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New Data Reveals Twin Crises from Silver Tsunami and COVID-19 in Minnesota

Fred

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!

This November, the Worker Owner Initiative, a part of Nexus Community Partners, officially became a technical assistance provider with the City of Minneapolis’ Cooperative Technical Assistance Program (C-TAP).

In this role, we help business owners with succession planning, share information on forming a cooperative business or refining a cooperative business model, and more. The Nexus Worker Ownership Initiative (WOI) team specializes in exploring the benefits of employee-owned business models for restructuring or as an exit strategy.

This information and training is provided free of charge, with costs covered by the City of Minneapolis. For more information on ways that WOI can support your organization, please reach out to the WOI at btsai@nexuscp.org or cnicholson@nexuscp.org.

Learn more about C-TAP below (excerpted from City of Minneapolis):

City of Minneapolis B-TAP | C-TAP Program

In 2016, the City of Minneapolis expanded its Business Technical Assistance Program (B-TAP) to include services aimed at supporting the development of new Minneapolis co-operatives by launching the Co-operative Technical Assistance Program (C-TAP).

The City desires to leverage the co-op model for maximum community benefit to:

    • Act as an economic development tool to reduce poverty and promote social cohesion.­
    • Increase racial and ethnic diversity, and community ownership.
    • Support innovation, community building, and local investment by encouraging a more collaborative business model.

 

At Nexus, we recognize the difficult choices many business owners face right now. We have expanded our business services and created our new Business Legacy Program, which implements a  3-pronged strategy to help keep local legacy businesses stabilized in our community.

  • Consulting on succession planning: helping businesses explore succession planning and restructuring options provided by employee-ownership.
  • Technical assistance for emergency funds: assisting in finding and applying for emergency loans and grants.
  • Grants for businesses: limited funding is available to clients that are exploring employee-ownership options.

Many local businesses are considering their liquidity, exit, and succession planning options. Selling all or part of a business to the employees is a viable option for owners looking to exit or revitalize their business and can be an opportunity to access new capital, gain tax benefits, motivate employees, and secure the legacy of the business. Owners can opt to stay with the business as a co-owner, or transition out at their own pace.

The Nexus Worker Ownership Initiative offers free consultations for business owners to learn about transitioning to employee ownership. Our full suite of services includes:

  • Learn about succession planning and restructuring via employee ownership models
  • Feasibility studies to assess a fair sales price and tax benefits for the seller
  • structuring the sale
  • Lining up financing with our CDFI and philanthropic partners
  • Training employees on governance (management structures often stay the same)

Find out if employee ownership is a fit for your business. For many business owners, it is the ideal way to receive fair market value, gain tax benefits, and to ensure that it will live on as an asset for your employees and your community.

Contact us for a free consultation. We keep all private information confidential, and never share with 3rd parties without written permission.

A summary of different response and recovery resources for businesses during the COVID-19 crisis

In conversation with businesses and experts in the field, we have been gathering information on resources for small businesses and co-ops (emergency loans, grants, and etc). The situation is constantly changing and we are working to keep this document updated regularly. It also includes specific advice that can help co-ops navigate some of the application processes. You can access it here.

In addition to assisting with immediate economic impacts, The Nexus Worker Ownership Initiative is  still available to talk with businesses about succession planning and exit strategies. We specialize in working with owners and employees who are interested in exploring employee-owned business models. Please contact us if we can be of assistance.

The Nexus Worker-Ownership Initiative is proud to announce the completion of its first cooperative conversion! Starting in 2020, Happy Earth Cleaning Cooperative is now in business. 

Nexus, in partnership with Project Equity, helped provide technical assistance for Happy Earth Cleaning LLC to become an employee-owned co-op.  Over a period of 10 months the previous business owners and employees were guided through a proven conversion process that included feasibility studies, structuring the deal, and training employees to become owners of their own business.

MPR rounds out the story with their article, “Supporters see worker co-ops as way to spread the wealth. How one housecleaning business joined the workers’ cooperative movement”. An excerpt of the story is below. You can listen to the audio and read the full article here.

“With the support of the cleaning company’s founders, employees in January officially transitioned the company into the Happy Earth Cleaning Co-op — a cooperative owned and run by workers. Employees at worker cooperatives get a say in how their business is run and a cut of the profits. As wealth disparities continue to increase in the country, some are hoping co-ops can make the economy more equitable and democratic.”

Thanks also go out to The City of Minneapolis Co-op Technical Assistance Program (C-TAP), Neighborhood Development Center (NDC), The Metropolitan Consortium of Community Developers (MCCD). Project Equity, and Erin Heelan Consulting.

Nexus Community Partners and the Saint Paul Area Chamber of Commerce (SPACC) are partnering to host an event to highlight options for retiring business owners to sell their enterprises to their employees. Businesses transitioning to employee ownership are a trending alternative in business succession.

Two thirds of small businesses listed for sale never sell, and only 15% are passed on to family members. Acquisitions by larger firms or out-of-state buyers often lead to layoffs and restructuring. But a local buyer may be closer than you think! Join Nexus Community Partners and SPACC for our upcoming event Next Generation Business Models: Exploring Benefits of Employee Ownership and find out why more and more employers are securing their company’s legacy by selling to the employees who helped to build it in the first place!

The event is an opportunity to learn from companies that have transitioned to employee ownership including Terra Firma Construction and Isthmus Engineering. We will also hear from industry experts including: Equal Exchange, Dorsey Whitney Law Firm, and Project Equity.

To register for the event, click here.

Here, is access to the Facebook Event.

Thursday, November 14, 2019 7:30 AM – 11:30 AM CST

Sunrise Banks – The Bridge

2525 Wabash Avenue

Saint Paul, MN 55114

Cost: $35.00, Breakfast included.

Keynote speaker : Ole Olson, Engineer, Isthmus Engineering & Manufacturing.

Agenda and panelists to be announced soon!

 

 

Nexus’ Worker Ownership Initiative and partnership with the St. Paul Area Chamber of Commerce was recently featured in Finance & Commerce:

“Cooperative ownership is a solution both to the challenges facing small businesses and to larger problems in the economy…Elena Gaarder, Director of Community Wealth at Nexus, says, ‘For us, this presents this really once-in-a-lifetime opportunity to move where the bulk of the wealth is held in our country and create so many more opportunities for ownership'”

Sixty percent of small business owners were born before 1964, according to the University of Minnesota. Nexus and the Saint Paul Chamber of Commerce are working together to address the ongoing wave of baby boomer retirements, keep businesses local, and build cooperative ownership. Read the full article here!

Learn more about the Worker Ownership Initiative (WOI) here!

ORGANIZATION OVERVIEW:  Nexus Community Partners is a community-building intermediary whose mission is to “build more engaged and powerful communities of color by supporting community-building initiatives and foster social and human capital.”

We are seeking an energetic and creative individual to fill the role of Program Manager for Nexus Community Partners’ Worker Ownership Initiative (WOI). Join our dynamic and diverse staff of thoughtful, equity-driven individuals who are deeply committed to the organization’s values.

POSITION SUMMARY: The WOI is a bold effort to promote worker cooperatives through the conversion of privately-owned businesses to worker ownership. The Initiative builds community wealth, grows the region’s economy and encourages workplace democracy by implementing strategies in 7 key areas:

  • Public Sector Engagement- Shifting policies and practices at the local, county and state levels.
  • Private Sector Cultivation- Building relationships with owners, chambers of commerce and business connectors.
  • Business Conversion Services- Providing professional services to support owners and new work-owners in transitioning to worker cooperatives.
  • Community Engagement- Build relationships with community leaders, organizers and labor groups to activate their networks to increase awareness of worker ownership.
  • Investment Capital- Ensuring access to capital and financial supports through CDFI’s, social investors, credit unions and banks.
  • Workforce Development- Embedding work-ownership in workforce and job creation efforts.
  • Field Building- Contributing knowledge, evaluation tools and raising awareness in the field.

 

POSITION RESPONSIBILITIES:

Program Management (60%)

  • Coordinate Business Conversion Services Program, including acting as the first point of contact for interested business owners, assembling and coordinating teams of professional and technical assistance providers to support owners and new work-owners throughout the stages of the conversion process and facilitating worker-owner training sessions.
  • Develop relationships with business owners and business connectors to build a pool of prospective business interested in converting to worker ownership.
  • Implement a communication strategyfor the WOI including promotional materials, outreach materials, monthly blogs, website updates, paid media buys and the coordination of additional communication support, such as with consultants.

External Relations/Community Engagement (40%)

  • Actively build connections, locally and nationallyon behalf of the WOI that will enhance the work and continue to build the field of worker ownership.
  • Identify and develop relationships with content experts to help deliver content for Business Conversions program.
  • Support the development and delivery of presentations at forums, conferences, workshops, etc.
  • Lead the development and implementation of a community engagement strategy to elevate worker ownership in Black, Indigenous and People of Color (BIPOC) communities.

QUALIFICATIONS:

Assets of most interests to the hiring committee include the following:

  • 3-5 years relevant experience in nonprofit, business and/or community work.
  • 3+ years’ experience in leadership positions, either in community, a volunteer position, or past employment.
  • 3+ years’ experience working in partnerships and collaborations across-sectors and with multiple partners.
  • Demonstrated experience working in the small business sector (e.g. business technical assistance provider, business owner, sales)
  • Experience in developing and implementing communication tools.
  • Proven ability to facilitate dynamic groups that have different levels of knowledge and understanding.
  • Capacity to work cross-culturally to achieve understanding and results. Ability to establish and maintain trust readily with a diverse set of partners.
  • Demonstrated understanding of culture and history as a foundation for building strategies in cultural communities.
  • Excellent oral and written communications skills.
  • Competent computer skills including Microsoft Office programs (Excel, Word, and PowerPoint). Design skills a plus.

 

KNOWLEDGE AND SKILLS:

  • Experience designing and/or delivering high quality, interactive learning opportunities.
  • Experience in designing and implementing community engagement strategies.
  • Knowledge of cooperative principals and cooperative development models.

The ideal individual would be able to start on or before August 26, 2019.

Nexus offers a competitive salary, generous wellness and benefits package. We are committed to the personal and professional growth of all staff.

Individuals should send a resume and cover letter via email, attention Human Resources

by July 18, 2019 to:

Email: Jobs@nexuscp.org

In your cover letter, please explain what motivates you to work with Nexus Community Partners, and how your experience, skills and commitment will advance our work to create a more equitable economy.

(email receipt confirmation will be sent)

NO PHONE CALLS PLEASE

NEXUS IS AN EQUAL OPPORTUNITY EMPLOYER. Black, Indigenous, People of Color (BIPOC) and LGBTQIA+ individuals are strongly encouraged to apply.