The deal-making crowd is understandably excited about the fees to be earned in helping baby boomers sell their businesses on their way into retirement.
None of the business brokers and bankers appear to have yet pointed out what the nonprofit group Nexus Community Partners has been saying, that this big generational shift in business ownership could provide an opportunity for even low-wage workers to get ahead.
Nexus, teamed up with a group called Project Equity out of Northern California, has embarked on a new effort to get the word out about the economic benefits to workers who manage to take over ownership of these businesses from their retiring bosses. What makes this at least worth hearing about, for business owners, is that a better buyer than their own workers may not come along.
Nexus is a small nonprofit in St. Paul, and one thing it does is to help make other individuals and groups working on issues like alleviating poverty get better at what they do. One reason Nexus joined with Project Equity is that the big baby boomer exit could be seen as a potential threat, too, as businesses shut down or move out of the neighborhood and take good jobs with them.
And they are talking about a lot of businesses. There are at least 26,000 businesses owned by baby boomers in the Twin Cities area, and they employ 320,000 people, Project Equity estimated.
A lot of the owners now eyeing an exit strategy probably know something about employee stock ownership plans, which are a form of trust that buy some or all of a company’s ownership on behalf of employee owners. While Project Equity co-founder Alison Lingane said she’s a champion first of employee ownership including ESOPs, an ESOP needs trustees and advisers and can be expensive to implement.
That’s one reason she likes the worker cooperative model.