Employee ownership has a long and robust history in the United States. It is especially important for our current political and economic moment. Several factors are also helping to create a favorable opportunity for business owners seeking to sell their businesses to workers through the co-op model.
We are in the midst of a “silver tsunami.” Baby boomers will be retiring en masse and those that own businesses will need to consider succession plans — this includes the option of selling their enterprise directly to employees. Governmental and private resources are helping to make these sales possible.
Policymakers specifically are turning their attention toward increasing employee ownership through legislation like the Mainstreet Employee Ownership Act. This 2018 bill signed into law makes it possible for firms to use Small Business Administration loans to finance employee ownership plans.
Numerous organizations are also helping to facilitate sales to employee-owned models as well. Groups like American Working Capital, National Center for Employee Ownership, The ICA Group, the Sustainable Economies Law Center, and Jason Wiener P.C., to name just a few, advise and conduct sales to employee-owned models ranging from ESOPs, to employee-owned trusts, to worker-cooperatives.
In the face of breathtaking income inequality, converting to the cooperative model is especially meaningful. Worker cooperatives go beyond other ownership models towards empowering workers through democratic governance and 100% worker ownership. Sharing ownership with workers ensures that a broad base of stakeholders are engaged and invested in the business. Workers take responsibility for enterprises that they own and operate. Recent research from a range of journals, including the Harvard Business Review, have documented the increased efficiency and improved performance and productivity of worker-coops.
Co-ops have other competitive advantages over ESOPs and traditional businesses as well. They offer workers protection from exploitation through shared governance and democratic decision-making. They improve information sharing within an organization, and better respond to crises through greater resiliency in downturns due to risk adversity and shared sacrifice. Co-ops often shake up typical supply and demand estimates by catering to unmet needs in the community. They generate goodwill among community members and a unique competitive advantage by incorporating a variety of stakeholders into the business model. And co-ops also attract those consumers who want to build social good and spend their money on a socially-minded enterprise.
With more of the economy moving online, a platform co-op offers a key intervention for business owners. Platform co-ops exhibit all the best practices of cooperatives but bring these techniques into the digital economy.
Through the platform co-op model, business owners can offer their workers greater income equality, dignified labor, democratic decision-making, shared ownership, and equity in their workplace.
Who Else Benefits from Platform Co-ops