Aging business owners who want to ensure their own retirement security, reward and empower their loyal workers, and sustain what they’ve built for future generations face difficult choices. Conversion to employee ownership may be the best choice to meet all of those goals. In many rural communities, it may be the only choice.
These certainly were the motivations for Susanne Ward, founder of Rock City Coffee Roasters and Rock City Cafe in Rockland. “I had three goals I wanted to achieve,” says Ward. “Obviously, my own financial security has to be the No. 1 priority. Then survival of the business, as it’s a really important part of our small town. And third, to keep it in the hands of the people who’ve made it a success.” Rock City had become a long-standing and highly-respected anchor of one of Maine’s most successful downtown revitalization success stories. She might have been able to sell to an outside buyer, but that likely would have changed the character of the cafe, and the coffee roasting business would probably have been snatched up by a bigger competitor and resulted in job losses. Now, her 25 workers, most of whom are in their 30’s with young families, will share in the rewards and responsibilities of ownership and this anchor institution of Main Street Rockland will remain strong and vibrant.
Coffee Roasting at Rock City Roasters, Rockland, which is converting to worker ownership at the end of 2016. Photo courtesy Rock City Roasters
As another example, in the remote communities of Deer Isle and Stonington, the employees of three retail businesses—Burnt Cove Market, V&S Variety, and The Galley market—became concerned when word circulated that the owners were thinking about selling the stores and retiring. Potential buyers who were not part of the community may not maintain the same level of jobs and services, and other employment options on the island were limited. For the community, these stores are the only source of groceries and other basic necessities, with the next closest grocery store 45 minutes away in good weather. So the employees joined together to create the Island Employee Cooperative (IEC) and buy the stores. They are now one of the largest employers on the island, the largest worker cooperative in Maine and the second largest in New England. This is the first time that multiple businesses of this size and scope have merged and converted into one worker cooperative, making this a particularly groundbreaking achievement.
Baldwin Apple Ladders in Brooks is another recent conversion to employee ownership. The company makes about 1,600 handcrafted ladders per year and dominates the market from Maine to Michigan and North Carolina. Founder Peter Baldwin didn’t have a plan to sustain this unique business and turned to the cooperative model to give an ownership stake to a new generation, who were great craftsmen but needed to step up and learn the business.
These are just three recent examples of how Maine business owners–at least those fortunate enough to know where to look for help- were able to secure their retirement while doing right by their employees and communities. In so doing, they’ve also done their part creating a stronger economy in Maine by helping more Mainers build wealth through ownership. Given the limited awareness and resources available, they would have been hard pressed to figure out how to do this all on their own. Improving awareness and support so that many more business owners and their employees can pursue this option should be a public policy priority (see section VII for recommendations). Thousands of baby boomer business owners in Maine face the same challenges and need the help.