Key Takeaways
BTI chose an Employee Ownership Trust (EOT) after employees expressed a desire for greater career growth and earning potential.
Founder Preston Martin wanted a succession plan that rewarded employees while preserving BTI's culture and independence.
After evaluating ESOPs, worker cooperatives, and other options, BTI concluded that the EOT best aligned with its goals.
Employee ownership has increased engagement, with employees taking a greater interest in profitability, expenses, and business performance.
BTI uses a profit-sharing model that allows employees to benefit from the company's success while continuing to reinvest in future growth.
The company paired its EOT with a charitable initiative, Bicycle Harvest, extending the benefits of ownership into the broader community.
EOT Advisors helped BTI design and implement one of the largest Employee Ownership Trusts in the United States.
Bicycle Technologies International’s Employee Ownership Trust: Aligning Succession Planning with Employee Growth
"How do I combine a succession plan with these goals, the employees' goals?"
That question became the catalyst for one of the largest Employee Ownership Trust (EOT) transitions in the United States.
For Preston Martin, founder of Bicycle Technologies International (BTI), succession planning had been on the to-do list for years. Like many business owners, he knew he needed a long-term transition strategy but had always found more urgent priorities competing for attention.
Then 2020 changed everything.
A company-wide employee survey revealed something that fundamentally altered how Martin thought about BTI's future: employees wanted clearer career paths and greater earning potential. Rather than simply preparing the business for an eventual sale, Martin began searching for a succession strategy that could directly address those employee aspirations.
The result was BTI's transition to employee ownership through an Employee Ownership Trust.
Building BTI from a Garage Startup
BTI began in 1993 in Ashland, Oregon, as a small bicycle suspension repair business operating out of Martin's garage.
"We fixed up my garage with its dirt floor and basically renovated the whole shack into a space where we could do our repairs."
What started as a small operation quickly evolved into a national bicycle parts distribution business.
In 1996, Martin and his partner relocated the company to Santa Fe, New Mexico, seeking a more central location, a longer riding season, and better opportunities for growth. The move helped BTI expand beyond the West Coast and establish relationships with bicycle retailers across the country.
Over the following decades, the company experienced continuous growth.
"It's been perpetual growth since we started."
In 2017, BTI opened a second warehouse in Sparks, Nevada, allowing the company to provide one-day shipping throughout much of the western United States and further strengthen its distribution capabilities.
From Succession Planning to Employee Ownership
Like many founders, Martin initially approached succession planning as a business necessity.
"Every business owner with a mature business is told, 'You should be thinking about your succession plan.'"
For years, that planning remained a future project.
Then came the employee survey.
The results highlighted employees' interest in greater advancement opportunities and stronger financial participation in the company's success.
"It revealed their strong desire for a more defined career path and greater earning potential."
Rather than simply selling the company to the highest bidder, Martin began exploring ways to combine succession planning with employee ownership.
"That's where employee ownership became a priority."
Evaluating ESOPs, Worker Cooperatives, and EOTs
BTI examined multiple employee ownership structures before deciding on an EOT.
Martin initially assumed that an ESOP would likely be the best solution.
"The ESOP was probably the best known, and I was fairly certain that that would be the direction we might go."
However, after interviewing ESOP professionals and learning more about the structure, he became concerned about implementation costs, administrative complexity, and ongoing maintenance requirements.
"It became clear that the formula wasn't right for our company."
BTI also explored worker cooperatives.
While Martin appreciated the cooperative model, he felt it emphasized decentralized decision-making more heavily than BTI desired.
"We wanted a strong management culture that still encouraged individual achievement amongst the employee-owners."
The Employee Ownership Trust ultimately struck the balance BTI was seeking.
While preserving the company's existing leadership structure, the EOT provided a framework for employee ownership, profit sharing, and long-term stewardship.
Why BTI Preferred Profit Sharing
One aspect of the EOT that particularly appealed to Martin was its focus on ongoing participation rather than deferred rewards.
Under a traditional ESOP, employees often receive the largest financial benefit when they leave the company and cash out their accounts.
Martin questioned whether that structure always aligned incentives effectively.
"We didn't want to basically incentivize an employee to leave."
Instead, BTI wanted employees to benefit while actively contributing to the company's success.
Through the EOT, employees participate in annual profit sharing while helping build the company's future. This approach reinforces the idea that ownership benefits are tied to long-term engagement and ongoing contribution.
Increased Employee Engagement
BTI announced the EOT transition at the beginning of 2021.
"We surprised the heck out of everybody."
Employees immediately began asking questions about how the trust worked, how profit sharing would function, and what employee ownership meant for the future of the company.
Since the transition, Martin has observed a noticeable increase in employee engagement.
"They're asking the right questions about our expenses, about how to increase sales, improve margin."
Employees had always cared about the business, but ownership has created a stronger connection between day-to-day decisions and company performance.
"They generally care about the bottom line in a way that they did before, but now they're very tuned in."
Employee Ownership and Community Impact
One of the most distinctive aspects of BTI's EOT structure is its connection to community giving.
During the transition process, BTI established a nonprofit organization called Bicycle Harvest.
The company's annual profit-sharing formula allocates resources to three purposes:
Reinvestment in the business
Employee profit sharing
Community impact through Bicycle Harvest
The nonprofit supports initiatives such as Free Bikes for Kids, which repaired and donated more than 1,000 bicycles during its first year, as well as long-running bicycle-based food donation programs.
For Martin, employee ownership extends beyond employees alone.
"We're trying to make sure that this company is going to be around for the long term, creating jobs and wealth for our community."
How EOT Advisors Helped Structure the Transition
As BTI evaluated succession alternatives, Martin discovered EOT Advisors through articles written by Chris Michael on Employee Ownership Trusts.
"You helped me understand the simplicity and the value of the employee ownership trust."
Working with EOT Advisors, BTI designed and implemented one of the largest EOT transactions completed in the United States.
The flexibility of the EOT structure allowed the company to preserve its management culture, establish employee ownership, create a profit-sharing framework, and incorporate community-benefit goals into the overall design.
Preserving BTI's Culture for the Long Term
BTI's transition was never simply about ownership.
It was about creating a company that could continue to grow while maintaining the values that had shaped it since its earliest days.
The EOT supports BTI's core value of "Take care of each other" while creating a structure that benefits employees, customers, vendors, and the broader community.
For Martin, employee ownership offered something more than a succession plan.
It offered a way to align the future of the company with the people who help make its success possible every day.
About EOT Advisors
EOT Advisors is the first U.S. financial services firm dedicated to Employee Ownership Trusts. Working with business owners in all 50 states, the firm guides each sale from start to finish: advisory, valuation, tax planning, financing, legal coordination, and trust administration.
To learn whether an EOT is the right path for your company, schedule a free consultation or call (800) 289-9865.