What types of businesses are a good fit for an EOT?

EOTs work well across industries and company sizes, but they’re not a one-size-fits-all employee ownership model.

EOTs tend to work well for:

• Owners seeking a fair, mission-aligned exit.
• Companies with solid cash flow (~$300,000+ EBITDA) and clean financials.
• Businesses with a capable leadership team in place (or leaders who can be developed).
• Owners wanting to avoid selling to private equity or competitors.
• Founders focused on long-term continuity.

EOTs generally aren’t a good fit for:

• Unstable or unprofitable businesses.
• Owners prioritizing maximum tax advantages.
• Owners seeking an immediate exit without a succession team in place.
• Businesses requiring individual licenses (medical, legal, accounting, etc.).

Sometimes, a business falls somewhere in the middle. In those cases, careful planning and the right adjustments can improve the viability of an EOT.