HARVEY MAPS FINDS ROUTE TO SUCCESS

Founded 40 years ago by Robin Harvey MBE and Susan Harvey MBE to provide a professional mapmaking service for the sport of orienteering, Doune-based Harvey Maps 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 such as hill walking and mountain marathons.

Harvey Maps, Doune, Stirlingshire, 21/11/2017: Harvey Maps founding directors Robin and Susan Harvey.

Harvey Maps founding directors Robin and Susan Harvey.

It also recently joined the growing number of businesses in Scotland to adopt the employee ownership model, with ten staff given the opportunity to become owners. An Employee Ownership Trust has been formed and will hold 90% of the shares on behalf of the employees. Susan Harvey is the only other shareholder with 10% ownership.

We caught up with Susan to hear more about the firm’s decision to become employee-owned.  

“In due course we will want to retire. However, having formed and developed the business into a market leading company over the past 40 years, we didn’t want to sell to a competitor and see our life’s work absorbed into another company.  It was also important to us to retain the jobs in Doune.

“We wanted a succession solution which gave the company, the jobs and the brand a good chance of continued independent existence following our retirement; employee ownership ticked all of our boxes.

“The whole process has been a leap into the unknown and we could not have done it without support.  We spent quite a bit of time working with specialist advisors from Scottish Enterprise and Co-operative Development Scotland, undertaking briefings with the staff to help them understand the concept of employee ownership.

“It was an extremely busy and challenging time for the business, with the transition to employee ownership, our 40th anniversary and during the busy festive promotions season. However, the future is bright and the involvement of all employees in the ownership of the business will be a major boost going forward. I am confident that once things settle down, employee ownership will be great for the staff, the brand and the company.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

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.

Harvey Maps staff, with founding directors Robin and Susan Harvey, centre

Merlin ERD Engineering Success with Transition to Employee Ownership

Perth-based engineering experts Merlin ERD has become the latest business to join the growing number of employee-owned firms in Scotland.

Merlin, which is celebrating its tenth anniversary in Perth, has become world leader in the design and delivery of horizontal, extended reach (ERD) and complex oil and gas wells.  The company has delivered more than 200 projects in 40 countries, all from its Perth office.

We caught up with Merlin’s founder, Iain Hutchison, to find out more about the decision to transition his business to employee ownership.

“When I first began to investigate succession options, I didn’t believe employee ownership (EO) was right for Merlin.  However, after attending a Scottish Enterprise EO session and looking at the detail, I discovered that the benefits of EO were closely aligned with our values. EO offered a succession path that increased business resilience, retained our culture and provided an ideal combination of an eventual exit for me along with advantages for our loyal staff.  I really didn’t want to see what we had built here in Scotland being moved, or worse, closed by a competitor allowing them to flourish elsewhere at the expense of our local team.  By becoming employee-owned, we’re anchoring highly- skilled jobs and a profitable high-tech business in Perth, Scotland.

Queens Award 067

Merlin ERD received its second Queen’s Award for Enterprise for International Trade in September 2016.

“Just as importantly, I want to see the business continue to grow; employee ownership has consistently proven itself to be an excellent mechanism for growth, with a more motivated and engaged workforce helping to drive innovation, ambition and turnover.

“We’ve enjoyed huge success here at Merlin ERD, expanding into overseas markets and being awarded two prestigious Queen’s Awards for Enterprise for International Trade, whilst weathering the oil and gas industry downturn.  It is my belief that our transition to employee ownership will assist in propelling the business through the next stage of growth, whilst providing exceptional opportunities for our employees who will stand to share in future profits of the business. If past performance is any guide to the future, Merlin is going to impress.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

MY VISIT TO MONDRAGON – AN ASPIRATION FULFILLED…

By Sarah Deas

I’ve always wanted to visit Mondragon, the world’s largest worker co-operative. So, I was delighted when the opportunity arose on my recent visit to the Basque Country.

Mondragon is the largest business group in the Basque Country. The co-operative was established in 1956 and now consists of 102 autonomous co-operatives, 140 subsidiaries around the world and 26 foundations / umbrella organisations. The group employs 73,655 workers across 268 business units.

Mondragon University, surrounded by some of the groups factories

Mondragon University, surrounded by some of the group’s factories

Whilst this sounds a large number, it represents a relatively small percentage of the 2,900 co-operatives and employee owned businesses in the Basque Country.  The significance lies in the number of industrial co-operatives within the group (68 in total) of which some are very large (employing more than 2000). Also, the breadth of the group is significant including credit, consumer, education and research & development businesses.

I met with Ander Etxeberria, director of Dissemination. To kick off our meeting he shared this video which provides an excellent introduction to the group. I won’t try and summarise its content… just recommend you watch it to learn more!

The inspiration and driving force behind Mondragon was a priest, Jose Maria Arizmendiarrieta. Recognising the economic hardships and social division that followed the world wars, he set out to change society for the better.

Mondragon

Ander Etxeberria, director of dissemination at Mondragon, with CDS Director Sarah Deas

Jose believed in the dignity of the human being, the importance of solidarity and the value of education and work. His business was founded on the principles of co-operation, participation, innovation and social responsibility, values that are as relevant today as they were in the 1950s.

He didn’t set out to become a businessman, instead recruiting others to lead the growth of the co-operative. His focus throughout his life remained on the ethos of the business and working to improve society. Reflecting on my visit, that was a key insight for me.

I wondered what Jose’s advice would be to us in Scotland as we aspire to ‘inclusive growth’ that ‘combines increased prosperity with greater equality, creates opportunities for all, and distributes the benefits of increased prosperity fairly’?

I think he’d be pointing us to reflect on our values and consider models that empower and reward a key resource (human capital) and share the dividends of enterprise more widely across society.  In fact, I was struck by the similarity in ethos to that of some owners considering succession options. Increasingly they are looking for a solution that allows them to leave a legacy… which employee ownership achieves.

If we need proof that it works… the Basque Country now has the lowest level of unemployment and inequality in Spain. Given the scale of worker ownership in the region this is a clear indication of the impact of an inclusive business model.

SHARING SCOTLAND’S EMPLOYEE OWNERSHIP STORY IN THE BASQUE COUNTRY

By Sarah Deas

Recently I was invited by the Provincial Council of Gipuzkoa to share Scotland’s success in promoting employee ownership as a succession solution with business leaders in their region. This was quite an honour given this region of the Basque Country is home to Mondragon, the world’s largest worker co-operative.

Sarah Deas Basque Country

So, why is the Basque Country interested in learning from Scotland? The answer lies in the fact that Gipuzkoa is facing similar economic issues to other developed world regions; ‘babyboom’ business owners are looking to retire – it is anticipated that a third of owners will be seeking exit solutions in the next 10-15 years.  There’s a desire to find solutions that will ensure the businesses’ continuity, maintain decision centres in the region, retain talent within organisations and motivate/reward workers.

Building upon a history of worker participation through worker co-operatives, the region is keen to promote a model that both addresses these challenges and aligns with their culture and values. Employee ownership offers that solution.

As keynote speaker at an event in San Sebastian, the capital city, I presented the economic development rationale for Scotland promoting employee ownership as a succession solution (very much mirroring that of Gipuzkoa) and shared success stories, including Aquascot and Page\Park.

The audience then heard from three local businesses that had chosen employee ownership as a succession solution; Exide (150 employee engineering business); Industrias Ormola (40 employee manufacturer of plastic, aluminium, and brass moulds for foundries); and Tarte Coop (28 employee provider of heating and air-conditioning systems).

I was struck by the similarity of each of their stories to those of Scottish businesses that have transitioned to the model. There was a strong ethos underlying each owner’s decision… a desire to see it continue in its current form, to sustain local employment and to do the best by those who had made the business a success. Also, recognition that employee ownership would drive performance and position the business well for a bright future.

A lively discussion session followed, covering many aspects of the model.  In wrapping up a question was asked as to the panel’s thoughts on the most difficult aspect of a transition. This stimulated a discussion on the difference between ownership and management. Whilst it was acknowledged that the culture in an employee-owned business will be more transparent and participative, the panel stressed the importance of clearly defining roles and responsibilities.  A valuable learning point.

The Provincial Council of Gipuzkoa has devolved tax raising powers which it uses to incentivise take-up of the employee ownership model. Whilst there are differences in approach, there was real interest to learn from the UK’s 2014 legislation that enables vendors selling a majority stake to an employee ownership trust to gain exemptions from capital gains tax and for bonuses paid out by the trust to be exempt from income tax.

Whilst the Gipuzkoa Province is seeking to actively promote the model, it already has a well-established employee ownership sector: 245* businesses employing 3,253 people (equating to 37% and 49% of employee owned companies and employees in the Basque Country respectively). So, I really did feel honoured to share Scotland’s aspiration and early success in building a strong employee ownership sector.  We have much to learn from my hosts and I look forward to continuing to share experiences.

*figures exclude co-operatives

COLLABORATIVE WORKING IS KEY TO GLOBAL RECOGNITION FOR ARGYLL AND THE ISLES TOURISM COOPERATIVE

Calum Ross - AITCOur client Argyll and the Isles Tourism Cooperative (AITC) was recently shortlisted for a major global award following the success of its highly effective “Wild about Argyll” campaign, which saw Scottish endurance cyclist Mark Beaumont embark on an ambitious 12-day journey across the region, participating in extreme sports and completing an array of challenges.

The campaign was named a finalist in the Place Brand of the Year category at the City Nation Place Awards 2017, which recognised destinations that have excelled at attracting tourism, driving economic development and engaging citizens. While Copenhagen walked away with the prize at the global conference in London, the inclusion of Argyll and the Isles on the shortlist alongside major destinations throughout the world marks a significant achievement for the consortium. We caught up with AITC chair Calum Ross (above) to learn more about the campaign and how collaborating to raise awareness has been key to driving growth of the area’s profile.

“A consortium comprising 11 organisations from across the west of Scotland, AITC was established to enhance the area’s marketing power by way of pooling resources. By highlighting the unique selling points of each individual area within the region and combining them under one umbrella brand, we had a stronger voice to promote our offering and raise awareness of the amazing experiences on offer in Argyll and the Isles. We also worked together to source external grant funding of more than £800,000 over the last 5 years, which enabled us to develop both our capacity locally and our domestic and global marketing strategy.

Wild About Argyll & Mark Beaumont Press Image CMYK

“The Wild About Argyll brand was originally conceived as a way to appeal to the adventure seeker, a much younger market on our doorstep in the Central Belt of Scotland. However with the involvement of Mark Beaumont, who captures the very soul of our region, the campaign has attracted global attention and reached an audience of millions – success which has led us to adopt Wild About Argyll as a general brand for the Argyll and the Isles region.

“Over a hundred of our local businesses supported thWildAboutArgyll Day9 NWM-23e campaign at the outset, a remarkable demonstration of the tremendous spirit of collaboration we have in Argyll. The international recognition of the campaign is not just a huge accomplishment for the area, but a real testament to the effectiveness of collaboration, which is central to the campaign’s success.

“Wild About Argyll was borne out of innovative and ambitious thinking, and delivered on a scale which would not have been possible for any of the members to implement individually. The success of the campaign is an extension of the success we have already achieved through collaborative working, which includes new trips to the area being offered by national and international tour operators we have worked with at VisitScotland’s annual EXPO events. We are now developing an exciting partnership with Glasgow Life, Scotrail and Calmac for 2018 promoting the cultural wonders of the city and the micro adventures in Argyll.

“We are thrilled to have created something that has captured the attention of so many and gained such wide-reaching recognition for our beautiful region, and we look forward to continuing to work collaboratively and innovatively to further grow the profile of Argyll and the Isles and attract more adventure seekers from home and abroad.”

WILD ABOUT ARGYLL - on glasgows doorstep

For more information about how collaboration could benefit your business, get in touch to arrange a chat with one of our expert advisors.

Pictures courtesy of Morrocco Media, Kieran J Duncan and Finalcrux Films. 

Employee Ownership Launched at STAR-Dundee

Leading aerospace engineering company STAR-Dundee is one of the latest businesses in Scotland to join the growing number of employee-owned firms in Scotland.

The company, which spun out from the University of Dundee in 2002, designs electronic components and test equipment for spacecraft, supplying it to international space agencies. We caught up with founder Professor Steve Parkes to find out more about STAR-Dundee’s growth and the decision to become employee-owned.

stuart mills

STAR-Dundee founder Steve Parkes

“Originating because several organisations wanted to use technology we were developing at the University of Dundee, STAR-Dundee has grown from an academic and a few enthusiastic research students designing and developing products in their spare time to an employer of 25 people with offices in both Dundee and Barcelona.

“Having formed STAR-Dundee and forged it over 15 years into a company with a worldwide reputation, I realised that I was not going to be around to see it through the next 15 years. It became clear that the future of the company was about the people that had helped make it a success and the culture that we had developed to support that success. Selling the company to another organisation, which would inevitably change the culture and might even move it from its Dundee base, was not a very attractive idea.

“Assisted by a succession planning project initiative by Scottish Enterprise, I reached the decision that employee ownership was the way forward for STAR-Dundee. Employee ownership retains and strengthens the culture and will ensure that the company always has a base in Dundee.

star Dundee team

The STAR-Dundee team

“The management team has been restructured to provide a firm foundation for further growth, and we’ll soon be launching a new technology, SpaceFibre, which we’ve spent the last ten years developing. Although designed primarily for spacecraft applications, it is creating interest in other areas including the robotics and medical equipment industries.

“STAR-Dundee has been a great success because of its people, and ultimately, our move to employee ownership allows these individuals to have a greater say in the running of the company and to further benefit from the success which they are instrumental in creating.”

If you would like to learn more about how employee ownership could benefit your business, please get in touch to arrange a chat with one of our expert advisers.

ACCESSING INTERNATIONAL MARKETS THROUGH COLLABORATION

ScotExport

When it comes to exporting, smaller businesses can face barriers that are less challenging for larger, established organisations. Lack of experience, legislative difficulties in other countries, and inadequate resources to manage shipping and logistics matters are just some of the challenges they come up against.

Next month, Scottish Enterprise will host ScotExport 2017, an event aimed at helping businesses build their export capabilities, featuring a packed programme of talks and workshops. Co-operative Development Scotland will be joining the Delegate Hub to talk about how collaboration can help businesses overcome some of these challenges, aiding access to international markets. Ahead of the event, to find out more about the importance of exporting and the role collaboration can play, we spoke with Karen McLeod, who manages the export advisory service at Scottish Enterprise.

Why is exporting important?
“Overseas markets have become increasingly important to the Scottish economy and in 2015 Scotland’s international exports were valued at £28.7 billion*, a 3.6% increase from 2014.

Our research shows that many overseas markets are underserved and there is demand for Scottish products and services internationally. This, paired with the fact that SE supported 2,500 businesses to export last year shows that there is opportunity and the ambition for exporting to continue to grow.”

What are the benefits?
“Trading abroad can boost your profile, credibility and bottom line.  That applies whether you’re trading with established markets such as the EU and USA, or high-growth markets like Brazil, China, India, Colombia and Vietnam.

“International markets like these offer you access to new customers, revenue and ideas. Crucially, they enable you to spread your business risk, increase the commercial lifespan of your products and services and secure economies of scale which are not always possible at home. In fact, exporting is now considered essential for Scottish businesses that want to safeguard future growth. 

“The figures are compelling, showing that those firms that choose to export become 34% more productive in their first year** while those already exporting achieve 59% faster productivity growth than non-exporters**, positively impacting on staffing and financial performance.

“Doing business overseas brings further benefits such as fostering ideas for new products and services. Once a company has ‘dipped their toe’ into a new market this in turn tends to increase confidence and ambition and provides the momentum for further growth through exporting.”

What are the barriers and how can you overcome them?
“Exporting can seem daunting to smaller businesses and the thought of going it alone can often be off putting and seen as high risk.  Collaborating with others can be a way to address those risks and make the most of the opportunities that exporting brings.”

How can collaboration help businesses access international markets?
“Businesses can collaborate using the consortium co-operative business model. This model allows businesses to come together for a shared purpose; to buy or sell in scale, market more effectively, share facilities or jointly bid for contracts. Collaborative activity can include the creation of a portfolio brand for export, consolidated shipping and joint e-commerce activity.

“A good example of businesses successfully adopting this approach is recent Collaboration Prize winner Made in Scotland: Collaborative Export Solutions, a collaboration of eleven companies involved in the luxury food and drink sector. Selling a range of products including salmon, cheese, gin and whisky, the member businesses pool together their resources and experience to extend their offering to the lucrative overseas market. Among the members is an e-commerce and logistics firm, giving valuable insight into this aspect of exporting.”

Made In Scotland Collaborative Export Solutions team members

Made In Scotland: Collaborative Export Solutions team members

 

Event information
To find out more about exporting from Scotland, join us at ScotExport 2017, taking place on 31st October at the DoubleTree by Hilton Hotel Glasgow Central. You can get more information about the programme and book your place here.

For more information about the support available to help you collaborate and access international markets please visit www.scottish-enterprise.com/collaboration.

*http://www.gov.scot/Topics/Statistics/Browse/Economy/Exports/ESSPublication
**UK Government UK Trade & Investment research publication – Bringing home the benefits: how to grow through exporting

THE RISE OF EMPLOYEE OWNERSHIP IN THE CARE SECTOR

11/12/15 - 15112301 - SCOTTISH ENTERPRISEGLASGOWSarah Deas

 

 

Research shows there are 86 employee-owned companies in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925million.  Recently there has been uptake of the model by businesses that operate in the care sector. Co-operative Development Scotland (CDS) director Sarah Deas discusses why the model is so well suited to this sector. 

 

 

Employee ownership has consistently shown to improve staff engagement and wellbeing, which in turn leads to better patient experience and outcomes. As owners, employees also have a say in how the business is run, and clients and their families are reassured that the business will remain rooted in the area and be run for the benefit of local people.

These benefits are clearly demonstrated by Highland Home Carers, Stewartry Care, Paramount Care and Caledonia Social Care. Highland Home Carers (HHC) was founded in 1994 and became employee-owned in 2004.  Since then, the business has grown to become one of the largest independent providers of home care and support services in Scotland with over 500 staff and a financial turnover of over £7million.

The company aims to deliver the highest possible standards of care, enabling people in the Highlands to remain in their homes and in their local communities for as long as possible.   Moving into employee-ownership has ensured that HHC’s unique ethos was secure and provided a platform for growth.

Stewartry Care also became an employee owned company in 2004. Turnover increased by 16% in the first year and profitability by 39% and the company has continued to grow. Employees benefit from being able to influence the direction of the company, being informed on performance and having the opportunity to stand for election as a Director or Trustee of the company. Their clients also benefit from having a highly motivated team, knowing that their care team are empowered and the reassurance that the company will remain locally owned and run for the benefit of local people.

Ruth - colour

Paramount Care founder Ruth Smyth

Fife-based care provider Paramount Care joined the growing number of employee-owned businesses in Scotland earlier this year with all 26 staff members becoming shareholders. Set up in 2000 by nurse Ruth Smyth who had a vision of a personalised care service that placed people at its heart, Paramount Care operates throughout Fife, Tayside, Perthshire and Clackmannanshire. Working across the public and private sectors, its team of fully trained carers deliver a range of care services both within people’s homes and within residential care homes.

When it came to exploring succession options for the business, the obvious route was to sell Paramount to another care firm, however, Ruth feared that the ethos her company was built upon would be lost.

Paramount was founded with the aim of providing a personal and approachable care service, where clients or employees wouldn’t have to call bases in locations like London or Birmingham whenever they had a query. It was never about dropping into people’s homes and doing the minimum in order to fit in as many clients as possible, but about providing a high quality of care with close and trusting relationships between carers and clients. The owner felt that these qualities, which set Paramount apart from other care firms, could be compromised if it was bought over by one of them.

By selling it to an Employee Ownership Trust, Paramount Care can continue operating as an independent company rooted in the local area, run by people who care about it. Paramount’s future is now in the hands of people who understand the importance of great care and will ensure the company continues to go from strength to strength whilst delivering the high standards of care that we’re renowned for.

Newly established social care provider Caledonia Social Care (CSC) became Scotland’s latest care business to adopt the employee ownership model, launching on EO Day 2017 (30 June).

Caledonia Social Care, management and staff. L-R - Ross Wilson, Practice Team Leader; Carol Park, Administrator; Stuart Robertson, Regional Manager; Margaret Paterson, Managing Director; Derek Oliver, Regional Manager; Vicky Hoolihan, Corporate Services Administrator; Kenny Nicholson, HR Leader Taken 27-06-17

Caledonia Social Care, management and staff

CSC focuses on care at home support, including the provision of dementia specific services, alongside personal care to older, disabled and vulnerable people.

Alzheimer Scotland is currently the main investor but will hand it over fully to the newly formed enterprise in the future. This was the first time a Scottish charity has transferred one of its service functions into employee ownership.

CSC’s dynamic employee-owned business model takes forward ownership of many of Alzheimer Scotland’s previous care at home services to support people living with dementia in the community. As well as delivering care at home services the company also offers personalised care to older, physically disabled and vulnerable people to help them remain in their own homes and to live as independent a life as possible for as long as possible.

The launch of Caledonia Social Care represented a real boost to Scotland’s care sector, with an empowered workforce of 150 employee owners, committed to providing an exceptional level of care to 480 clients.

The Scottish Government in its Programme for Government announced that it will be investigating the scope to expand its support to employee ownership, including in the social care sector. We look forward to supporting more businesses to adopt this inclusive model.

To out about the support available to businesses considering employee ownership, please get in touch.

CREATING AN ENTREPRENEURIAL AND INNOVATIVE CULTURE THROUGH EMPLOYEE OWNERSHIP

Co-operative Development Scotland (CDS) director Sarah Deas discusses the potential of employee ownership in driving an entrepreneurial and innovative culture within businesses.

FREE FIRST USE Lenny Warren / Warren Media 07860 830050  01355 229700 lenny@warrenmedia.co.uk www.warrenmedia.co.uk All images © Warren Media 2016. Free first use only for editorial in connection with the commissioning client's press-released story. All other rights are reserved. Use in any other context is expressly prohibited without prior permission.

Latest figures show that there are 86 employee owned (EO) companies operating in Scotland, with approximately 6,800 employee-owners generating a combined turnover of around £925million.

What are the reasons behind the rising popularity in an EO structure?  Aside from being a popular succession option, evidence shows it also drives an entrepreneurial and innovation orientated culture within a business.

Bright Ascension, experts in space technology, recently became employee owned in order to help meet plans for growth and to continue developing and creating innovative products. The Dundee and Edinburgh based business specialises in software products and services for satellites.

In order to build a world class business the directors recognised that they needed to attract, retain, motivate and harness the best talent in the field.  Their main priorities were to scale up the business by attracting investment and then fully engage employees to drive performance within the business.  These goals have been achieved through employee ownership.

Bright Ascension company, Edinburgh, 14/03/2017: Bright Ascension founder director Peter Mendham (correct, bottom), with technical director / software engineer Mark McCram and a satellite launch control board. Photography for Cooperative Development Scotland / Scottish Enterprise from:  Colin Hattersley Photography - colinhattersley@btinternet.com - www.colinhattersley.com - 07974 957 388

Bright Ascension founder director Peter Mendham and technical director / software engineer Mark McCram.

Similarly 4C Design, Hunter Adams and Accord Energy Solutions have all chosen the model to drive an entrepreneurial and innovation orientated culture. By having a stake in the business, employees have a vested interest in increasing productivity and driving innovation.  This sense of ownership leads to employees being more willing to contribute ideas, from developing new products to identifying new markets.

Statistics consistently demonstrate that employee-owned businesses outperform their non EO counterparts in terms of higher levels of profitability, improved business resilience during times of recession, increased productivity, enhanced employee wellbeing and greater desire to innovate. Recognising the benefits of the model, the Government recently introduced tax incentives to increase its adoption.

I’m anticipating that in the years ahead employee ownership will increasingly be adopted as a way to recruit, retain and reward employees, enabling business growth and higher levels of performance.

Through Co-operative Development Scotland we provide free support to businesses considering employee ownership, offering specialist advice and support to help them adopt the model.

For more information on the services provided by CDS, click here.

EMPLOYEE OWNERSHIP AS A SUCCESSION OPTION FOR FAMILY BUSINESSES

For family businesses, planning for succession is one of the biggest and most critical challenges they will face. However, it can also be a great opportunity to maximise opportunities and implement a structure that will allow the business to continue trading whilst staying true to its original values and ethos for generations to come.

Co-operative Development Scotland director Sarah Deas discusses some of the issues family businesses need to consider when looking at their succession options, and why employee ownership can sometimes be the most effective exit strategy for family businesses that want to remain rooted in their local community.

11/12/15 - 15112301 - SCOTTISH ENTERPRISEGLASGOWSarah Deas

“In a family firm, the first choice is almost always to sell to family. However, that’s not always an option if the next generation has chosen a different career. Indeed, the Scottish Family Business Association found that only 33% of family firms reach second generation and only 9% make it to the third; despite this, more than half of family businesses have no succession plan in place.  According to our research, 16,000 employers in Scotland will be looking to transfer ownership in the next five years – and employee ownership can be a very successful exit strategy.  Selling a company to its employees, or implementing an employee share plan, can boost productivity, increase employee engagement, and keep the company in the community.” 

“Employee ownership can be a very successful exit strategy for family businesses.  It allows the vendor to exit on their terms, whilst retaining jobs and rooting the business in its community. It is also an effective way to drive business performance; selling a company to its employees, or implementing an employee share plan, can increase employee engagement, boost productivity and drive growth.

“Some good examples of family businesses which have successfully transitioned to EO include agricultural supplier Galloway & MacLeod and technical textiles manufacturer Scott & Fyfe.

“We are seeing a growth of interest in employee ownership year-on-year, keeping us on track for achieving our aspiration of a tenfold increase in employee in Scotland over a ten year period.  Since 2009, the number of employee-owned businesses headquartered in Scotland has more than doubled tripled. 

“Seeking early advice increases the range of options open to a business owner. Scottish Enterprise offers a free Succession Expert Support service, available to all Scottish businesses.” 

For more information on employee ownership and how it could benefit your business, get in touch for a chat with one of our expert advisers.