Formed as a start-up or when the workers buy a company already up and running from the owner
KDC works with existing companies to plan, prepare, and execute the sale of a business to its employees.
This is beneficial to the business owner who will sell the business, to the employees who will then own their jobs, and to the community because a successful business is kept in the local economy!
If you’ve come to this page, that means you’re thinking about it seriously enough to explore the idea.
We offer a free one-hour initial consultation to answer see if selling your business to your employees is right for your company.
Explore a little more… why sell to your employees?
– As the business owner, you may want to preserve your business’s legacy, or
– Your employees know the business; they can do this! … or
– You want to recognize the work that your employees put into the business with you, or
– Selling to the employees keeps a successful business in the community: win-win-win!
WHAT are the characteristics of a business that KDC can successfully assist in an employee buy-out to form a worker cooperative?
– A stable business with a diverse customer base, for consistent revenue
– $250,000 to $1.5 M EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization)
– Generally consistent revenue and proportional expenses
– $2 to 5 M purchase price
– 5 to 20 employees, up to ~50, with low turnover; and a cohesive, stable workforce.
– Owner is interested in learning about the employee buy-out option
– This is our preferred range. We’re gearing up to be comfortable working with larger companies.
– Audited statements not necessary; just so they’re clearly presented
– With a straightforward deal structure
– Limited dependency on the owner for operations; and a strong management team in place is a great advantage
Connect now!
The sooner you begin to assess your options, the sooner a concrete and predictable path toward your goals can be developed.
Click for a free initial consultation:
Meet our team
KDC’s technical assistance staff are all well-versed in the employee buy-out process, cooperative structures and governance, and have experience in all phases of the pathway toward conversion. We work with other professional services associates to fill in any gaps in expertise or industry knowledge.
Hannah Derway
Operations Manager
Mathew Forth
Cooperative Developer
Ron Gaydos
Senior Cooperative Developer
Noemi Giszpenc
Executive Director
FAQs
What is a cooperative?
An enterprise owned and democratically controlled by members for common economic, cultural, and/or social goals, for the members’ mutual benefit. Members invest financially in the cooperative and receive benefits based on their participation and use of the business throughout the year. This structure prioritizes community, fairness, and shared success over maximizing profits for outside investors.
What is a worker cooperative?
It is a cooperative – or co-op – where the workers decide to own the business and run it together. Many staffing agencies, food processing, breweries, manufacturing, and professional services companies are worker cooperatives.
What if some employees don’t want to become worker-owners?
It isn’t necessary for all employees to participate in the buy-out and become worker-owners. Some employees may not be ready, or they just have valuable skills to contribute, but don’t want to be a part of the cooperative’s ownership. It is fairer to the worker-owners, however, for them to be in the majority, since they have the larger stake in the business.
Do all employees have to have business management experience?
This is not necessary. At the beginning of the process, an assessment of the skills, experience, and other qualifications among the employees is done, and the gaps can be filled by adding people to the group or training some of them up to ensure that the necessary skills, leadership, and management experience is in place.