Cooperatives represent a growing segment of the economy with an estimated 30,000 enterprises and 100 million members in the U.S. alone. A great way to bring democracy into the workplace, coops can be built from scratch, but they can also be created by converting existing businesses into worker-owned cooperatives. For retiring business owners as well as entrepreneurs, selling a business to employees is a way to strengthen the business while getting a return on investment.
Shareable spoke with Joe Rinehart, Cooperative Business Developer at the Democracy at Work Institute to find out how to go from thinking about a conversion to opening the doors of a worker-owned business. He provided the DAWI conversion timeline below which is based on previous versions created by the Ohio Employee Ownership Center.
What it entails: research and reading, worker ownership succession options workshop (for owner and their leadership team), initial owner conversation with employees, Worker Coop 101 workshop for the employees, owner and workers decide to move forward, select steering committee, contact outside transition support team.
What it entails: financial training for employees, business and industry training, cooperative trainings for employees, business valuation process, business valuation or owner’s price, determine financing options, review and revise current business plan.
What it entails: document current management plan, draft cooperative by-laws, define post-transition management.
What it entails: transfer business ownership, negotiate final price, seek financing, future members approve final price and financing, structure, complete the transaction, transfer governance and elect new board, transfer management as necessary.
What it entails: ongoing training with current employees
Worker-owned cooperatives, whether created from scratch or converted from existing businesses, are a central part of the sharing movement. As Hoover says, they’re the “original sharing platform.”