When it’s time to move on, your best buyers may be the very ones you’ve already hired, according to an Inc. report.
When Bill Roark co-founded Torch Technologies in 2002, he knew he wanted to eventually sell the business to his employees to make sure they wouldn’t be without a job. He established an employee stock ownership plan, or ESOP, which establishes an independent trust to buy the owner’s stock to hold for employees until retirement or departure from the company.
“I can live the life I want, and this organization can live on,” he says. “That’s more important than squeezing every possible penny out of a sale.”
There are a few more perks to selling your company to employees. It can minimize presale prep as well as allow for a gradual transition. Selling to the entire staff can also fuel greater loyalty and productivity.
However, this type of sale doesn’t mean every C-suite decision will become an all-hands vote. There are specific times when voting is required (such as selling the company) But founders who have embraced ESOPs say they appreciate the increased stakes everyone feels in their companies’ success. Read the full report.
