Millionaire Grocery Clerks, Tax-Free Companies Among the Many Possibilities Through Employee Ownership

The ownership and staff at Voodoo Brewing, an employee-owned company in Western Pennsylvania.

From Pennsylvania Center for Employee Ownership (PCEO)

Millionaire grocery clerks, real retirement savings, tax free companies. Crazy? No…it’s called employee ownership.

What if your employer (or you, as a small business owner) could sell you a percentage of their/your company? What if you paid NOTHING for the shares, but now had real retirement funds? And what if the company became more productive and was exempt from federal and state tax on profits?

This is all possible through an ESOP, an “Employee Stock Ownership Plan.” In 1974, the federal government created a program that allows owners of businesses to sell some or all of their company to their employees. 

The employees pay nothing.  Rather, the business takes on a note (a “mortgage”) that gets paid back over three to five years. 

The owner gets paid full fair market value, and now the employees have a real stake in the company and real retirement savings. Not surprisingly, employee owned companies are much more productive than non-employee owned companies and turnover rates decrease dramatically.

And here’s the best part – an ESOP company’s profits are tax free – forever. The tax savings pay off the mortgage! Yet, very few people know about this.

Pennsylvania has about 300 ESOPs including well known companies such as Sheetz and Wawa, and locally, Columbia Montour Chamber member Larson Design Group.  Read what some CEOs have to say about employee ownership.

At age 19 Cathy Burch took a job at WinCo, a supermarket chain and ESOP company. She worked in various roles – cashier, shelf stocker, inventory orderer, and by the time she was 42, she was a millionaire. At WinCo, her story is not unique. Read more about the millionaire grocery clerks.

To learn more, reach out to Rosalie Evans via email at the nonprofit Pennsylvania Center for Employee Ownership.

Main Street Act Supports Employee Ownership

From PA Center for Employee Ownership (PaCEO)

Note: The Columbia Montour Chamber, in partnership with the Greater Susquehanna Valley Chamber, the Bucknell SBDC, and PA CareerLink Columbia/Montour Counties, will present a free breakfast seminar on Tuesday, April 30, from 8-9 a.m. about the benefits of and converting to employee ownership. 

In August of last year, President Donald Trump signed into law the first major piece of federal legislation to support employee ownership in over 20 years.

The Main Street Act was passed (interestingly) as part of the National Defense Authorization Act. Could it be that employee ownership is a form of financial and economic defense for employees and communities? We’re going to go with “Yes”!

The PaCEO worked closely with Senator Kirsten Gillibrand (D-NY) and her staff, and was a co-sponsor of the bill.

The act directs the U.S. SBA (Small Business Administration) to provide loans and technical support to Employee Stock Ownership Plans (ESOPs) and other forms of employee ownership. It directs the SBA to ease current restrictions that have made SBA loans problematic for employee ownership. Some of the highlights include:

  • Allowing for the financing of transaction costs
  • Allowing selling shareholders to stay with the company and receive shares
  • Removal of cumbersome and restrictive regulations
  • Improved ESOP lending
  • Assistance to co-ops
  • Promotion of ESOPs

Read more about this important piece of legislation and how it is intended to further promote employee ownership of businesses. 

Also, here is a link to a column urging the passage of this bill from earlier last year before the legislation was signed into law. 

For more information about employee ownership, contact Rosalie Evans via email at the Pennsylvania Center for Employee Ownership.

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Deadline Alert for Small Business Administration Disaster Assistance in Pennsylvania for Flooding

The U.S. Small Business Administration (SBA) encourages businesses of all sizes, private nonprofit organizations, homeowners and renters to apply for a disaster loan for physical damage before the Feb. 11 deadline. Anyone in the declared counties in Pennsylvania with damages caused by flooding on Aug. 10-15, 2018 should apply for the SBA disaster loan assistance.

The declaration covers Bradford, Columbia, Delaware, Northumberland, Schuylkill and Susquehanna counties and the adjacent counties of Berks, Carbon, Chester, Dauphin, Lackawanna, Lebanon, Lehigh, Luzerne, Lycoming, Montgomery, Montour, Perry, Philadelphia, Snyder, Sullivan, Tioga, Union, Wayne and Wyoming in Pennsylvania; New Castle in Delaware; Gloucester in New Jersey; and Broome, Chemung and Tioga in New York.

Businesses and nonprofits can apply up to $2 million to repair or replace disaster damaged real estate, machinery, equipment, inventory, and other business assets. Loans for working capital, known as Economic Injury Disaster Loans, are available even if the business did not suffer any physical damage. Homeowners can apply up to $200,000 to repair or replace disaster damaged real estate. Homeowners and renters can apply up to $40,000 to repair or replace damaged personal property including automobiles.

Interest rates are as low as 3.675 percent for businesses, 2.5 percent for private nonprofit organizations, and 2 percent for homeowners and renters, with terms up to 30 years. The SBA determines loan amounts and terms based on each applicant’s circumstances.

Applicants may be eligible for a loan amount increase up to 20 percent of their physical damages, as verified by the SBA for mitigation purposes. Eligible mitigation improvements may include a safe room or storm shelter to help protect property and occupants from future damage caused by a similar disaster.

Applicants may apply online using the Electronic Loan Application (ELA) via the SBA’s secure website at DisasterLoan.sba.gov.
Additional details on the loan application process can be obtained by calling the SBA Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of-hearing) or by sending an email. Loan applications can also be downloaded at www.sba.gov. Completed applications should be mailed to: U.S. Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.

The filing deadline to submit applications for physical property damage is Feb. 11, 2019. The deadline for economic injury applications is Sept. 11, 2019.

Business Program is a Great Opportunity for Local Students

Winners of BizQuiz, PFEW’s version of Jeopardy, celebrate on a busy Wednesday afternoon!

From Pennsylvania Free Enterprise Week

Note: The Chamber is hosting a free informational breakfast for those businesses, students and parents that may be interested in learning more about this program on Wednesday, Jan. 23, at 7:30 a.m. at the Greenly Center, 50 East Main St., Bloomsburg (learn more).

There is an award-winning summer economics education program that for forty years has benefitted our local students. Pennsylvania Free Enterprise Week (PFEW) immerses rising high school juniors and seniors in the world of business, allowing them to experience firsthand what you face each day. Offered by the Foundation for Free Enterprise Education, PFEW was founded specifically to teach students about the American private enterprise system and provide tools to help students become the great employees and employers of the future. PFEW annually holds five week-long sessions in July and August on the campuses of Lycoming College and the Pennsylvania College of Technology in Williamsport, Pa, serving nearly 2,200 students and 250 volunteers each year.

At PFEW, participants are grouped into management teams of junior executives who have been hired to turn around underperforming manufacturing companies. These teams, mentored by adult volunteers called Company Advisors, operate their firms for a computer simulated three-years, competing against other student companies. They formulate production and financial strategies, develop income statements and balance sheets, prepare marketing and advertising campaigns, all the while reacting to a variety of external factors. Sound familiar?

PFEW is designed to give every participant an idea of real-world relevant issues facing today’s businesses. Each day’s activities include four to five presentations from world-class speakers from across the nation who deliver talks that both inspire and motivate our young entrepreneurs for their futures. Does it work? Consider the following quote from 2018 PFEW graduate Maya Moktan from West Chester East High School: “I actively participate in DECA at East, and I am pleasantly surprised at the more in-depth analysis of business at PFEW… However, my favorite part of PFEW by far was the motivational speakers. Each and every one was able to leave a mark in my mind. Each speaker had their own story, and I was left awestruck and truly inspired. At some points, I was almost brought to tears!”

The Chamber proudly supports PFEW and encourages our local companies and civic organizations to provide sponsorship for our students and, if possible, volunteers for the sessions. Every student attends PFEW on a fully tax-deductible $625 scholarship (the actual value of the scholarship exceeds $1,500) which is provided by a local firm, foundation, civic organization, or individual. PFEW is also an approved Educational Improvement Organization through the PA Educational Improvement Tax Credit (EITC) program. Scholarship donors are prominently recognized in several publications circulated throughout the state, and each student wears the name of their sponsor on their photo ID badge throughout the week. Students write their sponsors after graduation to report on what they have learned.

The Foundation for Free Enterprise Education proudly announces that they have recently expanded their programming to include the Stock Market GameTM, an interactive in-school game for students in grades 4-12 that teaches them about the Stock Market and Securities Industry. For more information on how to support or get involved with SMG, please contact Jeremy Kropf, Technology and Projects Manager at 814-833-9576 ext. 4, or email.

If you would like to learn more about the award-winning PFEW program and how you can help, please call the Chamber directly or contact Scott Lee, vice president of marketing & development for the Foundation for Free Enterprise Education at 814-833-9576 ext. 8, or emailPFEW is open to all current sophomores and juniors in Pennsylvania and information on attendance, as well as program applications, can be found on the PFEW website. Questions can be directed to Amber Goss, Schools Manager for PFEW, by calling her office at 814-833-9576 ext. 6, or email.

Email Safety Tips – A Must Read for Every Employee

From MePush

See original article from MePush website.

EMAIL IS THE #1 THREAT

Hi, this is Andy Gritzer with MePush.  I just wanted to send out an email to assist with email safety.

Unfortunately, email has become the biggest concern regarding virus related incidents.  While there are measures in place to catch most viruses (spam filters and antivirus) the easiest way to prevent them is through proper handling of spam/malicious email.

I will assume that most of you receive spam email.  Spam filters will catch about 99% of spam that flows to your organization.  It’s the ones that get through that we need to worry about.  Below are some tips on how to avoid compromising your accounts, your computer, and your company’s network.  Really, all it comes down to is being aware and diligent.

Example of an organization’s spam filter statistics is in the below picture

 

 

NOTE:  I will use the terms “spoofing” and “phishing”.  Spoofing is a fraudulent practice in which an unknown source sends communication disguised as a known source.  Phishing is when an unknown source attempts to acquire information such as account credentials or credit card information.

Just because it says it’s from John Smith does NOT mean it is from John Smith.  You may receive an odd email from someone you have constant contact with.  Remember to look at the email address it is from and NOT just the name.  It might show John’s return address as “[email protected]” (just an example) when the reality his email address is [email protected]

That being said we are at the point where there are a lot of spam/fake/phishing emails being sent via “spoofed” addresses.  The name AND email address will look proper.  It will say it is from John Smith with an email address of [email protected]  But when you hit reply it goes to another account completely.  Anyone can spoof anyone.  Which makes it very difficult to determine what is legitimate or not.  Also, check to make sure the signature (if there is one) matches the sender.

 

 

I am not trying to scare you; just please assume anything that comes in with a link or attachment is NOT legitimate.  Make sure you cover your bases when opening attachments from known senders and especially UNKNOWN senders.

Were you expecting [email protected] to send you a document?  Does the document pertain to something you do at your workplace or a shared interest?  If not, do NOT open it.  Contact the sender and inquire about it to make sure before opening.  A lot of times the sender or the sender’s organization was compromised at one point and you might just be receiving spoofed emails.

You receive an email from Microsoft, Google, DocuSign, etc. asking you for your account credentials. These can look very legitimate.  No self-respecting company would every ask you provide your login credentials to them.  They have them already.  A dead giveaway is if you happen to click on the link and it takes you to a landing page asking to select what type of account (Microsoft, yahoo, google, adobe) and to enter your email address and password.  Also, ask yourself, do I even have an Office 365 account?  If not, then chances are it’s a scam/phishing email.

 

 

 

 

 

 

 

 

If you oversee finances never make a requested wire transfer or open a random invoice.  These phishing experts target specific people/positions within companies.  They will get the name of the CEO, send an email that looks like it is from the CEO to the CFO requesting a money transfer.  Please check the language of the email.  If it sounds generic, chances are it isn’t valid.  We have had clients do this at great financial loss.

 

 

So please just keep this in mind when opening email.  Email has generally been the part of our jobs/home that takes very little effort.  You never really had to pay much attention when looking at your email.  Email was just, email.  Unfortunately, now we need to be very careful.  So, if something seems a little odd, chances are it might be.

I hope these tips were helpful!

Thank you, Andrew Gritzer