News Summary
Rhode Island is addressing small business succession challenges through a new initiative focused on employee ownership. Lieutenant Governor Sabina Matos announced the formation of the Rhode Island Succession Planning Task Force, which aims to guide business owners nearing retirement on succession options. The task force, composed of local entrepreneurs and organizations, seeks to advocate for policies that promote employee ownership and develop resources to support small businesses in the state.
Rhode Island is taking significant steps to address the looming challenge of small business succession with a focus on employee ownership, an initiative championed by Lieutenant Governor Sabina Matos. With over half of small business owners in the state nearing retirement age, the urgency for effective succession planning has never been more pronounced. The lieutenant governor announced the launch of the Rhode Island Succession Planning Task Force in March with the aim of providing essential guidance to business owners contemplating their retirement options.
The Small Business Association indicates that retirement is the leading cause of small business closures across the nation, making this initiative critically important for Rhode Island, where 99% of businesses are classified as small enterprises. The task force seeks to ensure that these businesses, which are integral to the state’s economic landscape, remain operational and community-oriented.
Employee ownership presents a viable succession strategy, allowing retiring business owners to sell their companies to their employees. Research shows that businesses with employee ownership tend to have longer lifespans, alongside benefits like significantly higher median household net wealth, increased income from wages, and longer job tenures for employees. Furthermore, this model can effectively expand financial opportunities for previously underserved communities.
Despite the promising advantages of employee ownership, Rhode Island currently lacks Centers for Employee Ownership, which are essential for providing the necessary legal and financial support during the transition process. In contrast, 23 other states, such as Massachusetts and Connecticut, have established such centers, highlighting a gap in resources available to local business owners.
Formation and Goals of the Task Force
To tackle these issues, Matos has assembled the Business Enterprise Succession Task Force, which includes small business owners, chambers of commerce, nonprofit organizations, and government agencies. This diverse group is tasked with advocating for funding and policies that would facilitate the creation of a Center for Employee Ownership in Rhode Island.
As part of the task force’s efforts, a survey was conducted to collect feedback from business owners regarding their retirement plans. This information is aimed at shaping the development of programs and resources tailored to meet the specific needs of Rhode Island’s small business community.
Community Engagement and Education
Recognizing the importance of collaboration, the task force has organized tours of local small business communities to foster relationships and gather insights. Additionally, they have developed a pilot program designed to guide legacy owners through the employee ownership transition process, ensuring that the necessary steps are clearly outlined and accessible.
Lieutenant Governor Matos highlights the significance of retaining small businesses as fundamental to Rhode Island’s cultural identity. By referencing local landmarks to illustrate this connection, she emphasizes the need for immediate actions to keep businesses in the hands of the community and ensure they continue to thrive.
Conclusion
As Rhode Island faces an increasing number of retiring small business owners, the efforts spearheaded by Lieutenant Governor Sabina Matos and the newly formed task force present a proactive approach to preserving the state’s economic and cultural assets. Through the promotion of employee ownership and the potential establishment of a Center for Employee Ownership, the state aims to secure a future where local businesses remain operational, vibrant, and community-focused.
Deeper Dive: News & Info About This Topic
- PBN: Matos Task Force to Offer Guidance on Business Succession Plans
- PBN: Retiring Business Owners Should Consider Selling to Employees
- Boston Globe: Commentary on RI Business Succession
- RI Monthly: LGBTQ Businesses in Rhode Island
- Encyclopedia Britannica: Employee Ownership
Author: STAFF HERE PROVIDENCE WRITER
PROVIDENCE STAFF WRITER The PROVIDENCE STAFF WRITER represents the experienced team at HEREProvidence.com, your go-to source for actionable local news and information in Providence, Providence County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as WaterFire, Rhode Island International Film Festival, and Rhode Island Comic Con. Our coverage extends to key organizations like the Greater Providence Chamber of Commerce and Providence Warwick Convention & Visitors Bureau, plus leading businesses in finance and manufacturing that power the local economy such as Citizens Financial Group and Textron. As part of the broader HERE network, we provide comprehensive, credible insights into Rhode Island's dynamic landscape.
