BRATTLEBORO — Austin Design is now a worker-owned cooperative, giving the employees a way to keep the firm running beyond the founder’s retirement.
“In our case, all of the employees bought into the model,” said Chamois Holschuh, general manager at Austin Design. “This was our succession plan.”
Each of the 10 employees own 10 percent of the Brattleboro-based company, which was founded by architect Bill Austin in 1993 and officially incorporated in 2012. Austin had been looking forward to retiring for “quite a while and we hadn’t let him,” Holschuh said.
Having two or three employees step up and buy the company wasn’t feasible several years ago so the group began looking at the cooperative model. Staff wanted to continue working together.
Austin already involved employees on financial decisions and the direction of the firm so the cooperative model made sense, Holschuh said. It took about a year for the switch to take place.
Austin Design first opened in Colrain, Mass., moved to Greenfield, Mass., then opened a secondary office in Brattleboro. Currently, the Brattleboro office is considered the main hub.
“It’s our only office really,” Holschuh said. “But we still do a lot of work in western Massachusetts.”
Employees also can opt to work from home, or a mix of remote and in-office.
As owners, Holschuh said, employees have “a little more skin the game” and take more responsibility for what happens with the business. The only challenges in moving to the worker cooperative she cited had to do with determining how the model would work.
Austin Design now has a board of directors made up of employee owners and corporate officers. Holschuh said the company plans to continue getting group consensus on decisions.
Employees can be hired who are not owners. Bylaws dictate eligibility for ownership.
Holschuh said the firm couldn’t have achieved the project without Austin’s “enthusiastic support.”
“He gave us a lot of time to figure things out and to set things up,” she said. “We’re really excited. We feel very fortunate that we have this opportunity.”
Austin still makes himself available to the firm. After 40 years in the business, he described retiring Sept. 7 as “bittersweet.”
“I was really glad how it worked out and it was my time for me to retire,” he said. “But still I’m trying to sort myself out a little bit. I’ve got plenty to do and I’ve got a chance to get at things that I deferred because I was working. There’s a whole lot less emotional weight that I have to carry but I still haven’t made the transition completely.”
Austin, 71, resides in Brattleboro and plans to eventually move to Maine. He attributes part of the success of the new ownership to “pretty amazing chemistry” among the team.
“Everybody really got along well with everybody else,” he said. “Everybody respected and appreciated everyone else. Everyone recognized their strengths and weaknesses.”
Austin said he tried to run his business “more horizontally than vertically,” including employees on important decisions and keeping them informed of financial matters.
A few years ago, several employees discussed the potential of becoming partners. However, the firm had a couple of bad years financially and it didn’t make sense for Austin to sell or for the employees to buy.
COVID-19 brought everything to a grinding halt at the firm. Austin and his wife stayed at their place in Maine and he realized he probably wanted to retire sooner than later.
Austin Design received federal Payroll Protection Program money during the pandemic. Then the firm started getting calls to resume its work again, and it benefitted from the real estate boom.
‘A strong culture of trust’Vermont Employee Ownership Center Executive Director Matt Cropp and his group first met with Austin Design to discuss the prospect of employee ownership in May 2021. He said the non-profit organization, which is funded through the state and some sponsorships, promotes and fosters employee ownership around Vermont through models such as worker cooperatives and employee stock ownership plans.
“We work a lot with business owners who are considering selling their business and trying to figure out what path to take,” he said. “And our job is to encourage them to take the path to sell it to their employees through this kind of structure.”
VEOC provides education to raise awareness about the options available for employee ownership, meets with business owners about the potential, and offers technical assistance.
Austin Design was a bit unusual because all of the employees supported moving to the new model. That showed there’s “a strong culture of trust” within the firm and “a vested interest” in the business, Cropp said. He explained how “the tipping point” is usually half to 75 percent of staff being on board for the change.
Going to employee ownership can offer “a greater sense of continuity” for staff when the owner is considering retiring, Cropp said. If the business is sold to someone else or a competitor, that could mean layoffs or uncertainty.
Under employee ownership, staff can feel more control. Divvying up the profits is another benefit of the model.
This marks the second Vermont business VEOC has helped navigate a shift to employee ownership this year. Earlier this year, Marshfield Village Store became a worker owned cooperative.
Cropp, who has been involved with the center for eight years, said his group sees “ebbs and flows” in terms of interest from businesses.
“But we certainly are seeing a lot more interest and activity right now,” he said, estimating that there had been a 50 percent increase in inquiries last year compared to the last five or six years. He suggested that could have to do with people leaving their jobs because of burnout at high rates recently, a phenomenon dubbed the Great Resignation, and business owners having similar feelings.
The center opened in 2001 and was the second one in the U.S. after Ohio. Cropp counted about 29 or 30 employee stock ownership plans and 21 worker cooperatives headquartered in Vermont. He noted national businesses with stock ownership plans also have operations within the state.
Cropp called the crew at Austin Design “very professional and competent.”
“The process moved very smoothly,” he said. “They’re all architects. They’re all about figuring out how to design a process and make a good thing for humans to live in.”
Austin agreed, saying the transition went “incredible well, so very smooth.”
Cooperative Fund of the Northeast, a community development finance institution, lends money to cooperatives.
Vikas Mangipudi, loan and outreach officer in Vermont and New Hampshire for CFNE, said the funding can go toward worker co-ops such as Austin Design or consumer co-ops such as the Brattleboro Food Co-op, resident-owned housing or other democratically-run businesses owned by their members.
“When it comes to conversions, we are purely on the side of the employee co-op,” Mangipudi said. “We work with the purchasing employees to come up with a loan that supports the long-term growth of their business. This is often one piece of the larger financing package that can make a conversion happen.”
