Dorset Chamber CEO Ian Girling encourages local enterprises to shine at the 2024 Dorset Business Awards, and it as a platform for success
Over the last couple of years, I have become aware of an increasing number of businesses that have become EOT’s – Employee Ownership Trusts. While there are still a relatively low number of businesses that have embraced this model, it’s definitely becoming more popular.
An EOT is a trust that enables the company to be owned by its employees. It’s an attractive proposition for many business owners who are perhaps looking to sell their business as part of their exit strategy, but are reluctant to see their current business swallowed up by a larger firm, effectively ending it. Understandably, business owners often have concerns about what may happen to their clients, employees and brand when their business is sold. An EOT can provide a managed exit strategy for the business owners and, in creating ownership by the employees, enables the company to continue trading.
An EOT can deliver huge benefits to the business in many ways. Most notably, it can result in increased engagement from employees: as part owners they help create a strong culture of shared responsibility. It can also help attract and retain good quality staff – it’s an appealing addition to your job benefits.
It’s also attractive from a customer perspective. The customers you have built up relationships with over many years will be glad to remain as customers and not transferred to a new business that may have a different approach in terms of their business culture and customer care.
Business owners also enjoy the security of knowing that the business they have worked so hard in for many years will continue after their exit.
However, as with all things there are pros and cons – becoming an EOT is not the right option for every business or every industry, and it’s an area that must be considered very carefully.
The transition can be expensive, and it is absolutely vital any business considering this takes professional advice before making such a commitment.
