Over $400,000 in Public and Private Funds to Support Business Ownership Transitions in Rural MaineOctober 23, 2018
The Cooperative Development Institute (CDI) has received a $200,000 grant from the John T. Gorman Foundation to support the Ownership Transition Initiative, which will assist Washington County business owners in developing exit plans that will sustain their business after retirement, and improve the quantity and quality of jobs in the region. The Initiative is being launched by a new partnership that includes CDI, Sunrise County Economic Council, Axiom Education & Training Center, Eastern Maine Development Corporation, Acadia Capital Management II, Inc., and Husson University’s Center for Family Business, and will offer a wide variety of education, training and services designed to ensure the County’s aging business owners understand their options and prepare accordingly.
Complimenting this grant is another recent award of $215,000 from the US Department of Agriculture. CDI received the Rural Community Development Initiative grant to support education and training for the Sunrise County Economic Council in Washington County and several groups in the Lewiston region that will improve their capacity to offer cooperative development services, including support for worker cooperative conversions, agricultural cooperatives, and affordable housing cooperatives.
The Ownership Transition Initiative has developed a new website to educate business owners about planning for retirement and exiting their business (https://ownershiptransition.org/), and will organize a series of workshops on selling a business, family business transitions, employee ownership transitions, financial analysis and business valuation, and other topics. To develop the most useful content for this program, we are asking all business owners to do a short, 5-minute survey (www.surveymonkey.com/r/5MF35SM) to determine needs and help shape the trainings and services offered through the Initiative. Business owners can also do the survey through the website.
“The default succession option for business owners nearing retirement is, all too often, to reluctantly liquidate and close. This option shortchanges owners and drains the communities’ access to jobs and economic activity that the business provided,” said Rob Brown, director of CDI’s Business Ownership Solutions program, which assists business owners and their workers in carefully evaluating whether transition to employee ownership can meet their needs, and guiding businesses through a transition to a worker cooperative.
National studies show the largest single source of avoidable job loss is from business closings due to owner retirement, and the annual rate of retirement is projected to double over the next 20 years. The problem is much more acute here in Maine because the state has the oldest population in the country, and Washington County has the oldest population in Maine.
“As a business owner and entrepreneur, I’m very proud of what I’ve built and the jobs I’ve created. I want to see that continue long after I’m gone and that takes careful planning,” said Susan Corbett, founder of Axiom Technologies and Axiom Education & Training Center, which is a partner in the Initiative. “No matter how big or small, every business owner should have a plan for how to exit their business in a way that keeps the business alive if at all possible, but they don’t know where to begin and they don’t have the time to figure it out on their own.”
Charles Rudelitch, Executive Director of Sunrise County Economic Council, said the goal of the initiative is to “ensure business owners have the information, training and analysis they need to retire comfortably without letting the business and jobs disappear.”
“The Ownership Transition Initiative is a comprehensive approach that will provide business owners with the succession planning assistance needed to sustain these rural businesses, provide workers with new skills that will improve profitability, and sustain economic activity and access to goods and services in rural communities,” said Kitty Barbee of Eastern Maine Development Corporation, the official workforce development agency for Washington County.
One unique aspect of this program will be the services provided by Husson University students studying business development and entrepreneurship, financial analysis and planning, exit planning and other relevant fields. “We are proud to offer our students these innovative internships where they will work under the supervision of experienced advisors, gain real world experience, and provide small businesses in Washington County with valuable and needed business services,” said Dr. Brien Walton. Walton is the Director of the Dyke Center for Family Business at Husson, and CEO of Acadia Capital Management II, Inc., a federally-certified community development entity that creates business financing solutions for economically-distressed communities. Husson faculty from several departments, and seasoned strategy consultants from Acadia Capital Management II, Inc., will collaborate in support of Washington county entrepreneurs.
For those business owners interested in exploring an employee ownership transition, the recent passage of the Main Street Employee Ownership Act at the federal level will provide additional support. The new law expands Small Business Administration loan guarantee programs for employee ownership conversions and requires SBA and Small Business Development Centers to make available education and training for employee ownership conversions. The new law was co-sponsored by Senator Susan Collins (R-ME) and is the most significant legislation supporting employee ownership to become law in 30 years.
“As they prepare for retirement, many older business owners are concerned about what will happen to the enterprise they created and nurtured with so much time and effort. An employee ownership arrangement helps to ensure that the business will continue to thrive with a loyal workforce that is literally invested in its future,” said Senator Collins. “I strongly advocated for this new law that makes it easier for business owners to make this transition, and I appreciate the work of organizations like CDI who help employers understand their options”.
About the Partners:
CDI is a 501(c)3 nonprofit organization that works with people to create cooperative businesses and networks that grow a prosperous, equitable economy. Founded in 1994, they are the USDA-designated Cooperative Business Development Center for the Northeast.
The Sunrise County Economic Council initiates and facilitates the creation of jobs and prosperity in Washington County. Founded in 1993 by a group of business and community leaders, they promote a grassroots approach to economic and community development in the County.
Axiom Education & Training Center, a 501(c)3 nonprofit created by Axiom Technologies, is a workforce training and Adult Education provider that advances the life-long educational and professional development of businesses and residents, while strengthening the economic, social, and cultural life of Washington County.
Eastern Maine Development Corporation (EMDC) is a private, non-profit, 501(c)3 organization. Celebrating 50 years of service, EMDC is proud to create economic development opportunities in Eastern Maine through community, business, and workforce development. Acadia Capital Management II, Inc. is an independent affiliate of EMDC providing strategic planning for Opportunity Zones and structured finance solutions using federal New Markets Tax Credits, to stimulate economic growth throughout Maine.
Husson University’s Center for Family Business (CFB) in Bangor, Maine, is dedicated to supporting and strengthening the 30,000+ family-owned businesses in Maine. The Center for Family Business serves family business owners, managers and employees through a variety of seminars and workshops.
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