Graduating NETI Fellows talk about their plans to strengthen regional businesses

Nov 18, 2024

 November 12, 2024 — The NETI Fellowship, a 9-month program that brought together a diverse group of business experts from across the region to expand their knowledge about exit planning and employee ownership, came to a close this month and we are celebrating our graduates by highlighting their plans to strengthen their local business communities.

The fellowship, which kicked off in February, moved fellows through a curriculum and projects that helped each participant develop a strategic, region-specific model to support businesses and business owners in navigating the exit planning process and the employee ownership option.

Many of our graduates noted different community needs that led them to join the fellowship including the wave of baby boomer business owners who are seeking to retire in the next few years and don’t know their options, avoiding unnecessary small business closures, closing wealth gaps, and increasing the profitability and growth of local businesses.

We asked each of our graduating fellows — who come from diverse backgrounds including lenders, small business development centers, economic development groups, and incubators — the same five questions to understand the unique needs of their communities and the learnings they plan to bring back and implement.

Q1: What kind of issues does your community face that you believe employee ownership can help to solve?

Christopher Hunter
Director of Advisory Services at Local Enterprise Assistance Fund (LEAF)
Chris Hunter: The community that we serve is composed of underserved business owners who face challenges maintaining stable profitability due to their scale, industry, or other challenges. These challenges make these businesses more susceptible to collapse which has a multiplier effect on the community with between 3 and 7 households connected to the business’ success. Improved coordination of the business stakeholders to engage in solving business problems is an essential ingredient to mitigating that risk and is incentivized through employee ownership.
Martha Bentley
Cofounder of Proprietor LLC
Martha Bentley: The “silver Tsunami” has been cresting in Maine for a while, but it is really at a critical point. Many of Maine’s successful small businesses are being bought by private equity investors or other larger businesses from outside the community. Employee ownership allows for the ownership to stay local and for the economic spillovers to stay local. In addition, when employee recruitment and retention is challenging, employee ownership is a good way to keep employees invested in staying and succeeding.
Benjamin Lamb
VP of Economic Development at 1Berkshire
Benjamin Lamb: I see employee ownership as being one of the portfolio of options we can educate and refer businesses into as a means to preserve the character of our diverse business community, to create new conduits for underserved populations to build equity and ownership, and for us to curb the loss of businesses. As a community, we have a high number of businesses with owners who will be seeking retirement in the coming years, and we know that a significant number have not even considered employee ownership because it has just not been widely promoted as an opportunity.

Q2: What did you learn about employee ownership and exit planning that you didn’t know before you participated in the NETI Fellowship Program?

Keyur Patel
Portfolio Manager at Boston Impact Initiative
Keyur Patel: Any exit planning, and especially employee ownership, takes many years of advance prep work and it is never too early to start the conversation. Thoughtful exit planning is like a management training program where we can achieve something that benefits everyone involved.
Sara Powell
Program Director at Hannah Grimes Center for Entrepreneurship
Sara Powell: I discovered that employee ownership is a viable path for a broader range of businesses than I had previously realized, and that there are robust resources available to support each business individually through the transition. I also gained a deeper understanding of the timelines and resources needed for comprehensive transition planning, including the specific mechanics of an employee ownership transition.
William Fitzgerald
Lead Program Coordinator at Initiative for a Competitive Inner City (ICIC)
William Fitzgerald: Delineating employee ownership from ESOPs was new to me. Understanding when employee ownership is a pragmatic option. Overall, I learned a lot about the logistic and emotional nuance of exit planning. There are challenges at every stage, and we covered a lot of solutions to those challenges.

Q3: What do you see yourself and/or your organization doing in the next five years with the information and tools that you gained through the fellowship?

Elsabel Rincon
Business Development Lending Officer at Mill Cities Community Investments
Elsabel Rincon: I see an opportunity to increase awareness and knowledge around employee ownership and exit/succession planning generally. It’s a topic we can more deliberately include in our educational programming and workshops. Additionally, we can strengthen partnerships to improve access to capital to support EO conversions.
Gwen Hart
VP Policy & Director at the Center for Women & Enterprise
Gwen Hart: I’d like to pursue more conversations in the transition planning sphere that would aid very small businesses (5 and fewer employees) in considering transitioning to a worker empowerment, collective model. I’d also like to create more readymade exit planning resources directed to the interests and values of women-owned businesses in the 5 or fewer employees cohort.
Benjamin Lamb
VP of Economic Development at 1Berkshire
Benjamin Lamb: In the next 6 months we will be putting together a comprehensive transition and succession plan that will incorporate a breadth of approaches, including employee ownership, as a platform through which we can help owners navigate their options, prepare themselves, and successfully transition their business to the next generation when the time is right.

Q4: What is the outcome that you are aiming to achieve to address needs in your community?

Nicole Obi
President and CEO of the Black Economic Council of Massachusetts
Nicole Obi: Too many of our members’ firms are vulnerable and poorly suited for growth if they don’t adopt a different strategic approach. Employee ownership could be an effective means for addressing these issues and drive growth and profitability.
Robert Griffin
Regional Director at Onondaga Regional Small Business Development Center
Robert Griffin: Increasing the number of transitioning business owners served by the SBDC to 200 businesses over the next 3 years.
Christopher Hunter
Director of Advisory Services at Local Enterprise Assistance Fund (LEAF)
Chris Hunter: We’d like to see improved participatory management (enabled by improved managerial financial reporting infrastructure) among both employee owned and non-employee owned firms. Ownership is not just participation in profits (to the extent they exist) but participation in guiding the business toward consistent success and continuous improvement.

Q5: If you could promote one call to action to move stakeholders including policymakers, your peers, governments, (and any others), what action would you want these stakeholders to take?

Robert Griffin
Regional Director at Onondaga Regional Small Business Development Center
Robert Griffin: Investment in the SBDC will help position us to take advantage of federal funds to continue to offer and expand services to more existing entrepreneurs in the state of New York and make us more competitive with states such as Florida and Michigan who are investing immensely in their small business ecosystems.
Nicole Obi
President and CEO of the Black Economic Council of Massachusetts

Nicole Obi: We are highly reactive and therefore poorly suited to support adoption and execution of these strategies. We need better data on who is considering leaving their businesses over the next 5-15 years and all of the pertinent details related to their firm. Then we need more of a public private partnership to define a path forward on the development and support of industry & sectors, by region and municipality. What resources (e.g. forgiveable loans, low interest loans) and policies (e.g. tax credits, zoning, etc) are needed to support those paths. And we have to ensure that all of this is through the lens of equity, especially given the growth of “minority” businesses and the exit of white business owners.

Keyur Patel
Portfolio Manager at Boston Impact Initiative
Keyur Patel: I hope that we can begin collaborating at a national level to advance these tenants that will help us bridge the growing wealth gap that we are witnessing around the country. We need to be focused on making sure that living wage jobs and affordable housing are available to all.