Answer

What will it cost my employees if they buy the business?

Short Answer

For most ESOP's and EOT's the answer is "$0."

For worker co-ops there is typically an equity buy in amount, but this will be decided on by the workers themselves democratically, and will typically be nominal (between $500 and $5,000).

This is a key advantage for employee ownership, and one of the most common misunderstandings.

For most ESOP's and EOT's the answer is "$0."

For worker co-ops, there is typically an equity buy in amount, but this will be decided on by the workers themselves democratically, and will typically be nominal (between $500 and $5,000). The buy-in for worker co-ops can often be deducted gradually from their payroll rather than needing to be paid upfront.

Also, EO transitions are a net new perk for employees, i.e., they follow the structure of a leveraged buyout where the cash flow of the business is used to pay for the business.

Zolidar