Blaise Kielar, founder of Electric Violin Shop, spent decades building a niche but thriving business, shipping instruments to customers in dozens of countries from a storefront in South Durham. But in 2016, when he decided to walk away from the shop to spend more time as a performing musician, Kielar didn’t want to leave his three employees without jobs.
Kielar discovered his path forward thanks to Anne-Claire Broughton, founder and former executive director of the North Carolina Employee Ownership Center, who helped Electric Violin Shop’s employees become owners of the business.
Susie Sneeringer, who joined Electric Violin Shop in 2010 before becoming manager in 2014, said, at first, the team struggled to convince traditional banks to finance the employees’ acquisition of the business from Kielar.
“They were like, ‘Oh, I think you’re nice, but the music stores are not doing great right now,’” Sneeringer said. “They were all being sold off to private equity. We really needed something that was kind of specialized to our situation.”
Broughton helped the shop pursue cooperative lending through Shared Capital. In 2016, Sneeringer and her colleagues became worker-owners, drafting their governing bylaws with free help from law students from Duke Community Enterprise Clinic.
Kielar wasn’t alone in not having a strategy for who would take over his business after he left. Over a third of the city’s legacy businesses have aging ownership without a concrete succession plan. According to city and county officials, 34% of Durham County’s roughly 6,500 businesses have owners 55 or older, and nationally only about 30% of business owners have any succession plan in place.
The city of Durham recently launched Keep It Durham-Owned, a campaign to connect business owners with the tools to begin succession planning, which could include selling to their own employees instead of closing shop, selling to a larger company, or selling to private equity. City officials, nonprofit partners, and a handful of employee-owned businesses gathered on September 14 at Provident1898—the historic headquarters of North Carolina Mutual Life Insurance—to celebrate the launch.
“When you keep Durham businesses in Durham, you preserve not only the economic benefit, but that cultural, that feel, that grit that makes Durham Durham,” Joshua Gunn, Durham’s Economic Development Director, said at the event.
The year-long campaign, housed inside the city’s Office of Economic and Workforce Development, is a partnership with North Carolina Employee Ownership Center and the Democracy at Work Institute. The two groups are offering participating business owners free advising and mentorship. Durham is one of three pilot cities for this type of partnership, along with Raleigh and Cincinnati.
The initiative focuses on three employee ownership models. Employee Stock Ownership Plans are the most common nationwide and allow employees to own company stock. Worker Cooperatives, like Electric Violin Shop, are businesses owned by the employees and governed democratically, with each employee typically receiving one voting share. Employee Ownership Trusts provide added benefits to employees after basic business expenses are met.
Few companies in Durham are employee-owned. According to data from the U.S. Federation of Worker Cooperatives, Electric Violin Shop is one of three worker-owned businesses along with Bountiful Backyards landscaping, and tilde Language Justice Cooperative. Educational assessment services company Measurement Inc, which touts hundreds of employees, and audio visual design firm Kontek Systems are also employee-owned and headquartered in Durham.
Momentum for worker-ownership in Durham has been building for years. In 2018, the city of Durham was one of four cities to participate in the Shared Equity in Economic Development (SEED) Fellowship, developed by the National League of Cities and Democracy at Work Institute, that specifically targeted legacy Black-owned businesses. Durham has a rich history of Black business ownership dating back to Black Wall Street in the early 1900s.
Keep It Durham Owned builds on this work with a broader range of Durham businesses. At the launch, Mayor Leonardo Williams pointed to a common refrain of his: When Durham residents shop locally, roughly 41 cents of every dollar stays in the community, compared to 14 cents at a national chain.
Councilmember Carl Rist, who advocated for the program along with his colleague Nate Baker, brought the idea to Gunn shortly after he was hired last year. The program is one of a handful of tools the city is using, Rist said, to support Durham’s small business owners and entrepreneurs.
The challenge moving forward won’t just be getting business owners to buy in, but building the network of service providers who understand employee-ownership structures and can help implement them.
“What we want to do is form relationships with people who would be advisors, accountants and attorneys, making sure folks in that ecosystem are familiar with employee ownership,” Rist said. “The hope would be that if we can show this works and get some traction, we would expand or fully fund this at OEWD to have a person or a couple people that could play this role. In some bigger cities like Boston and New York, they have an office. It speaks to the fact that this can be an important part of a city’s economic development package.”
A decade later, Electric Violin Shop has grown to five member-owners. Sneeringer said the team has learned a great deal about the process, like how to navigate big decisions—hiring and new vendors—by consensus, but there’s still room for improvement.
“Nobody was in here saying, ‘Well, I know about cooperatives, and this is how they should be,’” Sneeringer said. “We’re all babies when it comes to this.”
The hardest part, she said, wasn’t developing governance structures, it was finding financial professionals who understood a small worker co-op’s unique tax situation, a gap she still navigates.
“If other business owners want to talk to me about the process, I’m always like, ‘Yes! I will talk to you,’” she said. “I’ll tell you ‘this was hard, this wasn’t hard,’ and then you can decide whether it’s for you.”
Interested business owners can request consultation from North Carolina Employee Ownership Center, by visiting the city’s website. The core initiative will run through the end of 2027, with technical assistance and resources remaining permanently available.
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