Providing local businesses owners with a strategy for transferring ownership to long-term, dedicated employees is good economic development
LONG BEACH, Calif. (PRWEB) May 01, 2019
Project Equity, a national nonprofit organization advancing economic resiliency in communities across the country, today announced the release of new data that reveals where Long Beach businesses that have been in operation for 20 years or more could close or transfer hands when their baby boomer owners retire within 5-15 years. The data was researched and compiled by Project Equity in an innovative partnership with the Los Angeles Local Initiatives Support Corporation (LA LISC), the City of Long Beach, and in collaboration with Citi Community Development. It is the first economic inclusion effort of its kind within the Los Angeles region, focused on analyzing and retaining the community’s small businesses.
“Providing local businesses owners with a strategy for transferring ownership to long-term, dedicated employees is good economic development,” said Director of Economic Development John Keisler. “This creative public-private-partnership with Project Equity will allow the City of Long Beach to try new and creative solutions that sustain local businesses and retain jobs in the community.”
The research released by Project Equity helps identify businesses likely to need succession planning and suggests opportunities for transitioning them into employee-owned companies, which keeps these businesses rooted in the community, driving economic activity and providing front line workers a path to shared entrepreneurship.
“Too often very few of these businesses will be passed on to family members, which leave many of them risk for closing,” said Evan Edwards of Project Equity. “In some instances, these businesses will be sold to someone with no connection at all to the community such as larger, out-of-area company or investor.”
This research aligns with the city of Long Beach’s Economic Development Blueprint and “Everyone In” initiative, which was championed by former Vice-Mayor and current City Councilman Rex Richardson to ensure that economic inclusion is one of the key focal points of the city’s economic development strategy. The research is the first phase of Project Equity’s RETAIN initiative. Subsequent phases include awareness raising to help business owners see the importance of succession planning, outreach to identify and engage businesses that may be converted to employee ownership and feasibility assessments and transition services.
“Many of the business transitions we are exploring could provide low-and moderate-income workers an opportunity to become business owners, as well as offer a pathway to economic resiliency and financial security,” shared Tunua Thrash-Ntuk, Executive Director of Los Angeles LISC.
Project Equity’s data also reveals that small businesses that are 20 years or older provide an estimated 36% of jobs at private sector, locally-owned businesses with employees in Long Beach. This means Long Beach stands to risk up to 47,000 jobs.
“With so many small business owners set to retire in the near future, we have a unique opportunity to help them transfer ownership to the employees who have worked hard to build those businesses. By identifying opportunities for employee ownership, we aim to help build local wealth and preserve the economic and social vibrancy of Long Beach neighborhoods,” said James Alva, Southern California Market Manager for Citi Community Development, which supports research and initiatives in several markets across the U.S. to inform the field of employee ownership and promote the preservation of legacy businesses.
In Long Beach, and other coastal cities where rising housing costs outpace the rise in wages, it’s small businesses that provide significant wage-earning potential. Businesses 20 years and older in Long Beach generate more than 50% of City small business revenue, and wages to more than 40,000 workers making it clear that keeping small businesses locally owned and operated is extremely important. Long Beach is blazing the trail of a new way to support its small business owners and keep their businesses rooted in communities into the next generation.
Retaining Long Beach’s legacy businesses is central to this partnership. Long Beach’s small business history, and much of its present-day economy, has roots with its port—the second busiest container port in the U.S. Beyond businesses connected with the port, Long Beach has a rich, diverse legacy business community that provides thousands of jobs and robust economic activity, both in the city and the surrounding region.
About Project Equity
Project Equity is an Oakland-based nonprofit that is a national leader in supporting businesses to transition to employee ownership, and has partnered with communities as diverse as Lancaster, Pennsylvania, Detroit, Michigan, rural Western North Carolina and the Twin Cities in Minnesota. Visit http://www.project-equity.org.