RETAIN BUSINESSESin the small towns of Whatcom County, WA
As business owners retire, we help keep these businesses
thriving in our communities
Small towns of Whatcom County, WA
Employee ownership as a strategy for business retention
The small towns and unincorporated areas of Whatcom County have a combined population of 124,500, not including the county seat of Bellingham. The county is located on the border of Canada in the uppermost western corner of Washington State.
Whatcom County seeks to curb the effects of the Silver Tsunami
Small, locally owned businesses are essential to Whatcom County’s local economy and the vitality of its rural regions. Among the challenges throughout the county is keeping small businesses and the jobs they provide rooted in communities, as the Silver Tsunami – the retirement of baby boomer business owners – impacts the rural areas of the county.
The silent risk of the Silver Tsunami
Baby boomers (those born between 1946-1964) own nearly half of all businesses with employees in Whatcom County. Cities and regions need to understand the risk of the so-called Silver Tsunami as these business owners retire. The risk is that these legacy businesses won’t be retained locally — either because they quietly close down, are sold to out of area buyers, or simply don’t have a succession plan as the owner marches into retirement.
Whatcom County’s proactive approach
Whatcom County is taking a very proactive look at this issue and is supporting local and employee ownership succession. Through the Whatcom Community Foundation, they have partnered with Project Equity to shine a light on the need for smart succession planning and to develop an effective strategy to engage with their legacy businesses.
Project Equity performed an analysis for the entire county to quantify the number of privately-held companies with employees that are 20 years or older — a good indication that they need succession planning — and the impact if these businesses are not retained.
- Represent over 730 of the businesses in rural Whatcom County
- Employ an estimated 10,000 individuals
- Generate about $2B in revenue
Local ownership over the long-term
Keeping companies locally owned over the long term is a critical economic development strategy. Only 15 percent of businesses get passed onto the next generation because the kids aren’t interested in taking over their parent’s business. According to BizBuySell, the largest online marketplace for businesses, only 20 percent of businesses listed for sale ever sell. We clearly need more strategies for local business succession to avoid businesses inadvertently closing their doors due to lack of planning. The good news is employee ownership is viable for many companies, and it provides similar benefits to family ownership.
Employee ownership may be unfamiliar to many, but it keeps companies rooted in place, provides quality jobs and strengthens businesses for the long-term. It also offers a ready solution to the retiring business owner: there’s a buyer right there under your nose — the very employees who helped you build the company.
Local ownership is important to our region’s future. Let’s make sure the Silver Tsunami doesn’t put us at risk.
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SBDC hosts meetings about employee ownership succession