The Ohio Employee Ownership Center

Tag Archives: Succession planning

Interview with Graeme Nuttall on the Applications of Employee Ownership

Angela Perry the Chair of Employee Ownership Australia & New Zealand interviewed Graeme Nuttall, expert in Employee Ownership; partner at Field Fisher Waterhouse, UK; and author of Sharing Success: the Nuttall Review.

Topics include:

  • Key barriers to employee ownership in the UK
  • Essential elements tosuccessful employee ownership
  • The connection between employee engagement and employee ownership
  • Importance of employee ownership in succession planning and saving companies
  • Driving productivity and innovation
  • Importance of employee ownership for small to medium enterprises and start-up businesses
  • The global application of the developments in the UK

Watch the full video . . .


Cooperative Conference Highlights Employee Ownership and Succession Planning

A group of North American cooperative organizations are hosting a conference on business succession planning and employee ownership in Quebec City from October 11-13. Roy Messing from the OEOC will be participating in a number of events during the 3 days.

Interested? Find out more here.

Everybody Needs Succession Planning

I came across an interesting article today about the importance of succession planning for federal agencies. While the article is talking about organizational and leadership/management succession rather than business succession, the reality it outlines cuts across all types of organizations: The coming mass retirement of the baby boomer generation is coming.

Planning for this eventually is key.

Planning for Business Succession Doesn’t Have to Mean Retirement

Many business owners hesitate to plan for succession because they may not have a plan for what to do next. In actuality, planning for business succession doesn’t have to mean retirement.

I discuss some alternatives to the “succession planning=retirement” issue in a new post at the COSE Mindspring site. Let me know what you think!

ESOPs Gaining Traction in Canada

Canada’s National Newspaper, the Globe and Mail, recently published a series of stories on small business succession planning. One article of the series delved into the increasing popoularity of Employee Stock Ownership Plans (ESOPs) as a powerful strategy.

(For U.S. readers, there are differences between the Canadian and U.S. versions of  ESOPs. This article details some of them).

The first article details some of the reasons that ESOPs in Canada are growing in popularity, and they almost identically mirror the U.S. situation:

  • Impending retirement or other type of exit of current ownership;
  • Flexibility for selling owner regarding when they actually leave the company;
  • Hiring and retaining top talent; and
  • Productivity and profitability gains for the company moving forward.

Interestingly enough, it appears that there is not a similar tax break for the selling owner (at least at the federal level) similar to the 1042 Rollover in the U.S.

Business Succession Planning Is Layoff Aversion

Studies have shown that roughly 70-80% of small, closely-held, and/or family-owned businesses will not survive into the 2nd generation of ownership, in many cases due to improper or incomplete ownership succession planning. Those same businesses employ roughly 75% of all American workers.

It doesn’t take a genius to figure out that any sensible job retention and layoff aversion strategy needs to have business succession planning as tool in the toolbox. The problem is that layoff aversion strategies often only kick in when bad news arrives and jobs are already in process of being lost.

Therefore, the key then becomes early intervention, preferably 7-10 years before a change of ownership is scheduled to occur. Obviously, in the real world this doesn’t usually happen. However, allowing sufficient time to plan properly usually helps to ensure the goals and objectives of the business owner(s) and their family are met, they get a fair price for the business, the business will stay open during the process (and beyond), and that it will continue to employ our friends and neighbors. Getting an early start is probably the single greatest guarantor of final success.

Economic Development professionals have a distinct responsibility to proactively approach the business owners in their areas to educate and motivate them to get started on the process. The OEOC can help ED professionals design a proactive outreach program for their communities. For more info, feel free to drop us a line at oeoc@kent.edu.