We mean use an Employee Stock Ownership Plan as the instrument to sell your company to employees. You already read about Jim Schell selling one of his companies outright to two employees; this idea is wholly different.

Topic for Discussion:What is an ESOP and why should you consider executing an ESOP?

Answer: According to the ESOP Association, "an Employee Stock Ownership Plan (ESOP) is an employee benefit plan which makes the employees of a company owners of stock in that company. Several features make ESOPs unique as compared to other employee benefit plans.

First, only an ESOP is required by law to invest primarily in the securities of the sponsoring employer. Second, an ESOP is unique among qualified employee benefit plans in its ability to borrow money. As a result, 'leveraged ESOPs' may be used as a technique of corporate finance."

Ray gives us three reasons for doing an ESOP or any kind of employee stock ownership plan. He says it is often simply the right thing to do as it can keep the business from disappearing or being closed down when the founder dies or loses interest, and it provides liquidity for the founder.

You don't want to try to execute this option alone. Seek out free advice from Ray at the Beyster Institute and spend some time on the web sites of the two national trade associations for ESOPs (see the Overview section for links).

You think about it: Do you think that this option could be an employee motivation tool? Does this option intrigue you? Should you learn more?