New Data Finds Aging Baby Boomers Own Half of Small Businesses in North Carolina; Vast Majority Have No Concrete Exit Plan, Putting Local Jobs and State Revenue at Risk

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New non-profit organization aims to preserve businesses by raising awareness of employee ownership to strengthen the State's economic resiliency

“We are on a mission to preserve and protect the job and community impacts of small and medium sized businesses throughout the state of North Carolina by helping to transition many to employee ownership - Guenevere Abernathy, Executive Director- NC Employee Ownership Center

Today, the North Carolina Employee Ownership Center (NCEOC) released new data that reveals the impact of the Silver Tsunami, coupled with COVID-19, on small businesses across North Carolina. Developed by Project Equity, the study shows that baby boomers own half of the privately held businesses with employees in North Carolina and the majority of owners have no concrete exit plan, putting local jobs and state revenue at risk.

According to the study, business owners nearing retirement age own more than 78,000 businesses in North Carolina and employ approximately 880,000 employees. These businesses spend $32 billion on payroll—and generate more than five times that in revenue ($165 billion). One in four of these businesses is in construction, manufacturing, wholesale trade, warehousing and transportation industries, which are critical sectors of North Carolina’s economy.

The study also examined the impact of COVID-19 on businesses with owners facing retirement. Project Equity found the nationwide percentage of businesses with owners at or near retirement age jumped from 45 percent to 51 percent in the past five years. It provides small business ownership data by county and by industry to illustrate how communities across the state may be affected.

Employee ownership provides many of these businesses with a flexible exit plan, while also helping to increase employee satisfaction and productivity. Across North Carolina, businesses like Columbia Forest Products, the leading manufacturer of hardwood plywood and hardwood veneer products in North America, have seen the practical benefits of shifting their business to employee ownership. From the beginning, Andy Honzel, Sr., founder of Columbia Forest Products, wanted his employees to feel like it was their company, too. Granting his 2,100 employees ownership helped to create a culture with high employee involvement.

“Our employee-owners are our competitive advantage. Team members are able to contribute and constantly improve the way we do things,” explained Jeff Wakefield, Columbia’s Vice President of Human Resources and Development. “This reinforced our resiliency and enabled us to adapt during the pandemic and now, as we retool for reopening.”

NCEOC, which was formed in 2019 and is increasing its reach and impact, aims to engage community leaders and state and local government officials about employee ownership as a way to preserve North Carolina businesses, provide local quality jobs, strengthen the community’s economic resiliency, and create equity and wealth for all employees regardless of their race, ethnicity or education. NCEOC is currently partnering in Durham to support Legacy owned businesses. This work includes succession planning and employee ownership being on option for exiting a business.

“We are on a mission to preserve and protect the job and community impacts of small and medium sized businesses throughout the state of North Carolina by helping to transition many to employee ownership. We are excited to continue to expand our work in Durham across the Triangle and into other regions of the state, most recently Winston-Salem and Charlotte,” said Guenevere Abernathy, Executive Director of NCEOC.

“What businesses are experiencing in North Carolina is reflected across the country. If business owners nearing retirement lack succession plans, and have limited buyers in the market, legacy businesses in North Carolina are at risk. Employee ownership creates a roadmap for resiliency,” stated Alison Lingane, co-founder of Project Equity.

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North Carolina Employee Ownership Center
The North Carolina Employee Ownership Center (NCEOC) serves as the central hub for employee-owned businesses in North Carolina. Its primary mission is to educate business owners and their advisors (lawyers, bankers, accountants, wealth advisors) on the benefits of employee ownership via Employees Stock Ownership Plans (ESOPs), worker cooperatives, and Employee Ownership Trusts (EOTs). NCEOC provides resources, case studies, and articles, and a list of service providers who can assist with employee ownership transitions. NCEOC serves the entire state of North Carolina, with a particular focus on outreach to minority-owned businesses. For more information visit https://nceoc.org/.

Project Equity
Project Equity is a national leader in the movement to harness employee ownership to maintain thriving local business communities, honor selling owners’ legacies and address income and wealth inequality. Project Equity works with partners around the country to raise awareness about employee ownership as an exit strategy for business owners, and provides hands-on consulting and support to companies that want to transition to employee ownership. For more information visit https://project-equity.org/.

Media Contact:
Shannon Wojcik
585-831-6267
shannon@rkgcomms.com

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Steve Storkan
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