Why an Increasing Number of Retiring Entrepreneurs Are Selling the Business to Their Employees

Make no mistake: employee ownership is not some pie-in-the-sky, utopian scheme with no grounding in real-world economics. It is a reliable and time-tested model that is generating jobs and reinvigorating communities across the globe.

If you’re a boomer business owner planning for succession, you can’t afford to overlook the employee ownership option.


Even if you’re willing to consider out-of-town or corporate buyers, the odds aren’t in your favor. Only 20 percent of businesses listed for sale ever sell, and that percentage is likely to decline in coming years as boomer-owned enterprises flood the market at a record pace. Additionally, only about 15 percent of privately-held companies are passed on to a second generation.

If you don’t already have a solid succession plan in place and intend to put your business on the market and hope for the best, you’re setting yourself up for disappointment. Employee ownership could offer you an escape route from this predicament. Selling to your employees really has no downside. You’ll be tapping into a pool of ready-made buyers that were right under your nose all along.

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