My husband and I have an LLC for our work doing small engine repair. Occasionally our son helps a little, but otherwise it’s just us.
My husband has a close friend and former co-worker who is losing their job, and we are very busy and could use help, but we are deeply morally opposed to profiting from someone else’s labor. I was thinking that perhaps we could subcontract stuff to her for a little bit, and if things are working out, then we figure out how to restructure the business.*
There is a restaurant in a nearby town that is worker-owned, but I haven’t asked there for advice partly because their structure is byzantine, and idk if that comparison is apples-to-oranges because of the wildly different industries.
*
I understand that sharing ownership means sharing control. I would have qualms about that with pretty much every person I know because most people aren’t as obsessed with details and informed decision-making etc as I am; I am not concerned about that with this friend, because she has the same flavor of AuDHD as I do. I was undiagnosed when we met her, and our striking similarities in personalities and behaviors were a huge part of the reasons for seeking diagnosis.
Also, it’s a rural area, everybody knows everybody, and she is someone with deep roots who is pretty universally loved and respected. There are few people I would trust to try to step into my life and fill in for me if I were seriously injured, but I know she would give everything as much or more care than I do. She is the best.
Calculate a wage high enough so the business operates at a break-even point
Pay isn’t ownership but if you want to be sure that people are property paid then a profit sharing bonus is much better than simply calculating a wage increase because profit sharing accounts for the yearly variance in business performance.
Wages are much harder to adjust in most places and can’t be pinned to a variable factor like business performance.
that’s the opposite of the advice OP is asking about
Death to America
But it avoids buerocratic hassle
Not everyone wants to deal with the bullshit associated with ownership. Owning a business is not the same as doing the labour that makes the business money - there’s a bunch of other crap like dealing with taxes, licensing, insurance, marketing, and liability. It’s great that OP is willing to offer an ownership stake but not everyone wants it. In one small business I’m aware of, I know an offer like this was made and the person/employee declined because they didn’t want all the additional stress of work required for the business to legally exist and function and instead wanted to stay on the tools so to speak. They found it was better for their health/mental health limitations. Now that person is well paid and has a senior role, but isn’t an owner.
There is a non trivial amount of labor that goes along with owning a business that is necessary for a business to function. It is not so much labour that small business tyrants should be exploiting labour like they do, but it is work and it is almost always different in nature than the type of work that the business does that actually makes revenue. Paying someone super well and respecting their opinion for decision making purposes without an ownership stake is a respectful option for OP.
ok but presumably OP thought about all this before asking “how do i make my business worker owned”. otherwise they’d be asking “should i make my business worker owned”, which is a completely different question
Death to America