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Suggest who benefitsWould a True Capitalist Consider a Worker Co-op?
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Suggest questionA few months ago, John Abrams—author of From Founder to Future (https://www.penguinrandomhouse.com/books/786452/from-founder-to-future-by-john-abrams/) —joined us to talk about succession strategies and the different ways business owners can share ownership with employees. For his own business, John chose one of the more radical options: he turned his construction firm into a worker cooperative. Perhaps surprisingly, the more he described the co-op model, the more intrigued Jay Goltz became—although, predictably, Jay did retain a degree of skepticism. So we asked John to come back on the podcast to help Jay dig a little deeper: Are co-ops really all about democracy? Does someone on the loading dock get the same vote as the CEO? How do profits get split in the co-op model? How do losses get absorbed? How are loans secured without burdening frontline workers with personal guarantees? And perhaps most important: What can go wrong? In the end, I think surprising even himself, Jay failed to identify any real dealbreakers.
Show Notes:
Get a free trial of the Morning Report (https://21hats.substack.com/) .
Learn more about the Cooperative Fund of the Northeast (https://cooperativefund.org/) .
This is the podcast episode where Jay Goltz talks about how to do a We-SOP (https://21hats.com/how-to-sell-a-business-that-wont-sell/) .
About 21 Hats
The proponents of employee stock ownership plans can make them sound like the greatest thing ever. A business owner can take a big chunk of money off the table—or even all of it—while still getting to run the business. And there are some pretty great tax breaks. Oh, and it will also solve income inequality in America. On the other hand, if ESOPs are so smart, why are there so few of them?
Jim Kalb of Triad Components Group in San Diego and Jeff Taylor of Crafts Technology in Chicago have both implemented ESOPs. Jay Goltz of the Goltz Group in Chicago has reached his 60s without a succession plan, and he’s considering his options. In this 21 Hats Conversation, you get to listen in on a street-smart discussion of the pluses and minuses of ESOPs from the business owner’s point of view.
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