Business View Magazine June 2023

192 BUSINESS VIEW MAGAZINE VOLUME 10, ISSUE 6 doesn’t include the company-sponsored 401K accounts and matches, and year- end bonuses that Assay offers as well. “It’s a nice setup because our employees generally will earn income from three different sources annually,” Manning says. Assay has been growing its revenue at about a 15 percent annual rate over the last few years, and 2023 is looking strong as well. That level of growth has not always been the case, Manning says, but when growth is possible the ESOP model thrives. He estimates that the median ESOP account value of team members is around $250,000. About one-quarter of his staff have ESOP accounts worth more than $500,000. Being joint owners allows employees to maintain high company morale. Employees also make collective decisions that benefit the company, just as they would their own finances. Manning compares the relationship of being an owner at the company you work for to owning the home where you live compared to renting. “Our employees treat the company’s money as if it is their own,” Manning says. “For example, if we need to consider a new piece of expensive equipment, the team makes consider whether they can repurpose it rather than having to purchase it brand new. “We’re small enough and we all know each other and the company well enough that we all know the customers and vendors we have. Everyone is thinking like an owner all the time, which benefits us all. Tips for managing a successful ESOP Manning says there are a few examples that companies considering the ESOP model need to understand for it to be successful. First, cash flow is critical. Without consistent cash flow, ESOP accounts can’t be funded, and employee morale can sour. Second, companies can’t be too capital-intensive. Those high expenses can torpedo profitability and cash flow, and equipment that depreciates quickly harms the value of the business. Lastly, employees must be included in the strategic decisions of the business itself. “If you are successful in these three areas, chances are you will have employees who are committed to and engaged in their job,” Manning says. PREFERRED VENDOR/PARTNER n Ventura Trust https://www.venturaesop.com /com Ventura Trust is the premier provider of ESOP trustee services, offering the resources of a large institutional trustee with flexible, responsive and high-quality personal services, while developing long-term relationships. If you are ready to explore how an ESOP can help you with your succession planning strategy, then our team is ready to provide personalized service to meet the unique needs of your business.