Article written by:
Brian Bornino, CPA/ABV, CFA, CBA
Director of Valuation Services
If you read The Columbus Dispatch on Sunday, April 28, 2019, you learned that Matt Wienke, CEO and founder of Dublin-based consulting firm Infoverity, asked GBQ Consulting to help him transition ownership of his company to an employee stock ownership plan (“ESOP”). To learn about details of the transaction, which was successfully completed on December 31, 2018, click here.
But what are the key traits that distinguish Mr. Wienke, and other business owners who ultimately decide to pursue employee ownership through an ESOP, from those who do not? Based on our experience through 100+ ESOP-related projects annually, we find the following to be the most common traits of a business owner who will embrace the idea of an ESOP:
- Company-First Attitude
- Desire to Maintain Legacy as an Independent Company
- Desire to Reward, Attract, and Retain Employees
- Desire to Grow the Business
- Willingness to Accept Fair Market Value
Most business owners are proud of the business they built. They care about their company’s legacy and its ability to continue after they retire. They care about the employees who have helped the employees that built the company. In many cases, a business is truly an entrepreneur’s “baby.” However surprisingly, and unfortunately, many business owners never explore the wonderful advantages of transitioning their business to their employees through an ESOP.
Thankfully, Mr. Wienke, and others like him, are the exception. He was willing to take action to make this vision come true. He was willing to research and explore ESOPs, engage GBQ to conduct a formal ESOP Feasibility Study, and ultimately, authorize us to help his company transition to an employee-owned company. Now as a 100% ESOP-owned company, Infoverity is in a perfect position to attract and retain top talent, grow their business and take advantage of being a 100% income-tax-free entity.
If you are considering an ESOP or would like to learn more about the business and financial advantages of employee-ownership through ESOPs, please contact us. In addition to ESOP Feasibility Studies, we often offer free education about ESOPs including our upcoming seminar on May 14, 2019, Assessing the Feasibility of an ESOP. For additional event details and registration, click here.
