Leaving an organisation that you have built up and invested years of hard work and heart into, is a difficult decision.
Especially when you can see the positive impacts that your social business has had on its employees and the surrounding community, and you want that social impact to continue after you’ve gone.
Employee Ownership is a great way of preserving your legacy and leaving it the hands of people who are already invested and know the ropes. But like any business handover, it needs to be carefully planned.
If you have decided to exit your social business and have chosen employee ownership as your exit strategy, you need to consider a number of key aspects before handing over the reins to ensure that everything continues to run smoothly.
Below are our top 5 tips for getting your business ready for employee ownership:
Put together a sales strategy plan. Think about what you want to achieve from the sale
- What are you trying to sell? Is it your assets, your order book, your IP or a mixture of each?
- Do you want to achieve a certain value?
- Do you want a phased exit from the company? How long are you willing to remain with the business?
- Do you want to ensure the company remains rooted in the community?
Prepare for the sale of your social business. You could consider:
- An ‘open-book’ approach to finance, sales and future orders.
- Communication with employees. How involved are employees with the day to day running of the business? What information could help them contribute more to the business?
- What skills are already in the business and what skills need to be in place when you leave the business?
Develop a succession plan
- Who is in your management team? Will they make good leaders? Could they take on elements of your role now?
- What skills are needed in the workforce? Can you identify individuals to train for future management responsibility?
- How can you improve communication with your workforce?
Value your business
- How much is the business itself worth?
- What intellectual property does the business own? Consider the knowledge held by your employees as well as trademarks, patents and processes.
- What stock and assets does the business carry?
- What is the value of the future order book?
Pick the right business advisers
Implementing employee ownership solutions, and developing and engaging staff takes specialist knowledge, time and effort. Selecting who to advise you from the outset and throughout the journey should be carefully considered.
Social Business Wales provides one-to-one support to businesses interested in succession planning and is the ‘go-to’ organisation for employee ownership support in Wales. The in-house team of experts can advise on a wide range of aspects that are relevant to the transfer of ownership of an SME to employees. They are able to support a consideration of the corporate finance, tax and governance implications of the transition process.
The team also provide the skills and expertise necessary to deliver the broad staff engagement that is required to develop an understanding of the requirements of an employee buy-out and carefully consider potential pathways towards the full transfer of ownership alongside the requisite governance structure.
Would you like to speak to somebody about employee ownership?
Please contact Business Wales by calling 03000 603 000 and quoting ‘EO2019’. We will be happy to arrange an informal discussion with one of our Social Business Wales employee ownership experts.