According to the 2016 Annual Survey of Entrepreneurs which enumerated 105,583 Indiana businesses (businesses with paid employees):

• Business owners aged 55-64 owned 33,974 businesses, and
• Business owners aged 65+ owned an additional 21,954 businesses.

These two age groups account for 53% of Indiana business where their owners are 55 years old or older and are potentially approaching retirement.

According tp Project Equity:

• Only 20% of all businesses listed for sale ever sell
• 33% of business owners over 50 report s having a hard time finding a buyer
• Only 15% of businesses are passed down to the second generation

So what will happen to these 55,000 Indiana businesses?  According to Project Equity 35% can be accounted for by a sale, or transition to the next generation – that leaves 65% or ~ 36,000 businesses whose long-term fate is unknown.  Will these businesses close or simply fade away?

Suppose their owners elected to transition ownership to their employees through establishment of an ESOP, cooperative, or Perpetual trust?

• The owner receives liquidity for his long-term sweat equity in building the business.
• The owner/business legacy remains
• The employees keep their job, have a stake in the business, and have an opportunity to participate in the wealth they have helped to create
• The jobs remain local within the community

This is a win-win-win.  The owner is compensated.  The employees keep their jobs PLUS have an opportunity to participate in capital wealth appreciation.  The community keeps an employer and local jobs which provides consumers for other local businesses. And the state benefits by not having to pay unemployment benefits (if the company were to close) and through the tax revenue of the employees.

ESOP – Is this in your future?