Employee Ownership – A 21st Century Exit Strategy

After years of blood, sweat and tears building up your business, it’s no wonder that the issue of what happens after you leave is a tough one to figure out. While you may be ready to retire or withdraw so you can enjoy the fruits of your labour, the question of who will succeed you is the last big decision you will make for the company. So you want to make sure that you’ve examined all the options and picked the right one.

Stick with tradition?

Of course, there are the usual, traditional routes that you can take. But it’s worth considering whether they adequately address your needs and wishes.

  • Trade sale: This is a good way to ensure that people who truly understand your industry take the company forward. But it may feel wrong to sell your business to a competitor after so many years of doing battle with them in the industry.
  • A Management Buy Out (MBO)/ Management Buy-In (MBI): The idea of selling to those in senior positions in the company is likely to be much more attractive. But this is only an option if the management team can afford it and many can’t.
  • Liquidation: While this may be the right course of action for some, the idea of ending the employment of the people who helped you build your business is deeply unpalatable.

The modern solution?

It’s not a new concept, but the popularity of Employee Ownership has accelerated in recent years – not least thanks to tax reforms. This new found momentum has created a sense of something new and exciting. So it’s worth exploring if it would be a good fit for your business.

The Employee Ownership Association (EOA) reports that:

  • the employee-owned sector contributes £30bn to the UK economy annually
  • the number of employee-owned businesses is growing at an annual rate of just under 10%
  • 80% of employee owners experience a sense of achievement from their jobs

Could this be the exit strategy you’ve been waiting for but never knew existed?

 

For more information on employee ownership, visit the Employee Ownership Association (EOA) or contact WLP via enquiry@w-l-p.co.uk.