The owner at the very least risked a lot of time and money to get the business going, and it would have been a while before they hired someone else to do the job. It's not like they just sat back and did nothing.

This is absolutely not always the case. Many businesses (most, I'd bet) predate their current owner. And what is the risk? I don't get why this obsession with undefined "risk" is so important. What's the absolute worst case scenario? Their business shuts down and they have to go work for a wage like everyone else?

On a very small scale they sometimes work, when they get larger scale they usually have a CEO and upper management like any other business. In the end it's really not that different. Look at REI for example, it's a co-op, has a CEO, and at least in my area has pretty average pay and benefits. They have laid off people recently due to profit concerns, and have ok ratings on job sites. What is the advantage to these exactly?

REI is a consumer co-op, not a worker co-op, and that's mostly just a marketing gimmick. If you go to the store, you can pay $20 to become a "Co-op Member" for life and get discounts. I'm talking about worker co-ops, where the ownership and operation of the firm is shared among its employees. There are shitloads of these at small scales, but there are a few big ones - Mondragon and others in Spain, Uralungal in India, Huawei in China, etc. In my city, the largest industrial laundry operation is a worker co-op, and they have a practice of providing capital and expertise to other local businesses to convert into co-ops. However, it should be noted that the conditions for a worker co-op in capitalism are very different than they would be under socialism. In capitalism, they are at a competitive disadvantage on the market, because they will pay their workers more and thus have tighter margins. In socialism, that's not an issue.

Can you give me the best example of a current city, country, or whatever that is closest to what you think is best for the US to change to?

Economically, China, Cuba, and Vietnam operate under Marxist governments using different approaches to planned economies that place a large emphasis on worker power within businesses. It's been enormously successful for all of their development and quality of life. You could look at a number of Latin American countries where socialist parties contest with liberal/capitalist parties in electoral politics and see the success they tend to have under the more left wing governments. Here, Bolivia is an excellent example. They've had a socialist party (MAS) in power for over a decade and quality of life, life expectancy, poverty levels, literacy, public health, and education have all improved dramatically. But they are not truly a socialist country (even in the restricted sense of the explicitly Marxist states I mentioned above) because they still operate in a mixed economy where the capitalist class wields massive economic and political power, and the socialist parties in power work to restrain the capitalists and build alternative models. Nowhere on earth aiming for socialism isn't in a process of active struggle against the global capitalist powers-that-be, and that struggle looks very different under different circumstances. I don't just want the US to change to the Chinese model or something, but I do want an economic model much closer to the examples I've given here, though substantially adjusted to the conditions of the US (and the need for the US to make reparations for imperialism).