CRISIS #1: The baby boomer retirement wave
As baby boomer business owners retire, our local business landscape is going through a dramatic shift.
We must support retirement-age business owners to avoid simply closing up shop. Faced with the challenges of bridging this crisis, many business owners may feel that the best route is to close down; the investment of energy and capital may not feel worth it at the end of a long career as a small business owner. Since for most small business owners, the business is their retirement nest egg, they are faced with devastating choices.
We have the opportunity to keep many of these businesses locally-owned for the long term and to deepen their positive impact on our local economy.
How? By helping them transition to broad-based employee ownership.
Around half of all privately held businesses with employees in North Carolina have owners over age 55. As they retire, we will see the greatest transfer of generational wealth in history. In addition, the vast majority (over 85%) of business owners do not have a succession plan in place, and many are finding it hard to find a buyer when they are ready to sell. As a result, some of these companies will quietly close down, a very small percent will be passed on to family members, others will sell to another local owner, and some will be sold to a larger company or out of area buyer. Those in the last category will likely lay off employees, further concentrating ownership and wealth.
CRISIS #2: The devastating impact of COVID-19 on our local economies
Employee ownership can support business continuity, preserve good jobs and rebuild our local economies.
Many local businesses have shut down due to COVID, and local economies are hurting. Now is the time to build a more sustainable and stable economy. As North Carolina rebuilds and invests in the future economy, many are wondering how to increase opportunities and build an economy that works for all.
Employee ownership increases engagement, dedication and ingenuity, which is key to business success, and even more critical during this challenging time.
The Census Small Business Pulse captures business owners’ responses to key questions about the outlook for their business, including the effects of COVID-19 and their sense of how long it will take for the business to return to normal.
About NCEOC and our partner Project Equity
The North Carolina Employee Ownership Center, (NCEOC) is on a mission to preserve and protect the job and community impacts of small and medium-sized businesses throughout the state of North Carolina by helping to transition many to employee ownership. NCEOC has a particular focus on increasing these opportunities to BIPOC-owned businesses and businesses with majority-BIPOC workforces.
As a national organization, Project Equity advocates for and raises awareness of broad-based, democratic employee ownership, and we support businesses in transitioning to this highly beneficial business model. Through amazing local partners like the North Carolina Employee Ownership Center, we support this work in regions across the country.