New program helps business owners looking to exit sell to employees

For many people, the desire to own a business and be their own boss helped them forge a path in life and make that dream a reality. But what happens when that business owner is ready to move on in life, whether it’s retirement or simply shifting focus to another passion?

Many turn to brokers to help with listing their business for sale with the intent to sell the business to another owner for a simple handover of the keys. Dreams are not reality, however, and actually selling the business can be another matter altogether.

“The accepted belief is that nearly 80 percent of businesses listed for sale never find a buyer,” explains Marion Champoux-Pellegrin, Rural Employee Ownership Director for Rocky Mountain Employee Ownership Center, citing statistics from the Colorado Office of Economic Development and International Trade. “For many that don’t sell their business, the owners end up simply closing their doors, which has a ripple effect in their community.”

Indeed, those owners who aren’t able to sell their business must face difficult choices that often result in closures, displacing loyal employees to the unemployment line, and pulling money out of the community.

What many sellers overlook, however, are their employees. These employees are loyal to the company and already have a deep understanding of the business, making them not just valuable assets, but the potential answer for owners struggling to sell. 

While there are only 230 employee-owned businesses in Colorado, employee ownership offers a proven pathway for preserving small businesses, empowering employees, and strengthening local economies. Unlike traditional sales, transitioning ownership to employees ensures that businesses remain rooted in their communities, maintaining jobs and keeping profits local. 

Recently, the Colorado Office of Economic Development and International Trade (OEDIT) introduced a program making it easier for rural businesses to explore employee ownership. This program is available to all but Front Range communities and removes financial barriers while offering guidance, tax credits, and discounts.

According to OEDIT, with 48% of Colorado’s small business owners age 55 or older, there will be an uptick in the next decade of business owners looking to retire. “Too many business owners reach retirement without a solid succession plan,” says Champoux-Pellegrin. “This program provides a clear, affordable path for owners to explore employee ownership and safeguard what they’ve built.”

The funding from OEDIT is limited, however, and businesses who want to take advantage of it need to begin the process in 2025. Rocky Mountain Employee Ownership Center (RMEOC) is a Colorado-based nonprofit leading the effort to help Colorado small businesses explore and convert to employee ownership models. RMEOC provides technical assistance, education, and ongoing support, ensuring that business owners have the guidance they need throughout the transition process.

The program is available to a limited number of businesses that meet the following requirements: At least three interested employees, sale of at least 20% of the business, and located in rural Colorado.

Interested business owners are encouraged to contact Rocky Mountain Employee Ownership Center (RMEOC) today to begin the discussion to see if employee ownership might be a fit.