West Rachell with Keystone Bike Co., a cooperative, belonging to a cooperative at South Kensington, said that this is a arduous time for bicycle stores.
Rachell, who owns the employee, assigns a unique ownership structure as one of the company’s greatest robust suits.
“Many bicycle stores have been closing for the last few years,” he said. “My personal feeling is that this kind of structure has helped us to move around the challenges of 2020, and even the turbulent market we are now.”
Keystone Bike Co. It began in 2020. Woody Felice, another employee owner, explained that five founding owners are still operating employees of the store.
“We practice democratic decision making, like most cooperatives, and operate with an operational agreement,” she said. “We agree that we all have control and we speak in the industry.”
Many types of employees belonging to employees
Keystone bike is not alone. There are over 300 employees belonging to employees in Pennsylvania. For example, the Philadelphia Wawa icon is partly belonging to its employees. Similarly with Wawa’s rival, Voodoo Brewing Co., Hoss’s Family Steak & Sea House and several main engineering companies, defense contractors and other companies.
Kevin McPhillips, general director of the PACE-Profit organization, which is educated in employees’ own companies.
The model used by Keystone Bike Co. is a employee cooperative, in which the company is equally owned by employees.
“It works democratically, which means that if decisions regarding the company should be made, they are made as a group,” said McPhillips. “This does not mean that you vote every day whether to decide or open the door in the morning, but if there is something that affects business, financially or organizationally, everyone would think about it.”
Felice explained that the structure was helpful for this particular industry. She said that bicycle mechanics can sometimes experience struggle in established bicycle stores.
“It is difficult to earn a living as a bicycle mechanic,” she said. “Sometimes the owners of bicycle stores do not work full -time. So they are only someone who gets a payment and pay their employees. So we felt that if we were all owners and participated in business, it was more likely that we would be able to do it balanced in the long run, both for the store in which we work and for our own maintenance.”
Employee cooperatives are not the only model of activity that employees belonging to employees can operate.
Which companies create good ESOP?
McPhillips said that another popular option of the company belonging to employees is the ownership plan of employees (or ESOP).
“The company owner could sell some or all of his company to his employees,” he said. “Employees do not pay anything. Instead, the company takes a loan from the bank to pay the owner, the federal government and the state of Pennsylvania, and they say:” If you do it, you never have to pay taxes on any part of the company owned by employees. ” Tax savings pay the bank, and after a few years the company has all this additional cash. ”
One newer form of employees belonging to employees, which is already well established in other countries, is trust in employees or EOT. Thanks to this, McPhillips said that the current owner of the company decides to sell the company to employees, instead of selling it to third parties when the owner passes from the company.
“This is a way to make sure that especially” street companies “, don’t get on board,” said McPhillips. “They remain in the community.”
McPhillips said that implementing any of these frames – increased employee efficiency, safer retirement savings and maintenance of companies in this state. There are also some disadvantages.
He said that the ownership of employees does not benefit companies that want to buy companies and quickly turn around to sell them, or companies that are interested in maintaining a company for themselves.
“Most companies are bought by Venture Capital or strategic buyers, competitors,” he said. “There is nothing in possession of employees that brings one of these groups.”
In addition, there may be other problems – such as divorceing many participants, costs and logistics in creating these companies as well as a lack of understanding and participation of employees.
While McPhillips said that the structure did not work for everyone, he explained that it could be very effective for those who invest in the structure.
“Companies belonging to employees are on average 8% to 12% more productive,” he said. “Wages in people from 24 to 36 are 33% higher and nobody knows about it. That is why we exist today to teach people about it.”
McPhillips said that employees belonging to employees also have higher employee retention, increased tax benefits and increased profits.
Unique benefits
For Felice, having a structure belonging to an employee in Keystone Bike Co. It seems to be the right path of success.
“[Positive interactions] They are particularly easier to focus when everyone is invested in business, “she said.” For us it is important for people to have a good experience here and are happy, and that we are happy, and the people who come are happy if we can do it. ”
She said that the store structure not only helps employees, but also positively affects the surrounding community.
“I think that part of the cooperative belonging to the employee is that connections with the community are saved in our operational agreement,” she said. “The community is the highest priority, which is why we tried early priority.”
Ashleigh Newlin cooperates with Chartwell, a financial advisory company from Philly, whose goal is employees belonging to employees.
From her experience, she said, those who run companies belonging to employees want, among others, to build a robust culture of the company through retirement richness.
“All different types of companies have ESOP, small and large companies, but the only common feature is that they want to build retirement wealth for their employees, not just leaders, but everyone in the company,” she said.
Food rivals Wawa and Sheetz, which both have roots in Pennsylvania, are companies belonging to employees. Newlin explained that this means that all full -time employees are partial owners of the company and participate in the industry.
“Companies belonging to employees are more successful and are more resistant in difficult economic environments, such as in Covid, much less dismissals were needed in employees belonging to employees,” she said. “It really helps in culture and simply helps employees want to work hard because they know that they will actually bring them benefits in retirement.”
Recent research From the National Center for Employee, ownership shows that some Esop, the most popular type of employee activity, has a resignation rate, which is almost one third of the national average and that these companies have more than twice as many more retirement savings of their non-esop.
Despite this, there are some benefits that can make employees more attractive to some companies. In the above data, the measured ESOP was “corporations”, which means that they have a specific tax structure, which is more beneficial for diminutive companies and protects owners against liability. This structure would not be the same for larger companies.
Newlin said that there are ways to make employees ownership for companies of various shapes and sizes.
“There is great flexibility in this,” she said. “It can work for many different companies and I think that people on the right and on the left can support it and start. It is really a way for capitalism to work for everyone.”
Esop Forecers
There are also many companies related to employees in the USA in Pennsylvania, there are several, including Redner markets, Hoss’s Family Steak & Seafood House and Marketplace Kennie’s.
AND 2022 study By NCEO, he compared ESOP companies related to food from outside ESOP and found that there were fewer dismissals in ESOP companies, fewer employees and better benefits offered.
They are there Over 300 ESOP companies In Pennsylvania itself, as well as companies with other types of employee ownership models.
For Rachell and Felice, they are excited that they can continue to operate the model of employees belonging to employees to create a positive experience for other people coming to their adventure -oriented bicycle store.
“When someone enters the store, people often comment and say:” Wow, I did not expect it to be a positive experience, “said Rachell. “Over the past five years, something that has really helped us grow not only in our customer base, but in our presence in Philadelphi and this bicycle scene, is nice.
“It sounds like” hey again, it should be every business. ” But most people had negative experiences when entering a bicycle store.
