201 GREAT IDEAS for Your SMALL BUSINESS, Third Edition

GREAT 46 IDEA: Establish an Employee Stock Ownership Plan (ESOP)

When a small business owner wants to cash out or pull some equity out of his or her business for retirement, one of the best options for employers and employees is to set up an employee stock ownership plan, or ESOP.

ESOPs allow business owners to sell company shares to employees at a fair price. ESOPs also provide significant tax benefits for owners while providing retirement benefits for workers. Workers who own shares usually feel more loyal and driven to perform, so productivity increases and, as a result, their stock increases in value.

“Ninety-one percent of ESOP companies declared that creating employee ownership through an ESOP was a good decision that has helped the company,” ...