Business Successions

note: videos are below, while PowerPoints and notes are attached.

-Issues and Challenges of Business Transfers - Peter Hough, Financial Officer at the Canadian Worker Co-opertive Federation. October 12, 2011 (http://www.youtube.com/watch?v=IC-AMKRGx6g)

A business owner is retiring from a small or medium sized business. He or she has explored the options for succession and has decided to sell the business to his/her employees and managers. They have made a commitment to own and manage the business as a worker co-op.

The research analysed dealt with the financing of the purchase of the business by an individual buyer, i.e. the transfer of assets, and then with the transfer process:

• The importance of educating potential sellers about planning several years in advance before selling their businesses to limit the risk of failure;

(1) Educate the supporters of the buyout.

(2) Establish a buyout association.

(3) Do a pre-feasibility assessment.

(4) Conduct a feasibility study.

(5) Develop a Business Plan.

What Are The Advantages Of The Worker Co-operative Model?

1. Creating Decent Paying Jobs

2. Creating Productive Jobs

3. Saving Jobs

In recent years a growing number of working families have been threatened by workplace closures. Stress factors in the forestry, manufacturing, and food processing industries in particular have accelerated the rate of job loss in rural communities in Western Canada. The Western Labour - Worker Co-operative Council ("WLWCC" or the "Council") was formed in 2006 to support worker-driven interventions in situations of plant closure and threatened jobs.

Even before a plant closure is announced, unions, employees and the community can be prepared for the possible need to act quickly to save jobs. Developing early warning systems in the community and plant, negotiating collective bargaining protections and monitoring investment can all help you be ready for the rapid response that is necessary should a plant close. The following checklist suggests issues that can be addressed prior to the announcement of a plant closure. Early preparation increases the likelihood of developing an appropriate response to threatened job loss.

This resource guide answers frequently asked questions about what workers can do to protect their jobs against plant closure and other threats, when a worker buy-out may be a viable option, and what steps need to be taken to carry out a union-led conversion to worker ownership.

Case Studies:

Nanaimo Forest Products

Ambulance Sector in Quebec

Maumee Authority Stamping

Tower Colliery

Sharpsville Quality Products

As a business owner, you have spent many years and significant dollars in building your business, and you are proud of your accomplishments. As time moves on, you have started to think about retirement or stepping down to hand the business to someone else.

You have come together with a common goal in mind: to create a co-operative so you can buy a business. Not just any business, but a specific business that you have worked with for years. Your collective decision is probably based on a few key observations:

1. you know the business is about to be sold so its operator can retire. Even if he or she is not quite ready to sell the business, they may have no choice but to do so in the next few years because of age or a medical condition;

The role of an advisor is especially important for transferring a business to a co-operative. The advisor’s role is three-fold:

-advising the owner,

-advising the co-operative’s steering committee, and

Whether it involves a co-operative being created from scratch or a business being bought out by a co-operative, the process of creating the co-operative is the same from a legal standpoint. First off, you will have to hold a meeting to designate a steering committee in charge of administering the pre co-operative until the initial meeting, when the first board of directors will be elected.

This guidebook is a framework to guide the process of transferring a private company to a co-operative corporation. It brings together all the expertise needed to guide a win/win transfer of ownership from a private company to a co-operative in an orderly manner that will benefit the owner that wants to hand over a business to a group that is committed to maintaining and developing the business’ activities.

Tips include:

Phase I: Before the Start of the Transfer Process

Phase II: During the transfer process

Phase III: After the Business is Transferred

This checklist identifies the key success factors and milestones that should be met in order to ensure that there is a successful transition between the original owner of the business and the new co-operative structure. It reflects that both the new co-operative structure and the original owner have needs that must be met in order to have a successful transition.

Tips included: 

A. Initial qualitative assessment

B. Second in-depth assessment

C. Information That Should Be Provided by the Seller

D. Assessing Whether the Business Can Be Transferred to a Co-operative

Careforce Home Care Worker Co-operative Ltd. Was formed by the workers of Care Force Home Health Care Services Ltd. (Corporation) to purchase the Corporation (a share purchase) from the owner, Lay Yong Tan.

The Greenhouse Co-op is a worker-owned co-operative operating as a seasonal bedding plant and garden centre in St Peter’s, Nova Scotia.Three founding members established the Co-op in 1987. One founding member was the original owner of the business and another was an employee.

Yellowknife Glass Recyclers converted to an employee owned co-op in July 2006 to take advantage of growing popularity of high-quality recycled glassware and the opening of a glass distribution retail store.

A business owner is retiring from a small or medium sized business. He or she has explored the options for succession and has decided to sell the business to his/her employees and managers. They have made a commitment to own and manage the business as a worker co-op. This report, by CWCF, documents the information, knowledge and strategies involved in reaching such a decision, for the owner and for the workers.

Converting Conventional Businesses to Co-operatives

See also: http://www.coopzone.coop/lfi   

Excerpt:

 PRESENTATION ONE: QUINTIN FOX: