Latest / Mind Your Business - A Podcast Series produced by the Boone Area Chamber of Commerce / Exploring the Benefits and Structure of Employee Ownership

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Exploring the Benefits and Structure of Employee Ownership · Mind Your Business - A Podcast Series produced by the Boone Area Chamber of Commerce

• 0:00
  SPEAKER_02: Business owners parse their time a hundred different ways in the average day, but how much of that is spent on their personality?
• 0:08
  SPEAKER_02: This week we talk about the benefits of employee ownership.
• 0:12
  SPEAKER_02: How we can set up what's next for you and your team.
• 0:15
  SPEAKER_02: From the Boon Area Chamber of Commerce, this is Mind Your Business.
• 0:20
  SPEAKER_01: Mind Your Business.
• 0:21
  SPEAKER_01: Brought to you by Appalachian Commercial Real Estate, providing professional commercial real estate services.
• 0:27
  SPEAKER_01: Visit Appalachian CRE.com.
• 0:30
  SPEAKER_02: Hello and welcome into Mind Your Business.
• 0:32
  SPEAKER_02: I'm David Jackson, President and CEO of the Boon Area Chamber of Commerce.
• 0:36
  SPEAKER_02: Thanks for coming back and joining us once again this week, perhaps through the airwaves of WATA here in Boone, or as a subscriber of the podcast version of the program, which is made possible each week by our good friends at Appalachian Commercial Real Estate.
• 0:50
  SPEAKER_02: If you have yet to subscribe, today would be an excellent day to remedy that problem.
• 0:54
  SPEAKER_02: Just search for Mind Your Business wherever you get your podcast.
• 0:57
  SPEAKER_02: You can gain access to full archives, bonus content, extended episodes, and plenty more as we connect you with the business news that you can use from right here in the mountains of Western North Carolina.
• 1:12
  SPEAKER_02: We are almost seven months down for 2026.
• 1:16
  SPEAKER_02: Five months remain on the calendar, and for our high country business owners, it's the turning of that calendar that marks a time to reassess.
• 1:24
  SPEAKER_02: Just how did July perform?
• 1:26
  SPEAKER_02: What needs to happen to make the fall successful?
• 1:29
  SPEAKER_02: Are we ready for the return of students?
• 1:31
  SPEAKER_02: Did someone remember to turn off the open sign?
• 1:34
  SPEAKER_02: It's these ponderings and plenty more that are on the minds of area business owners and operators just about every day, no matter what size business they happen to be.
• 1:44
  SPEAKER_02: Here at the Boone Area Chamber of Commerce, we've talked to dozens of businesses over the years about day-to-day aspects of running a company, hiring and maintaining a staff, remembering those little things that may not really be so little when it comes to the operation of a small business.
• 2:00
  SPEAKER_02: Here's a fun fact for you.
• 2:01
  SPEAKER_02: Of our 700-plus members in the Boone Area Chamber of Commerce world, 85% of those have 15 or less employees.
• 2:09
  SPEAKER_02: Another 80% of those businesses have five or less employees.
• 2:14
  SPEAKER_02: Our community is a small business community.
• 2:16
  SPEAKER_02: And what is often celebrated as scrappy and unique is also sometimes lacking in capacity, more than one person to handle the finances, order the products, lock the door, and assemble the team.
• 2:29
  SPEAKER_02: Now, short term, yes, our businesses crush it, and that has to do a lot with the Appalachia DNA that's rooted deeply within family businesses and even some of our larger companies.
• 2:40
  SPEAKER_02: Now, long term, sometimes it's the visioning that gets sacrificed.
• 2:45
  SPEAKER_02: And part of that vision is actually the end game.
• 2:48
  SPEAKER_02: Now I realize that sounds a little bit more morbid than I intended, but you get the point.
• 2:52
  SPEAKER_02: Business owners must all have an exit strategy.
• 2:55
  SPEAKER_02: For many in our area, family lineage is the succession plan.
• 2:59
  SPEAKER_02: For startups, the absolute last thing on many entrepreneurs' minds is thinking about how to get out before they've even started, other than selling for that big cash, right?
• 3:09
  SPEAKER_02: And that's a strategy, but it's not for everyone, and it's certainly not the way many small business handoffs actually happen.
• 3:16
  SPEAKER_02: So how does one navigate the what if if you might not know when?
• 3:20
  SPEAKER_02: A few weeks ago we talked to Chris Gracinger of Mountain Bizworks on the podcast about entrepreneurs being able to buy seasoned businesses rather than starting from scratch.
• 3:30
  SPEAKER_02: That episode occurred on April 9th.
• 3:32
  SPEAKER_02: If you would like to go back in those archives I was just talking about, hit the rewind button, you can find that conversation.
• 3:38
  SPEAKER_02: This week on Mind Your Business, we're going to explore another tool for business owners that are looking for the exit ramp and may even want to preserve and protect their legacy at the same time, or at the very least, give the team they've built an opportunity to carry the torch.
• 3:53
  SPEAKER_02: Employee ownership has been a popular topic of late, especially when it comes to exit planning, enhancing employee benefits, and thinking about tomorrow in a thoughtful way.
• 4:04
  SPEAKER_02: One of the most important elements of any exit strategy is time.
• 4:08
  SPEAKER_02: These transitions take some thought to execute, and if you wait too long, you could play your hand into one of limited choices.
• 4:16
  SPEAKER_02: Our guest this week is Ela Burbank, the executive director of the North Carolina Employee Ownership Center, and her team serves as the central hub for information and resources around employee ownership across the state.
• 4:30
  SPEAKER_02: We'll first talk about the strategy, what it is, how it can help as an option for a business owner that is contemplating retirement, but may not have a direct pathway away from the company.
• 4:39
  SPEAKER_02: We'll hear about the benefits of employee ownership starting at the onset of a company's growth.
• 4:45
  SPEAKER_02: And we'll talk about times and types.
• 4:47
  SPEAKER_02: How long does this take, and what could it look like for a legacy business, or perhaps even for a business owner that just wants to step back a little bit, but not necessarily leave right away?
• 4:58
  SPEAKER_02: Ela Burbank from the NCEOC coming up in just a moment.
• 5:03
  SPEAKER_02: In other news, this week was a big week for Western North Carolina's economic recovery.
• 5:08
  SPEAKER_02: Remember in last week's episode when Sharon Decker from Grow NC talked about some pending EDA grants?
• 5:14
  SPEAKER_02: Well,$34 million of those grants dropped in the bucket on Monday, and we'll tell you how those dollars will impact Western North Carolina and the high country region.
• 5:24
  SPEAKER_02: And numbers.
• 5:26
  SPEAKER_02: We've got June numbers to share as the month of July comes to a close.
• 5:30
  SPEAKER_02: That's how it always works.
• 5:32
  SPEAKER_02: We'll get to all of that when we come back.
• 5:34
  SPEAKER_02: You are listening to Mind Your Business.
• 5:36
  SPEAKER_02: Each fall, the Boon Area Chamber of Commerce leads a celebration of community, the people and businesses that make us unique, the leaders that make the high country strong.
• 5:45
  SPEAKER_02: This celebration captures the spirit of boon.
• 5:49
  SPEAKER_02: Join us Thursday, September 24th, from 5:30 to 9 o'clock in the Grandview Ballroom at Kid Brewer Stadium as the Chamber hosts Spirit of Boon.
• 5:58
  SPEAKER_02: Connect and network with nearly 400 fellow business and community leaders.
• 6:02
  SPEAKER_02: Enjoy a delicious dinner.
• 6:13
  SPEAKER_02: Spirit of Boon is the chamber's largest fundraiser of the year with event proceeds that fuel our mission-driven work, programs, and projects.
• 6:22
  SPEAKER_02: Seating is limited, and this event has sold out in past years.
• 6:26
  SPEAKER_02: Tickets and corporate tables are available now at BoonChamber.com.
• 6:30
  SPEAKER_02: Join us as we celebrate the Spirit of Boon.
• 6:33
  SPEAKER_02: Serve your seats today at BoonChamber.com.
• 6:39
  SPEAKER_02: Welcome back to Mind Your Business.
• 6:40
  SPEAKER_02: I'm David Jackson.
• 6:41
  SPEAKER_02: Before we talk employee ownership, let us tell you about a great resource to help you navigate the ownership or rentorship of your next commercial property.
• 6:51
  SPEAKER_02: That, of course, being James Milner and Appalachian Commercial Real Estate.
• 6:55
  SPEAKER_02: They solve simple and complex commercial real estate problems in and around the Boone area and beyond.
• 7:00
  SPEAKER_02: Whether you own or lease commercial real estate, regardless of the property type, have an advocate on your side, along with expertise and experience to assist you and your business.
• 7:09
  SPEAKER_02: For more information, you can check them out on the web, Appalachian CRE.com.
• 7:15
  SPEAKER_02: Communities like ours are defined by our small business mix.
• 7:18
  SPEAKER_02: Just ask any old timer around here to talk about Shadowline or Farmers Hardware.
• 7:23
  SPEAKER_02: These businesses and many others like them have been gone for decades, but they are top of mind for a specific generation when reflecting on pillars of the community.
• 7:33
  SPEAKER_02: Businesses close, they transition, they sell for a variety of reasons.
• 7:37
  SPEAKER_02: Not every business owner faces the end of their career the same way, and it's a different exit from someone that may work for, say, Appalachian State, for example.
• 7:47
  SPEAKER_02: Forty years on the grind, you get a cake, a send-off, maybe even some football tickets.
• 7:51
  SPEAKER_02: For a small business owner, that 40-year send-off may mean watching your legacy fade away on the facade of an old building.
• 7:58
  SPEAKER_02: Or team members, some of them as close as family, have to move on to something else because you simply could not push forward anymore.
• 8:07
  SPEAKER_02: The good news here, it doesn't have to be that scary.
• 8:11
  SPEAKER_02: And in fact, employee ownership can unlock growth potential, employee stability, and yes, the opportunity for legacy, which keeps names on buildings around here longer than their founders may have ever dreamed possible.
• 8:24
  SPEAKER_02: Ela Burbank is the executive director of the North Carolina Employee Ownership Center.
• 8:29
  SPEAKER_02: And she first brings some context and definition to this important discussion.
• 8:34
  SPEAKER_03: Employee ownership is a way for business owners to, and I'm gonna say the word, convert their business over to their employees so that the ownership of their business is now held by the people who know the business the most, and that is their employees.
• 8:52
  SPEAKER_03: And they do that at market rates so that the business owner gets value for that hard work that they put into their business and they exit at market rates while providing ownership to the employees.
• 9:07
  SPEAKER_02: That sounds overly technical and awfully like a valuable resource at the same time.
• 9:13
  SPEAKER_02: So you work for the North Carolina Employee Ownership Center and consult with businesses on a variety of entry points into this discussion and then support them as they get into this type of business ownership.
• 9:29
  SPEAKER_02: What how does the center help find these folks that are interested in this and ultimately support them through this journey?
• 9:38
  SPEAKER_03: The North Carolina Employee Ownership Center, which is a mouthful, so we just shorten it and say N C E O C.
• 9:44
  SPEAKER_03: I think where we spend our most time is actually in education.
• 9:48
  SPEAKER_03: So of many of the business owners and even the advisors, CPAs, attorneys, lenders still don't really understand employee ownership.
• 9:58
  SPEAKER_03: They may have heard something about employee ownership, but they don't really understand the different models that are available for all different sizes of companies.
• 10:07
  SPEAKER_03: So we spend a lot of our time educating, doing webinars, doing seminars, conferences, lunch and learns, you know, events where we can spread the word about the different types of employee ownership, especially for those advisors who are often the first ones to hear from a business owner that, hey, my trusted advisor, CPA, you know, I'm thinking in the next two, three years that it's about time for me to hang up my hat.
• 10:37
  SPEAKER_03: Hopefully it's that, and it's not three months that they're thinking about it.
• 10:42
  SPEAKER_02: You know, one of the statistics that that is somewhat staggering is that 50% of business owners don't have the retirement plan yet.
• 10:51
  SPEAKER_02: And I know we talk a lot about the retirement entry to this.
• 10:54
  SPEAKER_02: We'll start there, but also go ahead and acknowledge that there are other ways to get to employee ownership.
• 10:59
  SPEAKER_02: When when you talk to a business that hasn't reached that point yet, what are some of the common things that that you're hearing for them about why that vision is lacking?
• 11:08
  SPEAKER_02: Like why they just haven't put those pieces together that at some point in time they're not going to come to work.
• 11:13
  SPEAKER_03: Yeah.
• 11:14
  SPEAKER_03: So a lot of business owners are just thinking about the next hour, the next day or the next week.
• 11:20
  SPEAKER_03: So they're working in the business.
• 11:22
  SPEAKER_03: They're there 50, 60, 70 hours a week on the day-to-day detail.
• 11:27
  SPEAKER_03: And it's sometimes hard to just kind of bring your nose up above the water and then just take bring periscope up and look to the to the horizon and see what the future is going to bring.
• 11:39
  SPEAKER_03: Um, so very few, some people say as few as 10 people actually have a formal succession plan in place for business owners.
• 11:48
  SPEAKER_02: Is it difficult to get that business owner, the one that you're talking about, that's that's working more hour to hour, to begin to contemplate, you know, the the end of the business career?
• 12:00
  SPEAKER_02: Um, and and how long does it typically take you talking about tools and and off ramps and that kind of thing for them to begin to strategize, even if this is years in the in the distance, but begin to strategize about the things that they can put together within their business to start down that road of planning.
• 12:15
  SPEAKER_03: Yes, we actually have several businesses we're working with when we had that initial conversation with them and they they're showing an interest that they they want to plan for that retirement or exit at some point in time, employee ownership is their top choice, right?
• 12:31
  SPEAKER_03: And if you don't do that now, your choices start to become limited.
• 12:35
  SPEAKER_03: Because if that business owner today said, I want to exit now, their choices would be extremely limited.
• 12:42
  SPEAKER_03: They don't, they the the problems that often crop up, and I start it often with the one question can you go on vacation for two weeks and not have your employees call you hourly?
• 12:53
  SPEAKER_03: And if the answer comes back, well, no, I can't do that, then it's time to have another conversation.
• 12:59
  SPEAKER_03: So you know, you do you need to develop your next level of leadership.
• 13:04
  SPEAKER_03: No matter what your exit is, you need people to be able to take this business and continue on with their culture and the legacy and the operations that that business owner developed.
• 13:14
  SPEAKER_03: But you also have to make sure that someone else knows about the financials.
• 13:17
  SPEAKER_03: You can't just up and leave, and nobody has an idea how to access the books or what do these numbers even mean.
• 13:25
  SPEAKER_03: And then all that knowledge that is in that business owner's head needs to somehow be passed on to someone else, even better if you can write them down, you know, and get those operations out into the open so that the business can carry on.
• 13:40
  SPEAKER_02: So we we've had uh conversations with businesses up here that have sounded a little bit like this.
• 13:44
  SPEAKER_02: It's like, I I want to get out, I need to get out within the next two to three years, and I have no idea for that to happen.
• 13:51
  SPEAKER_02: If I'm the business that's asking you that question right now, and let's assume, just for fun, that I do have a leadership team in place that that may be able to take on some of that burden.
• 14:00
  SPEAKER_02: Where does the conversation tend to go from there?
• 14:02
  SPEAKER_03: So you're the business owner who's looking for help to get to that point, you're saying?
• 14:06
  SPEAKER_03: Yes.
• 14:07
  SPEAKER_03: So we do have a lot of great resources, and I think people don't necessarily know about these resources in the um SBTDC.
• 14:15
  SPEAKER_03: If you're looking for someone who can just kind of you you meet with them, they come up with a plan of action, you have to be willing to do the homework.
• 14:23
  SPEAKER_03: They're not going to do the homework for you, but they're gonna help identify some of those pain points that you're having and put together a plan of action and how to get there.
• 14:32
  SPEAKER_03: That might be slightly longer term.
• 14:33
  SPEAKER_03: If you've got two, three years, they're perfect, right?
• 14:36
  SPEAKER_03: There's also SCORE, the senior core of retired executives, I think that the acronym is.
• 14:43
  SPEAKER_03: They're also a volunteer organization that can help you.
• 14:46
  SPEAKER_03: But if you want to go a little bit faster and if you have a little bit of funds to put towards that, you can also reach out to exit planners.
• 14:54
  SPEAKER_03: That's what they do.
• 14:55
  SPEAKER_03: They're here to help you plan your exit and get to the point when you're ready to exit.
• 15:00
  SPEAKER_03: So a wide range of options.
• 15:02
  SPEAKER_02: You know, several weeks ago we talked with Chris Gracinger of Mountain Bizworks uh about uh this notion that people that were entrepreneurial that wanted to get into a business may not have to start from scratch because of people that were looking to sell businesses and and maybe exit or move on to the next thing.
• 15:20
  SPEAKER_02: When you are differentiating that for an interested business, whether to sell or whether to go with this more internal employee ownership structure, what are some of the the hairs that get split that help make the decision toward employee ownership?
• 15:36
  SPEAKER_03: I'm going back up for just a real quick second, because if you have a business owner who is looking to exit and they want to buy a beach house and you know they want that every last penny to come out of that hard work.
• 15:51
  SPEAKER_03: They're not thinking necessarily about you know the legacy or those concerns, and and they have someone who's willing to pay more than mark market price, which is rare.
• 16:02
  SPEAKER_03: You got to find that right person.
• 16:03
  SPEAKER_03: Employee ownership is not gonna be that good fit, right?
• 16:06
  SPEAKER_03: Because then you go for that strategic buyer dirty word private equity, someone who can come in right and offer you more than that.
• 16:13
  SPEAKER_03: But you then have to acknowledge that business owner that yes, you got your financial rewards, and as long as you know that you know HR is going to be probably consolidated and you know, those those typical things that happen.
• 16:27
  SPEAKER_03: But otherwise, you know, if you don't have that, let's exclude that group of people.
• 16:31
  SPEAKER_03: Hopefully it's a small group of people, then the employee ownership is a really great option because of that legacy.
• 16:38
  SPEAKER_03: When you're selling, and I'm gonna do air quotes selling, we'll talk about that in a minute.
• 16:43
  SPEAKER_03: Employees don't pay out of pocket, but when you're converting it over, we'll say, to the employee ownership, you have the people who know your culture, the people who know your legacy.
• 16:54
  SPEAKER_03: The name is gonna stay on that business uh on the outside.
• 16:58
  SPEAKER_03: And so this is one of the reasons where people can gravitate towards employee ownership, that continuation of a legacy that they've built so hard, and maybe even their family name is on that business.
• 17:10
  SPEAKER_02: You know, I've had some conversations recently.
• 17:12
  SPEAKER_02: You mentioned private equity and and just the notion sometimes of people that may go down that road for the big payday, but then realize they've got two years tethered to that business or or some term that they've almost got to watch its demise.
• 17:25
  SPEAKER_02: And that becomes incredibly unsettling to sit there and watch everything that you've built up because you've you've gone down that one particular road, uh kind of a road out from underneath you.
• 17:34
  SPEAKER_02: So another way where employee ownership feels like a more natural transition, like you mentioned toward uh a group of people that are invested, but invested in a different way because they are the business and they are the culture.
• 17:46
  SPEAKER_02: Is that kind of the the difference in the vibe between those two, maybe?
• 17:50
  SPEAKER_03: Yes, definitely.
• 17:51
  SPEAKER_03: And let me mention a business name.
• 17:53
  SPEAKER_03: So AlphaTech just recently conferred or in Fletcher.
• 17:56
  SPEAKER_03: Um they just recently converted over to an employee ownership trust.
• 18:00
  SPEAKER_03: And we can talk about that model a little later.
• 18:03
  SPEAKER_03: But you know, what really has stuck with me with my conversation with him was that he said, I've known some of these employees since I was 10 years old.
• 18:13
  SPEAKER_03: Once I exit, I'm going to stay in the community.
• 18:16
  SPEAKER_03: And I want to go out into my community knowing that my employees and my community are taken care of.
• 18:23
  SPEAKER_03: What a what a great story.
• 18:24
  SPEAKER_03: And this is what it's all about, right?
• 18:26
  SPEAKER_03: You that legacy and the caring for for your employees, but you don't have to give up anything for that to happen.
• 18:33
  SPEAKER_02: That is wonderful.
• 18:34
  SPEAKER_02: And that speaks to to the small town roots that many in Western North Carolina really aspire to be connected to from a business ownership perspective and in a way for them to continue to do that.
• 18:44
  SPEAKER_02: We've talked about the retirement side.
• 18:47
  SPEAKER_02: Um, what are some other ways that you have seen businesses enter employee ownership that are not tied directly to you know, end of your your business career?
• 18:57
  SPEAKER_03: Sure.
• 18:58
  SPEAKER_03: So in my former career, I worked for a small manufacturing company and the founder sold a portion of the company to an to an ESOP plan, employee stock ownership plan.
• 19:11
  SPEAKER_03: So to the employees.
• 19:12
  SPEAKER_03: And you, you know, when you do something like that, he's still a young, I'll call him a serial entrepreneur.
• 19:17
  SPEAKER_03: So is able to take those funds and reinvest it into another business, which has been since become wildly successful.
• 19:26
  SPEAKER_03: So for those serial entrepreneurs, is that reinvesting that capital?
• 19:31
  SPEAKER_03: There's also, you know, business owners have put their soul, their life, and everything into this business.
• 19:40
  SPEAKER_03: And so, as they, you and I have retirement assets, we want to diversify as we get closer to our retirement age.
• 19:46
  SPEAKER_03: And in the same way, you can use employee ownership to sell a portion or all of your investments, stay in the business.
• 19:53
  SPEAKER_03: You can stay in the business and then diversify your assets a little bit.
• 19:57
  SPEAKER_03: So you don't have oligarchs in one basket.
• 20:00
  SPEAKER_03: And then the final thing, not final, but one of the other ones, is that you can also start a company.
• 20:05
  SPEAKER_03: If you are you and two or three other people are like-minded and want to start up a new business together, you can start out as a worker cooperative and reap the benefits of that employee ownership right from the beginning.
• 20:18
  SPEAKER_02: We'll take a quick break and continue our conversation with Ela Burbank in just a moment.
• 20:23
  SPEAKER_02: You are listening to MindYour Business.
• 20:25
  SPEAKER_01: Appalachian Commercial Real Estate provides professional commercial real estate services in the Boone area.
• 20:31
  SPEAKER_01: They provide sales, leasing, consulting, and appraisal services to owners and users of commercial real estate.
• 20:37
  SPEAKER_01: For more information, go to their website at AppalachianCRE.com.
• 20:42
  SPEAKER_02: Welcome back to Mind Your Business.
• 20:44
  SPEAKER_02: I'm David Jackson.
• 20:45
  SPEAKER_02: We continue our conversation with Ela Burbank as we talk employee ownership as a business exit strategy.
• 20:51
  SPEAKER_02: From a community standpoint, certainly here in the high country, a lot of startup energy, a lot of entrepreneurial spirit here that has driven our business community.
• 21:00
  SPEAKER_02: Do you see a benefit one way or the other to starting down that path with employee ownership right there in the target?
• 21:06
  SPEAKER_02: Or is it okay for those that are listening and say, well, I've been in business for 10 years.
• 21:11
  SPEAKER_02: Maybe it's not for me just yet.
• 21:13
  SPEAKER_02: I'm too far away from the end, but I'm also too far away from the beginning.
• 21:16
  SPEAKER_02: Is there a right or wrong time?
• 21:19
  SPEAKER_02: I guess is the long-winded way to ask this question.
• 21:21
  SPEAKER_03: There is no right or wrong time.
• 21:23
  SPEAKER_03: And, you know, when we meet with a business owner, we talk about what are your short-term goals and what are your long-term goals, because you could convert over to an employee ownership at any point in time.
• 21:35
  SPEAKER_03: Uh, there's actually been a lot of construction companies that have converted recently and the owner is staying in the business.
• 21:42
  SPEAKER_03: And one of the reasons they do this is for the recruiting and retention.
• 21:47
  SPEAKER_03: Because construction is really hard to bring employees and keep those employees on there.
• 21:51
  SPEAKER_03: So can you imagine bringing in a candidate to that construction firm and saying, hey, based on our growth rate, if you stick with us, look what you'll have five years.
• 22:00
  SPEAKER_03: 10 years, 15 years from now, because we're an employee-owned company, you could not get that anywhere else.
• 22:06
  SPEAKER_03: And so it just all depends on what your goals are.
• 22:09
  SPEAKER_02: Yeah, that that's an excellent segue into the next question.
• 22:12
  SPEAKER_02: From an employee's perspective, how have you seen the employee ownership model open their eyes up to a different type of benefit?
• 22:21
  SPEAKER_02: This isn't insurance or extra vacation time, but this this is something that's got a little bit more uh longer lasting appeal to it, is it not?
• 22:28
  SPEAKER_03: It it absolutely does.
• 22:30
  SPEAKER_03: And when we look at statistics of an employee-owned company versus a similar company that is not employee-owned, overall, on average, wages tend to rise for that employee-owned company.
• 22:43
  SPEAKER_03: So the median wage is 33% higher for an employee-owned company.
• 22:48
  SPEAKER_03: The job tenure is 53% longer.
• 22:52
  SPEAKER_03: And then the household net worth also increases by 92%.
• 22:56
  SPEAKER_03: But I was also part of a partial employee-owned company.
• 22:59
  SPEAKER_03: And I can tell you my personal stories in this manufacturing company that the employees no longer come in just punch the clock to do their job.
• 23:07
  SPEAKER_03: It takes a short bit, right?
• 23:09
  SPEAKER_03: But they kind of employees realize that wait a minute, it's more I'm doing more than just punching the clock.
• 23:15
  SPEAKER_03: The efforts that I put into this company to make this company better are actually going to have a direct, direct impact on me.
• 23:23
  SPEAKER_03: And so I started seeing more innovation and engagement by the employees to say, you know, I think there's a better way we can do this, which is fantastic.
• 23:32
  SPEAKER_02: You know, Lisa Cooper, the CEO of Mass General Store, speaks about that notion a lot when she talks about her company's benefits in being an Aesop.
• 23:42
  SPEAKER_02: And that's one of several types of employee ownership uh types that we'll have you discuss here in just a second.
• 23:48
  SPEAKER_02: But from Lisa's perspective, it always is about that the employee truly is the owner.
• 23:53
  SPEAKER_02: And she said they're doing everything from picking up candy wrappers on the floor, which at Mass General store there are a lot, to actually having substantive conversation about growth in their individual department and feeling like they're connected to it.
• 24:05
  SPEAKER_02: Is there a price tag on the connectedness uh that that an engaged employee can feel inside one of these types of organizations?
• 24:14
  SPEAKER_02: Mean a a little price tag of what it takes to get there or be just just I think more so of the metaphorical price tag of you can't buy this kind of engagement any other way.
• 24:27
  SPEAKER_03: You can't buy that because because you could bring in people to talk the talk and you know do the rah-rah that you should give us your input.
• 24:36
  SPEAKER_03: But you know, if you realize that that input and changes don't have that impact on you, and in fact, let's talk about private equity.
• 24:44
  SPEAKER_03: If the benefits that you are proposing are increasing the bottom line, and the bottom line is going back to Chicago.
• 24:52
  SPEAKER_03: Why am I gonna bother?
• 24:55
  SPEAKER_03: Right.
• 24:55
  SPEAKER_03: But here it's all the benefits stay with you, with your community, with your family.
• 25:01
  SPEAKER_02: So I mentioned ESOP a moment ago.
• 25:03
  SPEAKER_02: There are several different types of employee ownership that are available.
• 25:06
  SPEAKER_02: What can you uh tell us about the varieties and how they're how they're different, how they may be more advantageous for one business over another?
• 25:13
  SPEAKER_03: Certainly.
• 25:14
  SPEAKER_03: So we generally talk about three different types, three different models of employee ownership.
• 25:19
  SPEAKER_03: And the one that is most commonly known is that employee stock ownership plan or the eSOP.
• 25:26
  SPEAKER_03: The the ESOP, though, is a retirement plan.
• 25:29
  SPEAKER_03: So the very quickly, a trust is formed and the shares of that company, the trust buys the shares of the company from the departing founder at market rates.
• 25:40
  SPEAKER_03: So the founder gets to go and gets the money from that transaction, and now that trust holds the share of the company for the benefit of the employees.
• 25:50
  SPEAKER_03: Every year, employees are allocated shares that are kind of held similar to like a 401k plan, where you're you're vesting over time and you're getting more shares every single year.
• 26:02
  SPEAKER_03: And when that employee ends up retiring or leaving, the company buys back the value of those shares that you can roll into an IRA um after after you leave.
• 26:14
  SPEAKER_03: And so it's a retirement vehicle where the shares of the company are held on your behalf for your retirement.
• 26:24
  SPEAKER_03: So this is for larger companies because I just said a lot of words like 401k and retirement that should business owners should go, oh no, you know, not they shouldn't say oh no, but if you had a 401k plan, you understand that there's Department of Labor oversight, there's Orissa, there's you know the retirement system plan oversight.
• 26:42
  SPEAKER_03: There's a lot of governmental oversight on a retirement plan.
• 26:46
  SPEAKER_03: So you can't ask your Uncle Joe to be your trustee.
• 26:49
  SPEAKER_03: You're gonna need to bring in someone who is knowledgeable and willing to take on that liability of that retirement plan type vehicle.
• 26:59
  SPEAKER_03: So we tend to say is for being very generic here, 30 employees or more is going to be the appropriate one for an eSop.
• 27:11
  SPEAKER_03: How many businesses does that cover, right?
• 27:13
  SPEAKER_03: When you're looking at most of the people we talk to actually have fewer than 30 employees.
• 27:17
  SPEAKER_03: Now, don't get me wrong, ESOP's a great plan.
• 27:20
  SPEAKER_03: If you you are big enough for an ESOP, there's some great tax advantages, but not everybody is.
• 27:27
  SPEAKER_03: So next question, right?
• 27:29
  SPEAKER_03: Okay, what's available for those who are under 30?
• 27:32
  SPEAKER_03: Weird my mind.
• 27:33
  SPEAKER_03: Yes.
• 27:35
  SPEAKER_03: So there are two options then we go to there is the worker cooperative, and if we're gonna talk to business owners, this is where I usually say a worker cooperative does not mean you have to start wearing broken stocks and talking about socialism.
• 27:49
  SPEAKER_03: You know, this is that uh we have to change people's minds about that terminology.
• 27:54
  SPEAKER_03: A worker cooperative is a business, looks and smells and feels a lot like a regular business.
• 28:00
  SPEAKER_03: The other option is the employee-owned trust.
• 28:03
  SPEAKER_03: So real quickly, let's talk about those.
• 28:06
  SPEAKER_03: The employee-owned trust is going to be a little bit easier because structurally, just like the ESOP, a trust is formed and the trust buys those shares from the departing founder.
• 28:19
  SPEAKER_03: But instead of being a retirement vehicle, this trust then holds the shares in the benefit for the employees and the the net profits at the end of the year, what's left over after everything else is said and done, after salaries are paid, after the normal business structure, what used to go to the departing founder, the net profits, are then shared by the employees.
• 28:43
  SPEAKER_03: So it's a profit sharing plan, but the ownership is held by the trust.
• 28:47
  SPEAKER_03: And in fact, you can tell that trustee that you may never sell this.
• 28:52
  SPEAKER_03: I love my business, no one else may ever touch it, you may never sell it.
• 28:56
  SPEAKER_03: Or you can say you may only sell it if the following conditions are met.
• 28:59
  SPEAKER_03: If all of my employees get at least three times their salary, or you know, whatever you end up deciding.
• 29:05
  SPEAKER_03: So you don't have to worry about who's going to buy my business even after this one.
• 29:10
  SPEAKER_03: The ownership is held within that trust potentially forever, and the employees get to share in the profits, whether that's quarterly, semiannually, or annually.
• 29:20
  SPEAKER_02: This is all fascinating information, and I'm sure that that people's heads are spinning a bit at where they may be able to plug in.
• 29:28
  SPEAKER_02: The good news is there is an event coming up in mid-September where your uh organization is able to kind of help walk people through some of these processes a little bit.
• 29:39
  SPEAKER_02: Tell us uh about this aspect of the outreach of the NCEOC and how you do put these opportunities for people to come and learn more, but also learn in an environment that that is um comforting and not necessarily sitting in the conference room of the business that you're about to transform.
• 29:58
  SPEAKER_03: Yeah, so we do offer uh events throughout the year.
• 30:01
  SPEAKER_03: You know, if you go to our website, there's a place for events.
• 30:05
  SPEAKER_03: We hold them throughout the state, you know, eastern, western, central, wherever.
• 30:10
  SPEAKER_03: Um, but we are holding this large conference on September 16th.
• 30:14
  SPEAKER_03: It'll be at the McKimmons Center on the NC State campus.
• 30:18
  SPEAKER_03: Um, that is a full day event.
• 30:20
  SPEAKER_03: So that will have various topics, including leadership development, open book management, um, employee communications.
• 30:28
  SPEAKER_03: These are all topics that actually business owners can use today as they get their quest to be a better business or to go closer towards exit.
• 30:40
  SPEAKER_03: However, we'll also have plenty of topics on uh employee ownership or eSOPs.
• 30:46
  SPEAKER_03: You want to come learn more about EOTs or worker cooperatives, we'll have separate topics topics about those.
• 30:52
  SPEAKER_03: We'll also be bringing in business owners and a panel discussion and other opportunities where those business owners who went through what everyone else is going through right now, what do I do?
• 31:02
  SPEAKER_03: How they made that decision and why they made that decision to convert to employee ownership.
• 31:07
  SPEAKER_03: So you can see yourself in other people's shoes.
• 31:10
  SPEAKER_02: We'll put a link to the events page in the show notes for this podcast and link that in our chamber report.
• 31:15
  SPEAKER_02: Uh, for those of you that get that as members of the Boone Area Chamber of Commerce, you'll see how to engage with these events and plenty more.
• 31:21
  SPEAKER_02: Last question I want to ask, because this is one thing that we didn't necessarily touch on, but you brought it up in thinking about business continuity and some of the things that that you can do now to stabilize your business.
• 31:31
  SPEAKER_02: There may be somebody out there that thinks, you know, this does sound like this is the right vehicle for me, employee ownership and whichever form it may take.
• 31:39
  SPEAKER_02: But they think, you know, my my business might not be tidy enough for that.
• 31:44
  SPEAKER_02: I've got a you know, nagging project here, a loan over here, you know, maybe some stuff uh uh hanging around from the storm.
• 31:51
  SPEAKER_02: Is that necessarily a factor when entering into what essentially sounds like more of an operational way of being rather than a magnifying glass on you that you might have and going through a loan process?
• 32:04
  SPEAKER_03: So let me just tell you N C E O C we're a we're a nonprofit.
• 32:08
  SPEAKER_03: We're we're funded by from some very generous foundations and donations and sponsors.
• 32:15
  SPEAKER_03: And so everything that we do is at no cost to the business owner, whether we meet once, twice, five, or 10 times.
• 32:21
  SPEAKER_03: But I would urge a business owner to reach out now, whether they're ready or not.
• 32:26
  SPEAKER_03: And I have plenty of people that I've met with that, you know, we have that conversation and we know it's a long-term goal.
• 32:33
  SPEAKER_03: We're in it for the long run, you know.
• 32:35
  SPEAKER_03: So reach out now.
• 32:36
  SPEAKER_03: Let's start talking about some of the things that you can put into place.
• 32:40
  SPEAKER_03: Maybe put you in touch with other resources for that long haul, knowing that it might be two, three, or five years from now that it can actually happen.
• 32:48
  SPEAKER_03: But let's start the talking now, not when it's too late.
• 32:51
  SPEAKER_02: Well said, and a great way to cap this and really appreciate the opportunity to talk and give some people some things to think about.
• 32:59
  SPEAKER_02: You know, sometimes when we're we're cutting the grass and we're we're out there in our headspace, we need to think about what's next.
• 33:04
  SPEAKER_02: And I think that there's something to be said for the places where people feel motivated to do that.
• 33:09
  SPEAKER_02: So having information that is current and and on the front of the mind uh maybe can help some people in the right direction.
• 33:16
  SPEAKER_02: Again, we we will share the information that you have provided to us, but really deeply appreciate the time and look forward to connecting with you again in the future.
• 33:23
  SPEAKER_03: Thank you.
• 33:23
  SPEAKER_03: Appreciate the opportunity to speak with you.
• 33:27
  SPEAKER_02: Thanks to Ela for some great information.
• 33:29
  SPEAKER_02: More can be found at nceeoc.org.
• 33:34
  SPEAKER_02: Again, that's nceoc.org.
• 33:37
  SPEAKER_02: And Ela has a colleague right here in Western North Carolina.
• 33:40
  SPEAKER_02: That's Luke Hoffman.
• 33:42
  SPEAKER_02: He can easily assist in getting this conversation started.
• 33:45
  SPEAKER_02: The event that Ela spoke of, the North Carolina Business Continuity and Employee Ownership Conference, will be held in Raleigh on September 16th.
• 33:54
  SPEAKER_02: It only costs$25 to attend a great day-long agenda that will make the trek worth it.
• 33:59
  SPEAKER_02: And you can hear about types of employee ownership, the governance around these kinds of transactions, and even how cities and communities can support and benefit from this type of business and workforce development succession.
• 34:12
  SPEAKER_02: Sometimes you think about the businesses that we can't afford to lose.
• 34:16
  SPEAKER_02: Employee ownership is a great strategy to keep that from happening.
• 34:20
  SPEAKER_02: The link is in the podcast show notes, and for each chamber members, the link to this event and your chamber report this week.
• 34:26
  SPEAKER_02: Membership privileges, you know the same.
• 34:29
  SPEAKER_02: You are listening to mind your business.
• 34:32
  SPEAKER_00: Are you a young professional looking to expand your network?
• 34:35
  SPEAKER_00: The High Country Young Professionals, affectionately dubbed the High Country YoPros, is a dedicated group of 200 plus professional young adults under the age of 40 serving in various industries across the high country.
• 34:48
  SPEAKER_00: Join us for our casual networking event on the first Tuesday of each month from 5 to 7 p.m.
• 34:54
  SPEAKER_00: As we visit locations across the high country.
• 34:56
  SPEAKER_00: Events are free of charge.
• 34:57
  SPEAKER_00: However, donations are appreciated.
• 35:00
  SPEAKER_00: Not a chamber member?
• 35:01
  SPEAKER_00: That's okay.
• 35:02
  SPEAKER_00: No membership needed to join us.
• 35:03
  SPEAKER_00: You just have to be under 40.
• 35:05
  SPEAKER_00: Learn more about High Country GoPros at Boonchamber.com slash H C Y P.
• 35:13
  SPEAKER_01: Mind Your Business.
• 35:14
  SPEAKER_01: Brought to you by Appalachian Commercial Real Estate, offering sales, leasing, consulting, and appraisal services.
• 35:21
  SPEAKER_01: Visit Appalachian CRE.com.
• 35:25
  SPEAKER_02: Last week's Mind Your Business focused on the long-term economic recovery plan for Western North Carolina post-Hurricane Holeen.
• 35:33
  SPEAKER_02: That's a draft of a document as of now, but it's being informed by action in real time that will help set this up as a guiding document with some early wins.
• 35:42
  SPEAKER_02: Earlier this week in Asheville, the U.S.
• 35:45
  SPEAKER_02: Deputy Secretary of Commerce Paul Daber announced$34.2 million in disaster recovery awards for North Carolina, provided by the U.S.
• 35:54
  SPEAKER_02: Department of Commerce's Economic Development Administration, or EDA, for all future references.
• 36:01
  SPEAKER_02: The announcement was made at the site of the future home of the Asheville Bunkham Technical Community College Advanced Manufacturing Innovation Hub.
• 36:09
  SPEAKER_02: Now, this is from the release.
• 36:11
  SPEAKER_02: The awards announced are an early milestone in the long-term effort to support economic growth within the region.
• 36:17
  SPEAKER_02: And remember, Sharon mentioned last week this isn't necessarily just about Helene.
• 36:22
  SPEAKER_02: These are about economic pressures that have been with this region for decades now.
• 36:26
  SPEAKER_02: Back to the release.
• 36:27
  SPEAKER_02: These awards are being provided through the EDA's fiscal year 2025 disaster supplemental grant program.
• 36:34
  SPEAKER_02: That's a$1.5 billion effort that supports economic recovery activities in areas that have received major disaster declarations, just like ours, because of hurricanes, wildfires, severe storms, flooding, tornadoes, and other natural disasters that happen to occur in the calendar years of 2023 and 2024.
• 36:55
  SPEAKER_02: The awards that were announced this week include AB Tech and Bunkham County combining for a$29.2 million grant for the construction of a new 70,000 square foot advanced manufacturing workforce and innovation hub, which represents a partnership between multiple universities, community colleges, and economic development entities.
• 37:16
  SPEAKER_02: The town of Murphy received$2.1 million for the construction of a new sewer lift station to support local businesses.
• 37:23
  SPEAKER_02: Western Carolina University and its township of Culloway received$1.2 million for infrastructure improvements to the WCU Culloway Dam to support local recreational economies.
• 37:35
  SPEAKER_02: Land of Sky Council of Governments in Asheville received$500,000 to provide additional capacity and support recovery for hard-hit communities in Madison, Bunkham, and Henderson counties.
• 37:46
  SPEAKER_02: The Western Piedmont Council of Governments, located in Hickory, also received a half a million dollars to support a new regional disaster recovery coordinator position to assist communities impacted by Hurricane Helene.
• 37:58
  SPEAKER_02: The Centralina Economic Development Commission, that's in Charlotte,$400,000 for the development of a strategic analysis and regional engagement strategy to determine major employers in critical facilities and to support their resilience to natural disasters.
• 38:14
  SPEAKER_02: And finally, and closest to home, Ash County, the town of Jefferson specifically,$267,080.
• 38:23
  SPEAKER_02: I applaud the specificity there.
• 38:25
  SPEAKER_02: That money goes to the design, engineering, and permitting of three shell buildings at Ash Industrial Park.
• 38:33
  SPEAKER_02: You'll remember several months ago the announcement of an investment by GE Aviation in that same area.
• 38:39
  SPEAKER_02: Another win for Ash County and its industrial base.
• 38:44
  SPEAKER_02: There are potentially more funds coming to this area, but this is a national program, so applications are very competitive.
• 38:50
  SPEAKER_02: Governor Stein's office and the Grow NC team have been working with potential applicants across the region for the better part of a year to create the strongest projects possible.
• 39:00
  SPEAKER_02: This was$34 million of$1.5 billion in funding that's available.
• 39:05
  SPEAKER_02: So we'll follow this storyline and its impact for the region and really for the country throughout the course of the year to come.
• 39:13
  SPEAKER_02: You are listening to Mind Your Business.
• 39:16
  SPEAKER_01: Appalachian Commercial Real Estate provides professional commercial real estate services in the Boone area.
• 39:22
  SPEAKER_01: They provide sales, leasing, consulting, and appraisal services to owners and users of commercial real estate.
• 39:28
  SPEAKER_01: For more information, go to their website at AppalachianCRE.com.
• 39:36
  SPEAKER_02: Numbers to close out the show this week.
• 39:38
  SPEAKER_02: We've talked about Placer AI on past episodes.
• 39:41
  SPEAKER_02: That's a tool we use to track visitor activity in the area throughout the year.
• 39:46
  SPEAKER_02: This is for visits inside the incorporated Town of Boon Limits.
• 39:50
  SPEAKER_02: Not out in the county, not in Blowing Rock, but just for those inside the incorporated Town of Boone Limits.
• 39:56
  SPEAKER_02: Keep that in mind.
• 39:58
  SPEAKER_02: So the month of June saw tracked visits down about 6% month over month, 7.5% year over year, 101,000 out-of-market visitors during the month of June.
• 40:12
  SPEAKER_02: The spring, that's April through June, we'll call it, visits down 6.8% year over year, but up about 28% against the winter, that of course being January through March.
• 40:23
  SPEAKER_02: And there are reasons for that we'll get into in a moment.
• 40:26
  SPEAKER_02: The first half of the year total trips down about 5.7%, average monthly visits relatively flat at 81,000 per month.
• 40:34
  SPEAKER_02: Number of nights stayed down about 7%.
• 40:38
  SPEAKER_02: All right, so those are the numbers.
• 40:40
  SPEAKER_02: Here's the unscientific Chamber of Commerce executive analysis.
• 40:43
  SPEAKER_02: It's been a soft start to the year.
• 40:45
  SPEAKER_02: We have talked about that at length on this program.
• 40:48
  SPEAKER_02: I'm imagining the July numbers will pick up compared to June based on anecdotal evidence that we've heard throughout the month, and we'll see how those things apply to July of 2025.
• 40:58
  SPEAKER_02: Now, a few things that factor into these numbers.
• 41:00
  SPEAKER_02: Bad timing for snow in January and February.
• 41:03
  SPEAKER_02: That could be why the spring was so much farther ahead of what we saw back in the winter.
• 41:07
  SPEAKER_02: Also, not as many people ski as hike and recreate outside.
• 41:11
  SPEAKER_02: We could get into this and go on for hours and hours.
• 41:14
  SPEAKER_02: Remember, some of those impactful snows too back in the winter came on holiday weekends, like Dr.
• 41:20
  SPEAKER_02: Martin Luther King Jr.'s birthday weekend and President's Day weekend.
• 41:24
  SPEAKER_02: So timing is everything, right?
• 41:26
  SPEAKER_02: We've mentioned that a few times this year on the program.
• 41:29
  SPEAKER_02: Economic instability at the start of the summer has led to some of that softness and a later end date for school systems off the mountain compared to our local situation.
• 41:39
  SPEAKER_02: Seeing people come from closer in and stay shorter times, that tracks with what we've heard from some of our local retail and hospitality partners.
• 41:49
  SPEAKER_02: The top three destinations that visited Boone proper, Charlotte, Raleigh, Greensboro in that order, consistently, one, two, and three throughout the year.
• 41:58
  SPEAKER_02: That's also zero surprise, right?
• 42:00
  SPEAKER_02: One other point to make this is visits to Boone's town limits.
• 42:04
  SPEAKER_02: So as the summer progresses, this does not take into account people that enter the county and don't come through Boone's incorporated area.
• 42:11
  SPEAKER_02: That said, it's the economic hub of the region.
• 42:14
  SPEAKER_02: The story told is the story lived.
• 42:16
  SPEAKER_02: Hopefully, next month's numbers will show our strong 4th of July, Appalachian summer's impact, and other similar normal July trends.
• 42:24
  SPEAKER_02: What we really need, great fall color.
• 42:27
  SPEAKER_02: Maybe some Appalachian football wins wouldn't hurt so much either.
• 42:30
  SPEAKER_02: That'll do it for this week's Mind Your Business, this program written and produced by the Bune Area Chamber of Commerce each week.
• 42:36
  SPEAKER_02: Thanks to WATA for placing us on the airwaves, and thanks again as always to James Milner, an Appalachian Commercial Real Estate for making the podcast version of this program possible each and every week.
• 42:48
  SPEAKER_02: If you are not a subscriber, fix that today.
• 42:50
  SPEAKER_02: Just search for Mind Your Business wherever you get those podcasts.
• 42:53
  SPEAKER_02: You can visit us online anytime as well at boomchamber.com.
• 42:57
  SPEAKER_02: Until next week, so long, everybody.