Business owners must develop a planned exit strategy five to 10 years prior to their departure. On the business side, there are many ways to disengage from a long-held company. Options include selling the firm to an outside buyer, transferring ownership to a trusted successor, bringing in a partner, or merging with another firm with younger leadership. But another choice is becoming more common–converting a business to an employee-owned model called employee stock ownership plans (ESOPs).
The number of worker-owned businesses in the U.S. is growing robustly — around 6 percent per year — accounting for about 12 percent of the private sector workforce, reports U.S. News & World Report. In fact, more than 6,000 ESOPs with more than 10 million employees have been set up in the United States.
Read more: You built the company, now you are retiring