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

  • 5% 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

Is your business located in rural Colorado

Check out our Technical Assistance Funding for Rural Businesses!

Rocky Mountain background

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.

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.

01. Exploration
  • 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 the feasibility phase
02. Feasibility Study
  • 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
03. Coop Education
  • The trend of employee ownership in the U.S.
  • Legal Models & Governance
  • Finance I
  • Finance II (open book management)
  • How to raise capital?
  • How to build democratic workplace culture?
  • How to resolve conflicts?
  • Overview of the bylaws or operating agreement
  • Time period: 1-3 months
04. Structuring
  • Work in partnership with an EO knowledgeable attorney and CPA to finalize the new EO structure
  • Implementation of the new EO structure
  • New owners take the helm and begin operations


05. Completion & Thrive

MISSION ACCOMPLISHED

Ready to convert your company?

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? 

Ready to get started?

The path to employee ownership starts here.

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