A Worker Ownership Solution for Colorado’s Failed Mushroom Farm
Employee Ownership Glory Story: Empowered Energy Systems
July 10, 2023
July 10, 2023
The present and future leaders of Empowered Energy Systems
Welcome to the new blog series of RMEOC, in which we share the stories of companies that have decided to start as or convert to worker cooperatives. In this series, we explore the motivation, opportunities, challenges, fears, and rewards of individuals that have chosen employee ownership.
This month we bring you the story of Empowered Energy Systems, a solar design and installation company located in Hotchkiss, Colorado, since 2004.
Setting up a succession plan can be hard for business owners. In fact, 80% of business owners trying to sell their enterprises can’t find a new owner. However, worker cooperatives are an exceptional way to find a built-in buyer, maintain businesses and jobs, and preserve a legacy. That is why Danielle Carre and Brad Burritt, the owners of Empowered Energy Systems, became interested in transitioning out of the company
through a worker cooperative as they approached retirement age. They knew of other companies that had successfully formed worker-owned corporations, and they identified employee ownership as the best path for their company to continue to operate and thrive.
The idea of a more democratic structure and a shared mission with a group of owners had always been appealing to Brad and Danielle, who invited RMEOC to address the feasibility of carrying out this project. In April 2023, RMEOC completed a feasibility study, confirming the viability of converting EES to a worker cooperative, through which Brad and Danielle will be able to remain in the company as worker-owners before retiring. A core group of three employees, and possibly more, will also join the cooperative as worker-owners.
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RMEOC interviewed Brad and Danielle to learn more about the internal dynamics affecting the company during this conversion. Here is what they said:
What was the first reaction of your employees about the possibility of forming a worker cooperative?
The employees were intrigued by the idea and had enthusiasm, but they had a lot of questions about how such an entity could form and how their role in the company would change. Many were worried about personal financial liability with the transition, and some were concerned about having that level of esponsibility.
You have successfully completed the first phase of the conversion process through the feasibility study, and you are starting co-operative education. What are your feelings as you move on to the next phase?
We are excited to work together to figure out what precise form the new entity will be and to work on the creation of the legal structure (bylaws etc). We know we will be challenged in leading the company through the transition while also keeping the business going, but we are optimistic that it will be exciting and productive, too.
What have been the main challenges you have faced so far while in the process of converting?
The employees were hesitant to become involved due to the concerns listed above. Also, knowing what the process was to make this transition was not clear at first.
What made you keep going?
We feel that this is the best transition for this company, both as an exit plan for us, and for the future of the employees and the business itself.
What advice would you give to people who are thinking about embarking on this journey?
Start educating the employees as soon as possible about what worker-owned cooperatives can look like. Become transparent in the company’s operations and financial information. Have employees participate in decision-making. Develop a decision-making structure that can lead to a worker-owned business.
What is your vision/wish for the future of this co-op?
Our vision is that the company is well-managed and provides stable and well-paying jobs for all the workers while continuing to provide excellent service to its clients. We believe the company can set examples for other companies, too, with more creativity from an expanded ownership structure.
How would you describe your experience with RMEOC so far?
We have found that the people at RMEOC are very dedicated to helping companies become employee-owned, and the staff is friendly and willing to answer questions. We started working with RMEOC when they were in transition, and we were not always sure how to move forward with the process. With the new Executive Director, we were encouraged by having a feasibility study, and this gave employees a better
understanding of what the financials will look like with the purchase and any loans the group might pursue.
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The transition of EES to a worker cooperative will not only establish a unique and prosperous exit plan for the owners, but will also benefit the future worker-owners.
These benefits include:
- Better Income: Cooperatives are renowned for redistributing benefits among worker-owners through higher wages or by distributing dividends. International studies have revealed that cooperatives are more productive than conventional firms. The staff of labor-owned cooperatives tends to work better and smarter, therefore leading to higher productivity. Furthermore, profits are distributed more efficiently.
- Job Retention: The conversion will allow the retention of solar jobs in the North Fork Valley, where the aging local population and the silver tsunami–the mass retirement of Baby Boomers–could negatively impact employment. Preserving the legacy of the only solar company in Hotchkiss will empower future worker-owners and allow them to keep their jobs in the town.
- Democratic Workplace: Additionally, this conversion will establish a democratic workplace in which the members, as owners, will be involved in determining the future of the company through the main principle of cooperatives: one member, one vote.
Many other solar companies have transitioned to employee ownership across the United States, one example being Boulder-based Namaste Solar. Stay tuned to learn more about the future of EES as it joins the growing directory of cooperatives formed in the country and celebrate this exciting news with them.
Resources:
Namaste Solar Webinar with RMEOC
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