Project Equity Data Uncovers Opportunities to Sustain Berkeley's Small Businesses
Keeping small businesses thriving through employee ownership becomes a priority of
the Office of Economic Development
By: Project Equity
BERKELEY, Calif. - March 12, 2019 - PRLog -- Project Equity, a Bay Area nonprofit advancing economic resiliency in communities across the country, announced today the release of the Small Business Retention Data analysis commissioned by the City of Berkeley's Office of Economic Development. The data highlights $1.6 billion in annual revenue generated by 1,200 Berkeley small businesses, and an estimated 13,000 employees all at risk when aging businesses owners decide to retire and choose to close their businesses altogether or sell to an out-of-area buyer. The data also provides excellent insight into the possibilities of jobs and businesses that could be retained in the city of Berkeley through the transition to employee ownership, which encourages long-term business success.
There is no doubt that masses of retiring small business owners who are baby boomers—a phenomenon dubbed the Silver Tsunami—will have an adverse effect on local economies nationally. In Berkeley, where numerous small businesses of varying industries have thrived for decades, the local community could be severely impacted.
"Small, locally-owned businesses are essential to Berkeley's local economy and community vitality," said Jordan Klein, the City of Berkeley's Economic Development Manager. "Presently, Berkeley's small businesses face many challenges that, increasingly, are threatening their viability. Among the challenges the city faces are keeping small businesses and the jobs they provide rooted in the community."
One strategy the city is implementing to mitigate displacement and ensure local ownership into the future is providing small businesses access to services that help them convert to employee ownership. Project Equity was contracted by the City in late 2018 to analyze data to determine how to support and boost the city's small business economy, then to engage directly with local businesses around succession planning and employee ownership.
The key findings of the study indicate that 20 percent of Berkeley's small businesses are 20 or more years old, posing a high retention risk. Additionally, there are 13,000 individuals, 30 percent of Berkeley employees who depend on these businesses for their livelihood. Retaining these businesses not only prevents the current loss of those jobs, but it also keeps future employment opportunities in the city of Berkeley.
Businesses 20 or more years old accounted for approximately 60% of the annual revenue earned by businesses in Berkeley, further highlighting the need for strategies to retain these long-standing companies.
Berkeley is already home to a thriving employee-owned business community, including the locally revered Cheese Board Collective, and less well-known businesses like Charcoal Companion and Mal Warwick and Associates. Plus, Adams & Chittenden Scientific Glass1 is currently working with Project Equity to become employee-owned as a succession plan for its baby boomer owners.
"This information could not be more compelling in terms of the significance of Berkeley's small businesses which are the foundation for our local economy," added Klein. "Through our partnership with Project Equity, the Office of Economic Development can now offer services to help educate small business owners who are considering retiring about their options for keeping their legacy alive, and for keeping their employees employed for the long term."
Project Equity will be reaching out to small businesses identified as at risk and offering consultations to learn more about the businesses' succession planning needs. It will also be offering a webinar and an in-person event for interested businesses later in the spring.
-------- About Project Equity: Project Equity is an Oakland-based nonprofit that is a national leader in supporting businesses to transition to employee ownership, and has partnered with communities as diverse as Lancaster, Pennsylvania, Detroit, Michigan, rural Western North Carolina and the Twin Cities in Minnesota. Visit www.project-
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