Why I sold my business to my staff
Staff at Softstar Shoes in Oregon have discovered a newfound enthusiasm for eking out resources and growing profits.
It started in January when the shoemaker became owned by its 30-strong workforce.
Former sole owner and chief executive Tricia Salcido had decided to sell the business to the employees, because at age 56 she is starting to plan for her future retirement.
Salcido, who for next few years is staying on as chief financial officer, says that colleagues are now offering lots of suggestions for how to best run aspects of the business.
"I'm getting personal emails from employees saying, 'well, have you thought about this idea?'," she says. These are business insights that weren't forthcoming before!"
Salcido is among a small but growing number of business owners in the US said to be choosing to entrust their ventures to employees, rather than sell to an outside buyer.
One 2025 study said that up to 600 US firms, external are now being sold to their workers per year, with investment funds available to help finance the deals rising 78% to $865m last year from $500m in 2024, an indication of more businesses making the transfer.
As well as motivating staff – who share in the risks and rewards of ownership – research shows that employee-owned companies can be more productive,, external less likely to make staff redundant, and that they pay higher wages.
For Salcido, it was a way to preserve local jobs and prevent her firm's artisan shoemaking from being taken out of the US – which she was convinced would happen under a cost-cutting corporate buyer.
"It's something you put your life's work into… most small business owners really care," she says.
A huge number of other US entrepreneurs are in the same boat as Salcido – they are approaching retirement age, and therefore having to decide what to do with their businesses.
The "baby boomer" owners of about six million American small and medium-sized companies will retire between now and 2035, says a report this year, external from business consulting firm McKinsey. Some commentators have dubbed this a "silver tsunami".
McKinsey adds that this mass retirement will result in "a once-in-a-generation wave of ownership transitions".
Ethan Rouen, associate professor at Harvard Business School, says: "I don't think a week goes by where I don't talk to an owner who is looking to sell their business." Their grown-up children often aren't interested in taking on the family venture, he adds.
Rouen and his Harvard colleagues believe a switch to employee ownership could help many firms survive, and that such a move often appeals to owners who care deeply about their employees, and worry about what would happen following a sale to a larger company or private equity firm.
That was the case for William Stockwell, who wanted to protect the future of Stockwell Elastomerics, the Philadelphia-based manufacturer of industrial components that his great-grandfather started in 1919.
Stockwell made the decision to sell to his employees after seeing what happened to other firms that had been bought out. "The new [outside] ownership might move the business, they might shut it down, or drastically change it in other ways, and the people remaining are stuck," he says.
There are a number of different schemes available in the US by which a workforce can buy their company. At Softstar Shoes they used an Employee Ownership Trust (EOT).
Under an EOT a trust is set up, which takes ownership of the business on behalf of the staff, removing the need for them to buy the business out of their own pockets.
The trust then pays the former owner the agreed sale price of the business in instalments as a share of future profits.
This means that Salcido has committed herself to a waiting game before she gets her money, with an element of risk on top – she needs the business to continue to be successful.
"I carry the risk, in that if anything happens, I don't get paid," she says. But she has faith in her team to deliver. They also get a share of annual profits.
Stockwell, who now works part-time for Stockwell Elastomerics, opted for a slightly different method of transferring ownership to the staff – an Employee Stock Ownership Plan or ESOP.
This also sees the business placed under trust ownership, but instead of staff sharing the annual profits, they get shares which they can only cash in when they leave the company.
Meanwhile, the retiring owner also must wait for his or her money. "I'm accepting payments over 10 years," says Stockwell, who acknowledges he is making a "short-term financial sacrifice".
ESOPs are the most common method by which firms are handed over to their workers in the US. In 2023, the most recent year for which data is available, there were 6,609 companies under such ownership structure. These employed 10.9 million people, and held combined assets of more than $2tn (£1.5tn).
A third method of staff taking ownership is through the creation of a worker co-operative, whereby workers purchase a share of the business.
Harvard's Rouen says employee ownership doesn't just appeal to older founders looking to preserve what they have built over many years. Younger workers, "disillusioned" by traditional, unequal corporate structures, are also attracted to the model.
"The only way to truly create wealth in this country is through ownership of capital. And this is a way to democratise that," he says.
However, EOT and ESOP schemes are undoubtedly more complex to set up than a simple, traditional sale of the business, which may put off some owners. As does the longer wait for their money, and the increased risk.
Adoption is also hampered by a lack of awareness that the schemes even exist. "No one's heard of them," says Salcido at Softstar Shoes.
In central Pennsylvania, Paul Silvis is in the process of selling his manufacturing business SilkoTek Corporation to his employees. He says he is confident that he has made the right decision.
"I'm getting ready to ride off into the sunset at some point," says the 71-year-old.
Stockwell cautions that retiring business owners who want their staff to take over ownership need to start planning early for a process that could take years. "It's not something you want to begin the year you want to retire," he says.
Rouen says that, thankfully, there is now political will in Washington to simplify the process of employee ownership, as the US government has started to encourage it. The Department of Labour has a new Employee Ownership Initiative, , externalwhich aims to both promote the practice and offer advice.
He adds that there is also bipartisan support in Congress "to figure out ways to make [selling up to staff] an easier and more realistic option for business owners." As a result, "my hunch is that we will see more successful employee ownership conversions in the next few years."
Read the full story at BBC ↗
Softstar Shoes, an Oregon shoemaker, transferred ownership to its 30 employees in January 2025. Founder Tricia Salcido, 56, chose this path as she plans retirement, using an Employee Ownership Trust structure where the company pays her in instalments from future profits. Employees now actively contribute business ideas and share in profits. This reflects a growing trend: approximately 600 US companies annually transfer to worker ownership, with investment financing rising 78% year-on-year to $865m. Research indicates employee-owned firms tend to be more productive, retain staff better, and pay higher wages. The model appeals particularly to retiring business owners who fear external buyers would relocate or dismantle their ventures, and to younger workers seeking alternative ownership structures. However, adoption remains limited by setup complexity, longer owner payment timelines, and limited awareness. The US government has launched an Employee Ownership Initiative to promote and simplify the process, with bipartisan congressional support emerging.
Read the full story at BBC ↗
Staff at Softstar Shoes in Oregon have discovered a newfound enthusiasm for eking out resources and growing profits.
It started in January when the shoemaker became owned by its 30-strong workforce.
Former sole owner and chief executive Tricia Salcido had decided to sell the business to the employees, because at age 56 she is starting to plan for her future retirement.
Salcido, who for next few years is staying on as chief financial officer, says that colleagues are now offering lots of suggestions for how to best run aspects of the business.
"I'm getting personal emails from employees saying, 'well, have you thought about this idea?'," she says. These are business insights that weren't forthcoming before!"
Salcido is among a small but growing number of business owners in the US said to be choosing to entrust their ventures to employees, rather than sell to an outside buyer.
One 2025 study said that up to 600 US firms, external are now being sold to their workers per year, with investment funds available to help finance the deals rising 78% to $865m last year from $500m in 2024, an indication of more businesses making the transfer.
As well as motivating staff – who share in the risks and rewards of ownership – research shows that employee-owned companies can be more productive,, external less likely to make staff redundant, and that they pay higher wages.
For Salcido, it was a way to preserve local jobs and prevent her firm's artisan shoemaking from being taken out of the US – which she was convinced would happen under a cost-cutting corporate buyer.
"It's something you put your life's work into… most small business owners really care," she says.
A huge number of other US entrepreneurs are in the same boat as Salcido – they are approaching retirement age, and therefore having to decide what to do with their businesses.
The "baby boomer" owners of about six million American small and medium-sized companies will retire between now and 2035, says a report this year, external from business consulting firm McKinsey. Some commentators have dubbed this a "silver tsunami".
McKinsey adds that this mass retirement will result in "a once-in-a-generation wave of ownership transitions".
Ethan Rouen, associate professor at Harvard Business School, says: "I don't think a week goes by where I don't talk to an owner who is looking to sell their business." Their grown-up children often aren't interested in taking on the family venture, he adds.
Rouen and his Harvard colleagues believe a switch to employee ownership could help many firms survive, and that such a move often appeals to owners who care deeply about their employees, and worry about what would happen following a sale to a larger company or private equity firm.
That was the case for William Stockwell, who wanted to protect the future of Stockwell Elastomerics, the Philadelphia-based manufacturer of industrial components that his great-grandfather started in 1919.
Stockwell made the decision to sell to his employees after seeing what happened to other firms that had been bought out. "The new [outside] ownership might move the business, they might shut it down, or drastically change it in other ways, and the people remaining are stuck," he says.
There are a number of different schemes available in the US by which a workforce can buy their company. At Softstar Shoes they used an Employee Ownership Trust (EOT).
Under an EOT a trust is set up, which takes ownership of the business on behalf of the staff, removing the need for them to buy the business out of their own pockets.
The trust then pays the former owner the agreed sale price of the business in instalments as a share of future profits.
This means that Salcido has committed herself to a waiting game before she gets her money, with an element of risk on top – she needs the business to continue to be successful.
"I carry the risk, in that if anything happens, I don't get paid," she says. But she has faith in her team to deliver. They also get a share of annual profits.
Stockwell, who now works part-time for Stockwell Elastomerics, opted for a slightly different method of transferring ownership to the staff – an Employee Stock Ownership Plan or ESOP.
This also sees the business placed under trust ownership, but instead of staff sharing the annual profits, they get shares which they can only cash in when they leave the company.
Meanwhile, the retiring owner also must wait for his or her money. "I'm accepting payments over 10 years," says Stockwell, who acknowledges he is making a "short-term financial sacrifice".
ESOPs are the most common method by which firms are handed over to their workers in the US. In 2023, the most recent year for which data is available, there were 6,609 companies under such ownership structure. These employed 10.9 million people, and held combined assets of more than $2tn (£1.5tn).
A third method of staff taking ownership is through the creation of a worker co-operative, whereby workers purchase a share of the business.
Harvard's Rouen says employee ownership doesn't just appeal to older founders looking to preserve what they have built over many years. Younger workers, "disillusioned" by traditional, unequal corporate structures, are also attracted to the model.
"The only way to truly create wealth in this country is through ownership of capital. And this is a way to democratise that," he says.
However, EOT and ESOP schemes are undoubtedly more complex to set up than a simple, traditional sale of the business, which may put off some owners. As does the longer wait for their money, and the increased risk.
Adoption is also hampered by a lack of awareness that the schemes even exist. "No one's heard of them," says Salcido at Softstar Shoes.
In central Pennsylvania, Paul Silvis is in the process of selling his manufacturing business SilkoTek Corporation to his employees. He says he is confident that he has made the right decision.
"I'm getting ready to ride off into the sunset at some point," says the 71-year-old.
Stockwell cautions that retiring business owners who want their staff to take over ownership need to start planning early for a process that could take years. "It's not something you want to begin the year you want to retire," he says.
Rouen says that, thankfully, there is now political will in Washington to simplify the process of employee ownership, as the US government has started to encourage it. The Department of Labour has a new Employee Ownership Initiative, , externalwhich aims to both promote the practice and offer advice.
He adds that there is also bipartisan support in Congress "to figure out ways to make [selling up to staff] an easier and more realistic option for business owners." As a result, "my hunch is that we will see more successful employee ownership conversions in the next few years."
Read the full story at BBC ↗
Softstar Shoes transferred ownership to its 30-person workforce in January 2025 using an Employee Ownership Trust. Founder Tricia Salcido, aged 56, chose this structure to plan her retirement. Under the EOT model, a trust owns the business and pays the former owner in instalments from future profits, transferring risk to the seller. Salcido reports employees now proactively offer business suggestions they previously did not. Approximately 600 US companies transfer to worker ownership annually. Investment financing for employee-ownership transfers increased 78% to $865m in 2024, from $500m in 2023. Employee-owned companies demonstrate higher productivity, lower redundancy rates, and higher wages than comparable firms. Six million US small-business owners will retire between 2025 and 2035. ESOPs are the most common employee-ownership structure, with 6,609 US companies operating under this model in 2023, employing 10.9 million people with combined assets exceeding $2tn. Retiring owners fear external corporate buyers would relocate or dismantle their businesses. Younger workers are 'disillusioned' by traditional corporate structures and attracted to ownership models. Employee ownership represents a way to 'democratise' capital ownership. Adoption is hampered by complexity, lack of awareness, and longer payment timelines for sellers. The US Department of Labour has launched an Employee Ownership Initiative to promote and simplify the process. Bipartisan congressional support exists for simplifying employee-ownership conversions.
Read the full story at BBC ↗
- Softstar Shoes in Oregon became employee-owned in January 2025 when founder Tricia Salcido sold to her 30-person workforce using an Employee Ownership Trust.
- Up to 600 US firms transfer to worker ownership annually; investment funding for such deals rose 78% to $865m in 2024.
- Employee-owned companies show higher productivity, lower redundancy rates, and higher wages; the model appeals to retiring owners wanting to preserve jobs and younger workers seeking wealth democratisation.
- Six million US small-business owners approach retirement by 2035; employee ownership offers an alternative to external buyers or private equity.
- Complexity, lack of awareness, and longer payment timelines limit adoption; US government now supports simplification through the Department of Labour's Employee Ownership Initiative.