How Employee Ownership Strengthens Local Business and Community Ties
In central Minnesota, small businesses serve as vital components of the local economy. They sponsor youth teams, support community events, and provide stable jobs that keep families anchored. However, many local business owners are nearing retirement, leading to uncertainty about the future of these establishments.
Understanding Employee Ownership and Its Impact
October is celebrated as Employee Ownership Month. It presents an opportunity to explore how employee ownership can benefit communities in areas like Brainerd, Little Falls, and Wadena. Employee ownership can take various forms, including:
- Employee Stock Ownership Plans (ESOPs)
- Worker-owned cooperatives
- Employee ownership trusts
This approach not only keeps businesses local but also rewards employees who contribute to their growth.
The Benefits of Employee Ownership
From working in community and business development and serving as mayor, I witnessed the challenges small business owners face. When businesses close without a solid succession plan, communities suffer. Employee ownership offers a solution. It allows for the transition of business ownership while preserving jobs, stabilizing tax revenue, and retaining local wealth.
Research highlights that employee-owned businesses tend to:
- Grow at a faster rate
- Be more resilient during economic downturns
- Have lower employee turnover rates
Additionally, employees in these companies generally receive higher wages and accumulate greater retirement savings. These financial benefits extend throughout the entire community.
Resources for Local Business Owners
The Minnesota Center for Employee Ownership, established in 2020, aids in connecting business owners and employees with resources tailored to support this model. Partnerships with organizations like the North Central Small Business Development Center at Central Lakes College and the Central Minnesota Manufacturers Association provide vital no-cost valuation and succession planning support.
When employees share in ownership, they also share in collective success. This collaborative model is essential for the continued growth and strength of central Minnesota for generations to come.
