From the Desk of Director Durham – 1/8/15
The New Year traditionally provides an opportunity for fresh goals and new beginnings. For Iowa business owners, this might be an excellent time to evaluate the benefits that an Employee Stock Ownership Plan, or ESOP, may provide, especially for those owners looking at retirement or business transition. An ESOP is both a tool allowing owners of companies to share the business equity with employees, as well as a retirement plan for those employees. Statistics show that in companies that implement ESOPs, employees are more invested in the success of the organization, have more job security and personal satisfaction with their jobs, and are more productive and profitable.
In addition to offering increased options for Iowa businesses, an ESOP can also be beneficial for Iowa communities. Businesses that participate in an ESOP program help ensure that the company will remain local, as opposed to the possibility of being purchased by an out-of-state buyer that could potentially shift jobs and profits out of the region.
The state of Iowa offers two ESOP-related programs to help encourage businesses to consider participation. The ESOP Formation Assistance program provides financial assistance to businesses interested in establishing an ESOP, by helping to fund some of the costs associated with obtaining a feasibility study. Another part of the program offers a capital gains deduction for sale of stock to an ESOP, which is intended to help incentivize business owners to sell to employees rather than a non-employee buyer, and to help businesses achieve the competitive benefits that result from employee ownership.
Further information on available financial and technical assistance can be found on the IowaEconomicDevelopment.com website. We will also have a couple guest blog articles on the topic of ESOPs later this month, so be watching for that.
This month we also celebrate Martin Luther King Day. Martin Luther King’s nonviolent activism in the civil rights movement continues to be an inspiration to us all. He once famously said, “Life’s most persistent and urgent question is: ‘What are you doing for others?’” It is with this spirit that we encourage small businesses to take some time on Martin Luther King Day to provide a public service within your community. Little things such as providing an opportunity for employees to volunteer at the local food bank, or offering a business donation to your favorite charity, can help make a big difference.
January also marks the start of the popular Dream Big, Grow Here business grant contest. For the first time this year, there will be six industry-specific, statewide contests available, and entrepreneurs from all across Iowa can participate. If you are an aspiring business owner with a great business idea or a business owner with a dream of expanding your Iowa-based firm, this could be your opportunity to receive up to $15,000 in grants. We will be providing another webinar about the contest on January 15 available on IASourceLink.
There are other events taking place this month to be aware of. On January 13, Renew Rural Iowa, in partnership with DMACC Business Resources and the Newton Development Corporation, is hosting “Journey to Your Vision” in Newton. This one-day seminar is uniquely designed to help Iowa entrepreneurs uncover opportunities for improving their business or further define a business concept. Additionally, Ascent will be hosting a Startup Business Boot Camp for Women in partnership with Drake University, with the first session to be held on January 16. These events, and many more, can all be found on the IASourceLink calendar.
That’s it for this month. All of us here at IASourceLink wish you a very profitable new year!