Over the years, we often have heard tire dealership owners lament about what to do with their businesses once the time comes to retire.
Bob and Juanita Purcell, of Purcell Tire & Rubber Co., found a solution other tire dealers might want to consider. They sold their Potosi, Mo., company to employees via an Employee Stock Ownership Plan (ESOP).
These are the people who helped build Purcell Tire into one of North America's largest independent tire dealership chains. Now with the sale, they have a direct stake in the future success of the business. Meanwhile, Mr. and Mrs. Purcell will continue to direct operations of the family-owned dealership, while realizing a well-deserved return on their investment.
The Purcells didn't have to do it this way. They could have made a handsome profit by selling outright and simply walking away. But that's not the way they chose to go.
They wanted the company to continue and looked at various possibilities to make that happen. The Purcells achieved a lot by selling to the employees. It's no secret that people who feel they have a stake in a business' future will tend to do whatever it takes to make certain the firm doesn't fail.
As employee-owners, their work is no longer just a paycheck.
The Purcells also found a way to get their money out of the business while retaining control of it, at least until they officially are ready to retire. As Purcell Tire's president and executive vice president, their leadership will help keep the company strong and allow for a more orderly transition when it's time to step down.
An ESOP is not for every dealership. But for those owners who don't have a successor or potential buyer, or who are altruistic, selling to the employees might be the way to go.