Ohio Employee Ownership Center Helps Build a Strong Economy

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Return to Issue of April 7, 2008 

With job retention and economic development at the forefront of Ohio Governor Ted Strickland’s mission, Kent State’s Ohio Employee Ownership Center is helping to improve the state’s economy through employee-owned businesses.

Steve Clem serves as senior program coordinator for the Ohio Employee Ownership Center.

Employee ownership and cooperative enterprises save jobs and companies, anchor capital locally, benefit local economies and create new wealth for employee owners. In addition, employee-owned companies improve job security while increasing productivity and enhancing employee motivation, making Ohio’s and the nation’s economies stronger.

“Employee-owned businesses are generally more profitable, more productive and help to stabilize the local economy,” says Steve Clem, senior program coordinator for the Ohio Employee Ownership Center. “Just as important, employee-owned firms aren’t likely to move offshore.”

Established in 1987, the center is a nonprofit, university-based organization that provides information and preliminary technical assistance to Ohio employees and business owners interested in exploring employee ownership. It is one of only three active, state-supported employee ownership centers in the country and the only one attached to a university.

“Being attached to Kent State gives the center additional credibility, along with the resources that can be found in a university,” Clem says.

Since its inception, the center has worked with more than 575 firms and helped more than 14,300 Ohio employees become owners. Funded through the Ohio Department of Development and the Ohio Department of Job and Family Services, along with grants from private foundations and donations, the center offers its initial services at no cost to its clients.

According to the American Institute of Certified Public Accountants, failure to plan for ownership succession is the greatest threat to businesses with sales less than $3 million and the second greatest threat to closely held, larger businesses. Yet while 80 percent of small businesses are family owned, only 21 percent have a written plan for succession. Should something happen to the owner, these companies may face serious financial and management crises. In an effort to avoid the instability these unexpected crises often cause and to help business owners explore all of the options available to them, Kent State’s Ohio Employee Ownership Center has been tasked by the Ohio Department of Job and Family Services to expand its succession planning training throughout the state. This spring, the center is teaming up with the Greater Cleveland Partnership’s Council on Smaller Enterprises, Jackson-Belden Chamber of Commerce and Jefferson County Chamber of Commerce to present seminars on business succession planning for small businesses in the Cleveland, Canton and Steubenville areas. In addition, the center is piloting two other programs of interest: a series of succession planning webinars for business owners and a two-day training course for economic development professionals on guiding companies as they plan transition to the next generation. More information is available on the center’s Web site.

All together, the center helps people on both sides of the table: owners looking to sell the business to their employees and employees looking to buy a business.

“Before a group of employees tries to buy out a business, there are many things to consider,” Clem says. “They must look at the market the business is a part of and learn how it is doing. Also, is the company profitable in its current state?

“We provide advice and education so that when employees sit down with their lawyers and other professionals, they are prepared and have an idea of what to expect.”

On April 18, the center will hold its 22nd Annual Ohio Employee Ownership Conference, “Employee Ownership: Job Retention in a Global Economy,” in Fairlawn, Ohio. Widely regarded as the best one-day conference on employee ownership in the country, its topics will include employee stock ownership plans, best practices, increasing profits, employee buyouts and more.

For more information about the Ohio Employee Ownership Center and its conference, visit the center’s Web site.

By Olivia Mihalic

Return to Issue of April 7, 2008