New Tennessee Program Supports Business Succession Through Employee Ownership

State-funded business assistance program will help Tennessee business owners evaluate employee ownership as a succession strategy

NASHVILLE, Tenn. (Oct. 21, 2026) — As business owners across Tennessee consider succession and the future of their companies, employee ownership offers an alternative to selling to an outside buyer. Employee Stock Ownership Plans (ESOPs) can help preserve business legacies, keep jobs rooted in local communities and create opportunities for employees to build wealth.

Yet determining whether an ESOP is a viable option requires specialized financial and legal expertise, and the cost of evaluating a potential transition can be a barrier for some business owners.

To help address this barrier, the Tennessee Center for Employee Ownership (TNCEO) is launching the Tennessee Employee Ownership Business Assistance Program. Made possible through a $500,000 grant from the Tennessee Department of Economic and Community Development (TNECD), the program will provide technical assistance funding to eligible Tennessee businesses over the next three years. Eligible businesses may be reimbursed 50% of the cost of an ESOP feasibility study, up to $25,000 per business. TNCEO will administer the program and connect participating businesses with independently selected, qualified ESOP service providers.

“Helping Tennessee businesses plan for the future is an important part of strengthening local economies, particularly in rural communities,” said Deputy Gov. and TNECD Commissioner Stuart C. McWhorter. “Employee ownership is not the right fit for every business, but when it is, it can help preserve jobs, keep businesses rooted in their communities and give employees a stake in the value they help create. Through this program, we are helping business owners access the expertise they need to determine whether an ESOP is the right path for their business and its future.” 

Tennessee is home to 97 ESOPs, according to the National Center for Employee Ownership's analysis of 2024 federal filings, fewer than neighboring states including Kentucky (113), North Carolina (126) and Georgia (158). Nationally, more than 6,600 ESOPs cover about 11 million participants and hold more than $2 trillion in plan assets.

"I've seen what happens when the people who build a company also own a piece of it,” said Shannon Litton, board chair of the Tennessee Center for Employee Ownership and CEO of 3LS Professional Services. "They think like owners, they stay, and the business stays rooted in its community. Too many Tennessee owners never hear about this option until it's too late to consider it. This program gives them access to the expertise to find out early whether an ESOP is the right fit for their business."

TNCEO will celebrate the launch Thursday, Oct. 22, at A Celebration of Employee Ownership, hosted at JE Dunn Construction's Nashville office. Business owners can learn more, review eligibility requirements and sign up for updates at tnceo.org/business-assistance. Applications are expected to open in early Q1, 2027.

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About the Tennessee Center for Employee Ownership

The Tennessee Center for Employee Ownership (TNCEO) is a nonprofit organization working to grow employee ownership across Tennessee. TNCEO helps business owners understand succession options including Employee Stock Ownership Plans (ESOPs), worker cooperatives, and employee ownership trusts (EOTs), connects them with qualified resources, and brings together the state's employee-owned companies, advisors and public partners to strengthen support for employee ownership statewide. Learn more at tnceo.org.

Media Contact

Tennessee Center for Employee Ownership

Rachel Merfalen, Executive Director

rmerfalen@tnceo.org