In a significant move towards employee ownership, Rocky Mountain Steel in Olathe has become Colorado’s latest 100% employee-owned business in 2024, facilitated by Dylan Wiman, a Grand Junction native. This transition is part of a broader initiative by the Colorado Employee Ownership Office, which has been active since 2020 to promote employee ownership across the state. With six in ten business owners nationwide planning to retire or sell within the next decade, the need for sustainable ownership transitions is becoming increasingly urgent. Notably, only 15% of businesses are passed down to the next generation, and in Colorado, 48% of small businesses are owned by individuals aged 55 or older.
To support these transitions, the Colorado Office of Economic Development and International Trade (OEDIT) offers tax credits that cover up to 50% of conversion costs, with a maximum benefit of $150,000. Additionally, the Cash Collateral Support Program assists businesses in securing loan collateral, making it easier for them to transition to employee ownership models. Both Rocky Mountain Steel and Blue Sky Builders are taking advantage of these incentives to ensure their employees have a stake in the future of their companies.
In related news, Stewart's Shops, a northeastern chain of ice cream shops, has made headlines by turning 175 of its employees into millionaires through an Employee Stock Ownership Plan (ESOP). This plan allows employees to become 'partners' in the company after meeting certain work hour requirements, fostering a vested interest in the company's success. The employees receive dividend payouts from the company's profits, with many seeing their balances grow significantly over time. This model not only rewards employees but also strengthens the company's overall performance.
As the landscape of small businesses evolves, these initiatives highlight the importance of employee ownership as a viable solution for succession planning, particularly in rural areas where traditional business transitions may be less feasible. The employment data revisions in Colorado, which revealed an overcount of jobs by 72,700, further underscore the dynamic nature of the job market, with final revisions expected in February 2025. [e3b0fc77]