If you’re simply looking at the facts around employee ownership you are in danger of missing the point. Contributor Simon Poole Founder and Managing Director – Jerba Campervans.
For entrepreneurs and business owners, the exit is supposed to be the moment all your blood, sweat and tears finally become worth it. It should be the confirmation that you are set-up financially to create your new venture, or free to skip off on a happy, bountiful retirement.
In reality, it is often a stressful time, with the potential to pose fraught negotiations and deep moral dilemmas. For one thing, there is a loyalty issue. If you want to seek the solace of a buy-out from a larger competitor, then you also know at the back of your mind, it will mean your employees’ roles become uncertain.
There will likely be efficiency savings – if not immediately, then shortly after – where teams will be merged and jobs could be lost or cut down. It is encouraging therefore that increasing numbers of business owners are instead looking to their staff as the future of their businesses.
And while employee ownership may not be a panacea, it makes sense on so many levels, especially when it comes to the cold hard financial incentives, such as tax breaks and increased certainty.
Yet the financial rewards go beyond that. For a start, rather than efficiency savings coming through a merging of departments (as is so often the case with buy-outs), they come from within. Productivity is everything to employee owned businesses – where staff feel pride and take ownership of decisions that directly affect them.
While these benefits along with the financial incentives are naturally welcome, they aren’t the real reason we would strongly recommend this model of business succession. What really makes us passionate about it has been our own experience of the emotional connection. The team feel security through self-actualisation. They take ownership of mistakes and feel pride in achievements.
Clients, meanwhile, take delight in finding out that the firm is employee-owned – and that there is inherent goodness in it. We know we are leaving our business in a healthier state for it. Yes, we are benefiting, but the team are benefiting too. It feels fantastic.
What’s more, the support has never been better with the Scottish Enterprise and the Scottish Government hugely supportive of businesses that opt to become employee-owned; they are there to guide you on the way.
If you are considering your exit and employee ownership is on the table, of course you should weigh up the facts, the financial pros and cons. But whatever you do, don’t undervalue the strength of the positive feelings behind leaving your business to the team that helped you to build it in the first place.