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Colorado Employee Ownership Office

Colorado Employee Ownership Office

Across the United States, an estimated 6 in 10 business owners plan to retire or sell their businesses within the next 10 years. Yet only 15% of businesses are passed down to the next generation, and only 20% of listed businesses sell. That leaves many owners without the opportunity to benefit financially from their decades of hard work and leaves employees susceptible to job loss. Colorado is no exception—across the state, 48% of Colorado’s small business owners are 55 or older. 

Employee ownership models offer an alternative path to retirement that also preserves jobs, creating a win-win for business owners, employees and communities. Within the next 10 years, thousands of business owners in Colorado plan to leave their business. Employee ownership, paired with business strategy, creates sustainable economic opportunities.

The Colorado Employee Ownership Office establishes a network of training, support, education, and consulting for businesses considering employee ownership structures. The office brings together partners including employee-owned businesses, attorneys, financial and accounting professionals, and other employee ownership organizations.

Employee-owned businesses promote a higher quality of life for employee-owners including higher wages, less turnover, access to better benefits, and job security. For the business owner, they get the benefit of a more engaged workforce, a guaranteed succession plan, and a way to attract and retain top talent. 

Programming

To learn more about the benefits and employee ownership options, the Employee Ownership Office has produced an introductory course. This is a free online course available on demand and accessible to Colorado-headquartered small business owners interested in investigating employee ownership.  To get started with this introductory course, click on the Colorado Business Learning online platform link, scroll up to the "exit pathway", click on the “learn more” button. Select "Introduction to Employee Ownership" course to enroll in the course. You will need to create a free account prior to the course launching.

 After completing the course, you will be able to "connect with a consultant" to learn more about next steps on your conversion journey and receive a referral to an employee-ownership organization.

The Employee Ownership Peer Networks connect Colorado Employee-Owned Companies with business owners interested in employee ownership. These networks connect employee-owned companies across the state and offer a space where business leaders can collaborate with one another to share best practices and discuss challenges they may be facing. By creating an employee ownership community in Colorado, we are able to connect more resources and opportunities for business owners, service providers, and employee owners.

We have 3 Peer Networks: the ESOP Executives Peer Network, the ESOP Communications Committees Peer Network, and the Worker-Cooperative Peer Network. Sign up for the Employee Ownership Peer Network to connect with other employee-owned companies:

 

By submitting this form, I certify that this information is accurate and that I, as the business representative, have the authority to submit on behalf of the business. I confirm this information can be verified and used to illustrate the growing community of employee ownership service providers in Colorado.

To learn more about Exit and Succession Planning, the Employee Ownership Office has produced an introductory course. This is a free online course available on demand and accessible to Colorado-headquartered small business owners interested in learning why succession planning is essential to your current business strategy, how to think about the real value of your business, and learning the basics of business valuation.  To get started with this introductory course, click on the Colorado Business Learning online platform link, scroll up to the "exit pathway", click on the “learn more” button. Select "Exit Planning for Your Business" course to enroll in the course. You will need to create a free account prior to the course launching.

As you work through the course, there will be points where you will need to schedule time to speak with a Colorado Small Business Development Center (SBDC) Consultant. The Consultant’s role is to assist with calculations and estimates, answer questions, and offer additional guidance as needed. You can request consulting for this program and others through your local SBDC.

In 2022, the office partnered with the Exit Planning Institute to release the Colorado State of Owner Readiness Report, (PDF) and Quicklook Brochure, (PDF) to provide insight into how prepared Colorado businesses are to transition ownership, including selling to employees.

If you would like to be added to the database of Service Providers and Technical Assistance Providers to stay informed on the deployment of future programming in the succession, exit, and continuity planning spaces, please complete the Service Providers Registration.

Funding Opportunities

Funding from the Employee Ownership Tax Credit to Establish or to Expand program will be available to Colorado-headquartered businesses to cover up to 50% of a qualified business’ conversion costs for use on their state income taxes. Applications are open and accepted on a rolling basis.

Funding from the Employee Ownership Tax Credit to Strengthen and to Thrive program will be available to Colorado-headquartered newly-established employee-owned businesses beginning in tax year 2025. Newly-established is defined as an employee ownership structure 7 years of age or younger. The tax credit provides up to $50,000 per applicant and can be claimed year over year. 

The Colorado Employee Ownership Office is pleased to share details on two transformative business support programs funded by ARPA SLFRF and activated by Rocky Mountain Employee Ownership Center (RMEOC) and Center for Community Wealth Building (CCWB). These programs offer technical assistance scholarships to help you assess the viability of employee ownership for your business and implement an employee-owned model. Funding is limited and these programs are expected to fill up quickly.

These programs are your opportunity to:

  • Access vital funding and resources.
  • Explore employee ownership with expert guidance.
  • Build a stronger, more sustainable future for your business.
  • Contribute to the economic vitality of your community

Program 1: Center for Community Wealth Building (CCWB) - Building Resilient Urban Businesses

  • For businesses in urban Colorado seeking to transition to a worker cooperative.
  • Benefits:
    • Expert guidance and resources to transition your business into an employee-owned company through various tiered service packages.
    • Foster loyalty, retain jobs, create a lasting legacy, and build community wealth.
    • Scholarships available to cover part or all of the service costs.
      Services offered on a sliding scale cost structure.
    • Any remaining costs not covered by the scholarship may be eligible for the Colorado Employee Ownership Tax Credit to Establish or to Expand program.
  • Eligible Counties for CCWB Program:
    • Your business must be located in one of the following: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer, and Weld.
  • Learn more & Apply

Program 2: Rocky Mountain Employee Ownership Center (RMEOC) - Supporting Rural Businesses

  • For businesses in rural Colorado seeking to transition to an employee-owned structure.
  • Benefits:
    • Funding to offset the cost of technical assistance for converting your business through two comprehensive phases.
    • Expert guidance to ensure a smooth transition and keep wealth in your community.
    • Scholarships available to cover part or all of the service costs.
      Services offered on a sliding scale cost structure.
    • Any remaining costs not covered by the scholarship may be eligible for the Colorado Employee Ownership Tax Credit to Establish or to Expand program.
  • Eligible Counties for RMEOC Program:
    • Your business must be located in any Colorado county EXCEPT the following: Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer, and Weld.
  • Learn more & Apply

Our office can assist you in finding the right financial resources for your employee-ownership transition. We maintain a database of sources of capital, and the following programs are also available:

  • Cash Collateral Support: The Cash Collateral Support program helps small and medium-sized businesses in Colorado access loans that they would otherwise not get because they do not have enough collateral. One of the goals of this program is to support employee ownership business transitions and financing for employee-owned businesses. 
  • Colorado Credit Reserve: The Colorado Credit Reserve program helps businesses that typically struggle to get access to a bank loan. The program helps lenders make loans by establishing a loan loss reserve account with the lender as additional security.

Please reach out to the employee ownership consultant for further information. 

Further Information

A common belief of employee ownership is that a company must either have an employee stock ownership plan or be a cooperative. However, Colorado's definition of employee ownership is more broad.

We broadly define an employee-owned company as the following:

  • Offer at least 20% equity in the business to employees (excluding founders) 
  • Have at least 3 full-time employees included in the employee-ownership structure (or 3 members of a cooperative)
  • Be headquartered in Colorado
  • Use one of the following structures to offer ownership to employees:
    • Employee Ownership Trust (EOT)
    • Employee Stock Ownership Plan (ESOP)
    • Employee Stock Purchase Plan (ESPP)
    • LLC Membership
    • Phantom Stock
    • Profits Interest
    • Restricted Stock
    • Stock Appreciation Rights (SAR)
    • Stock Options
    • Synthetic Equity
    • Worker-Owned Cooperative (Co-op)

Check out the latest Employee Ownership News

Colorado is home to over 230 employee-owned companies! If you would like to be added to the map, please review the Colorado Employee-Owned Company Definition above, and connect with a consultant below. 

View Colorado Employee Owned Businesses in a full screen map

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