This is a subscriber-only article. Join Entrepreneur+ today for access

Learn More

Already have an account?

Sign in
Entrepreneur Plus - Short White
For Subscribers

How to Build an Employee-Owned Business These four steps will help you turn employees into engaged, invested coworkers.

By Michelle Goodman

This story appears in the February 2015 issue of Entrepreneur. Subscribe »

Julia Vandenoever
Kim Jordan turned over ownership of New Belgium Brewing Company to employees; beneficiaries included tasting room rep Laura Ferenchik.

Kim Jordan and Jeff Lebesch wanted to run a more democratic business. Rather than shoulder all the tough decisions themselves, the founders of New Belgium Brewing Company sought their employees' input early on. This meant cultivating what Jordan calls a "high-involvement culture" of engaged, enthusiastic workers and transparency with staff about all sorts of matters, including company finances.

But employee enthusiasm goes only so far, so in 1996 the pair created a phantom deferred compensation plan, at no cost to the staff of their Fort Collins, Colo.-based craft brewing company. Later, when they started an employee stock ownership plan (ESOP), they honored the original plan until all account-holders' ESOP balances were larger than their phantom balances.

When Lebesch left New Belgium in 2009, Jordan and the company bought him out, bringing employee-owned shares to 41 percent. After mulling succession plans, Jordan opted for full employee ownership. By early 2013 more than 500 New Belgium employees—Jordan refers to them as "co-workers"—assumed 100 percent ownership of the company. (Shares are awarded based on the recipient's percentage of the total wage pool.)

The rest of this article is locked.

Join Entrepreneur+ today for access.

Subscribe Now

Already have an account? Sign In