Tuesday, November 30, 2021
9:00 am – 3:00 pm Eastern
In the next 10 to 15 years approximately 70% of privately owned businesses —worth an estimated $10 trillion— will exchange hands. This exchange will represent the largest intergenerational transfer of wealth in U.S. history. In Indiana alone, there are 49.5 thousand businesses owned by people aged 55 and over. These businesses employ 664 thousand citizens, with a payroll of $25 billion, and generate over $138 billion in revenue. (from Project equity Indiana overview)
The question now is how these transactions will occur. The answer? It varies. Some businesses will be sold at a premium because of smart business owners who took it upon themselves to plan the process of a smooth and valued transfer of assets. Some may transfer to a family member. Some businesses will be sold for a loss due to other factors like an untimely illness or death. Still others will simply close their doors and sell the equipment and inventory at bargain basement prices. Where will your business fall during this transitory period?
Business succession planning is not an event, but a long-term process. According to the Annual Survey of Entrepreneurs 30% of business owners have no succession plan in place. Today’s program will look at succession planning through the lens of “employee ownership”. We’ll look at the conversion process to a worker co-op and an ESOP (Employee Stock Ownership Plan).
Chris Cooper, Director, Ohio Employee Ownership Center
Business valuation is a process and methodology used to estimate the economic value of an owner’s interest in a business. Various techniques are used by valuation professionals to determine the FMV or Fair Market Value of the business. The FMV is the price a willing buyer and seller are willing to pay or receive to effect a sale of the business. This very important discussion will be led by Andy Manchir and Brad Minor.
Andy Manchir, Director, Katz, Sapper & Miller
Brad Minor, CPA/ABV/CFF, ASA, CVA, CMEA, CM&AA, Blue & Co.
11:00 – 11:10 am: Break
Decades of research have shown that employee ownership can drive company productivity while rewarding the people who are contributing to the company’s success. It also provides a flexible tool for ownership transition that can help preserve the company’s mission and values. There are a number of different ways to share ownership with employees. Which option is right for your business depends on the goals of the business owners, the type of the business, and the company’s mission and values. Depending on which structure is used for the transition, there are many potential tax incentives for the selling owner(s) and the business. Today’s discussion led by Jeremy Fetty and Fenton Strickland will look at the conversion process to worker co-ops and Employee Stock Ownership Plans.
Co-op Track
Jeremy Fetty, Partner, Parr Richey
ESOP Track
Fenton Strickland, Senior Attorney, Krieg Devault
12:00 Noon – 1:00 pm: Lunch
Governance is the collection of mechanisms, processes and relations used to manage an organization. Good governance leads to a better‐run organization. Lori Stuart, and Chris Cooper discuss the governance structure for co-ops and ESOPs and the rules and procedures for decision making that clearly determine the levels of management responsibility.
Co-op Track
Chris Cooper, Director, Ohio Employee Ownership Center
ESOP Track
Lori Stuart, Senior Manager, Crowe LLP
Shawwn Storms, CPA Principal, Fiduciary Trustee Services
1:45 pm – 2:00 pm: Break
Our panel of worker co-ops and ESOPs will discuss the in’s and out’s and the challenges and benefits of converting their organizations to employee ownership.
Jennie Scheinbach, PattyCake Bakery
Jeremy Lekich, Nashville Foodscapes
Dr. Lucy Klym, Opportunities for Positive Growth, Inc.
Kevin Johnson, Kocolene Development Corporation