Many business organizations in the United States are worker cooperatives. Owners of these organizations sold them to their employees. The original owners of these businesses belong to the baby boomer generation.
They own about 12 million of these businesses. 70% of their establishments will change hands because owners are becoming aged. Besides, their children are no longer active in managing their businesses. So, they either sell the organization or risk losing their assets.
Owners of these organizations prefer to sell them to their workers which results in the emergence of a worker cooperative. Well, here are tips of turning the business into a worker cooperative business model.
Related: What Is a Business Model? 30 Successful Types of Business Models You Need to Know
Making the right decision
Begin the process by reflecting and carrying out research. Determine if your employees have an interest in owning the organization. Still, identify if they take part in business processes.
A participatory workplace will motivate employees to invest in a business organization. Also, educate workers on the importance of a cooperative model. When they are aware of the benefits of such a model, they may participate in its activities.
Avoid discrimination, and encourage diversity
According to the experts from The App Solutions, the management should accept any person willing to meet its responsibilities. It should not discriminate on gender, race or social-economic class.
Besides, the leaders of the organization need to identify the abilities of every member and assign them tasks they can complete.
Train employees and find out the value of the business
It is an essential step business owners should not ignore. Train your employees on the financial operations of the organization. Also, engage them in the operational activities of the organization.
Furthermore, ensure that you evaluate the worth of the business establishment. Getting an accurate valuation will enable you to quote the right price. You should allow your employees to negotiate on a deal. Such a process results in transparency. The owners and employees will get satisfaction.
Developing the structures of the cooperation
This process creates a plan for the transition and post-transition stages. During this stage, impart managerial skills to your employees. A worker cooperative is not a democratic organization. It entails encouraging members to take part in the decision-making process thought.
Also, these cooperatives usually experience a change in the managerial structure. So, the employees of the organization should know what these changes are.
It will motivate them to become active participants in the decision-making process of the business establishment. Thus, they may provide useful information to the leaders of the organization.
Complete the process
This stage involves finalizing your agreements and signing the deal. This stage also includes looking for funds. Your employees may not have enough money to finance the deal.
They can get it from banks or other financial institutions. Still, this process involves the board of governors election. They will carry out their first meeting. Besides, check with your attorney, and ensure you followed the law.
Ensuring it is independent and autonomous
Worker cooperatives are autonomous organizations. It is their members who control them. Thus, any pact with other organizations should allow the participation of members.
The institution can collaborate with other cooperatives. Alternatively, it can get into agreement with the government or private institutions. No matter the organization, they should keep their independence.
Once the launching process is complete, carry out a regular check. Track the progress of the business. The intention is to determine if it is achieving its goals. Besides, keep a communication process with the management. Still, ensure the managerial structures are in place. Also, they will serve future employees.
Analyze the worker-management relationship. Ensure everyone knows what a cooperative is, and plans for growth are in place. For this to succeed, the organization needs to have ongoing training procedures to teach employees how to apply its policies. Their effective implementation will determine the success of the new cooperative.
To sum up, worker cooperatives are gaining popularity in America. They represent the continuity of a business organization. The employees have experience running the organization. So, they will manage them well. The community will continue getting benefits from its operations. Besides, the original owner will not lose assets, because of business failure.
Still, during the process, talk to former owners. Inquire about any difficulty they had to face. This information will guide you during the process. What’s more, think about the future of the organization.
Guest contribution Michael Shannon: by Being a content marketer at The App Solutions, Michael Shannon strives to help brands to plan effective business strategies including creating, publishing and distributing content for a targeted audience online. With 5 years of rich domain knowledge, he loves to share his views on modern technologies through his well-researched content pieces.
Other business resources:
- What Is Business Model Innovation
- What Is a Business Model
- What Is A Heuristic
- What Is Bounded Rationality
- What Is Business Development
- What Is Business Strategy
- What is Blitzscaling
- What Is a Value Proposition
- What Is a Lean Startup Canvas
- What Is Market Segmentation
- What Is a Marketing Strategy
- What is Growth Hacking