USDA grants fund employee ownership education workshops targeting business advisors
by Karen Kahn
Thurston County, where the Northwest Cooperative Development Center is located, has nearly 2,000 businesses owned by baby boomers age 60 and over. These businesses employ nearly 15,000 people in a county of just over 250,000 residents.
These kinds of numbers spurred the NWCDC and The Washington Grange to apply for funds from the United States Department of Agriculture Rural Cooperative Development Grant (RCDG) program to educate business advisors across Washington, Oregon, and Idaho on the feasibility and benefits of employee ownership. “Many of these business owners don’t have a succession plan,” says Executive Director of NWCDC Diane Gasaway. “The data shows that only about 20 percent will find a buyer. If most of these businesses close, thousands of jobs will be lost.”
The nonprofit NWCDC supports the development of cooperatives across several Western states, while the Washington Grange, also a nonprofit, is dedicated to improving the quality of life for the state’s residents. Their joint effort is yet another example of the growing number of new allies advancing employee ownership as a way to protect local economies (see Employee Ownership News Stories covering Miami, Durham, and Chicago).
The case for cooperative ownership is compelling, says Gasaway, but the majority of small business owners don’t have any idea that it’s a real option, no less that it might be the best option. Selling to employees ensures the owner can access the wealth the business has created while at the same time leaving an important legacy: a viable business that will continue to generate jobs and wealth for the new worker owners. “We want them to realize this is a real thing,” says Gasaway. It is “one more tool to consider.”
Rather than educating business owners directly, NWCDC came up with a different strategy for reaching out. Gasaway noted, when you educate a business owner, the information only goes as far as that person — and he or she may never act on it. Instead, the USDA grant funds are being used to educate business advisors: attorneys, accountants, brokers, bankers, advisors at economic development agencies, and so on. “Anyone,” says Gasaway, “who is a touchpoint for small businesses.”
NWCDC is planning to launch a series of workshops this spring that will take place in at least 10 locations around the Northwest. The Washington Grange and the Affiliated Tribes of the Northwest are helping to market the workshops.
To make the workshop series seem “serious and credible” to business advisors who may have misconceptions about the viability of worker ownership, NWCDC is working with accrediting organizations to offer continuing education credits to both attorneys and accountants. The goal is to build knowledge that will have lasting impact among those whose job it is to educate, advise, and assist entrepreneurs in launching, sustaining, and exiting their businesses.
In a fortuitous confluence of events, NWCDC received the USDA grant in July 2018, just weeks before the passage of the Main Street Employee Ownership Act, which improves access to financing for employee ownership conversions and also mandates Small Business Development Centers, which are funded by the U.S. Small Business Administration, to conduct outreach and training for interested businesses. The NWCDC has reached out to the SBDCs to promote the workshop series and is applying for additional funds that would support a formal partnership. “The SBDCs have expertise in doing feasibility studies, market studies, and business planning,” says Gasaway, “while we have expertise in community organizing, democratic processes, and how to manage a cooperative business. Working together we will be able to serve and assist many more businesses in converting to cooperative ownership.”
Note: The Congressional appropriations process for FY20 is underway, and advocates are pressing for increased funding for USDA’s Rural Cooperative Development Grant (RCDG) program. According to CooperationWorks!, from 2008–2014, the RCDG program has developed over 300 cooperative businesses and created or saved more than 4000 cooperative jobs. To learn more, visit CooperationWorks!
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