Rhode Island, like many states, is on the verge of a quiet but consequential economic transition. In the next few years, thousands of locally owned businesses that anchor our communities will change hands as founders retire. Many owners, however, have not started succession planning. While previous generations often passed a company to family members, today that path is far less certain.
When there are no plans and no clear paths forward, healthy companies may face existential risk, not because demand disappears, but because ownership has nowhere to go. Lieutenant Governor Sabina Matos’ proposed Center for Employee Ownership would help business owners plan early, understand their options, and, if it is the right fit, sell their companies to the people who helped build them.
With the right support, employee ownership offers retiring founders a way to preserve what they have built while empowering the next generation of entrepreneurs. I have experienced that promise firsthand at AVID Products, a 100 percent employee-owned Rhode Island company providing audio products for education, healthcare, and other sectors. When employees become owners, they do not just show up for a job, they show up for a shared future.
Founded in 1953 in East Providence by Albert Allen, AVID was family-owned for 60 years. In 2013, the Allen family decided to sell the business to its employees through an Employee Stock Ownership Plan (ESOP). Their goal was not a quick exit. The emphasis was on ongoing stewardship, reliable customer service, stable communities, and wealth-building opportunities for employees.
The results have been measurable. Since becoming an employee-owned company, more than 20 current and former employees have built ownership accounts exceeding $100,000, and several have surpassed $500,000. That is life-changing wealth that would not exist without employee ownership.
Employee ownership worked for us in part because we had the time and resources to plan carefully. Many small and mid-sized owners do not. Succession planning can feel complex, expensive, or overwhelming, especially when you are focused on payroll, customers, and keeping the lights on. Owners often default to selling to a competitor, selling to private equity, or closing the doors entirely. Too few even realize employee ownership is an option, and fewer still know where to find trusted, objective guidance to pursue it.
That awareness gap is exactly why Rhode Island needs a Center for Employee Ownership. Employee ownership through ESOPs, cooperatives, or employee ownership trusts can keep local businesses rooted here, protect jobs, and reward the people whose work created the value in the first place. But these transitions require education, early planning, and specialized expertise that most owners cannot access on their own.
The Lieutenant Governor’s bill, sponsored by Senate Majority Leader Frank Ciccone and Representative Grace Diaz, follows a model already used in at least 25 other states. It would strengthen Rhode Island’s business services infrastructure by creating a dedicated expert concierge for employee-ownership transitions. This role would help owners develop an employee-owned succession plan by connecting them with accounting, legal, financing, and permitting resources, public and private. The bill does not mandate employee ownership. It creates a front door – a place to start succession planning earlier, learn about employee ownership as one option among many, and get credible technical assistance to evaluate it responsibly.
The Center for Employee Ownership would not just help save legacy businesses. It would help build a more resilient economy. Employee-owned companies consistently show lower turnover, higher engagement, and greater resilience during downturns. Workers gain a real stake and a path to long-term wealth. Communities keep stable employers, stronger local supply chains, and a reliable tax base.
In short, the Center for Employee Ownership would help ensure that strong Rhode Island businesses are not lost simply because owners lack information or a clear path forward. It is a practical, bipartisan approach to economic development that aligns the interests of owners, employees, and the state.
Tom Finn is the CEO and an employee-owner at AVID Products, Inc., a 100 percent employee-owned Rhode Island business.