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.
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, navigate to the “to strengthen” track of the Small Business Educational Programming page and click on the “Introduction to Employee Ownership” course to instantly enroll in the course. 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, navigate to the “to strengthen” track of the Small Business Educational Programming page and click on the “Exit Planning for your Business” course to instantly enroll in the course. 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 from the Employee Ownership Tax Credit 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.
- 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.
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 if 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)
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