Almost all U.S. businesses are small businesses (99.9%) and more than half do not have a succession plan. Yikes! Additionally, 40% of small business owners are baby boomers who are retiring at a rate of 10,000 per day. Double Yikes! Succession planning should be part of a comprehensive BRE strategy to retain businesses in your community. Transitioning to employee ownership is one way a business can continue to provide jobs and economic impact in a community.
The NC Employee Ownership Center was selected as the 2022 Creative Give Back winner because we believe in creative strategies to retain and grow businesses. The Center works to preserve the job and community impacts of small and medium sized businesses by helping them transition to employee ownership. Losing even one small business in a small and rural place is hard to replace. We have seen the story play out time and time again. A small business owner retires. No one in the family wants the business. It closes. The building sits vacant for years contributing to blight.
Small businesses in small and rural places have unique challenges with succession planning. Rural business owners tend to be older given the demographics of most rural places. Rural owners also have a harder time selling their business. Beyond BRE, employee ownership is one strategy to build wealth. When ownership is local, all of the wealth generated at the business stays local rather than having a business sold to outside ownership and wealth leave the community.
The NC Employee Ownership Center is part of a national network. In North Carolina, the Center provides training, raises awareness, and makes connections for professional assistance. The Center is a good resource for economic developers who want to learn how to share information locally and connect business owners with experts. The website has a list of employee-owned companies in North Carolina, videos of business owner stories, and downloadable content. Contact Luke Hoffman to schedule a program in your community and access the Center’s resources. For our colleagues in Virginia and South Carolina, the Employee Ownership Expansion Network is looking to set up more centers throughout the country.
Creative EDC’s goal for the Give Back project was to develop strategies and key messages the Center can use to engage with economic developers and business advisors. The Center wants to form strategic partnerships to further raise awareness of the value of employee ownership. Key takeaways for economic developers are below. Read the full report here.
- 99.9% of U.S. businesses are small businesses.
- 50% of small business owners do not have a plan for what will happen to their businesses when they are ready to retire.
- 40% of small businesses owners are owned by baby boomers who are retiring at a rate of 10,000 per day.
- Employee ownership is an important business retention tool.
- Employee ownership can keep a small business open and locally owned.
- Rural business owners tend to be older, making succession planning even more critical.
- Rural business owners have a harder time selling their business, making employee ownership a more viable option.
The Creative Give Back is Creative Economic Development Consulting’s way to give back to the field of economic development. This is the firm’s ninth year of giving away a consulting project. In addition to our regular Creative Give Back, we also gave away 10 small projects in 2022 to celebrate the firm’s 10th year in business. See our year-end video that summarizes the 10 give back projects.
To be considered for The Creative Give Back, projects must be creative, challenge us to think outside the box, have the ability to significantly impact the local economy, and give us the opportunity to work with great communities and people. Previous winners of the annual Creative Give Back have included the Nikwasi Initiative, Lancaster, SC, Waynesboro Office of Economic Development, VA, Cabarrus County EDC, NC, Wayne County Development Alliance, NC, City of Graham, NC, and the Blacksburg Partnership, VA. To learn more about these projects visit our Free Creative Resource Library here.