Last winter while talking with a friend, the conversation turned to the lack of employment opportunities in central Maine. A parent with an advanced degree in physics, he poignantly remarked, “For many fields, you need to be an entrepreneur in central Maine to make competitive wages.”
Those of us who have returned home to Maine after leaving for education and experience know this truth. The changing demographics of our rural Maine communities is dramatic and well-documented. We have lost key industries and seen our communities grow older and less secure as our upwardly mobile youth chase opportunities in southern Maine and beyond.
Nearly a decade ago, I permanently returned to my hometown of Pittsfield. This had little to do with the economy and a lot to do with place — my family has lived in central Maine for nine generations, and the community-centered ethic of rural Maine was something that would clearly benefit my two stepsons.
I brought with me a small solar business, as well as an engineering degree and teaching certifications. If my company didn’t make it in central Maine, I was confident that I’d be able to find steady work. I have been very fortunate to be able to follow Plan A and build my company in my hometown.
While hard work and luck have played a role, the ability to attract the right people has been foundational in our success. We have been fortunate to find skilled, hardworking individuals who are committed to this company. These talented folks help me shoulder the responsibilities of running a business in a way I would never have been able to do on my own.
As any small-business owner can attest, the addition of these talented individuals increases one’s responsibility and stress. Our payroll now directly affects more than a dozen families in the area, and our success has become something of a bellwether for a town that has seen significant losses in job quality during the past decade. As our company grows, my level of risk increases. Increased risk in the business world is often seen as an opportunity for greater profits, but with two young sons, I would gladly trade profits for time to share the fleeting moments of their youth.
The solution that makes the most sense for us is converting to a worker cooperative. This business model more accurately aligns responsibility and reward and will allow us to grow in a manner that maintains the quality of our work and job quality for our staff. The formal involvement of our workers in corporate decision-making coupled with direct economic benefit provides an authentic mechanism for accountability and prosperity.
This decision also promotes a good quality of life for our workers. Our team is comprised of community-minded individuals committed to living in central Maine. When workers become owners, they have greater opportunity and job security without shouldering the risk and burden of running their own business.
In a region where attracting and retaining quality employees can be challenging, this business model softens the line between boss and employee in a manner that empowers all members of the company and promotes continuity. It allows us to build things together rather than depend on a few individuals to bear the burden of returning prosperity to rural Maine. As business owners near retirement, selling the company to their workers allows our communities to keep these companies and jobs alive.
Maine would be well-served by creating policies that encourage other business owners to consider employee ownership. We could create far greater benefit for our economy and communities by making investments in companies that help workers become owners.
LD 1338 is just such a policy. Incentivizing the sale of a business to its employees would provide thousands of workers in Maine a chance to gain greater economic security and the opportunity to build wealth through ownership.
For most business owners, the value of their business is the only retirement savings they have. Selling to employees can often provide the best chance for an efficient and cost-effective exit, while providing them the retirement income they need.
Some owners think they can try to sell their business, but only 20 percent of such listings ever sell. Some hope their children will take it over, but only 15 percent of privately-held companies are successfully passed on to a second generation. Unfortunately, liquidation and closure ends up being the default option far too often. For smaller and rural businesses, the likelihood of that outcome is higher.
LD 1338 would raise awareness of and incentivize the employee ownership option, and it would help save businesses and jobs on which our communities rely.
Vaughan Woodruff is the founder of Insource Renewables. He is currently converting his company to worker ownership. He lives with his family in Pittsfield.
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