Leading Practices

Leading Practices

• Colorado established a statewide Office of Employee Ownership to increase the number of employee-owned companies in the state by administering a statewide tax credit (HB-21-1311) for employee-owned companies. It provides grants for feasibility studies and technical assistance to help owners sell to their employees and educates businesses about employee ownership through storytelling and building a network of employee-owned companies.

• Miami, Florida, amended its revolving loan fund policies to allow its community-development-block-grant-funded loan program to finance the conversion of existing businesses to employee-owned structures, with specific callouts for worker cooperatives.

• New York City developed the nation’s largest municipal initiative for education and technical assistance around employee ownership and conversion. Business owners can access $10,000 of technical assistance services, utilize the Owners2Owners hotline and have targeted financing and grant opportunities for worker cooperatives.

• Minneapolis offers a free co-op feasibility training for potential and new cooperatives and existing businesses interested in converting into a cooperative. The program also provides one-on-one technical assistance (consulting).

• San Diego Workforce Partnership uses federal Workforce Innovation and Opportunity Act funds designated to avoid layoffs to subsidize feasibility and transaction costs for retiring business owners to sell to their employees. Its investments have an explicit focus on racial and gender equity by targeting industries in San Diego with a majority Black and Latinx frontline workforce (slides 22-29).

• Firebrand Bakery in Oakland, California, is a bakery owned by and for its employees through an employee ownership trust. Firebrand has 11 purposes baked into its corporate charter such as obligations to hire people who are formerly homeless or incarcerated, year-end profit sharing with all employees, creating a diverse and equitable supply chain and operating the company for long-term success rather than short-term profit.

• Tucson, Arizona, used American Rescue Plan state and local fiscal recovery funds (SLFRF) to complete a data study on the small business retention risk in Tucson, raise awareness of employee ownership with business owners and provide technical assistance for businesses to assess the feasibility of employee ownership and begin the process of an employee ownership transition.

• North Coast Small Business Development Center in Humboldt County, California, surveyed its small business clients about succession plans and used federal and state small business development center funding to provide education and advising on employee ownership as a succession and exit strategy to local business owners.