Good examples of employee profit sharing for small businesses.

Post date: 2024-03-22 00:18:48

I'm nearly two decades into running my small business and am trying to think of some exit strategies. I've had a long-running fantasy about making it employee-owned or implementing some kind of co-op model with profit sharing, but I can't find a viable pathway to get there. I'd love to hear from anyone who has experience on either side of this either as a business owner or employee, or perhaps examples of other companies who have done this successfully. Very aware of all the cautionary tales and horror stories already - looking for the success stories here!

A few more details... We're a relatively niche media business. I don't want to sell at the moment as I think I'd get more out of it by running it for another 5-10 years. Something like a management buyout would be beyond the means of the current staff. I've spent decades of my life building it up, so I want to continue to draw an income from it if possible as a step away operationally, but I see this a long term plan over the next ten years.

I don't want to overcomplicate this, but at the same time I don't want to put something in place that is all talk and no action. I want to put money in the pockets of the team so they can eventually have tangible ownership and make their own decisions over time, but I don't want it to come at the expense of keeping the business actually open and sustainable. Then there's all the other questions on top of it - What happens to annual raises if those previously came from profit? How much transparency do you provide in terms of everyone's wages or personal expenses that get covered by the business? What happens to people who go on extended leave? etc.

I know there are a lot of businesses experimenting with co-op models at the moment, especially in journalism, but from what I can see they don't seem to be hugely successful from a financial perspective. Speaking to some employees at other businesses who have gone down this road I hear a lot of tales of resentment and broken promises. On the other hand, the ones that do seem successful seem to be huge tech businesses with dozens or hundreds of employees reaping massive profits which is very much not in our grasp. We're very much a small business of around 15 staff, so I'm really looking to hear some stories or examples of others in that range if possible!

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