Your dealership is doing well. You know a lot about your market and the industry. But that restless feeling just won’t go away. You figured one of your kids would join your business but they have zip interest. You’ve learned you don’t enjoy being responsible for everything and lacking the micro-manager gene your fingers don’t need to be in all that goes on. But being part of some decisions might be okay. So how to make this work?
A guy at the gym mentioned something called ESOP. You Googled it. Could this be right for you and your team? You talked with your bean counter and called your lawyer and accountant.
ESOP?
Often used as an exit strategy or succession tool for business owners, an Employee Stock Ownership Program is a tax-qualified, defined-contribution retirement plan that allows employees to own part or all of a company. One of the things that helps ESOPs work is that instead of employees buying shares in the business, a company contributes shares or cash to a trust, sometimes borrowing money to purchase additional shares. Employees are vested with shares according to bylaws within the ESOP or a company’s retirement plan (if any). ESOP shares can also include those of other companies (like when you bought Apple at $12). Shares in an ESOP are usually allocated based on an employee’s tenure or other criteria. Like this: Your director of managed IT services who has been solving your customers’ IT issues for eight years will probably have more shares than a service tech who’s spent her/his two years diagnosing problems on a phone and replacing parts while twisting a screwdriver.
Although we connected with Woodhull, a mid-sized dealer in Ohio (more from them in a moment), an ESOP is hardly limited to office technology dealerships. We also talked with Jennifer Dietz, president of FSSI in Santa Ana, California, who transformed her company into an ESOP. “I’m passionate about ESOPs,” enthused Dietz, who led FSSI’s transition about five years ago. It is important to cite FSSI, a coast-to-coast transactional printer, to show that ESOPs can work for privately held companies, large and small.
Why Dietz’s passion? A big part is experience. She said it formalized the company’s DNA, the spirit and sense of belonging that is often deemed essential to a successful ESOP. FSSI initially shared 49% of the stock. Dietz now plans to make that 100%, putting her passion into affirming (and increasing) the value of employee ownership. To Dietz, it makes sense to have FSSI be fully employee-owned so everyone benefits from the actions they take together.
She thinks more privately held firms with the necessary sharing DNA should consider the ESOP option because it motivates employees while providing a path to the future. This can be especially important in a time when many employees don’t feel valued by employers.
While ESOPs are yet to become a go-to strategy for office-tech dealers, a notable exception is Woodhull LLC in Springboro, Ohio. Woodhull is new to the ESOP ranks, having become employee owned in 2025. We reached out to Robert Woodhull, president, to hear how an ESOP worked for an office-tech dealership. Here’s what he told us:
Robert Woodhull, president of Woodhul LLC, was named a Young Influencer by The Cannata Report in 2024.
CR: What made you decide to go to an ESOP structure?
Woodhull: Woodhull is a multi-generational family business. The decision to move to an ESOP structure was rooted in long-term stewardship rather than short-term liquidity. For us, it was about succession with continuity. Selling to a consolidator or private equity group would have changed the DNA of the company. The ESOP allowed us to remain locally controlled and mission-driven while still creating a meaningful transition strategy.
CR: There is often talk about company culture, especially in smaller businesses. How has culture been important in developing an ESOP?
Woodhull: The ESOP was a natural fit and amplified our culture, what we term the ‘Woodhull Way.’ We’d been operating with an ownership mindset for years, with leaders and employees accustomed to thinking about margins, service excellence, and long-term customer relationships. The ESOP formalized what we already believed, understanding that we are caretakers of something bigger than ourselves.
An ESOP reveals the truth about a company’s culture. If the culture is weak, the structure will expose it. If culture is strong, it will accelerate performance and alignment.
CR: How is your ESOP structured and how has it changed operations?
Woodhull: The ESOP represents ownership in equity, not a shift in managerial authority. The ESOP is a 100% employee-owned trust, but governance continues to flow through executive leadership and the Board. Leadership is still responsible for strategy, execution, and results. What has changed is the level of transparency and engagement. We talk more openly about financial performance. There is greater emphasis on financial literacy, so employees understand how EBITDA, margins, and cash flow impact the valuation of their ESOP accounts.
CR: How did employees react?
Woodhull: Some were excited by the idea of ownership and proud to be part of something unique. Others wanted to know more about how the ESOP worked. A few were skeptical and wondered whether the value was symbolic or truly meaningful. The most common questions centered on valuation, vesting, long-term impact, whether an ESOP affected their compensation, and what would happen if they left the company.
The key to navigating these reactions was education. An ESOP cannot simply be announced: It must be explained clearly and repeatedly. Without education, ownership does not become transformational.
(Editor’s note: As an aside, Dietz said the ESOP makes FSSI attractive to prospective employees who find the idea of ownership attractive.)
CR: How did you determine valuation and share allocation?
Woodhull: To ensure compliance with fiduciary standards and regulatory requirements the valuation process was handled by an independent third-party ESOP valuation firm. The company’s value was determined using established financial methodologies, including analysis of EBITDA performance, cash flow stability, market comparables, and projected growth trajectory. It was a disciplined, data-driven process. Share allocation is formula-driven rather than subjective. It is based primarily on compensation levels and tenure within the framework of the ESOP plan design. This ensures fairness, transparency, consistency, and compliance, ensuring discretionary distribution of shares cannot happen.
CR: This had to be rather complex. You must have needed different advisors.
Woodhull: We did. Implementing an ESOP required specialized advisors beyond our traditional legal and accounting relationships. It was critical to work with professionals who focus specifically on ESOPs to ensure compliance and proper execution. Traditional corporate attorneys and CPAs may not have the knowledge required.
ESOP transactions are governed by ERISA (Employee Retirement Income Security Account) and involve complex regulatory requirements. We engaged experienced ESOP legal counsel, valuation advisors with ESOP expertise, and accountants familiar with the structural and tax implications.
(Editor’s note: Dietz explained that FSSI also brought in outside accounting and legal expertise, as well as ERISA support, to ensure the ESOP was properly structured.)
CR: How are new employees included?
Woodhull: New employees become eligible for the ESOP after meeting defined service requirements, typically based on hours worked and tenure thresholds. Once eligible, they begin accumulating shares annually according to the allocation formula. Over time, those shares vest according to the plan structure. This reinforces long-term engagement and retention. Employees understand that sustained performance and tenure lead to greater ownership accumulation.
CR: Were there other implementation challenges?
Woodhull: A significant challenge was balancing education with clarity that didn’t overwhelm people with technical detail. It was important that everyone understood that ownership brought responsibility, not entitlement or automatic reward. Another challenge was aligning ownership mentality with our performance culture. It required consistent messaging that the ESOP’s value is directly connected to operational excellence, profitability, and disciplined execution.
CR: If you were to do this again, what would you do differently?
Woodhull: If we were to go through the process again, we would likely begin financial education sooner. Ownership concepts need repetition and reinforcement, especially in the first year. We would also tie the ESOP to measurable performance metrics from day one. The clearer that connection, the stronger the cultural alignment becomes.
It’s Your Call
For both Woodhull and FSSI, forming an ESOP was a threefold plan: A cultural commitment, a succession strategy, and a legacy decision. When positioned correctly, an ESOP can do more than transfer ownership by elevating responsibility and aligning an entire organization around shared success.
Only you can say whether an ESOP might be right for you or your dealership. Hearing from companies that have been down this road, it seems as if an ESOP may be worth considering as an option for now or for when you decide to do something else. The answer depends on your style as a business owner, your people and company, your strength and longevity in your market, the money involved, and much more. It can be an exit strategy, a way of sharing the wealth with those who made your success possible, or a way of continuing something greater than your existing business. Ultimately, it’s your call.
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