Employee-Owned Business (ESOP or Co-op)

Employee-owned businesses transfer ownership to workers through ESOPs (Employee Stock Ownership Plans) or worker cooperatives, sharing profits, governance, and wealth-building with employees while often improving productivity and retention.

With 6,500+ ESOP companies and 400+ worker cooperatives in U.S., employee-owned firms generate revenue of $450,000-$2,000,000+ depending on industry and scale.

The business requires ESOP or cooperative structure, ownership transition financing, democratic governance systems, employee education and engagement, and professional advisory support.

Industries include manufacturing, professional services, construction, retail, or food businesses with stable cash flow.

Revenue comes from ongoing business operations with profit-sharing distributed to employee-owners.

Success factors include viable business with positive cash flow for ownership transition, ESOP financing or cooperative capitalization, employee education about ownership and governance, democratic decision-making practices, and measuring employee ownership impact on productivity and retention.

Most successful conversions involve retiring owners selling to employees or entrepreneurs launching worker cooperatives from start.

The business builds worker wealth while improving productivity and retention.

Many ESOPs maintain similar management while sharing financial ownership; cooperatives implement democratic governance.

Tax advantages incentivize ESOP conversions.

With wealth inequality and worker power concerns growing in 2025, employee ownership offers equitable opportunities for business owners and entrepreneurs building companies sharing ownership, profits, and governance with workers creating broad-based wealth-building and stakeholder capitalism alternatives to extractive shareholder primacy.