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Get a complete view of your exit options, including employee ownership, to secure the value and legacy of your business. Start with your personalized Day Zero Guide.
Employee Ownership benefits for SMBs
Zolidar makes it easy.
Our interactive tools simplify your exit journey, including employee ownership transitions like ESOPs, EOTs, and Co-ops.
Day Zero Guide
Get clarity on your exit options with insights tailored to your business.
Aha Planner
Assess your business valuation and the financial feasibility of your exit options.
Zolid AIFree for limited time
Meet your exit journey companion, providing context-aware support every step of the way.
of owners fail to sell their business — even after spending time & money on a third party sale
Employee ownership is often the key to a successful business exit
Benefits of employee ownership
Employee ownership transitions, including ESOPs, EOTs, and Co-ops, offer competitive sale proceeds without requiring a financial contribution from your employees.
Get a tax-advantaged sale
Sellers lose up to 30% to taxes in third party sales.
Keep data within your team
Third party sales require sharing data with prospects, often competitors.
Personalize your transition
Third party sales have rigid terms for your involvement and exit.
Sell all or part of your stake
Third-party sales demand full ownership transfer.
Preserve your business legacy
Third party sales often change or close your business.
Build employee wealth
Third party sales create financial insecurity for employees.
Employee ownership benefits businesses and employees
higher profits
higher sales
higher retention rates
better health
Zolidar is on a mission to increase the household wealth of everyday Americans.
The Grid: Built for the SMB community
Where owners, advisors, and financiers connect, find answers, and build reputation.
Frequently asked questions
Understanding Employee Ownership
1What is Employee Ownership (EO)?
What is Employee Ownership (EO)?
Employee ownership is a business ownership model where employees receive a stake in their company in return for the work they do. It enables the employees to build long-term wealth in addition to existing cash compensation and benefits. This is also a viable exit path for many owners, with financing used to pay out the owner while the business continues to operate.
Employee ownership can take several forms:
- Employee Stock Ownership Plan (ESOP): Retirement plans that transfer company equity to employees in a retirement account, realized upon leaving the company.
- Worker-Owned Cooperatives: Owned and governed by employees, with profits (known as patronage) shared among them.
- Employee Ownership Trust (EOT): Use a Perpetual Purpose Trust to protect the company's mission and benefit employees perpetually, with profit-sharing distributed based on compensation and tenure.
Employee ownership boosts engagement and productivity, builds worker wealth, and simplifies succession planning, benefiting both employees and the company.
2Why haven’t I heard about Employee Ownership before now?
Why haven’t I heard about Employee Ownership before now?
Despite its many benefits, employee ownership (EO) has been called a "well-kept secret" for decades. Many advisors or owners are either unaware of EO or misunderstand it.
Interestingly, EO's roots go back to the founding of our country. Thomas Jefferson, for example, placed a condition that companies receiving tax credits must enable profit-sharing with employees.
EO companies span all industries and sizes. Large examples include Publix Supermarkets, the largest ESOP in the US with over 250,000 employees to smaller EO companies to Isthmus Engineering in Madison, WI, with 80 worker-owners. EO companies can have as few as three employee-owners.
Transitioning to Employee Ownership
1Why should I consider Employee Ownership instead of selling my business?
Why should I consider Employee Ownership instead of selling my business?
A staggering 80% of owners fail to sell their business even after spending time & money on the sale process. Despite being profitable, these businesses are unattractive acquisition targets to outside buyers who need to achieve a high Internal Rate of Return (IRR).
Employee ownership, through models like ESOPs, EOTs, and Co-ops, is a viable solution for owners who want a competitive exit plan that is often more predictable. These models help many businesses avoid closure, retain jobs, and preserve the founder's legacy. Employee ownership can be a good model for many companies, but it may not be appropriate for all companies or situations:
- Profitability: Employee ownership isn't the right choice for companies that aren't showing a healthy profit and for whom the financing costs aren't feasible given the business's cash flow
- Owner's motivation: Employee ownership might not be a good idea for owners who has many interested third party buyers and wants as much cash as possible for their business right now.
2Will my employees want to buy my business and how much will it cost them?
Will my employees want to buy my business and how much will it cost them?
Employee ownership can be a great exit strategy for you, but it doesn't rely on individual employees coming up with the capital. In employee ownership structures, the company itself facilitates the purchase, not individual employees.
For most ESOPs and EOTs the answer is "$0" financial contribution from employees. For worker co-ops, there is typically an equity buy in amount, but this will be decided on by the workers themselves democratically, and will typically be nominal.
EO transitions are a net new perk for employees, i.e they follow the structure of a leveraged buyout where the cash flow of the business is used to pay for the business. Overall, employee ownership can be a win-win situation. You get a successful exit strategy, and your employees gain a stake in the company's future, potentially boosting morale and performance.
3Will Zolidar support my transition to employee ownership?
Will Zolidar support my transition to employee ownership?
Yes, completely. Zolidar is designed to guide you through the entire employee ownership journey, from initial exploration to final execution. Aha Planner is built to support the planning phase by analyzing financial feasibility, valuation scenarios, and EO viability for your specific exit-planning stage.
Coming soon: For owners who select employee ownership, Zolidar will help you form a team of experienced EO practitioners, align with financiers, and serve as your software platform for efficiently executing transitions to ESOPs, EOTs, or Co-ops. Contact Us to find out more.
You can also connect with other business owners exploring employee ownership and find experienced practitioners through The Grid, our free professional community.
Getting Started
1What if I’m not ready to sell my business?
What if I’m not ready to sell my business?
That's okay! Succession planners often recommend planning to begin 5 years in advance of the anticipated exit.
Why 5 years? This advanced planning allows business owners to prepare the people, process, and profit attributes of their business for a potential buyer. Moreover, owners can leverage various tax strategies effectively. Initiating early succession planning allows business owners to comprehensively understand the exit options, form realistic expectations, recognize potential hurdles, and potentially modify the business model to attract a broader spectrum of buyers. Waiting until the "verge of selling" significantly limits the scope of impactful changes and hampers the potential to enhance the business's valuation.
The advantage of employee ownership is that you can sell a portion of your business now, and continue to transition over time.
2Is Zolidar compatible with SMB or EO advisors?
Is Zolidar compatible with SMB or EO advisors?
Absolutely! Here's how Zolidar could benefit SMB / EO advisors:
- Access to Cutting-edge Technology: Advisors gain access to Zolidar's innovative software solutions, streamlining the evaluation, implementation, and management of employee ownership structures.
- Educational Resources: Zolidar offers educational content and training modules, keeping advisors informed about the latest trends, benefits, and best practices in employee ownership.
- Networking Opportunities: Zolidar hosts events, webinars, and forums, providing valuable networking opportunities with other professionals, potentially leading to new partnerships or opportunities with potential clients seeking guidance on transitioning to employee ownership
3How should I get started with Zolidar?
How should I get started with Zolidar?
We recommend starting with the free Day Zero Guide to explore your exit options. Then dive deeper with the Aha Planner to understand your business valuation and assess the financial viability of each exit option.
You can also connect with other business owners and advisors in The Grid for additional support and community insights.
4What is Zolidar’s mission?
What is Zolidar’s mission?
We founded Zolidar with the mission to increase the wealth of everyday Americans by building the easy button for employee ownership. The name Zolidar is inspired by solidarity and the outcomes it can drive by aligning incentives of individuals towards a shared purpose.We aim to create a seamless experience where owners, employees, and advisors can collaborate, plan, and execute successful transitions that preserve legacy, build wealth, and support thriving communities. We plan to continue expanding our features and partnerships to make employee ownership more accessible and widely adopted.
5How does Zolidar promote employee ownership?
How does Zolidar promote employee ownership?
Zolidar promotes employee ownership by educating business owners and business advisors on the benefits of this exit path, offering tools that make it easier to evaluate and implement, and working closely with advisors and industry experts to create resources that simplify the transition. Our platform is designed to demystify employee ownership and make it a viable option for more business owners.
6Does Zolidar have a bias for EO when suggesting exit paths? If so, how do I know the suggestions will always be in my business’s best interest?
Does Zolidar have a bias for EO when suggesting exit paths? If so, how do I know the suggestions will always be in my business’s best interest?
While Zolidar is passionate about employee ownership, we are committed to providing objective and personalized recommendations based on your business's specific circumstances. The Day Zero Guide evaluates multiple exit paths, including employee ownership, strategic sales, and financial buyers. The Aha Planner assesses the net sales proceeds, tax implications, and present value of payout structures for a third-party sale as well as employee-ownership. We help you understand the pros and cons of each, but ultimately, the decision is yours.
In certain scenarios, Employee Ownership will emerge as the best choice for an owner to exit their business regardless of other factors. As an example, exit through employee-ownership emerges as a winner in all cases where businesses that have a strong track-record of profitability, established processes, a concrete plan for leadership transition, and flexibility from owners on the timeline for receiving sale proceeds.
7If Employee Ownership isn't right for me, can I use Zolidar to explore other exit options, like a third-party sale?
If Employee Ownership isn't right for me, can I use Zolidar to explore other exit options, like a third-party sale?
In short, Zolidar can help you explore and prepare your business for an exit even through a third-party sale. Further along the exit journey, our features focus on exiting through employee-ownership, however the underlying concepts apply to other exit paths too.
Zolidar's Day Zero Guide and Aha Planner help you evaluate all your business exit options, which fall into three primary options of employee ownership, strategic sale, or financial sale. Based on your business metrics, you will get personalized insights and tips relevant to any exit option you choose.
The Day Zero Guide tells you how each exit option aligns with your goals and then provides resources for you to explore any aspect in greater depth. With these insights, you can improve the feasibility of all three of these exit options. The Aha Planner then takes this further, providing insights that let you make a fair comparison from a financial perspective between employee ownership models, such as ESOPs, EOTs, and Co-ops, and a third-party sale. Together, these tools help you understand the pros and cons of each exit path so you can confidently choose a path and start building your future.
We do know that many businesses are not a good fit for third party sales (finding an outside buyer), given 4 out of 5 businesses never find a buyer. We believe that employee ownership is a viable and advantageous option for many of these businesses. Our next set of features will be focused on employee ownership and making it easier for these businesses to make this transition.
8Can I talk to a real person for help with employee ownership, exit planning, or Zolidar products?
Can I talk to a real person for help with employee ownership, exit planning, or Zolidar products?
Yes! You can talk to real people for help. Here's how:
Contact Zolidar
Our team is here to help with technical support, product questions, employee ownership guidance, and exit planning. We can point you in the right direction and help you get started.
Ways to reach us:
- Book a Call: https://calendly.com/sk-zolidar-euea/zolidar-demo?hide_gdpr_banner=1 to speak directly with our team about employee ownership options, get a product demo, or discuss how Zolidar can help with your exit planning needs.
- Phone: +1 (650) 977-4744 - Calls go to voicemail, and we'll return your call. Please leave a detailed message with your name, contact information, and what you'd like to discuss.
- Contact Form: Use the "Get in Touch" form at the bottom of most pages for general inquiries or feedback.
We can help with:
- Technical support and product questions
- Guidance on using Zolidar's tools (Day Zero Guide, Aha Planner, Zolid AI)
- General information about employee ownership and exit planning
- Product demos and onboarding help
- Connecting you with the right resources for your situation
Or Connect with Professionals in The Grid
If you want to explore working with advisors on your own, The Grid https://zolidar.com/grid is our community directory of professionals who specialize in employee ownership and business succession planning. You can browse profiles, search by expertise or location, and reach out to professionals directly.
Note: While Zolid AI can answer many questions immediately, it's an AI assistant, not a real person. For personalized guidance or complex situations, we recommend starting with our team—we can help determine the best path forward for your needs.
Get in touch
Have an interest in business succession planning or employee ownership? Let's connect!
