WOMEN-LED EMPLOYEE-OWNED BUSINESSES LEAD THE WAY

Research carried out by Women’s Enterprise Scotland shows that women-led businesses contribute more than £5 billion towards the Scottish economy, and that if rates of women-led businesses equalled that of men, the contribution to Scotland’s GVA would increase to £13 billion. Therefore, it’s encouraging that the past few years have seen a rise in the number of female-fronted businesses in the employee ownership sector, with several of the businesses transitioning to EO being owned or run by women.

We caught up with our director Sarah Deas to hear about some examples.

“One of Scotland’s most prominent EO businesses being run by a woman is Arran’s award-winning Auchrannie Resort. Established by Iain and Linda Johnston in 1988, it became employee-owned in December 2017, with 160 members of staff becoming owners. Linda has led the company as managing director and board chair since 2010.

Auchrannie 1

The team at employee-owned Auchrannie in Arran

“With two 4-star hotels, 30 5-star self-catering lodges, two leisure clubs, three restaurants, an ASPA spa and Arran Adventure outdoor company, Linda and Iain had cultivated a hugely successful business. When considering her succession options, it was important to Linda that the ethos of the company, the existing team, and the community use of Auchrannie’s facilities for the future was protected.

“Those were the drivers in deciding that employee ownership was the way forward for the company, and the new ownership structure means that her team now plays a huge part in shaping and influencing the future success of Auchrannie.

“Another Scottish business which has adopted the EO model in recent years is Doune-based Harvey Maps, a professional mapmaking service for the sport of orienteering. Founded 40 years ago by Robin Harvey MBE and Susan Harvey MBE, it is one of a very small number of companies in the UK to generate its own map data, becoming a market leader in maps for outdoor pursuits.

“As Susan considered her exit strategy, she felt it was important that the business they had built up over the years wasn’t swallowed up by a competitor. She decided that EO would give the company the best chance of continued independent existence and success, while retaining jobs locally. The employee buyout saw ten staff given the opportunity to become owners.

Harvey Maps, Doune, Stirlingshire, 21/11/2017: Harvey Maps staff, with founding directors Robin and Susan Harvey (centre), pictured outside their firm's offices (white building, left) on Doune's Main Street, Stirlingshire.

The team at Harvey Maps, Doune

“Heading up Glasgow-based architects Page \ Park is Karen Pickering, who was appointed as its chair of the board of directors following its transition to employee ownership. Having served 27 years with the company, her energy and drive to ensure the best possible architectural outcomes has continued in her new leadership.

“She states that becoming employee-owned boosted productivity and increased engagement among staff – team members are no longer ’wage earners’, they are ‘company owners’ and that has brought about greater energy, drive and pride – a great endorsement of the employee ownership model.

Page  Park Architects, Glasgow, 02/12/2013: Page  Park Architects staff, pictured at the firm's offices in James Morrison Street, Glasgow. Photography for Cooperative Development Scotland / Scottish Enterprise from:  Colin Hattersley Photography - colinhattersley@btinternet.com - www.colinhattersley.com - 07974 957 388

Page\Park Architects in Glasgow

“Also benefiting from EO is East Kilbride-based brand-realisation company Novograf. When the founders were considering their succession options, the company was performing well, winning some significant new business. They wanted to ensure this momentum would continue with those who knew the company best.

“Heading up the team of employee owners is managing director Jennifer Riddell–Dillet, who is harnessing the power of a highly engaged and motivated workforce to drive the business forward to further innovation and success.

Novograf in East Kilbride

Novograf in East Kilbride

“Employee ownership has great potential to help drive economic growth and create greater wealth equality in society. It’s great to see such successful, female–led businesses thrive within the sector, and we look forward to the number of women leading the way in EO continuing to grow.

If you have a question or you want to talk about how employee ownership can help you, please get in touch with us here using the ‘expert support’ option.

CHEMCO INTERNATIONAL BECOMES EMPLOYEE OWNED TO ADDRESS SUCCESSION AND SAFEGUARD SKILLS AND JOBS

Chemco International is the latest company in Scotland to become 100% employee owned.

The company, which is headquartered in Coatbridge, is regarded as a market leader in the design and manufacture of state-of-the-art protective coatings and is at the forefront of delivering environmentally friendly products for a wide range of industries throughout the world.

Chemco International

The Chemco International Team

Founded in 1990 by Manny Khorasani, Chemco traces its origins back to the Original Glassflake Company, the inventors of glassflake technology in the 1960s. Manny joined Glassflake as a production supervisor in 1982 and after quickly rising through the management ranks, he bought the company in 1990, renaming it Chemco International. The company is now one of a few remaining Coatbridge-based engineering firms that has continued to evolve, expand and develop over the past 40 years.

Around eighteen months ago Manny started to think about taking a back seat in the business and, after considering his options, he decided that employee ownership was the best way to secure the company’s future and protect and retain the jobs of his staff. In December, Chemco International announced it had completed its transition to become an employee-owned business, with 24 members of staff becoming owners.

An Employee Ownership Trust was formed to hold 100% of the shares on behalf of the new owners.  We caught up with Manny to hear more about the reasons behind the decision to move to employee ownership.

“We are almost an institution in the area, having been here for almost 40 years. That’s why it was really important to me that the company not only stayed within the local community, but that the jobs and the skills of the staff, who all live locally, were retained and protected. 

“I looked at a number of different options, including selling the business, but my concern was that due to the nature of the business, a trade buyer would most likely relocate the company. None of the options I explored delivered the business continuity I wanted for our customers and employees and this is when the employee ownership became an attractive option. 

“I carried out some research and then attended an employee ownership event run by Scottish Enterprise. The event was really useful and I came away with lots of valuable information. Even before I left the event I knew that employee ownership was exactly what I was looking for – it would provide the security that we wanted and, most importantly, would allow the employees, who have all played a key role in the growth of Chemco International, to have a real say in its future. 

“I must also mention Scottish Enterprise, for being instrumental in facilitating the employee ownership scheme for Chemco, and giving impartial, independent trustworthy advice. 

“It’s a very exciting time for our company and we all look forward to the opportunities this brings.

As far as I am concerned employee ownership is a win, win situation for all concerned and it is my belief that this will be the way forward in the near future.”

For more information about employee ownership and whether it is right for your business, please get in touch here using the ‘expert support’ option.

 

THE PRIORY HOTEL BECOMES EMPLOYEE OWNED

Founded in 1972 by Stuart Hutton, The Priory Hotel in Beauly is a local institution, holding a special place in the hearts of many from the town and beyond. Over the years, Stuart and his family have played a key role in the day-to-day management and running of the hotel. However, after over forty years of business, he began to consider his retirement and what that might mean for the hotel. After considering his options, Stuart concluded that employee ownership was the best way to secure the hotel’s future and reward his loyal staff.

An Employee Ownership Trust has been formed which will hold 72% of the shares on behalf of the employees. Stuart’s son Kenneth Hutton will retain the bulk of the remaining shareholding, to demonstrate that the family remains committed to the continuation of the hotel. Kenneth grew up with the hotel since childhood, and despite taking a different career direction as a golf professional, he has become involved again over the past few years. He will become managing director of the company, and will oversee its operation as his dad begins to remove himself from the business.  We caught up with Kenneth to hear more about the reasons behind the decision.

The Priory Hotel, Beauly, Thursday 22, November, 2018. Image: Assembled staff

The Priory Hotel team 

“My dad was at the stage where he was considering a step back from the business. He had put the hotel on the market recently and had a couple of trade sale offers, however he didn’t feel that the prospective buyers were the right fit for the hotel. A staff member had once mentioned employee ownership as a potential solution to this – it meant the business would be sold to those who know it best, and it wouldn’t be taken over by a large chain. The option stuck with my dad and when he felt like he had the correct management team in place, the time was right to begin progressing the buyout.

“Beauly is a small town and many people from the area have worked at the hotel over the years. Many marriages were forged at our discos and musical events in the 70’s and 80’s, and people still travel from far and wide for our food offerings, and in particular our famous Sunday carvery and traditional High Teas. The Priory Hotel is a huge part of the local community and a takeover by a large chain could have put jobs and company values at risk. By selling to his employees, my dad knows that the business he spent 46 years building is now in the hands of a loyal and invested team that wants the best for the hotel and the local area.

“Some of the key management team will assume positions on the board, including Kate Melens, who will be the General Manager of the hotel, bringing a wealth of experience and a fresh view to the way the business needs to develop with changing times. The staff are very excited by the news and are looking forward to learning more about the role they will play in the hotel’s future.”

For more information about employee ownership and whether it is right for your business, please get in touch here using the ‘expert support’ option.

CATCHING UP WITH SCOTLAND’S EO CHAMPION

Following the announcement from First Minister Nicola Sturgeon in August about the establishment of a new Industry Leadership Group, ‘Scotland for Employee Ownership’ (SfEO), an Employee Ownership Champion has been recruited to work with the group.

We caught up with Yogi Johnston, Champion, Scotland for Employee Ownership, to find out more about her role and what the SfEO group will be working on.

sdr

 “I am thrilled to be given the opportunity to work for SfEO.  Being a HR professional, I’ve always focused on challenging individuals, managers and teams to have an inclusive approach to how they work.  I want to use that experience at a macro level to influence and enable entire businesses to work and grow in an inclusive way; resulting in a stronger, larger and more confident Employee Owned Business community in Scotland.

“My focus for the coming year will be to work with the SfEO Board members to help deliver the strategy, visit Employee Owned businesses across Scotland and facilitate initiatives in three key areas; learning, enabling and influencing.

“We want our Employee Owned businesses to thrive, which means enabling access to the right type of learning and development.  Therefore, one of the group’s key initiatives will be to drive the creation of a world class learning environment where people will be able to access learning that will help them understand the technicalities of being employee owned as well as learning how to develop and maintain their employee value proposition.

“The SfEO group will also consider how we engage with key partners such as the Employee Ownership Association, to bring together Employee Owned Businesses (EOBs) from across Scotland.  These types of events will focus on sharing knowledge and best practice, as well as discussing challenges and celebrating successes.

“One of the overall aims of SfEO is to raise the profile of Employee Ownership such that it moves from ‘the fringe to the mainstream’ as an attractive business model. To achieve this, we will be looking to engage with key influencers, including professional institutions and academic researchers to help influence research and policy – perhaps we can get a few university dissertations on the go too!  I definitely have a busy year ahead of me and can’t wait to get started!”

PALIMPSEST BOOK PRODUCTION LTD ENTERS NEW CHAPTER WITH EMPLOYEE OWNERSHIP TRANSITION

Falkirk-based Palimpsest Book Production Ltd, one of the UK’s market leaders in book production, has joined the growing number of employee-owned businesses in Scotland, with 21 employees given a stake in the business.

Established in 1994 by Craig and Ruth Morrison, Palimpsest provides the full range of pre-press services, including typesetting, proofreading, digital publishing, design and reprographics, to the UK publishing market. From modest beginnings based in the Morrisons’ home, the company quickly grew, adding several staff and moving to new premises within 12 months.

Craig and Ruth have now sold a controlling interest in the business to an Employee Ownership Trust which will hold the shares on behalf of the employees and allow them to participate in the future success of the business.

Palimpsest Book Production Ltd, Falkirk, 30/08/2018: Staff and directors at Palimpsest, including managing director Craig Morrison (third from left in back row), director Ruth Morrison (seated left), director Andy O'Neill (fourth from left in back row), director John Forsyth (sixth from left in back row) and trustee director Sarah Eddie (correct, far right in lower row).

The Palimpsest team 

We spoke to Craig to find out more about the decision to become employee-owned.

Craig said:  “Looking to the future, we realised that at some point we would need to create a succession plan for the business. We wanted to ensure that when we did eventually retire, we could guarantee that Palimpsest would continue to operate successfully.  Doing some research into our options, I attended a seminar on succession planning organised by Co-operative Development Scotland.

“We were immediately attracted to the idea of transitioning to employee ownership because it would enable us to realise part of our investment while continuing to work in the business until we are ready to retire.

“Employee ownership will also ensure that Palimpsest continues to thrive, offering employment and careers in Scotland into the future. With a client base ranging from leading international publishing companies to self-publishing authors and an ‘end to end’ range of pre-press services, the new Employee Ownership Trust has a strong foundation.

Craig continued: “We’ve had an amazing journey over the last 24 years, with clients telling us that we have become their trusted partners in both print and digital book publishing. Ruth and I are delighted we now have a succession solution in place, though have no plans to retire for a while yet.”

20/20 PROJECT MANAGEMENT JOINS SCOTLAND’S GROWING EMPLOYEE OWNERSHIP SECTOR

The UK’s leading specialist provider of project management training, 20/20, is one of the latest Scottish businesses to announce its transition to employee ownership, with 20 employees becoming owners.

The project management and project controls training company delivers courses and consulting services throughout the world from its Aberdeen base.  It works with major names across a range of sectors including BP, Centrica, Transport for London, BAE, Rolls Royce and AMEC, as well as a range of public sector organisations, and has an annual turnover of £3million.

An Employee Ownership Trust (EOT) has been formed and holds 61% of the shares on behalf of the employees with the option to acquire the remaining shares in the future.

Becoming an employee-owned company has been a positive step for 20/20, with the board of directors deciding it was the right move to enable the engagement of the employees to effectively take the business through its long-term goals.

We caught up with founding director Tony Marks to find out more about the decision.

Mr Marks said:  “Initially employee ownership was considered as part of 20/20’s succession planning strategy, and after I attended a succession masterclass run by Co-operative Development Scotland the benefits became very apparent and the plans to make it a reality came into action.

“We had developed a future leaders programme with the eventual aim of preparing some of our staff to oversee business operations.  Myself and two fellow directors were the three main shareholders in the business and we still hadn’t resolved the issue of realising the value of our individual shares.

“Hearing first-hand about the process and experience of becoming employee-owned really helped us understand the potential benefits, and we agreed it was an effective solution to our succession issues. The prospect of a more engaged workforce and a culture which encouraged greater innovation really appealed to us. We held a team meeting to tell our staff, and the news was very well-received.

“Employee ownership allows myself and my fellow directors to remain in the business as we continue to actively develop our future leadership team, with the knowledge that 20/20’s future is secure. We hope that with a highly-invested workforce, the company will continue to grow and succeed well into the future, with all employees sharing in the rewards.”

Emma Davidson, 20/20’s employee trustee, added:  “The employees see this as a very positive thing and are collectively looking forward to building on 20/20’s business success for years to come.  By becoming an employee-owned company, we feel empowered to create an environment that suits us as a workforce, ultimately increasing our productivity to bring 20/20’s success to the next level.”

20/20 Business Insight of Aberdeen. (back row left to right) Karen Brown, Emma Hart, Jamie Birse, Jacob Bonner, Business Development Director Tom Vincent, and Operations Director Neil Harkin. (front row left to right) Emma Davidson, Service Delivery Director Graham Chapman, Finance Director Mandy Buck,  and CEO Tony Marks. Taken 15-08-18

NEW LEADERSHIP GROUP FOR EMPLOYEE OWNERSHIP – SCOTLAND FOR EO

First Minister Nicola Sturgeon recently announced the establishment of a new industry leadership group which will aim to make Scotland the best country in the world for employee-owned (EO) businesses.

Under the strapline ‘Employees CAN DO Ownership’, Scotland for EO aspires to increase the number of employee and worker-owned businesses from around 100 to 500 by 2030. It will be backed with £75,000 of Scottish Government funding and will be co-chaired by Jamie Hepburn, Minister for Business, Fair Work and Skills.

We caught up with some of the people involved to find out about the reasons behind the establishment of the group.

The First Minister, who revealed the news during a visit to the employee-owned Auchrannie resort on Arran, said:

“All the evidence tells us that employee ownership delivers benefits to business performance, the people who work in them and the places in which they are located. This has certainly been the experience of the Auchrannie team in Arran.

“The health of the Scottish economy depends on having a diverse range of business-types and employee ownership clearly has an important role to play in that.

“We want to make it easier for companies and workers to find out more about this model and to move towards it if it’s right for them. Scotland for EO will help to make this into a real option for businesses across Scotland.”

John Clark, chair of employee-owned business Novograf and member of the steering group behind the initiative, described how the group aims to cultivate the perfect environment for further growth in Scotland’s employee ownership sector.

“We have a choice: to be passive and allow the development of a support environment for EO companies to happen without industry input, or to take a proactive approach and seek to actively influence how that environment evolves. We believe the proactive approach creates the prospect of making Scotland the best country in the world to establish and grow an EO business.”

Evidencing the increasing popularity of EO in Scotland, Co-operative Development Scotland director Sarah Deas concluded:

“The appetite for employee ownership has never been greater. In the last five years the number of employee and worker owned businesses operating in Scotland has trebled and this past year we have been working on a ‘deal a month’ on average.  Our client pipeline is expanding too, indicating take-up of the model will continue to accelerate in future years.

“Promoting employee ownership helps drive growth in the economy and create greater wealth equality in society.”

EMPLOYEE OWNERSHIP PROVIDES PERFECT SUCCESSION SOLUTION FOR PRODUCT DESIGN CONSULTANCY

Edinburgh-based i4 Product Design Ltd is an ambitious Scottish company which was formed in 2003 by four founding directors, Brian Combe, Ewan Maxwell, Gordon Miller and Jim Ward, who went on to build a successful business with a strong track record.  Three of the four founders, Brian, Ewan and Gordon, are still with the business and form the current board of directors.

i4 has a mix of designers, innovators and engineers that collaborate as one team to deliver eye-catching and well-engineered products. Specific services include project management, industrial design, mechanical engineering, electronics and systems engineering, prototyping and manufacturing support.

The business has designed some well-known home and garden products for brands such as Flymo and Bosch as well as medical diagnostics and prosthetics products for world-leading vision device manufacturer Optos (part of the Nikon group) and Touch Bionics (an Össur Company).

In May this year, the company announced it had completed its transition to become an employee-owned business, with 14 members of staff becoming majority owners.  An Employee Ownership Trust (EOT) has been formed and currently holds 75% of the shares on behalf of the employees; the co-founders have an equal share of the remaining 25% but it is envisaged the EOT will eventually hold 100%.

I4 Product Design, Edinburgh Image shows directors and staff of i4 Product Design at their Edinburgh headquarters. Taken 23-05-18

Directors and staff of i4 Product Design at their Edinburgh headquarters 

We caught up with Brian Combe, i4’s managing director, to find out more about the decision to become employee-owned. Brian said:

“The main objective of establishing an employee ownership structure was to provide a stable platform for growth by allowing our employees to feel more engaged, informed and integrated into the company.

“Many exit options had been considered over the years, even employee ownership which at the time we wrongly assumed would be too complicated for us. However it soon became clear that employee ownership was an ideal fit for the aspirations of the directors, for leaving a legacy of a sustainable and profitable company.

“Since the company’s inception we have always strived to do the right thing by our employees, and so once we understood the principles of employee ownership, we knew it was the perfect vehicle for us to begin the process of engaging our team for the next chapter of our company’s development.

“We were extremely satisfied with the support we received from CDS and our legal and financial teams on implementation. Although there is a lot of hard work still to complete to make employee ownership work for us, we firmly believe that this will be good in the long-term for everyone involved. 

“All employees were kept in the loop from the start of the process. We held off-site strategy days where a wide selection of our employees attended and contributed to discussions on many points including succession and various models of ownership. Once the employee ownership model was debated in more detail and identified as the preferred option, a wholesale engagement with the employees was undertaken on a regular basis as the company stepped through the process. Keeping the lines of communication open proved to be very useful as feedback from the employees during the sessions ultimately shaped the finer details of the EOT.

“Time will tell how it might help the business but the hope is that transferring ownership to the employees is recognised as a genuine commitment and display of confidence by the co-founders in the employees being able to take the company to the next level.  We hope that the process will encourage the staff to bring new ideas, add real energy and drive to take the business forward and importantly make them feel part of something exciting and have a real sense of pride working for i4.”

EMPLOYEE OWNERSHIP IS CLEAR SUCCESSION SOLUTION FOR BALHOUSIE GLAZING

Perth-based glazing specialist Balhousie Glazing recently joined the growing number of employee-owned businesses in Scotland, with 12 staff becoming owners. Operating throughout Perth, Dundee and beyond, the company provides a wide range of services such as windows, doors and patio installation and the building of conservatories, porches and orangeries. The team’s experience spans small residential builds and renovations to major commercial projects.

We spoke with founders Malcolm Sweeney and Drew Hey, who set up Balhousie Glazing in 1993, about the decision to sell to their employees.

Employees and directors at Balhousie Glazing in Perth  Pictured Directors in centre Drew Hay (on left) with Malcolm Sweeney (on right) Taken 16-07-18

Employees and directors at Balhousie Glazing in Perth.

Malcolm said: “Drew and I had been discussing the issue of succession, and as neither of us had family members in the business, the only option we were really aware of at the time was a traditional trade sale. We would likely have been purchased by a rival company, something we didn’t want. However, one day we were reading The Courier, our local paper, and spotted an article about a nearby seminar being held by Co-operative Development Scotland the following day and decided to go along.

“It was about business succession and one of the speakers was Bob Anderson, financial director of Bentley’s Shopfitting, an employee-owned company based in Dundee. He spoke about how the EO process had worked for them and the benefits of employee ownership and we were really sold on it.

“A lot of our staff have been extremely loyal, and it was essential to us that we safeguard their jobs and ensure they could continue paying their mortgages and providing for their families. Being employee-owned would anchor the company in the local area, keeping our team’s extensive skills here too. We contacted CDS and one of its advisers paid us a visit to give us more information before we decided to proceed with the employee buyout.”

Drew added: “We had a meeting with our employees about the decision and they seemed really happy and ready to embrace their new role as employee owners. With a vested interest in the business, they will reap the benefits of strong performance, so it’s been a positive boost for morale and motivation.

“As well as retaining jobs, employee ownership will ensure the business maintains its values and ethos. Much of our work comes from word-of-mouth recommendations, and our reputation, which we have been building for 25 years, is very important to the success of the business. A trade sale to a competitor may have affected our standing in the local community or impacted the excellent customer service for which we are renowned, both of which could have a negative effect on referrals.”

EMPLOYEE OWNERSHIP IS SOLUTION TO RETAIN OWNERSHIP OF SCAN BUILDING SERVICES IN DUNDEE

Dundee-based building engineering company Scan Building Services Ltd, founded in 1980, operates in the construction industry as a specialist contractor, providing services such as heating, ventilation, air conditioning and plumbing systems.  Serving clients in the Dundee area and beyond, the company’s experience ranges from installations in domestic properties to major commercial and industrial buildings.  Scan Building Services’ clients include construction contractors, local authorities, health trusts and private companies.  It has an annual turnover of £3.9million.

In May this year, Scan Building Services announced it had completed its transition to become an employee-owned business, with 56 members of staff becoming owners.  Previous owner David Anderson has sold 100% of the shares to an Employee Ownership Trust, which is holding them on behalf of the employees. The deal was structured in order to make it affordable to the business without affecting its ability to reward the team and reinvest for the future. The plan is to also introduce an Enterprise Management Incentives (EMI) scheme for senior management.

We spoke to previous owner David Anderson and Graham Prophet, part of the senior management team, to find out more about the decision to become employee-owned.

Scan Building Services, Dundee, 11/05/2018. Scan Building Services, pictured on Dundee Law, Dundee. Directors Graham Prophet (correct, lower front centre with navy coloured jersey) and Mark McKenzie (lower front centre, black jacket, tie and white shirt) with other Scan staff. Photography for Scottish Enterprise from: Colin Hattersley Photography - www.colinhattersley.com - cphattersley@gmail.com - 07974 957 388.

Graham said: “Throughout the years we have endeavoured to provide the best possible quality of products and services to our clients and to pride ourselves in the standard of the work we provide.  To do this we employ a highly skilled workforce of dedicated and local craftsmen, many of whom trained through the company’s apprenticeship scheme.  So when we were considering our options for future ownership of the business, we wanted to ensure the jobs were retained in Dundee and the staff were rewarded for any success.  Employee ownership ticked all of those boxes and following a feasibility study last year, we knew it was the best option for us.

“A fair price was achieved for the previous owner that also ensured sufficient reserves were left in the company to provide working capital to invest for the future.

“We notified the staff early on in the process and made sure they were involved and updated as the project progressed.  All employees now have a real interest in the success of the business which will motivate them to perform and achieve.”

David Anderson added: “Rod Mathers from Henderson Loggie, a valued adviser to the business over the past two decades, suggested this very effective structure which met my objectives and allowed ownership of the company to pass to the employees, who now have a vested interest in making it the best company it can be and to benefit directly from their efforts. The team at Henderson Loggie guided us through the whole process from feasibility stage right through to completion most efficiently. I’m very proud of the way things have worked out and I wish the new owners of Scan every success for the future.”