Worker-owned Cooperatives Create Jobs in Rural America

(Submitted by Ivory Harlow, Program Assistant, Ohio Cooperative Development Center, OSU South Centers)

Job growth in rural America lags behind growth in urban areas, according to USDA publication Rural America at a Glance. Rural areas have difficulty attracting firms, especially businesses that provide living-wage jobs to residents. Limited infrastructure and workforce challenges are two reasons firms chose urban cities over rural towns (2016).

The worker-owned cooperative model empowers rural Americans to create viable jobs close to home. A worker cooperative is a business that is owned and operated by its employees. Member equity contribution, voting rights and the sharing of profits among members are three characteristics of cooperatives. In a worker-owned cooperative, workers typically make an initial capital investment in order to become a member of the co-op. Membership entitles each worker a vote in company decision-making. Members receive a share of the company’s profits, typically in proportion to the amount of labor he or she contributes to the business.

Worker-owned cooperatives can be viewed as grassroots business organizations because decisions are made from the bottom-up, rather than top-down. Members manage operations, policies, procedures and finances based on the co-op’s Articles of Incorporation, bylaws and operating agreement.

A publication from the Department of Economics at Iowa State University found members of worker-owned cooperatives receive better pay and benefits, greater job security and overall job satisfaction (2011).

Worker-ownership can provide a transition opportunity for business owners seeking to retire. This is especially important in rural America with a large aging population. Half of American business owners retiring within five years have no succession plan for their business (2014).

The value of worker-owned cooperative business extends beyond workers to the larger community. Keeping dollars close to home strengthens the local economy. Businesses that are governed by their workers are more likely to stay in business and provide economic stability to rural areas (2011). As a result, the quality of life in rural America improves over time.

Sources:

Artz, G. & Younjun, K. 2011. Business Ownership by Workers: Are Worker Cooperatives a Viable Option? (p.20- p.22). Iowa State University. Working Paper No. 11020.

Project Equity. 2014. Case Studies: Business Conversions to Worker Cooperatives. (p.7). Retrieved May 22, 2017 from http://www.project-equity.org/about-us/publications/case-studies-business-conversions-to-worker-cooperatives/

USDA Rural Development. 2016. Rural America at a Glance. Retrieved May 22, 2017 from https://www.ers.usda.gov/webdocs/publications/80894/eib-162.pdf?v=42684

Keeping the Good Ones

(Submitted by Melissa Carter, Business Development Specialist, Small Business Development Center, OSU South Centers)

Whether you have just hired new employees or you’ve had staff for 20 years, it’s important to retain quality employees. Some ways to help keep the ones include:

• Communication – While this may seem like a no-brainer, this is the most important factor in retaining good employees. Communicate on a regular basis your expectations, their successes and good work, barriers and challenges they face on completing the job, and how the day/project is going. Along with this is to LISTEN. Hear what your employees are saying and take their suggestions in consideration.

• Establish clear expectations and provide effective evaluations – Along with strong communication, setting up clear expectation of the job or a specific project allows the employee to complete the task without having to ask questions or assumptions. Evaluating on a regular basis allows the owner and the employee to address issues, reward great work and create a path for success.

• Create growth opportunities – While this is harder with a small business, show a clear path for good work. Whether that means a different title, pay raises or different responsibilities, creating opportunities for growth in the business allows for employees to work hard and be able to advance if possible.

• Have creative perks – Typically small businesses cannot afford the same benefits to employees as a larger corporation. But that doesn’t mean you can provide other incentives or opportunities for your employees to have a good work place. If you are a retail business, offer your employees a discount or a free piece of clothing every so often. Do you have an office where it’d be ok for your pets to hang out? Maybe there’s a pizza party when everyone meets their goals for the month.

• And lastly, recognize good work. A simple acknowledgement and appreciation of a job well done goes a long way. Whether it is just a thank you or a financial incentive, appreciate your employees.

Reasons Why “The Customer is Always Right” is Wrong

(Shared by Ryan Mapes, Manager, Endeavor Center and Program Leader, Business Development Network, OSU South Centers)

THE BLOG 04/15/2014 11:53 am ET | Updated Jun 15, 2014
By Alexander Kjerulf

The phrase “The customer is always right” was originally coined in 1909 by Harry Gordon Selfridge, the founder of Selfridge’s department store in London, and is typically used by businesses to convince customers that they will get good service at this company and convince employees to give customers good service.

However, I think businesses should abandon this phrase once and for all — ironically, because it leads to worse customer service.

Here are the top five reasons why “The Customer Is Always Right” is wrong.

1: It Makes Employees Unhappy
Read more…

Half of Millennials Plan to Start a Business in the Next 3 Years

(Shared by Brad Bapst, Director, Small Business Development Center, OSU South Centers)

Study Conducted by America’s SBDC Reveals Insights into the Entrepreneurial Mindsets of Different Generations of Americans

Washington, D.C. – America’s SBDC partnered with the Center for Generational Kinetics to better understand how different generations view and approach entrepreneurship. The findings reinforced previously held beliefs such as a strong entrepreneurial inclination among millennials, while challenging preconceived notions about their motivations for starting a business.

“We were excited to embark on this important study to better understand how Americans across different generations are drawn to entrepreneurship and could not be more excited about the survey’s results,” said Charles “Tee” Rowe, president of America’s SBDC. “It is clear that the entrepreneurial spirit is not only alive and well in America, but that people are eager to find help to build their dream business. We at America’s SBDCs could not be more ecstatic or well positioned to help them grow with our nearly 1,000 locations across the country filled with dedicated professionals.”

Generational Perceptions
Small Businesses play a huge role in the lives of Americans. One third of Americans (34 percent), have worked in a small business in the past and nearly a quarter (24 percent) of both Millennials and Gen X own or have owned a small business.

The study found that the entrepreneurial spirit is alive and well with 41 percent of Americans saying they would quit their job and start a business in the next 6 months if they had the tools and resources they needed. This number is higher for Millennials with more than half of those surveyed stating that they would be willing to take the entrepreneurial leap in the next 6 months with the right tools and resources.

All generations surveyed lived through the great recession, yet seemingly this hasn’t dampened entrepreneurial willingness for most. The study cites that 62 percent of Americans have a dream business in mind that they would love to start, and close to half (49 percent) of millennials, intend to start their own business in the next three years.

Motivations are in the Wealth Creation
Wealth creation was the number one rated catalyst to start a small business with 47 percent of Americans listing the potential to make money as what would motivate those most to start their own business. The appeal of being your own boss is also a strong factor, with 40 percent of Americans listing it as their motivation. While there is a perception that millennials are most interested in their work being fun, the survey reveals that 62 percent would rather have a business that makes a lot of money than a business that is a lot of fun.

Opportunities for Untapped Entrepreneurial Potential
Under the right circumstances, Americans are willing to make the leap into entrepreneurship. Money was cited as the most limiting factor in entrepreneurship with 55 percent of Americans rating access to money as the most difficult aspect of starting a business. When broken down by gender, women feel more challenged by this barrier with 63 percent saying access to money is a barrier to starting a business.

The lack of knowledge and small business savvy is another roadblock existing for Americans looking to start small businesses. Over half of Americans (61 percent), say they would be encouraged to start a small business if they knew where to go for help. Even more striking, more than 13 million Millennials cite not knowing where to go for help to start or run a business as the number one reason that keeps them from starting their own business.

The study also found that:
• 59 percent of Millennials say that with the right idea and resources they would start a business within the next year
• 61 percent of Millennials believe that the best job security comes from owning your own business
• 45 percent of Millennials say access to capital is the biggest barrier to starting a business
• 51 percent of Millennials would absolutely want help with a business development plan
• 45 percent of Millennials would absolutely use training for accounting or bookkeeping software

With nearly 1,000 locations across the country, SBDCs provide local businesses and entrepreneurs the resources they need to thrive, compete and succeed. For more information on America’s SBDC or to find a SBDC near you, go to www.AmericasSBDC.org. For the complete study results, visit: www.AmericasSBDC.org/SBDCGenStudy