The new board of directors at Ward Lumber.
Ward Lumber’s journey to employee ownership began in May 2018, when Jay Ward met with U.S. Senator Kirsten Gillibrand (D-NY) at an event hosted by the Adirondack North Country Association (ANCA) at its Saranac Lake offices.
The Senator met with local business owners and economic development leaders to promote the Main Street Employee Ownership Act, which proved to be instrumental in Ward Lumber’s ownership transition. The federal legislation, designed to improve access to capital and supply technical assistance to businesses interested in employee ownership, was championed by Gillibrand and passed with bipartisan support in 2018.
“Ward Lumber’s successful transition is a great example of how we envisioned the Main Street Employee Ownership Act would work for businesses across the nation," Gillibrand said. "Cooperative ownership models improve business productivity, increase wages and boost employee retirement savings. All this while creating greater stability and resilience for businesses, workers and local communities. I applaud Jay Ward and the Ward Lumber team for securing their future through employee ownership, and ANCA for their good work supporting innovative economic development.”
“It has been an honor to support Ward Lumber along their path to worker ownership,” said ANCA Executive Director Kate Fish. “We believe that a diversity of business ownership models strengthens our regional economy and expands opportunities for aspiring entrepreneurs — particularly as we face tens of thousands of business closures across the region due to retirement. We applaud the Ward team for their forward thinking and hard work making this transition happen.”
Ward and his staff have worked closely with Rob Brown, director of business ownership solutions at the cooperative development institute (CDI), to provide intensive support and training on the business transition process. Brown helped guide the team through the worker ownership transition — from initial inquiry to financial and business analysis to legal structuring and financing of the buyout.
“It’s been amazing to watch these workers develop the leadership and business skills needed to take over,” Brown said. “By solidifying the local ownership of the business and jobs, these workers can now chart their own future and the future of the enterprise and build wealth through ownership.”
Ward’s flexible succession plan and successful buyout were also supported through training, business plan development and grant writing assistance provided by the SUNY Canton Small Business Development Center (SBDC) at Clinton Community College (CCC), financing from Cooperative Fund of New England (CFNE) and Capital Impact Partners, and a $250,000 grant from Empire State Development (ESD) awarded through New York State's Regional Economic Development Council initiative.
“The Ward Lumber team certainly should be looked at as leaders in the employee-ownership movement, to not just maintain local jobs and keep small businesses in operation, but to preserve legacies and livable wages for resident retainment in the North Country,” said Angela Smith, assistant director of SUNY Canton SBDC at CCC. “They will always be seen as innovators here.”
Ward Lumber’s transition to worker ownership comes at a time when local businesses face significant challenges, exacerbated by the COVID-19 crisis.
In New York State alone, even before the pandemic, an estimated 3,700 businesses closed each year due to owner retirement, leading to a loss of 13,260 jobs annually. Surveys indicate 79% of business owners want to retire in the next ten years, 57% in less than five years, and 33% in less than three years.
And fewer than one in five owners have a credible succession plan, and most do not understand business transition options or processes.
A ribbon-cutting ceremony will take place at both Jay and Malone store locations and virtually via Facebook Live at a date and time to be determined in June 2021.
Business owners interested in transitioning their companies to a worker-ownership model are can contact the Center for Businesses in Transition at [email protected], the Cooperative Development Institute at [email protected] or SUNY Canton SBDC at [email protected].