Date 5/4/2021

Six out of ten Minnesota business owners plan to sell in the next decade

Minnesota —Today, the Minnesota Center for Employee Ownership (MNCEO) released new data that reveals twin crises from the Silver Tsunami coupled with COVID-19 for businesses across Minnesota. Developed by Project Equity, the study shows that approximately 50% of all job-creating businesses in Minnesota (53,000) are owned by baby boomers. It is estimated that 60% of these businesses plan to transfer ownership in the next decade and COVID-19 has accelerated this timeline for many. The study results are presented on a county by county basis at mnceo.org/employee-ownership-101#crises.

Affecting approximately 600,000 Minnesota employees and with nearly $124 billion in generated revenue at stake, the Minnesota Center for Employee Ownership, Project Equity and Twin Cities-based Nexus Community Partners are joining together in an effort to greatly expand the number of employee owned businesses in the state to stem the tide of the Silver Tsunami and the fall out from COVID-19.  MNCEO aims to engage community leaders and state and local government officials about employee ownership as a way to preserve these at-risk businesses, provide local quality jobs, strengthen the community’s economic resiliency, and create equity and wealth for all employees regardless of their race, ethnicity or education.

“The timing is crucial to educate business owners across Minnesota and to provide resources to help them navigate their options,” said Sue Crockett, Executive Director of the MNCEO, a nonprofit that serves as the central hub for information on employee ownership in Minnesota. “Each year, Minnesota ranks in the top ten in the number of employee-owned companies across the country. We’re on a mission to continue the momentum by turning the entire state of Minnesota into a place where every working person can also be an employee-owner.”

Roger Ryberg, former owner of Windings, Inc. in New Ulm, Minnesota, identified employee ownership as a pathway to retirement by choosing an ESOP (Employee Stock Ownership Plan) model. His daughters were not interested in assuming management responsibility in the 100-person manufacturing company, and he did not want to walk away. Employee ownership allowed him to sell the business on his own timeline, preserve jobs and keep the company rooted in the community.

“Transitioning a business you have grown from scratch is not only a financial transaction, but an emotional experience. Employee ownership kept my company anchored in New Ulm, retained valued employees, and provided opportunity for growth, not to mention the financial benefits the employees have gained over the years,” states Roger Ryberg. Due to the strong culture of employee ownership, Windings, Inc. was better able to weather the COVID-19 economic downturn.

“What businesses are experiencing in Minnesota is reflected across the country. As half of all business owners near retirement age, most do not have an exit strategy for what will happen to their business and employees once they retire. Employee ownership creates a roadmap for resiliency,” stated Alison Lingane, co-founder of Project Equity.

“This moment is an opportunity to grow and perpetuate community wealth by teaming up with government and community leaders to expand opportunities for business ownership,” said Benjamin Tsai, Director of Community Wealth Building at Nexus Community Partners, a nonprofit that helps businesses transition to employee ownership, with an expertise in worker-owned cooperatives.

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Minnesota Center for Employee Ownership
The Minnesota Employee Ownership Center (MNCEO), a member of the Employee Ownership Expansion Network of state centers,  serves the entire state of Minnesota as the central hub for free, unbiased information on employee-ownership. Its primary mission is to educate business owners and their advisors on the benefits of employee ownership. MNCEO provides resources, case studies, articles, and a list of service providers who can assist with employee ownership transitions.

Project Equity
Project Equity is a national leader in the movement to harness employee ownership to maintain thriving local business communities, honor selling owners’ legacies and address income and wealth inequality. Project Equity works with partners around the country to raise awareness about employee ownership as an exit strategy for business owners, and provides hands-on consulting and support to companies that want to transition to employee ownership.

Nexus Community Partners
Nexus Community Partners, based in the Twin Cities, works to build a more inclusive economy for communities of color. The Nexus Worker Ownership Initiative helps business owners with succession planning and specializes in exploring the benefits of incorporating employee ownership into their transition plans.

 

For Immediate Release
Contact:
Sue Crockett
Mobile: 612-590-1191
Email: scrockett@mnceo.org

Since Christina Nicholson joined the team last November, her energy, humor, and deep knowledge of cooperative economics have already made an impression. Christina is the Worker Ownership Initiative Program Manager, an Aquarius, and a talented quick-bread maker. We sat down over zoom to talk about her role, her journey to Nexus, and her hopes for the future.

Interview edited for length and clarity

What do you do at Nexus?

Everyday for me in the Worker Owner Initiative is a new learning experience! For example, through our role as a Minneapolis C-TAP provider (Cooperative Technical Assistance Program), I’m working with a small language-learning cooperative. We meet weekly to develop their new bylaws and articles, as well as helping them build their internal culture and their ecosystem of outside resources. Together, this foundation will help the cooperative grow and thrive once it’s established. I am also doing work as a financial analyst – looking at another business who is considering converting to a cooperative, and helping them understand how to create a fair sale price for the worker owners who are considering purchasing the business.

In general, I have found in business that people are disinvited from their own agency when it comes to the language of finance. In my new role, I have found that helping teams understand the technical side of things can help build a cooperative’s culture— this is exciting because it becomes a more empowering relationship. The goal for me is for the teams I serve to be able to say “We understand this model, we’re taking this model, and moving beyond it.”

What did you do before Nexus?

In my 25 year cooperative career I’ve done every job from front line bagging to leading whole organizations as a general manager. In 2019, I got my MBA to understand how current capital systems move, at a more technical level, to help people build the bridge between their work and their ability to claim their own agency.

I’ve learned that you are always a better leader if you are doing the work with people. Successful leaders aren’t only thinking about the work, or visioning, but they are IN it. My work has been about leading on the ground and being influenced by those around me. Cooperatives help foster that environment and give you a sense that you are truly interdependent in the work you do.

What do you hope to learn next year?

I want to learn how to support people’s health, agency and wellbeing while seeing them move away from conventional, white supremacist, capitalist models of business. As more people from historically marginalized communities continue to grow in their power, I am energized to see how their cultural and individual gifts will shape the future of cooperatives!

What do you like to do outside of work?

I love to cook, and I always overplant kale in my garden. We have a LOT of recipes for raw kale salads. Thankfully, my daughter appreciates the earthiness. I also love to travel—I love oceans and mountains, but I am the happiest when I get to spend time with my wife and a good book!