the workers and selling owners to the company itself. Worker ownership is better for the environment, better for local communities, and a model for progress toward addressing social issues like racial and gender disparity in the workplace.
RMEOC is devoted to advancing an economic agenda that works for everyone.
Interested in learning more about how employee ownership can benefit your business while creating a more inclusive economy?
Recommended Resources:
Colorado Employee-Owned Companies (RMEOC)
Employee Ownership by the Numbers (NCEO)
Colorado Employee Ownership Office (OEDIT)
Employee Ownership Resource Center (Fifty By Fifty)
Ensuring Your Legacy (ICA Group)