A place often visited by photography enthusiasts for top camera equipment and high-quality prints is hoping to leave a legacy in Fresno.
The owners of Horn Photo, Stan and Shelly Grosz, decided they would retire and sell the business, but not before handing each employee a new name tag that identifies each of them as “owner.”
They delivered the sweet surprise to employees with the help of the Teamshares company.
“Our employees are ecstatic, everyone is already stepping up with a spring in that step,” said Stan Grosz. “I believe it is the very best situation. Shelly and I really want Horn Photo to continue way beyond us.”
Innovation has enabled Horn Photo to thrive. When Stan and Shelly bought the shop in 1991, it was the smallest of Fresno’s five camera stores. Today it is the only specialty camera store in the city. Three years ago, the trade publication Digital Imaging Reporter named Horn Photo as its Dealer of the Year.
How Does Teamshares Work?
Teamshares focuses on purchasing small businesses from retiring owners and works to keep all employees by providing equity in the small business.
A total of 18 Horn Photo employees will collectively receive 10% of the company’s stock as a group, then after 15 to 20 years, employees will own 80% of the company.
Kevin Shiiba, a Teamshares co-founder, says that while the company has bought Horn Photo, it doesn’t invest in companies to run them. Instead, Teamshares relies on bringing in someone new or someone the previous owners have trained to run the business.
“Stan and Shelly will exit the business and fully retire in confidence knowing that this business is not going anywhere,” said Shiiba. “So then the business will be owned 10% by the employees now owners of Horn Photo and 90% by Teamshares.”
According to Shiiba, over time, Horn’s profits will go into the pockets of the employee-owners through dividends and stock buybacks eventually resulting in 80% of the shares being owned by employees.
A New Way for Small Businesses to Attract Talent
Shiiba says many small businesses in the country are constantly going up for sale, with 70% to 80% of them failing to be bought.
However, according to the company, employee ownership often leads to boosts in profits by as much as 14%. In addition, employee productivity increases by 4% to 5%, and sales increase by 2% to 3%.
By transitioning to an employee-owned company, says Shiiba, small businesses are often shown to be more profitable, as well as recession- and pandemic-proof. Employees also tend to be happier and stay longer.
Apart from the current Horn employees who have received these benefits, new employees can expect the same benefits once they join.
“We know employee ownership helps to attract and retain talent.” said Shiiba. “We’re also excited to bring something new, employee ownership, to the small business space.”